We have come across a couple of instances lately where clients have been at risk of losing their patents, trademarks and/or registered designs as a result of company reorganisations. Ownership of IP rights is something that can get overlooked when winding up one company and transferring the business to another.
The danger that can arise is that, if a clear assignment of rights to the new company is not completed before the original proprietor company has been officially wound up, the rights may vest in the Crown as bona vacantia. In practical terms, that means that the rights are lost.
Sometimes companies have been wound up and the business continued in a new company, which ends up with the same name as the original company. It is not, however, the same legal entity. If the rights were not specifically transferred to the new company by a document signed by both parties, then the new company cannot record itself as owner.
Where a company becomes insolvent and is placed in the hands of a liquidator, the liquidator can sell the rights to another company, but of course can only do so while the original owner company still exists and the liquidator has power to act. We have seen sale documents that fail to identify the IP rights being transferred and therefore cannot be used to record the new owner as the proprietor of the rights. This can lead to the rights being forfeit.
Another situation that can result in rights being lost is where the rights are in the name of an individual who dies intestate or whose will does not make provision for transfer of the IP rights.
It is important to keep your patent and trademark attorneys in the loop when changes are occurring in the company structure for whatever reason, so that we can ensure that all rights are preserved. And don’t forget to tell us about changes in the company’s address!
If you are an individual owner of IP rights, consider making explicit provision in your will over who will own the rights (identify them, rather than just refer vaguely to “IP rights”).
For advice on any of these points, call us now on 01522 801111 and avoid problems in the future.