When you incorporate a business, one of the most important yet often overlooked considerations is how intellectual property (IP) should be owned and managed. Whether you're filing a patent or registering a trademark, it matters who holds the rights—especially as your business grows.
Patents: Who Owns Them and How?
By default, a patent is filed in the name of the individual inventor. This is true regardless of whether the inventor has incorporated or is operating as a sole proprietor.
If you have incorporated and you are the sole owner of the corporation, you can choose to keep the patent in your own name. However, if you intend for the company to own the patent—especially in the case of multiple stakeholders—you will need to assign the rights to the corporation. This is done through a formal assignment document that is filed with the United States Patent and Trademark Office (USPTO).
This process makes the transfer official and ensures that the patent is treated as a company asset. It is a common and accepted practice in both small startups and large corporations.
Patent Valuation
Patent valuation typically happens after the patent has been granted. Before issuance, the claims—the part of the patent that defines what it actually protects—are not finalized, making early valuation difficult.
There are firms that specialize in valuing intellectual property, but most will wait until the final claims have been approved. While the valuation process may seem complex or even subjective, these firms rely on legal, technical, and financial criteria to assess the value of a patent.
Trademarks: Personal or Corporate Ownership
Trademarks can be owned by either an individual or a legal entity, such as a corporation or LLC. The choice often depends on how the business is structured and how the brand is intended to be used.
For individuals operating as sole proprietors, it may make sense to register the trademark in their own name. In other cases—especially if there are plans for licensing, investment, or eventual sale of the business—it is advisable to register the trademark under the company's name.
Unlike copyright, where the duration of protection can differ based on whether the work is owned by an individual or a company, trademark protection follows the same timeline regardless of ownership. Trademarks can be renewed indefinitely, as long as they are actively used in commerce and renewal requirements are met.
Summary
Understanding how intellectual property ownership works is an essential part of building a strong legal foundation for your business. Whether owned by you personally or assigned to your company, the way you manage patents and trademarks today can affect your business’s value, legal protection, and flexibility in the future.