NEWS : ILCT IP Team shared insight on IP assets management when a business is on the verge of closing down

ILCT IP Team shared insight on IP assets management when a business is on the verge of closing down

Ratinuch Kawnachaimongkol, our Intellectual Property Practice partner shared her insight with AsiaIP on how to manage a Company’s IP assets once a threat of closing looms.

Key takeaways are as follow:

In Thailand, there is no specific law that addresses this situation. However, some IP laws have provisions regarding the status of an IP right after the shutdown. For example, the country’s trademark law states that if the owner of a registered trademark ceases to have its office or address or its company is dissolved in Thailand, its trademark registration may be cancelled by the Trademark Registrar pursuant to Section 59 of the Thai Trademark Act.
Thus, before the closure of a company, it is advisable to complete the assignment of the IP to a particular person while the company directors are still authorized to do so in the name of the company.

Can the company owners/founders license or transfer ownership of the IP to themselves?

As the company and directors/shareholders are viewed as different legal entities, the company as the IP owner may license or assign the IP to its directors/shareholders as long as the applicable law is complied with.

Should IP be sold before or after the shutdown?

Selling and assignment of IP prior to the shutdown also helps to avoid complications arising from the closure of a company.

Can the developer of a technology who was an employee of the company, continue to work on that technology on his own after the company folds up (say, he forms his own company and continues to work on the technology for his own firm)?

In the absence of an agreement containing such clauses, the patented invention is owned by the company or employer.
Under this circumstance, to enable the original developer of the technology or employee in this case to use such invention on his own after the shutdown without infringing any IP rights of the employer, the said patented invention must be assigned from the company to its employee before the shutdown. The developer can also sell his patented technology to another person.

Does the same hold true for trade secrets? For example, can a member of a restaurant’s kitchen staff who developed a secret recipe for the restaurant, use the same recipe when the business closes and he decides to open his own food venture?

The owner of a trade secret is a person who discovers, invents, complies or creates trade information that is eligible for protection as a trade secret under Section 3 of the Thai Trade Secret Act. In the absence of the agreement providing otherwise, the developer of a trade secret could, therefore, be regarded as the owner of a trade secret who can continue using the same after the closure of his previous employer’s shop.