Research On The Legal Risk Of Intellectual Property Investment

Nowadays,there are four forms of business organization in China,includingsingle-proprietorships,partnerships,limited liability companies and joint stockcompanines.In these forms,investors using intellectual property as the object ofcontribution to establish a new business organization are not prohibited by the law andregulation.Intellectual property Investment has become an important part of enterprisecapital and a key of increasing enterprise value.With the purpose of suggesting how to avert legal risks of intellectual propertyinvestment,this paper expounds on the development history of Chinese and foreignintellectual property investment and the evolution of legislation,and then, based oninvestment practices,concludes that there are six kinds of law risks using intellectualproperty investments,what are risks about not criterion availability of the investor andthe object of intellectual property contribution, ownership defects,improper evaluationof contributions, impacting enterprise sustainability and imbalance of enterprisecapital.Finally,this paper, through the comparison of Chinese and foreign legal systemon intellectual property investment,gives the following legal advices to avert risks ofintellectual property investment:I Analysing on nature of enterprises and development stages of industry,enterpriseand investors can avert law risks by concluding contracts including every possibleintellectual property investment risk according to law. This method can avert most oflegal risk.II The following legal risks of intellectual property investment should be legislated:a.To allow perspons without or with limited capacity for civil conduct to establishas a limited liability partner partnerships.b.In addition to the partnership enterprise,under China’s law,it is not prohibited thata perspon without or with limited capacity for civil conduct invest a new enterprise,notincluding single-proprietorships,using his own intellectual property.If a companyaccepts an investor without or with limited capacity for civil conduc,the rights ofshareholders should be performed by investor’s legal agent according to law.Therefore,The legal agent system should be fined..c.A perspon without or with limited capacity for civil conduct suffers from his legal agent’sbehavior, the statute of limitations should be run when he has full capacity for civil conduct. d.To legislate the capital verification system to solve the ambivalence between current legalrules and practices formed by CPA enforcing capital checking service according to the CPA AuditingStandards No.1602.At the end of this paper,establishing litigation database of intellectual property investment toavert legal risks dynamically shoulg be advised.