IP carve out agreement for business sale transactions

You usually need a separate IP carve out agreement when the sale documents do not deal clearly enough with intellectual property the seller is keeping. This often comes up where the seller retains a brand, software, source code, content, data sets, know-how, or product materials that are still connected to the business being sold. A standalone agreement can spell out exactly what is excluded, whether the buyer gets any licence or temporary access, and what restrictions apply after completion. That extra detail is especially useful where the retained IP is operationally important or customer-facing.

An IP carve out agreement usually identifies the excluded IP in detail and sets out who can use it after settlement, on what terms, and for how long. It may cover ownership, licences, access to systems or files, confidentiality, restrictions on copying or modification, and treatment of customer-facing materials that include the retained IP. Where the IP is embedded in the business assets, the document may also deal with separation steps, handover obligations, and transitional use. If third-party rights or consents are relevant, those issues should also be addressed before completion.

The drafting depends on the type of IP involved and how closely it is tied to the assets being sold. We usually need details about current ownership, any existing licences, whether contractors or developers contributed to the IP, and whether the buyer needs ongoing access after completion. It also matters whether the carve out involves software, branding, databases, designs, manuals, or confidential processes, because each raises different risks. If rights sit across more than one jurisdiction or depend on third-party approvals, Where an external authority is involved, we will help you understand what may be needed for your situation..

A template is often too blunt for an IP carve out because the real issues sit in the detail. Generic wording may say certain IP is excluded, but leave uncertainty around versions, source files, derivative works, access credentials, updates, or whether the buyer can keep using related materials after settlement. That can create commercial friction if the retained IP is needed to keep the business operating or servicing customers. A tailored agreement is usually more practical where the parties need clear boundaries on ownership, licence rights, transition support, and what must be separated before or after completion.

Timing depends on how clear the commercial deal already is and how complicated the retained IP position is. A straightforward carve out can progress quickly once we have the sale terms, a description of the excluded IP, and any proposed licence or transition arrangements. It may take longer where ownership is unclear, third-party licences are involved, or the IP is mixed with assets being transferred. The practical next step is to provide the draft sale documents and a list of the IP being retained, so the agreement can be prepared or marked up with the key risk points identified.

Just submit an enquiry via this page or click the 'get started' button on our website to submit an enquiry. After you've submitted an enquiry, one of our legal consultants will review your enquiry within 1 business day and get in touch to get a better idea of exactly what you are looking for.

Then your legal consultant will send through an email with a bit more information about the services you need, along with a fixed fee quote setting out costs, scope of the service and timing. Have a read through it, and if you're happy with the scope, you can accept and sign our engagement letter online - easy!

Once you've formally accepted, we'll connect you with a specialist lawyer and they will work with you to complete your project. They will contact you by email or phone if they need to get in touch.

Sprintlaw works on fixed-fee pricing wherever possible, so you can review the scope and cost before you decide whether to proceed. For the IP Carve Out Agreement service, pricing starts from $900.00.

After you enquire, a legal consultant will confirm what is included, the expected timing and whether any extra work is needed before you engage us.

We operate completely online, which means we can help you wherever you are in New Zealand. We have office spaces in Sydney, and in Melbourne, but our use of technology allows our team members to work remotely from around the world. Our legal team are mostly based in Sydney, Melbourne, Brisbane and Perth. We also have a London office for Sprintlaw UK.

Our legal team is made up of experienced lawyers, who are specialists in various areas of law and hold an Australian legal practising certificate. None of our Sprintlaw lawyers are New Zealand qualified lawyers and they do not currently hold a New Zealand practising certificate.

They provide legal services working remotely from Australia via our 'legal consultancy' model, through which (under section 6 and section 35 of the New Zealand Lawyers and Conveyancers Act 2006) our Australian legal team are permitted to provide legal services to New Zealand businesses provided they do not provide services in certain 'reserved' areas of law. You can read our FAQ page to learn a bit more about our 'legal consultancy' model.

Given the strong similarities between Australian and New Zealand law, and the areas of law in which we practice (being small business and startup law), we do not view the fact that our lawyers have not qualified in New Zealand as having any substantive impact on the quality of our service. We are committed to ensuring that we provide high quality, affordable legal services to all our New Zealand clients.

Our legal team have all trained at leading firms, but have left the traditional corporate law world to join us on our mission to create a new and better way of delivering legal services. They have specialist expertise in technology law, intellectual property law, contract drafting and review, corporate law and commercial law.