Issues of Presenting Patents as Intellectual Shares in the Capital of Joint-Stock Companies

Abstract

 Patents face a set of issues when presented as shares in the capital of a joint-stock company, considering that the contribution of shares by partners is one of the essential elements for establishing the company. The Iraqi Companies Law stipulates the contribution of what is called intangible assets from intellectual property rights (such as patents) in the capital of joint-stock companies, restricting their contribution to the founders during the company's establishment phase. Thus, the legislator considers the contributor's status similar to that of a founding partner, compared to the contribution of tangible assets such as real estate and movable properties. Taking into account the specific nature of intellectual shares as components of the company's capital, the Iraqi legislator's regulation of the provisions for presenting patents is inadequate and has numerous issues, some of them relate to the use of a term that refers to the contribution process, in addition to the problem of the method of presenting such shares and the required formality. Through this research, we have reached to a series of recommendations regarding the issues accompanying the presentation of patents as intellectual shares in the capital of joint-stock companies including adding a provision addressing the specific rules for presenting intellectual and in-kind shares, not limiting such contributions to the founders at the time of establishing the company.

Keywords: Intellectual shares, contribution of shares, patent, capital of joint-stock companies