Sale of business assets and transfer of the trade mark licence

The sale of business assets (fonds de commerce) including ownership of trade marks does not transfer to the acquirer the selective distribution agreement for the products bearing those marks, absent a contrary stipulation in the sale deed. Where that distribution agreement and the licence to use the trade marks form an indivisible whole, the licence is not transferred either. The licensed distributor cannot then require the new owner of the trade marks to perform those contracts.

Key points

• The sale of business assets including ownership of trade marks does not entail transfer of the selective distribution agreement for products bearing those trade marks, absent a contrary stipulation in the sale deed.
• Where the distribution agreement and the trade mark licence form an indivisible whole, the licence is not transferred with the business assets either.
• An acquirer who has not consented to take over the distribution agreement owes the authorised distributor neither supply of products nor continued use of the trade marks.
• Indivisibility stipulated between two contracts creates no vehicle for transfer: on the contrary, it extends the absence of transfer to the whole contractual set.
• A distributor wishing to keep its rights must ensure that the sale deed and the description of the assets expressly cover the ongoing contracts.

An authorised distributor facing the acquirer of the trade marks

The sale of business assets including trade marks transfers neither the selective distribution agreement nor the licence that is indivisible from that agreement (Com., 18 February 2026, No. 23-23.681). The commercial chamber dismisses the appeal to the Cour de cassation (France's highest civil court) brought by the distributor, which sought performance of its contracts from the last acquirer of its supplier's assets.

A manufacturer of footwear articles owned several trade marks. On 14 December 2016, the shareholders of a marketing company transferred their shares to a buyer. On the same day, the manufacturer licensed its trade marks to that company and entrusted it with the distribution of its products, as an authorised distributor. The manufacturer was then made subject to an asset sale plan (plan de cession) in 2018. The acquirer was liquidated in 2019 and its assets were sold to another company in 2020.

In 2021, the distributor and its shareholder brought proceedings against this last acquirer, seeking compliance with the licence and distribution agreements concluded in 2016. The decision under appeal (CA Bordeaux, 28 November 2023, No. 23/02835) held that those two contracts had not been transferred, that they were not enforceable against the acquirer and that the latter had incurred no contractual liability. The commercial chamber sets out the applicable rule (free translation):

The sale of business assets which includes the transfer of ownership of rights in trade marks does not entail, absent a contrary stipulation in the sale deed, the transfer of the selective distribution agreement for products bearing those trade marks, nor, where that agreement and a licence to use the said trade marks are indivisible, the transfer of that licence.

The commercial chamber notes three findings made by the lower court judges. The selective distribution agreement had not been transferred automatically with the business assets. The parties had expressly made that agreement and the licence an indivisible whole. The contracts did not appear among the intangible assets described in the information document brought to the attention of the last transferee. The court of appeal had thus shown that the transferee had not consented to the transfer of the selective distribution agreement.

What the acquirer of the trade marks owes the licensee

The licensed distributor cannot require the new owner of the trade marks either to deliver the products or to maintain its right of use, since that owner has not taken over the contract. The purchase of the trade marks transfers an industrial property right, not the contractual relationships entered into by the previous owner. An acquirer who has not taken over the distribution agreement cannot therefore be criticised for a failure to supply or for wrongfully terminating that contract.

The appeal argued that a trade mark licence is akin to a lease and necessarily follows the trade mark that is sold, the new owner being required to guarantee the licensee quiet enjoyment of the sign. The commercial chamber does not accept that reasoning. The licence is not treated as an accessory automatically transferred with the right of ownership in the trade mark. For the distributor, the consequence is direct: the continuity of its network depends on what the acquirer accepted, not on what it acquired.

What scope for trade mark licences in distribution networks?

The solution confirms that a selective distribution agreement does not pass automatically and extends that rule to the trade mark licence which is indivisible from it. Indivisibility stipulated between two contracts does not operate as a vehicle for transfer. It has the opposite effect: because the distribution agreement is not transferred, neither is the licence linked to it. The decision, which is to be published, settles this interplay between contractual indivisibility and the sale of assets.

The decision under appeal recalls that a juge-commissaire (judge overseeing insolvency proceedings) had held, to the contrary, that the acquisition of the trade marks had transferred the licence as an accessory of the assets sold. The lower court judges rejected that analysis, since there was no res judicata as to the principle of the transfer. The point was therefore debated before the decision under discussion: it is no longer debated in the same terms in the state of the case law as at 18 February 2026.

One question remains outside the scope of the solution. The court of appeal had also noted that the licence had been concluded in consideration of the person of the distributor. The commercial chamber sets that reasoning aside as superfluous and therefore does not rule on the scope of intuitu personae in this type of transfer. The reservation for a contrary stipulation remains intact: the parties to the sale may always expressly agree to transfer the contracts.

Which clauses protect the distributor in a takeover?

The distributor retains its rights only if the deed selling the business assets expressly covers the ongoing contracts, or if the acquirer separately consents to them. The decision highlights the decisive role of the documents describing the transaction. The lower court judges found in particular that the disputed contracts did not appear in the information document given to the last transferee. What is not described within the perimeter of the assets sold has little chance of being held to have been taken over.

Two reflexes emerge for distribution networks. On the supplier's and the acquirer's side, the perimeter of the sale should list the contracts being continued, trade mark by trade mark and contract by contract. On the distributor's side, the indivisibility clause deserves a clear-eyed review: tied to a distribution agreement that does not pass automatically, it weakens the licence instead of protecting it. A written undertaking from the acquirer remains the only tangible security.

Points to check before acquiring trade marks

• Check that the deed selling the business assets expressly lists the licence and distribution agreements being continued.
• Review the description of the assets made available to prospective acquirers: contracts absent from that description are not deemed to be taken over.
• Assess the effect of an indivisibility clause between the licence and the distribution agreement before stipulating it.
• Obtain the acquirer's written agreement to continue the relationship, rather than relying on the transfer of ownership of the trade marks.
• If deliveries stop, gather the documents establishing who holds the contract relied on and on what basis.