Written by Thomas Staveley | February 28, 2023
A limited company is a separate legal entity and therefore can be the proprietor of a intellectual property rights, meaning it can license it to third parties, assign it to third parties etc. From a liability perspective, this can be beneficial for directors of limited companies, however it is always important to remember that if you intend to voluntarily dissolve a company, you need to deal with any intellectual property rights beforehand. The same goes if a company goes into liquidation, however it is likely that any liquidators will try and sell the intellectual property rights given they can be valuable assets to creditors, therefore this article will focus on a company which is voluntarily dissolved.
It would always be advisable, prior to dissolving your company to assign any intellectual property rights back to you personally. This can be done via an agreement. We will focus on a trade mark in this instance.
In the event that you do not deal with the assignment of a trade mark from the company to you personally and you intend to continue to trade using the trade mark owned by the company, once any dissolution has taken affect, all rights will pass to the Crown. Meaning the Crown owns the rights to the trade mark not you. You cannot then rely on your trade mark for protection or enforcement. This can be extremely detrimental to you, as it is not a simple solution to have the rights assigned back to you from the Crown. The options you have are:
If a third party also decides to request the Bona Vacantia Department assign the trade mark to them, the Bona Vacantia Department is objective and will not take into account that your company was the previous owner. Therefore, in the event multiple parties are wishing to assign the trade mark, the Bona Vacantia Department is likely to engage the parties in a bidding war process. This can take the power away from you as any third party may use your vulnerability and need for the trade mark, as a way to push up the price paid.
Both options incur costs and as a result of a simple administrative error, you may find yourself incurring a lot of money. It is extremely important that if you intend to dissolve your company but intend to continue to trade and make use of any intellectual property rights, that you have these dealt with prior to any dissolution.
Written by Thomas Staveley – Solicitor
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