Often, the crown jewels of a business are the intangible assets in the form of intellectual property. For those unfamiliar with intellectual property (IP), the phrase refers to a number of intangible rights that flow from the creativity and innovation of individuals and businesses. The rights are vital for the economic growth of a business and ongoing innovation and include patents, trade marks, designs, copyright, database rights, confidential information and know how.

A failure to appreciate the value of IP rights can lead to them being lost inadvertently or used in a manner which does not maximise their value. IP rights cannot only be sold to release funds but can also be licensed out to third parties or used as security to raise finance for a business.

The value of IP rights, and particularly trade marks, was highlighted when dress designer Elizabeth Emanuel, who was renowned for designing the Princess of Wales’ wedding dress in 1981, lost ownership of her trade marks after selling her business. The designer had traded under, and by reference to, the “Elizabeth Emanuel” name and a distinctive logo. Both were registered UK trade marks and the marks became vested in a separate company for whom Ms Emanuel was an employee. Having since left that company, the rights in the Elizabeth Emanuel name are now in dispute.

An example of where a trade mark has been retained and licensed, rather than being sold, involves the use of the “Rolls-Royce” trade mark for motor cars. In 1998, when car manufacturer Volkswagen bought the rights to manufacture the well known Rolls-Royce and Bentley cars, the company did not acquire the right to use the Rolls-Royce name, which remained with British aero-engineering group Rolls-Royce plc. Rival car manufacturer BMW acquired a licence to use the Rolls-Royce name, which allowed them to build their own car and affix the Rolls-Royce trade mark, leaving VW unable to use the mark.

More recently, the issue of IP rights has been highlighted following the apparent collapse of a proposed joint venture for car production between Birmingham based MG Rover and the Shanghai Automotive Industry Corporation (SAIC). The IP belonging to MG Rover should be of significant value but it appears that the company may not have full ownership of the rights.

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