Q&As

Can a customer list/customer contracts be sold other than through an asset purchase agreement?

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Published on LexisPSL on 27/11/2020

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • Can a customer list/customer contracts be sold other than through an asset purchase agreement?
  • Personal data
  • Confidential information

Can a customer list/customer contracts be sold other than through an asset purchase agreement?

There are no general property rights in data. There is an exception, however, where the data is capable of attracting copyright or database right protection. The provisions of the Copyright, Designs and Patents Act 1988 (CDPA 1988) that deal with rights in copyright works apply in relation to database rights and databases as they do to copyright and copyright works, meaning that database rights are transmissible by assignment, testamentary disposition or the operation of law (Copyright and Rights in Databases Regulations 1997, SI 1997/3032, reg 23 and CDPA 1988, s 90(1)).

An assignment transfers ownership of copyright or database right from one entity to another, so that the assignor is no longer the owner of it and therefore cannot use that right in the database unless the assignee grants a licence back to the assignor.

An assignment of database rights:

  1. must be in writing

  2. must be signed by or on behalf of the assignor

  3. may be total or partial

  4. may include prospective rights which will or may come into existence in the future, either on the creation of a future work or class of works or on the occurrence of a future event

For further detail on the format and wording of the assignment, see Practice Notes: Selling or licensing a database and Transferring

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