How can you get back intellectual property from a bankrupt startup? I have written some software for an American startup that has since gone bankrupt. The intellectual property consists of: Software code Patents that have me listed as their inventor, but that, according to online patent registers, are still assigned to the now defunct company The company, having had investors, has apparently auctioned off all of its assets, including the intellectual property. I therefore have the following questions: How can I find out whom the intellectual property now belongs to? For the patent, is this possible through the patent office? If the assignee has not been changed in the patent register, is it possible to reassign the patent to myself, since the company has apparently neglected to do so? I would also be happy about other general advice for this situation. Can you just call the current owner and ask to buy the IP back? How does one go about that?
How can I find out whom the intellectual property now belongs to? For the patent, is this possible through the patent office? If it is a patent, the patent office; if it is a copyright, the copyright registrar. You could also look at the return from the auction in the bankruptcy court case file, which would control even if the patent office and copyright registrar records haven't yet been updated. You could also call the person who conducted the auction, or the lawyer who arranged for the auction, to ask. Often they would cooperate in telling you this information since a bankruptcy auction is, by definition, a public sale anyway, and cooperation might help them gain positive referrals from you in the future. If the assignee has not been changed in the patent register, is it possible to reassign the patent to myself, since the company has apparently neglected to do so? No. Doing this would be a form of fraud or embezzlement. The intellectual property became the property of the bankruptcy estate. If the bankruptcy estate is determined to have property not disposed of in the case, you would have to petition the bankruptcy court to have the remaining assets sold for the benefit of the creditors of the estate at fair market value. The Follow Up Questions I'm going to decline to answer the follow up question about how to arrange to purchase intellectual property from someone when you would like to own it, once you determine who the owner is. This is a more general question that applies to lots of circumstances and is as much a question of economics as law. There is an Ask Patents.SE forum, which might be a more appropriate place to ask that question.
Generally not. There is a notion in copyright law called the first-sale doctrine in which after a particular copy of a copyrighted work is legitimately sold, the purchaser can sell, lend, lease, give away, or otherwise dispose of the copy as he sees fit. Copyright does not give the copyright holder exclusive rights to authorize resales. See 17 U.S.C. § 109 for the relevant US law; in other countries the same principle is sometimes called exhaustion of rights. There are limits to the doctrine. In the US, it does not allow for for-profit software rental (for most software) or musical record rentals. Moreover, software companies noticed the part where the doctrine applies to a transfer of title (i.e. an actual sale). If you read a typical software EULA, it is generally quite explicit that the software was licensed to you instead of sold; this is why. Courts in the US have often enforced these provisions (particularly if the license imposes limits like "you can't resell it"); European courts have, as far as I know, been far less willing to accept that argument. However, as a general rule resale is specifically not forbidden by copyright.
Short Answer The kind of lawsuits you could end up being involved in simply from owning a copyright are similar to those you could end up being involved in for receiving shares of stock in a publicly held corporation that never actually pays any dividends - i.e. only those that are inherent in any kind of property ownership. There Would Be No Criminal Or Tort Liability If by "can I get in legal trouble just for the simple fact of owning these copyrights? . . . please give legal precedents where people have been somehow punished for just owning a copyright[.]" Normally, when you use the term "punished" you are thinking about criminal or tort liability. If, by "legal trouble", you mean can you have criminal liability or civil liability for wrongdoing in tort (i.e. for a civil wrong), the answer is that you probably can't get in "legal trouble." I can't think of any way that mere ownership of a copyright could give rise to that kind of liability in the way that you might have to be concerned if, for example, you owned real estate that wasn't maintained and caused an injury to someone. You Could Still End Up In A Lawsuit But if, by "legal trouble", you mean that you can't be legitimately made a party to, or involved in, a lawsuit that doesn't allege that you are personally at fault, the answer is that you probably can get in "legal trouble." I'll provide some examples, although not necessarily specific cases where these things have happened, because they are largely self-evident. Instead, I indicate what my personal