When a UK company is dissolved, any property it still holds at the point of dissolution becomes “bona vacantia” - a Latin term meaning "ownerless goods". This can include physical assets, bank accounts, and intellectual property rights such as trade marks, designs, copyright works and patents.
What happens to IP rights when a company is dissolved?
In the UK, any bona vacantia goods automatically become the property of the Crown. The Government Legal Department's Bona Vacantia Division (BVD) is then responsible for the management of these rights. In practice this means holding onto them until they lapse or are purchased by an interested third party e.g. someone with a similar design, patent or trade mark.
What is the process for acquiring bona vacantia rights?
Check the status: The first thing to do is to verify whether the IP rights in question are in fact bona vacantia. This can be done via the UK Intellectual Property Office (UKIPO) or directly through the Bona Vacantia Division.
Contact the BVD: Once confirmed, you can get in touch with the BVD to express your interest in acquiring the IP rights. You will need to provide various documents which show, amongst other things, the rights in question and evidence that the dissolved company owns the rights.
Negotiate a price: The BVD will typically assess the IP rights’ value based on several factors, including its market worth and remaining validity. For example, a single trade mark will be subject to a minimum price of £1k plus £300 per mark for the BVD’s official fees.
Payment and ownership transfer: Once a price is agreed and the IP right is assigned to you (without full title guarantee), you will need to record the transfer of the ownership yourself at the UKIPO.
Managing the IP right: After acquiring the IP rights, it’s crucial to manage it properly. This includes renewing it at the appropriate intervals and considering how to integrate it into your business. This is particularly important for trade marks which need to be used in the course of trade in order to remain valid.
Why purchase bona vacantia IP rights?
Acquiring a bona vacantia IP right, such as a trade mark or registered design, can be a great opportunity for businesses seeking to expand and strengthen their IP portfolio. It is especially useful if the trade mark has existing recognition or goodwill.
Before purchasing, you should thoroughly investigate the IP rights’ history, including any disputes or expired licences, to ensure it aligns with your business strategy. This is particularly important because the BVD does not give full title guarantee to the IP rights, any assignment will not provide the benefits of warranties as to the value, validity and infringement of the rights.
The need to purchase bona vacantia IP rights may also arise if a company was dissolved during a restructuring and the parent company was not aware of the intellectual property rights it owned when it was dissolved. However, in this case, if the company was dissolved within the past six years, it may be simpler to restore the dissolved company to the register, assign the rights out and then dissolve it again.
What’s next?
The process of acquiring bona vacantia rights may sound straightforward but it requires detailed due diligence and understanding of intellectual property rights. Remember, there is no guarantee that the BVD will sell the IP rights to you! If you’re interested in buying any IP rights in a dissolved company, please get in touch and we can help you navigate this process.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com
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