06/08/2024
It is important to conduct due diligence before entering into an agreement to ensure that your organisation is actually getting what it paid for. This is particularly true when it comes to intellectual property which can be more difficult to “see”, “touch” and “hold”.
Whilst it is an older case, Case No IV/M.1283- Volkswagen/Rolls-Royce/Cosworth is still very relevant and a good reminder of the importance of carefully reviewing IP ownership.
In 1998, Volkswagen purchased the assets of the Rolls-Royce Motor Cars Group for around £430 million. However, it was only after the deal was closed that Volkswagen became aware of the fact that the Rolls-Royce trademarks, most notably the name and badge, were not owned by Rolls- Royce Motor Cars, but rather by Rolls-Royce PLC, the aircraft engine arm of Rolls-Royce. Upon the conclusion of the sale, Volkswagen had acquired the assets and personnel of Rolls-Royce, including the classic shape of the car grilles but did not own the rights to the name “Rolls-Royce” nor the logo. Despite the amount spent, Volkswagen had acquired everything necessary to manufacture a Rolls-Royce, but could not legally call it a Rolls-Royce.
To make matters worse, Rolls-Royce PLC opted to license the brand and logo to BMW, who had been Volkswagen’s principal competition in bidding to purchase the motor-car arm of Rolls-Royce, for the sum of £40 million. BMW, too, was at the time the manufacturer of the engine for both Rolls-Royce and Bentley, the two brands that fell under the Rolls-Royce Motor Cars Group and threatened to cease supply of parts to Volkswagen. Eventually, the two German car manufacturers came to an agreement in which BMW would supply engines and the licence to use the name Rolls-Royce to Volkswagen for four years, after which time, they would become the sole manufacturer of anything under the Rolls-Royce name. Volkswagen, for their part, walked away with the Bentley name and logo.
In this case, Volkswagen failed to properly review the IP that would be associated with their acquisition, and as a result found themselves without the most valuable asset associated with Rolls-Royce – its branding.
It is vital for all organisations to properly review and consider intellectual property ownership.
Contact Griffin Legal’s team of IP law experts for further advice on how we can protect your interests.