Sale of a trade mark – the full process

• Sale of a trade mark – the complete process
• Trademark sale - why
• Expense list
• How to find potential buyers
• And how do we find potential sellers
• Risks and how to avoid them

The sale of a trade mark is a common occurrence in modern business, allowing companies to monetise their intangible assets or restructure their operations. This process represents a full transfer of the exclusive right to the trade mark from its current holder to a new owner. For the transaction to be legally valid and protected, it goes through several successive stages.

• Trademark valuation - determining the market value of the asset based on its recognition, reach and commercial potential.

• Legal status check – establishing the validity of the trade mark, territorial coverage, classes of goods and services, as well as the absence of encumbrances or pending disputes.

• Negotiation and drafting of a preliminary agreement - negotiation of financial parameters, payment terms and scope (goods, services, territory, etc.) of the transfer between the parties.

• Drafting and signing of the final contract – drawing up a written contract for the assignment (transfer) of the trade mark, compliant with the requirements of local legislation. For the transfer of a trade mark as part of a commercial enterprise, notarisation of the signatures and content is required.

Trademark sale - why

The sale of a trade mark is rarely a spontaneous decision and is usually part of a long-term business strategy. As a valuable intangible asset, a brand can be the subject of a transaction for a number of economic, legal or operational reasons.

Business restructuring or shift in focus

When a company decides to change its business activities, exit a particular market segment or focus on a new core product, the best solution is to sell the old brand. This allows the company to divest itself of assets that no longer serve its objectives and to redirect its resources elsewhere.

Monetisation and capital generation

A trade mark that has gained popularity and a good reputation has real financial value. Selling it is a quick way to generate fresh capital, which the business can invest in innovation, settling debts or expanding into other areas.

Mergers and acquisitions 

In corporate transactions where one company is acquired by another, trade marks often change hands as part of the overall asset package. In some cases, the buyer is interested solely in the brand and its customer base, which leads to the brand itself being sold separately.

Liquidation or cessation of business

If a given company ceases to exist due to bankruptcy or voluntary liquidation, its assets are sold off. The trademark becomes one of the means for satisfying creditors or for distributing the residual capital among the partners.

Selling a trademark – how much does it cost?

If for one reason or another you have decided to sell your trade mark, you must prepare for certain costs. 

• State fees – The Patent Office of the Republic of Bulgaria (or respectively EUIPO for EU trade marks) collects a fee for entering the transfer of the right in the State Register. The fee for entering the transfer of an EU trade mark is 200 EUR for each trade mark. The transfer has effect with respect to third parties from the date of its entry in the State Register.

• Fee for an industrial property representative or lawyer - the drafting of a legally sound sale and purchase agreement (assignment) that protects your interests and complies with the specific requirements of the law requires professional intervention.

• Preliminary study and expert assessment fee – prior to the sale itself, a legal audit (due diligence) of the brand is often required to ensure that there are no encumbrances and to determine its real market value.

• Notary fees - depending on practice and jurisdiction, trade mark assignment agreements or powers of attorney for authorities may require notarisation of signatures for additional security.

What determines the price of the trademark itself?

The price of the trademark itself is not fixed and does not depend on the fees paid for its initial registration, but is determined by its market strength. First and foremost, a key factor is the recognition and reputation that the brand has built among consumers – the more popular and valuable it is, the higher its value.

Furthermore, the financial performance of the business associated with the brand, its geographical scope (whether national, European or international) and the number of classes of goods and services for which it holds exclusive rights all have an impact. Last but not least, the price is influenced by the market niche, current demand and the brand’s potential to generate future revenue for the new purchaser.

How to find potential buyers

Finding a buyer for a trade mark requires a proactive and strategic approach, as there is no single public exchange for brands in Bulgaria. 

The first step is to research direct competitors and companies operating in similar or complementary niches. Often, businesses looking to expand their product range or enter a new market without having to build trust from scratch are the most interested.

