Background

Between June of this year until present, our firm has been advising and assisting a well-known Canadian clothing distributor in the acquisition of a trademark portfolio consisting of 193 trademarks, covering over 50 countries / territories and formerly owned by a well-known shoe products / care accessories manufacturer BAMA GmbH (which itself had a heritage since 1914).

Bama GmbH, a well-known shoe products / care accessories manufacturer based in Germany, recently entered into insolvency and its assets were under charge of an insolvency administrator.

This resulted in Bama GmbH’s assets being sold-off including its vast ‘BAMA’, ‘TANA’, ‘WOLY’ and other brands.

To this end, our client was successful in bidding and acquiring, with the help of a M&A German speaking advisor the overall worldwide brand portfolio from Bama GmbH (there having been several worldwide interested bidders – effectively a contract race).

Key Stages of the Transaction

Given the urgency to completing the overall transaction, our firm’s first task was to perform an extensive intellectual property rights due diligence and accompanying report to verify the following non-exhaustive aspects in relation to each of the 193 brands:

The existence, validity and ownership of each brand;
Unresolved opposition, revocation and / or cancellation proceedings in relation to each brand;
Upcoming trademark renewal deadlines for each brand; and
Categorising each brand as domestic or international registration.

Having completed the due diligence in a busy weekend sitting with myself and my Singapore and China lawyers / team members, we, with our German-speaking M&A advisor, next negotiated the terms of the Trademark Sale and Purchase Agreement with Bama GmbH’s legal team, the liquidation committee.

There was just one issue: one of the key trademarks registered in the United States was subject to a Co-Existence Agreement with an American University (not to mention that it was summer term break so contacting someone proved to be more challenging than anticipated given the deadline of the bankruptcy proceeding).

Fortunately for our client, our firm managed to reach the university’s US law firm who were extremely understanding and gracious and made it plainly clear that their client had no objections to the manner of the proposed assignment of the Co-Existence Agreement to our client or the proposed wording expressly naming the university as a third-party beneficiary within the draft Trademark Sale and Purchase Agreement.

This lead finally to the closing of the acquisition which was completed without further issue followed by what is now an extensive post-completion exercise whereby we must ensure all 193 trademarks are renewed (particularly for those trademarks with imminent upcoming renewal deadlines) and assigned to our client.

Partial Post-Acquisition Sale

Our client decided to partially sell a number of trademarks from its trademark portfolio to a European buyer.

For international trademark registrations registered with WIPO there was an option to do one assignment transaction from Bama GmbH to the European buyer thereby skipping the first assignment registration to our client.

As for domestic trademarks, there is generally a requirement to record both trademark assignments chronologically.

Conclusion

This asset acquisition transaction provided our firm with many interesting and complex issues, primarily due to the volume of trademarks but also in part because of a chain of acquisition and disposal and how to overcome restrictions / obligations in previously concluded contracts, time zone difference being in 3 time zones, cultural, languages and summer time challenge!

Based in Asia since 1998, Caroline Berube represents SMEs, MNCs, foreign banks, and private equity firms in the Asia Pacific region, dividing her time between HJM offices in China and Singapore.

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Recent asset transaction: Acquisition of famous century old worldwide trademark portfolio