Buyer Beware: Acquiring a Product Line May Put Trademark at Risk

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Spinning off an existing product line as a separate on-going business poses risks to trademark rights if the buyer and seller will use the same mark on related goods after the spin-off. The trademark cannot be sold outright with the spun-off product line because the mark would no longer identify a single source of the trademarked goods and could be deemed abandoned. The buyer, however, will pay a premium only if it acquires the perpetual