Another successful channel is specialised online platforms and brokers for buying and selling existing businesses and intellectual property. 

Investment funds may also show interest if the brand has strong potential. The key here is preparing a short but meaningful business proposal that presents the brand's recognition, its market share, customer base and financial benefits for the future owner.

And how do we find potential sellers

When the roles are reversed and a business is looking to purchase an already established brand, the process requires active market and industry research. One of the most reliable channels is websites for the sale of active businesses, franchise systems, or companies in liquidation, where brands are often sold as standalone assets to optimise debt. In Bulgaria, leading specialised platforms for such deals are KPD.BG (the country's largest portal for business listings), BIZZ.BG, and digital exchanges such as Businessbroker.bg.

A valuable source of information is also the registers of the Patent Office - trademarks with expiring rights can be identified there, or those whose owners have ceased their commercial activity but still hold the rights to a valuable brand.

Another successful approach is to make direct contact with companies operating in the same or a similar niche, but which are going through a period of stagnation or restructuring. Making a proactive and financially sound proposal to an owner who is considering withdrawing from the market often leads to a swift deal to acquire their brand. Specialist consultants and intellectual property lawyers they also have a network of contacts and can mediate in finding vendors who prefer to maintain confidentiality.

Risks in trademark purchase and sale and how to avoid them

Intellectual property transactions harbour specific legal and financial pitfalls that can jeopardise the interests of either party. For this reason, the transfer of trade mark rights requires precise planning and risk assessment before proceeding to the signing of documents.

For individuals and businesses selling their trademark, the main risks include:

• There is a risk that the buyer may acquire the trade mark but fail to fulfil their financial obligations. How to avoid this: the contract must explicitly include a clause stating that the transfer of rights shall only take effect and be registered with the Patent Office once the full amount has been credited to the seller’s bank account, or an escrow (trusted) account.

• The new owner can bring claims if issues arise with products sold under this brand prior to the transaction. How to avoid this: include a limitation of liability clause that clearly defines that the seller is liable only up to the date of transfer, after which all commercial risk passes to the buyer.

• Loss of rights to similar brands from the portfolio - if you sell a brand that is very close in design or name to your other active brands, the Patent Office may refuse registration or a market conflict may arise. How to avoid it: conduct a preliminary audit of your own portfolio and sell only assets whose separation will not harm the rest of your business.

Those who enter the transaction in the role of buyers must also approach the process with extreme caution. What are the critical risks for the party buying the trademark?

• Acquiring a trade mark with encumbrances or legal disputes - it is possible that the trade mark has been pledged as collateral for a loan, is the subject of pending cancellation proceedings, or has attachments imposed upon it. How to protect yourself: it is essential to carry out a full legal analysis (due diligence) in the official registers of the Patent Office and the Commercial Register before purchase.

• Earlier registered identical third-party trade marks - the buyer may pay for a brand that could subsequently be blocked by older rights or cancelled retroactively due to a lack of novelty or distinctiveness. How to avoid it: a professional search for earlier rights and similarity, prepared by an industrial property representative, will ensure that the trade mark is „clean“ for use.

• If within a period of 5 years from the date of registration the proprietor has not put the trade mark to genuine use, or if such use has been suspended for an uninterrupted period of 5 years, the registration may be revoked. How to avoid this: require the seller to provide written evidence of genuine commercial use (invoices, promotional materials, contracts) for the preceding years.

Security for a successful transaction

The sale or purchase of a trademark is a strategic move that turns creative capital into real financial value. 

Whether you are parting ways with an established image or acquiring a ready-made market springboard, the key to a successful deal lies in clean paperwork and security. 

With the right preparation, detailed risk assessment and clear contractual relationships, you can guarantee stability and long-term digital immunity for your business. Trust the intellectual property lawyers at IPfabrika, who will ensure that the entire process goes flawlessly and in your best interests.