When he is sworn in on January 20th, Donald Trump will become the first American president to have owned trademark registrations while in office. (Quick quiz: Who was the only U.S. President to have a patent while in office? Answer at the end of the post).
Trademark Office records show that he has personally owned 90 trademark registrations, most of which include the Trump name. This unprecedented situation — one of many unprecedented developments resulting from his election, the rest of which I won’t discuss here — provides some lessons for anyone including intellectual property in business transactions. (Nor will I discuss why Mr. Trump held these trademarks in his own name for years — he transferred them to a holding companyin early 2016).
Trump started his career in real estate development, and, not surprisingly, most of his “Trump” trademarks related to apartment buildings, hotels and other real estate services. The branding included several rental apartment buildings on the West Side of Manhattan, three of which decided to remove the Trump name in the past few months after residents complained.The owner of those buildings, which were developed by Mr. Trump’s company, was no longer obligated to use the Trump name.
Long before Mr. Trump ran for president he had switched his business model from real estate development to a branding company focused on licensing out the Trump name. The continued use of a brand name contains lessons for businesses purchasing physical assets.
Anyone purchasing a branded asset, especially when that asset involves real estate, should confirm that the rights to the name, logo or other brand associated with the asset is part of the purchase. Intellectual property rights do not necessarily transfer along with a physical asset, and purchasers need to ensure that the rights they think they are acquiring are specifically included in the transaction. Such a transfer could either be a complete assignment or a license to use the brand (especially if the brand is an essential part of the seller’s ongoing business and the seller will continue to use it with other assets). A transfer of intellectual property rights associated with a physical asset should include trademark registrations and applications (along with the associated goodwill), domain names, social media accounts and possibly even copyrights.
Concerns over intellectual property rights transfers extend beyond those associated with real estate. Buyers of commercial products for resale should also examine their rights to use existing brand names on the resold products, as many producers of goods for “white label” resale do not permit the use of the trademark for the underlying product with the resale.
(Quick quiz answer: Abraham Lincoln owned a patent for an engineering device.)