On The Quality Of Intellectual Property Rights

The pledge right of intellectual property, also called pledge right of chose in action, refers to the debtor of the third party use the transferable intellectual property as the security of debt according to the laws, and establish pledge. When the debtor cannot fulfill obligation on time, the creditor can sell on discount or by auction the intellectual property and has the priority to receive compensation. In short, it is the right established with the intellectual property as the subject-matter. With the approaching of the era of knowledge economy, intellectual property is becoming more and more important. The use of intellectual property to establish pledge right as financial assurance will obtain widespread application.The pledge right of intellectual property is one kind of pledge rights, it thus has the characteristics of property right, mortgage, subordinacy, and priority of payment, which are held by normal pledge right. Because the subject-matter of intellectual property is a kind of chose in action, it therefore has some features different from other rights and duties in its object, way of establishing, and way of realization.Intellectual property is the unity of property right and personal right, among which the personal right cannot be pledged due to the fact that it has no security value. Only property right can be pledged. The Law of Guarantees formulates that pledge right of intellectual property the guarantee of pledge right in its narrow sense, that is, it formulates only the pledge right of intellectual property with regard to patent right, trademarks, andcopyright. Virtually, intellectual property, in its broad sense, includes business name, business secret, designing of integrated circuit, and vicinity right, etc. They all have the nature of property, so pledge right can be established in terms of these rights.Pledge right of intellectual property is established according to the act of pledge. According to the 79"' article of the Law of Guarantees of China, when exclusive right of trademarks, patent right, and copyright are pledged, a written contract should be signed and registered in the administrative authorities. The contract takes effect at the day it is registered. So the establishing of pledge right entails first the signing of a written contract, and secondly the registration of the pledge in administrative authorities. But if a written contract was not signed, the pledge does not necessarily have no effects. It is effective under conditions conforming to law. The registration is the establishing act and the necessary condition of pledge right. The current Law of Guarantees confuses the taking effect of pledge contract with the establishment of pledge right by staling that the pledge contract takes effect from the day it is registered. This should be improved in law-making later. Though the establishing of pledge right is similar to that of mortgage. But we do not call the latter mortgage right of intellectual property because the subject-matter of pledge right belongs to right over movables instead of real estate. It is worth noting that when the pledge right of intellectual property is established, we should make assessment on intellectual property, which plays an important role in reducing the creditor's risk of guarantee. Therefore, our country should have a comprehensive system of assessing laws.After the establishment of intellectual property right, it thenhas impacts on the obligatory right guaranteed, the subject-matter, and both parties. The pledge right of intellectual property has the same effect on obligatory right and subject-matter as pledge right of movables. The effect of it on the pledgee, that is, the rights and duties of the pledgee includes the priority of receiving payment, the right to receive interests, preservation of pledge right, lien certificate, etc. and the duties that he should not use and treat the objects of intellectual property, that lie safeguard the certificates of right, and t...