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Shell company patent ownership under threat as USPTO pushes for greater transparency

In his last major speech before announcing his decision to step down as Director of the USPTO, David Kappos highlighted the importance of transparency when it comes to the ownership of patents:

At the heart of a well-functioning innovation environment is accurate information about who owns what assets, so that license rights can be confirmed or sought, and unproductive effort simply avoided. By analogy, if you want to build a house on a piece of land, you check property records to determine who owns the land, so you know who to contact about purchasing or leasing the land. Of course, the same goes, in theory, for patent properties. But in our current environment, it can be a real challenge for those who find themselves facing a possible infringement suit to determine the owner of the patent they may be infringing… The completeness of the patent record, including ownership, is essential to a functioning innovation market. Transparent and accurate markets attract investment, and repel gaming. It’s time for the patent system to man up.

On 26th November, it was announced that the office would be holding a workshop in January 2013 on “Proposed Requirements for Recordation of Real-Party-in-Interest Information Throughout Application Pendency and Patent Term”.

Two proposals for defining what real party in interest information should be submitted by patent owners will be discussed during the workshop: the identity of the parties that have the legal rights to enforce the patents; and the identity of what is termed the “Ultimate Patent Entity”, that is an entity which is not controlled by another one. Either option could make it much harder, if not impossible, for the ultimate owner of a patent to, say, hide who it is through the use of shell companies.

The information would be collected by the office when an application is filed, prior to publication, prior to issuance and when a maintenance fee payment is made. It would apply to applications filed on or after 16th March 2013. This may have a pretty significant impact on the patent transactions market in the US over the medium to long term, and on patent management strategies generally.


Joff Wild
IAM Magazine
03 December 2012

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IP management, IP politics, Patents, IP business

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