experience as a lawyer has been with each kind of situation. For the most part, the legal principles involved would be general to pretty much any kind of property interest in anything and are not really specific to a copyright in particular. But, because it is a copyright rather than another kind of property, in the U.S. at least, the lawsuits would have to be brought in federal court, rather than in state court, in some of these cases, because the federal courts have exclusive jurisdiction over cases related to the validity, registration, and enforcement of copyrights. You could also be subjected to a subpoena because as a copyright owner you have access to, or might have access to, information that is relevant for some other lawsuit or criminal prosecution. The cases where you could get into a lawsuit basically fall into the following categories: Disputes Over Who Owns Or Should Own The Copyright Or A License To Use It The author leaves you the copyright in a Will, but the author's heirs are convinced that the author was mentally infirm and sue to have the Will invalidated. You have to be involved in the lawsuit because you were one of the beneficiaries of the allegedly invalid Will. (I've handled half a dozen Will contests). The Will could also be invalid because the author had a contract or divorce settlement requiring the author to leave the copyright to someone else and the author violated that contract. (I've handled a case with this fact pattern, although involving real estate rather than a copyright.) Unbeknownst to you, before the author's death, the author sold the copyrighted work to someone else and they sue you in a lawsuit intended to establish that they own it and not you. (I've handled cases similar to this involving water rights.) Unbeknownst to you, before the author's death, the author licensed the copyrighted work to someone else and they sue you in a lawsuit intended to establish that their license is still valid. (I've handled cases like this involving leases to real estate.) Unbeknownst to you, the author obtained the copyright for a work that was actually written by someone else (or for work that was done "for hire" while working for someone else whom they had agreed would own the copyright). As the current owner of the copyright you could be sued in an action to have the author's copyright invalidated. In a variant of this scenario, the author could have omitted a co-author of the work when filing for a copyright and the co-author could sue to be legally recognized as a co-author. (I am handling a lawsuit like that right now involving a copyright.) Suppose that the author got divorced shortly before death and didn't disclose the existence of the copyright in the divorce action. The author's ex-spouse could sue you to recover all or part of the copyright that might have been awarded to the ex-spouse in the divorce if the existence of this asset had not been concealed, perhaps under a legal theory known as "constructive trust" (which would mean that the legal fiction that you were holding this copyright in trust for the true legal owners of it to be determined in the future, as a result of the author's wrongful conduct, would be utilized). (I've represented a client in a divorce where this remedy was obtained by a party.) Suits To Gain Ownership Of The Copyright As Part Of Debt Collection Suppose that the author was subject to a tax lien before the author died for unpaid income taxes, and the author's estate does not pay off that tax lien in the probate proceeding in which you receive the copyright. The taxing authorities could sue you to enforce their tax lien to collect the author's unpaid taxes. (I've represented people in income tax lien cases, although never one where someone ended up dying before the collection could take place.) Another kind of taxes that could give rise to a tax lien on a copyright would be those arising as a consequence of the author's death. In the U.S., that would usually involve estate taxes. In Canada, this would often involve capital gains taxes on increases in the fair market value of the copyright that arose during the author's lifetime. (When I handle probate cases, I consider this possibility and have published a couple of articles on liens in probate cases.) Similarly, if the copyright were used as collateral for a loan that was unpaid at the author's death, the lender could sue to seize the copyright in partial payment of the loan. (I've handled cases like this involving real estate and ownership interests in companies.) Suppose that the copyright had genuine economic value and the author gave it to you at a time when the author was insolvent (i.e. had debts greater than the total value of the author's assets and the author was not paying the author's debts as they came due). A creditor of the estate could seek to set aside the transfer to you in what is known as a "fraudulent transfer" lawsuit in order to seize the copyright in order to collect a debt. (I've litigated fraudulent transfer lawsuits involving other kinds of intellectual property, although never a copyright.) Subpoenas You could end up being involved in some sort of "legal trouble" because you could be subpoenaed to provide information that you have as a result of being a copyright owner. Still, this