Patent Capitalized Legal Thinking

Patent capital is another economic law phenomena in relative to technology commercialization in a narrow sense. It is a dynamic process where intellectual properties are changed into the form of share holding. In this paper,the concept of patent capitalization refers to the process in which patent owner contribute his/her patent as investment identical to monetary investment. In this process,patent owner would not receive equivalent cash in return to his patent contribution,but acquire some of the shares of entity. At the same time,the patent owner will not lose the ownership of patent completely. The patent owner may share the ownership of the entity as a shareholder or partner. To do this,the patent owner has two optional approaches:1) Contributing patent as capital;2) Contribute patent license as capital. The result of this process is the hybrid of technology assets and financial assets among the many legal interrelations,where the productivity elements under the circumstance of intellectual economy are optimized.The fact that patents can function as assets for investment is based on the nature of patent being a right. Generally,the use of patent rights includes three aspects:1. Manufacture,sales,export and import of patented products;2. Trade under patent license;3. Investment activities with patent rights as capital.Carl Marx,in his book The Capital,describes the natures of capital as added value,being dynamic,values,competition,and rights. In the theory of manpower capital,the concept of intellectual industry delivers interpretation on capitalized patent rights from economic perspective. In Chinese laws,such as The Company Law,The Law for Enterprises with Sole Foreign Investment,The Law for Partnership Enterprises,The Law for Promoting Transfer of Technology,and the The Regulations on Promoting Transfer of Technology,have already provided legal basis.The capitalization of patent rights is not only a revolution of capital itself,but also an enrichment and development of patent right. A series of law issues arises in the process of patent right capitalization pertaining to reliability of patent technology,patent right evaluation,and protection of patent right,which must be analyzed deliberately.From the view of reliability of patent technologies,many patent technologies are just conceptual frames,and not necessarily a mature technology. Patent examining procedures and standards result in such an phenomena that a patent technology is not necessarily a state-of-the-art technology,because the review process of patent application determines that a patent may not be the latest achievement,and that patent technologies have their life time,i.e. time and regional restrictions.During the evaluation of patent rights,the legal factors that have influence on the value of patent rights are complicated. The patent that is under application is uncertain as whether it will be authorized or not. This is the most outstanding factor that has influences on its value. The evaluation process is divided into patent authorization stage,patent protectionvalidation,countries/regions where the authorization is given,and the delimited area where the patent right is applicable. All of these may have influence on the evaluation of patent rights. For instance,considering the time factor,the values of the rights to apply for patent,the right during patent application,and approved patent are incremental. The legal validation of invention patents are obviously longer than that of practical new patents,therefore the value is higher. For the same patent,its value decreases along the time path toward its expiration. Considering regional factors,the more "Patent families" a patent acquires,the higher its value would be. For the same "Patent families",the higher its marketability,the wider region it covers,consequently the value of the "Patent families" is higher.Patent protection is very important in the process of patent capitalization. The disputes on duty invention and non-duty invention are the highl...