How to deal with IPRs when a company is going to be dissolved?
There are several companies applied for dissolution everyday. However, compared with tangible assets, such as real estate, equipment and etc., many companies have ignored IPRs, such as trademarks, patent and etc.. If IPRs have not been arranged well and timely, companies or their shareholders might encounter troubles or miss good business opportunities.
Therefore, if a company plans to submit the dissolution application, it shall settle IPRs in advance, such as transferring IPRs to another party, and handling the application for change in a timely manner. It should be noted that when transferring trademarks, similar trademarks registered on the same commodity, and the same or similar trademarks registered on similar commodities should be better to be transferred together.
In practice, when dealing with IPRs during the dissolution procedure of a company, there are some special circumstances, which require corresponding measures case by case.
The first special circumstance is about the jointly owned IPRs. For example, Company A and Company B jointly owned a patent. Company A planned to apply for a dissolutuion, then it should discuss with Company B on the settlement of the patent. Normally, such IPRs would be transferred to other existed co-owners. However, if relevant parties have agreed on the settlement of the patent in advance, or the co-owners agreed other settlement after a party plans to apply for a dissolutuion, then the relevant IPRs could be settled accordingly, such as IPRs could be transferred to a third party, and the application for change should be conducted in a timely manner. In the above example, if Company A has completed the cancellation registration procedures, and Company B knows afterwards, then the settlement of the patent shall be
The second special circumstance is about the jointly owned technology which is in the process of applying for a patent. If a co-owner plans to apply for a dissolutuion, then what can other co-owners do? The Patent Office would not voluntarily require applicants to make changes for such circumstance. In principle, if the Patent Office does not require the planned to be dissolved co-owner to participate in a response process, or furtherly require such co-owner to submit more subject certificates, then the final patent certificate would show the title of all applicants, and such certificate is valid. However, such settlement is not a good choice, for example, if the existed co-owners plan to license or transfer the relevant patent in the future, and the cancelled co-owners could not deal with the relevant procedures, then such license or transaction might be deemed invalid. In order to avoid such troubles, it is recommended to apply for changing the planned to be dissolved co-owner’s title into other co-owners’ title or other agreed third party’s title timely. Under such circumstance, the Patent Office would require the applicants to submit the relevant transaction agreement. If such process of change has been accomplished before the patent certificate is issued, then the front of the certificate would show the information after the change, but the back of the certificate would still show the information filled in on the day of the application, which means the title of the planned to be dissolved co-owner would be shown on the back of the certificate. If such process of change is accomplished after the patent certificate has been issued, then the front and back of the certificate would show the information filled in on the day of the application, and the Patent Office would issue a notice of the change, and such notice should be used jointly with the certificate on proving the ownership of the patent. Similarly, if the aforesaid patent is a trademark, it is also recommended to conduct the process of change timely.
May be you still wondering about is there any remedy measures after a right owner has accomplished the cancellation registration?
Regarding the trademarks, Article32 of the “Regulations for the Implementation of the Trademark Law” prescribes the migration system of exclusive rights to use a registered trademark, which says “In the event of migration of exclusive rights to use a registered trademark due to succession etc. other than transfer, the party concerned which accepts the exclusive rights to use the said registered trademark shall present he relevant proof documents or legal documents to complete the formalities for migration of exclusive rights to use registered trademark with the Trademark Office.” Regarding the copyright, Article 21 of the “Copyright Law” stipulates that in the event of termination of a legal person which owns the copyright of a work, during the period of protection stipulated in this Law, the rights of copy, distribution, information network transmission and etc., shall be owned by a legal person or an unincorporated organization which succeeds the rights and obligations; where there is no legal person or unincorporated organization which succeeds the rights and obligations, the copyright shall belong to the State. Regarding the patent, since the “Patent Law” has not explained this circumstance, the parties could submit the relevant documents to the Patent Office, and ask for a further guidance.
In the end, it is highly recommended for companies to agree on the ownership, the right of application, the subsequent licensing and transfer and etc., with the counterparties in business cooperation or an entrusted R&D. Because such agreements could reduce the potential risks, and could be conductive to the dissolution of the owner of relevant IPRs.