IPR in Bona Vacantia: Intellectual property and legal insights

Bona vacantia, which translates as ‘vacant goods’, is the term used when, on its dissolution, a UK company’s assets pass to the Crown. It is a similar legal process to when an individual dies intestate with no heirs to their estate. The assets are deemed ownerless and are automatically deemed to transfer to the Crown, managed by the Bona Vacantia Division of the Government Legal Department (BVD). For a business, these assets can include potentially valuable intellectual property rights (IPR), such as trade marks, patents and designs.

As a firm, we most commonly advise on bona vacantia where a business has been acquired or restructured but its IPR were not successfully assigned as part of the transaction and/or relevant registers have not been updated to complete the transfer of ownership. To recover its assets, the rightful owner must petition the BVD and submit a request to repurchase the assets. This process is neither cheap nor straightforward. The petitioner must pay open market value and, for UK trade marks and patents, a minimum price per asset of £1,000 plus costs of £300 plus VAT applies. The buyer must also submit full details of its interest and the background before the BVD will determine whether to sell. There is no guarantee that the assets will be recovered.

If you are planning to dissolve a company, whether as part of a business sale or corporate restructure, it is therefore essential to ensure IPR are appropriately sold or transferred to a new owner before dissolution. For purchasers or acquiring parties, undertaking thorough due diligence to identify all relevant IPR owned or used by the business and establishing its current registration status prior to purchase or restructuring is the first step to protecting your interest (and can save you thousands of pounds in the long run). Once the extent of the IPR is clear, assignment documentation should be executed in good time before the company is dissolved and, in the case of registered rights, the change of ownership notified to the relevant registry.