The Trademark Ownership Mistake That Can Disrupt a Business Deal

A company may build its entire commercial identity around a name, logo or product brand. It may invest heavily in marketing, packaging, websites, social media and customer recognition.

But when an investor, buyer, bank or franchise partner asks who legally owns the trademark, the answer is not always clear.

The founder may have registered it personally. A former partner may be named as the owner. A marketing agency may have created the logo without formally transferring the relevant rights. In a group structure, the trademark may be registered under an operating company when management intended it to belong to the holding company.

These issues may remain unnoticed for years—until the business enters an important transaction.

Using a Brand Does Not Always Confirm Ownership

A business may use a brand every day without being the registered owner of its trademark.

The following names may all be different:

• The registered company name

• The trade licence name

• The trading name used with customers

• The website domain owner

• The social-media account holder

• The person who designed the logo

• The registered trademark owner

Having a trade licence or domain name does not, by itself, confirm that the company owns the corresponding registered trademark.

The trademark registration record identifies the recognised owner of the registered mark. The UAE Ministry of Economy and Tourism allows trademark applications to be filed in the name of companies, establishments or individuals, subject to the relevant documentation requirements. Ministry of Economy and Tourism – Trademark Registration

Why Trademarks Are Sometimes Registered in the Wrong Name

Ownership misalignment often begins during the early stages of a business.

A founder may register the trademark personally because the company has not yet been incorporated. One group company may pay the registration fees even though another company operates the brand. A business partner may submit the application using their own details without considering the long-term ownership structure.

Common situations include:

• The trademark is registered personally by the founder

• A former shareholder remains the registered owner

• The mark is owned by a dormant or inactive company

• A foreign parent owns the mark but the UAE company uses it

• The operating company owns a mark intended for the wider group

• A distributor registers a brand belonging to a manufacturer

• An employee or consultant is listed as the applicant

• Different versions of the brand are owned by different entities

The arrangement may work informally while relationships remain stable. The risk becomes visible when circumstances change.

What Happens When a Founder Owns the Trademark Personally?

Personal ownership is not automatically incorrect. In some structures, the founder or a dedicated intellectual-property holding entity may intentionally own the mark and license it to the operating company.

The concern arises when the business believes that it owns the trademark but no written arrangement confirms its right to use it.

Important questions include:

• Can the company continue using the brand if the founder leaves?

• Is there a written trademark licence?

• Can the founder withdraw permission?

• Who is responsible for renewals and enforcement?

• Can the company sublicense the mark to branches or franchisees?

• Does the arrangement allow the company to modify the brand?

• What happens if the founder dies or becomes incapacitated?

• Has the arrangement been disclosed to investors and lenders?

Without clear documentation, the company may be commercially dependent on an intellectual-property asset that sits outside its legal ownership and control.

Why Ownership Matters During Investment or Sale

Trademark ownership is commonly reviewed during legal and commercial due diligence.

An investor or buyer may want evidence that the company owns—or has a secure right to use—the brands generating its revenue.

If the trademark is held by a founder, related company or external party, the investor may require:

• Transfer of the trademark before completion

• A formal and sufficiently broad licence agreement

• Representations regarding ownership

• Confirmation that the mark is free from disputes or pledges

• Evidence of registration and renewal

• Documentation covering logos and creative materials

• Protection in relevant markets and classes

Unclear ownership may delay the transaction, affect valuation or become a condition that must be resolved before funding is released.

Trademark Ownership in a Group Structure

Businesses with multiple companies should decide which entity is intended to own the intellectual property.

Possible structures include:

Ownership by the Operating Company

The company using the brand in its daily activities owns the trademark directly.

This may be straightforward for a single-company business, but the brand could become exposed to the operating company’s commercial risks.

Ownership by a Holding Company

A parent or holding company owns the trademark and licenses it to one or more subsidiaries.

This can centralise control, but the licence arrangements and related payments should be properly documented.

Ownership by a Dedicated IP Company

A separate entity owns and manages the group’s trademarks and other intellectual property.

This may be appropriate for larger or international groups, subject to legal, tax, commercial and substance considerations.

There is no universal ownership structure for every business. The correct approach depends on how the brand is used, financed, licensed and expected to grow.

Licensing Must Be Properly Documented

Where the trademark owner and user are different parties, a licence agreement can define the permitted use.

A trademark licence may address:

• The trademark being licensed

• The authorised products or services

• The geographical territory

• The duration of the licence

• Whether the licence is exclusive

• Quality-control requirements

• Marketing and brand guidelines

• The right to sublicense

• Licence fees or royalties

• Enforcement responsibilities

• Termination and post-termination use

A licence should reflect the actual commercial arrangement. A short letter granting general permission may not adequately address the company’s long-term operational requirements.

Can Trademark Ownership Be Transferred?

Yes. The UAE Ministry of Economy and Tourism provides a service through which ownership of a registered trademark, together with the associated rights, can be transferred from one owner to another. Ministry of Economy and Tourism – Transfer Trademark

The UAE Trademark Law also recognises that trademark ownership may be transferred through different legal forms. The transfer should be properly documented and completed in accordance with the applicable registration requirements. UAE Federal Decree-Law No. 36 of 2021 on Trademarks

Signing a private agreement may be only one part of the process. The relevant trademark record should also be updated so that the registered information accurately reflects the intended owner.

Ownership Details Must Remain Current

Even where the correct company owns the mark, its registered information may become outdated following:

• A company-name change

• Change of legal form

• Merger or restructuring

• Transfer to another group company

• Change of address

• Change in nationality or jurisdiction

• Sale of the business

• Founder or shareholder restructuring

The Ministry provides separate services for transferring a trademark and amending an owner’s information. Businesses should determine which procedure applies to the specific change rather than assuming that updating the trade licence automatically updates the trademark register. Ministry of Economy and Tourism – Trademark Services

A Trademark Ownership Review

A business should periodically verify:

• The exact name of the registered owner

• Whether the owner is still active

• Whether company details are current

• Which entity uses the trademark

• Whether a written licence is required

• Whether all important brand variations are covered

• Whether registrations cover the correct products and services

• Whether renewals are being monitored

• Whether any assignment has been properly recorded

• Whether designers and agencies transferred the relevant creative rights

• Whether ownership supports future investment, franchising or expansion plans

This review is particularly important before fundraising, restructuring, franchising, licensing, selling the company or entering a new market.

Build the Brand on a Clear Legal Foundation

A strong brand can become one of the most valuable assets of a business. That value depends not only on customer recognition, but also on clear ownership, accurate registration and properly documented usage rights.

Devenir Corporate Services assists businesses with trademark searches, registration, ownership reviews, renewals, amendments, transfers and coordination of trademark documentation.

Before investing further in your brand, confirm that the right person or company actually owns it.

Devenir Corporate Services — Building strong foundations.