Patent holding company

Patent holding companies are companies set up to administer, consolidate and license patents or otherwise enforce patent rights, such as through litigation. Many patent holding companies have been characterized pejoratively as patent trolls due to aggressive enforcement of their patent rights through litigation.

Rationale

Large companies

Large, multinational companies may have many separate divisions in different countries, or within the same country. If a patent is granted in the United States to a European-based arm of a multinational company, the U.S. arm of that same company cannot make use of the invention in the U.S. without infringing the patent. It is also legally dangerous to ignore any infringement of a patent even if that infringement is by an associate company since it might create a legal assumption that you are not intending to defend your patent rights.

Consequently, many multinationals set up a patent holding company in a tax-favourable country or U.S. state (e.g. Switzerland or Delaware) and then sell (i.e. transfer or assign) all of the patent rights for the company as a whole to that patent holding company. The patent holding company can then focus on the task of granting licences to the different divisions of the multi-national as well as to third parties.

Small companies

Similarly, it is not uncommon for numerous small companies to band together to consolidate their patents in order to better compete with a larger company. If these numerous small companies are potentially competitors, they may not trust each other to maintain independent ownership of the various patents. One solution is to set up a new patent holding company which can be jointly managed.

Inventors

Similarly, it is common for independent inventors with valuable technology patents to set up a technology-licensing company and to assign all the patents for their inventions to that company(Examples include NTP, Inc.; Townshend Intellectual Property, LLC and many others).

See also

* Patent pool
* Patent portfolio
* Patent thicket
* Patent troll


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Holding company — A holding company is a company that owns part, all, or a majority of other companies outstanding stock. It usually refers to a company which does not produce goods or services itself, rather its only purpose is owning shares of other companies.… …   Wikipedia

  • Patent troll — is a pejorative but questioned term used for a person or company who is a non practicing inventor, and buys and enforces patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or… …   Wikipedia

  • Patent pool — In patent law, a patent pool is a consortium of at least two companies agreeing to cross license patents relating to a particular technology. The creation of a patent pool can save patentees and licensees time and money, and, in case of blocking… …   Wikipedia

  • Patent portfolio — A patent portfolio is a collection of patents owned by a single entity, such as an individual or corporation. The patents may be related or unrelated. Patent applications may also be regarded as included in a patent portfolio. The monetary… …   Wikipedia

  • Patent thicket — A patent thicket is a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology. [ Carl Shapiro, [http://faculty.haas.berkeley.edu/shapiro/thicket.pdf… …   Wikipedia

  • Patent — A patent is a set of exclusive rights granted by a state to an inventor or his assignee for a fixed period of time in exchange for a disclosure of an invention.The procedure for granting patents, the requirements placed on the patentee and the… …   Wikipedia

  • Glossary of patent legal concepts — Patent law (patents for inventions) …   Wikipedia

  • List of patent related topics — This is a list of topics related to patents. See list of patent legal concepts for a list of articles on various legal aspects of patents, including special types of patents and patent applications. Organizations and patent offices : For more… …   Wikipedia

  • Catch and release (patent) — Catch and release in patent law refers to the practice of a patent holding company buying a patent, offering a license to its members and then selling or donating the patent after a certain period of time.… …   Wikipedia

  • Chicago Tunnel Company — Under the streets of Chicago, pre 1906. Locale Illinois Dates of operation 1906–1959 T …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.