Software and IP Licensing

otmeng

I'm interested in expanding my current services offering (primarily engraving) to include embroidery. In the process I've looked at both buying an existing business (warts and all) and buying a new or used machine and establishing the services from the ground up. In my blissful ignorance viewing the world through rose-colored glasses, I think I see definite advantages and disadvantages to both methods. Now, the glasses have come off and I'm attempting (in abject futility, it appears at times) to educate myself.

In my previous life, I dealt with software and intellectual property licensing - it's not really as boring as it sounds, honest - and assets such as these could USUALLY be transferred with the sale of a company. I've noticed that the embroidery file sellers (though I've by no means checked them all) that provide off-the-shelf, digitized images have in their license agreement that the images may not be sold, transferred, lent, bartered, traded, used as collateral, given outright, or in any other way surreptitiously passed on by the original owner to another party. I've even had that clarified via e-mail by one of them.

My question is: Is that an industry standard 'cause that really makes a difference if digitized images are being offered as a part of the business? And it adds to the degree-of-difficulty in the due-diligence process if each license needs to be verified.

'course looking at it the other way, it greatly simplifies the due-diligence process - treat all those assets as non-transferrable, zero-dollar assets and move on.

Whit

aardvark7

Not wanting to second guess the law where you are, it may be one thing for the original supplier to state that, but it could be arguable if you were to buy an entire business.

However, the simple truth is that standard logos have very little intrinsic value, regardless of whether the businesses who sell them like to pretend otherwise!

Basically most people and businesses want their own logo. The few that don't have anything already designed might be happy with adding some lettering to a stock logo, but the task of looking through catalogues at thousands upon thousands of them is too much effort! I'd be astonished to discover any embroidery business making more than 1% of turnover through the use of stock designs.

With that in mind, I'd follow your own advice!

otmeng

Thanks for the reply, aardvark7. I figured the use of canned images would be low but I had no idea it'd be that low. I guess if someone wants to put their touch on something, they want to make it truly theirs.

I think I'll take your advice . . . and take my own advice. I'd pretty much resigned myself to treating them as non-transferrable assets. The time required to confirm otherwise would likely be worth more than the assets themselves.

Whit

minimalist

I don't use any stock images at all from any of the companies that produce them. They want to sell you designs but don't want you to use them. Their legal stuff is specious at best as they don't state any hard numbers on usage of the design. You probably wouldn't use 99 percent of the catalog anyway. If you do end up with a stock collection you can contact the company and they will charge you a fee to transfer the license.

If you are talking about the previous design files done for a customer that is another story. They do have some value but only if they are used on a consistent basis. There might be an issue with some designs as a asset purchase versus outright company purchase. The PO will need to state in a release document that all artwork and designs are part of the sale. You might also have to get new sign offs on copyrighted or trademarked designs by the customer. I've turned down plenty of jobs because the customer won't provide me with a signed document that grants me permission to use the artwork or logo. I had one come up recently in that a insurance company employee wanted me to put the name of the company on a product. Round and round with them over the trademark issue. The employee related to me that the manager said it was OK. Still wouldn't provide me with a written release with the name and title of the manager so in my best soup nazi parody, no product for you.