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What Happens to Intellectual Property (IP) Rights When a Company Becomes Insolvent?


What Happens to Intellectual Property (IP) Rights When a Company Becomes Insolvent?

In the challenging landscape of corporate insolvency, understanding the fate of Intellectual Property (IP) rights is crucial for both creditors and company stakeholders. As a reputable UK-based insolvency practitioner, we are here to shed light on the intricate aspects of what happens to Intellectual Property when a company faces insolvency.


The Importance of Intellectual Property


Intellectual Property encompasses a range of intangible assets that contribute significantly to a company’s value. These assets can include trademarks, patents, copyrights, and trade secrets. Companies invest time, resources, and creativity in developing their intellectual property, making it a valuable aspect of their overall worth.


The Impact of Insolvency on Intellectual Property


When a UK company becomes insolvent, the fate of its Intellectual Property rights is subject to legal processes and creditor interests. The primary objective of insolvency proceedings is to maximise the return to creditors, and this can involve the realisation or sale of the company’s assets, including IP.


1. Identifying and Valuing Intellectual Property:


During insolvency, the appointed insolvency practitioner plays a pivotal role in identifying and valuing the company’s intellectual property. This involves a comprehensive assessment of the various IP assets owned by the company.


2. Sale of Intellectual Property:


In some cases, the sale of Intellectual Property might be a viable option to generate funds for creditors. This could involve selling patents, trademarks, or other IP assets, either as part of the overall business or as individual entities.


3. License Agreements:


Another avenue is the licensing of Intellectual Property. The insolvency process may allow the IP to be licensed to third parties, enabling the company to generate revenue and continue operations.


4. Retaining Intellectual Property for Restructuring:


In certain scenarios, the insolvency process might involve restructuring the company, and retaining key intellectual property assets could be crucial for a successful turnaround.


5. Secured Creditors and Intellectual Property:


Secured creditors, who have a legal charge over specific assets, may have a significant influence on the fate of Intellectual Property. Their interests need to be considered when determining the future of these assets.




Navigating the complexities of Intellectual Property rights during insolvency requires expertise and a nuanced understanding of both legal frameworks and business considerations. As a leading UK-based insolvency practitioner, we strive to guide companies and stakeholders through these challenging times, ensuring the most favourable outcomes for all parties involved.

For tailored advice on your specific situation or to discuss the insolvency process further, please do not hesitate to contact our expert team on 020 7769 6831, or email help@voscap.co.uk.

About Voscap Ltd

Voscap’s primary objective is to save your business! Our team of experts’ knowledge in restructuring and turnaround assignments is invaluable when assessing the best option available to your needs. With experience spanning several decades, we have the skill and resources to provide viable solutions within all industry sectors. All organisations go through difficult times and we are here to help. From small to multi-million turnover businesses, we have dealt with the most complex of cases. We offer an initial free assessment in analysing your financial position and providing clear and precise advice making your experience a simple non-complicated process. Get in touch →

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