IP Firms: Indispensable IP Legal Service to the Success of Patent Auction

2012/10/11,By Kevin Nie, China IP,[Patent]

In the final analysis, a patent auction is also a transfer process of legal rights, and a patent transfer process is inseparable from intellectual property legal work. As one of the undertakers of the patent auctions organized by China Technology Exchange (CTEX) and the only intellectual property legal service provider, Unitalen Attorneys at Law (Unitalen) provides IP legal support in the whole auction process. Its specific work can be broken down into following parts:
I. Preparation and legal verification for a patent auction listing. There are several legal risks in this part: the preliminary work for a patent auction lasts for several months, which means that if the patent tending for the auction does not pay the annual fee, the patent will become invalid by the time of final auction; if the candidate patent has been licensed or pledged, its patent right would be defective. Unitalen will warn the auction consignors of the abovementioned risks to ensure that they are minimized to the lowest level.
II. Drafting of patent documentation. Patent documentation equates to a product introduction and instruction of the breadth of the patent claim. Written in concise and clear legal language, the patent documentation will facilitate the decision making process for business managers so that they understand the patent content and assess its value within a short period of time. This will help potential bidders make quick decisions and participate in the auction. The quality of the patent documentation also determines the scope of patent rights in any future patent transactions. A patent with a well written instruction may gain higher market value and may be more likely to find a buyer because bidders are aware of what the patent covers.
III. Pre-invitation and invitation to the patent auction. Since foreign-related patents should be submitted to the Beijing Municipal Commission of Commerce for pre-examination on technology export before auction announcement, patent attorneys of Unitalen will remind the organizers and undertakers of related legal risks and suggest that the patent be subject to pre-examination before the auction invitation phase. Pre-examination is essential in order to determine whether the patent is eligible for transfer. If it is not eligible, an attempted sale would be a violation of relevant provisions of national technology export policies and the seller could not complete the patent transfer formalities by the end of the auction, which would give rise to liability for breach of contract.
IV. Press conference. Unitalen works closely with the auction undertakers and promotes the auction activities and coordinates activities to improve potential patent transfers.
V. Patent presentation. At the patent presentation meetings, Unitalen announces the due diligence investigation results on various legal statutes of patents and answers questions raised by bidding companies in detail. Many questions may be asked, such as: can the patent holder provide services on technology transformation? Has the candidate patent been licensed or pledged? Is there any patent related to standards? Is it possible to participate in the auction by phone? Will the patent transfer contract be standard form contract? Can contact terms be modified? Unitalen will address these questions.
VI. Preparation for patent auction files and patent announcements. Unitalen is responsible for drafting the patent transfer contracts and other legal documents signed by the two parities on the alterations in patent recordation items. The key point in this part of the process is that the patent auction is different from a traditional auction. An IP Legal Notice, which includes tips of annual patent fees, notice of patent pledge or license status and exemption of policy risks, should be added to the auction documents so that bidders can know in advance.
VII. Unitalen provides on-site IP legal advice for bidding companies and prepares legal documents for patent transfer. In this process, patent attorneys will emphasize “two re-examinations: the first is to re-examine the qualification of the signatory to prevent legal risk of invalid signature; the second is to re-examine the patent title to ensure that the patent titles in Patent Transfer Proof and that the patent transfer contracts are consistent with the patent title in the Patent Search and Service System of State Intellectual Property Office of the People’s Republic of China, which will help avoid unnecessary corrections in patent transfer.
VIII. Unitalen takes charge of signing related legal documents on patent transfer and handling patent transfer formalities after the auction. It also helps the transferee companies with an in-depth analysis on the patents and other follow-up work including consulting and cooperation in technology transformation.
(Translated by Li Guanqun)

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