is really no different from the risk you can have of being subpoenaed to provide information related to all many of things that you know about in your daily life that could be relevant to a court case, for example, knowledge you involuntarily obtain when you witness a car accident, or run a credit card transaction for someone that could provide the customer with an alibi in a murder case. (I issue subpoenas all the time in civil cases and routinely represent people who have received subpoenas.) In these situations, you could be required to provide records or show up to a deposition or trial to testify at a witness, with only minimal compensation, even though no one is trying to impose civil or criminal liability of any kind on you personally. Still, this legal obligation could be a significant economic burden to you that you can do nothing about but suck up and comply with. But, if you failed to respond to the subpoena, a warrant could issue for you arrest for contempt of court and you could be incarcerated or fined until you complied with the subpoena, and of course, if you lied while you were testifying (or at least, a prosecutor and judge believed that there was probable cause to believe that you were lying during your testimony), you could be prosecuted for perjury. Obviously, in these cases, the civil or criminal consequences would be due to your own personal misconduct in connection with a court case and not your ownership of the copyright itself, of course. For example, suppose that the author's son was getting divorced. He or his wife might subpoena you to produce records such as the copyright transfer document, to prove that the son didn't inherit that asset, to prove that it isn't an asset of the son in the divorce. (I've had cases where issues like this are litigated, although not yet involving a copyright.) As another example, suppose that the federal government suspected the author and daughter of being part of a money laundering scheme and was prosecuting the daughter for this crime (the author, being dead, wouldn't have to worry about that prosecution). The daughter's defense attorney might subpoena you to testify in court regarding the fact that you received the copyright as a gift rather than purchasing it, and that you weren't collecting royalties on it, in order to prove that the copyright wasn't being used as part of the alleged money laundering scheme; or the prosecution might call you to testify to the same information because the author had been reporting royalties from the copyright on his tax returns when in fact he hadn't been receiving any royalties and the money he received was really from a cocaine dealing cartel. (Creating paper trails to make it possible to disprove money laundering allegations if they were ever made is something that lawyers involved in business and estate planning and asset protection planning matters, like me, spend a lot of time worrying about, even though we rarely end up actually litigating it in the end.) Footnote: Some Extremely Unlikely Extreme Privacy Cases There are extremely rare cases in which the mere public acknowledgement of the existence of the copyright could have national security or trade secret implications, and you could be sued, or subject to legal action or threatened legal action of some kind in order to suppress public knowledge of the existence of the copyright. For example, suppose that the name of the work was "A User's Guide To Cracking The Chinese Military's Nuclear Weapon Control Codes." Furthermore, suppose that the author was a former employee of the National Security Agency (N.S.A.) which is the spy agency that secretly cracks foreign government's codes. In this situation, you could probably be subject to secret legal action to put a gag order on the existence of this work. This is because if China knew that someone in the U.S. had cracked their nuclear weapon control codes, they would change them and this would impair U.S. National Security. (As a mathematics major in college I discovered that a significant number of PhD mathematicians in certain specialities related to cryptography end up being basically coerced to work for the NSA because their research is classified for national security reasons, so they have to get paid a decent salary to work for the NSA or never publish their work which deprives them of an ability to make a livelihood (e.g. as a professor or business consultant) using their knowledge - its a running source of dark humor among advance math students contemplating graduate school studies. I also have many estate planning clients who work for intelligence agencies, i.e. for spies, who have to keep certain information secret for national security purposes.) Similarly, suppose that the name of the work was: "A Computer Program Designed To Utilize Backdoors To Encrypted Fortune 500 Company Databases Pursuant To Section 324(b) Of General Software Corporation's Service Contract Which Nobody Ever Reads", and the author was a former employee of General Software Corporation that used this backdoor for its own selfish business advantage contrary to the client's financial interests, which was legal because corporate software clients authorized this in an obscure clause of their standard service agreement. Perhaps access to this backdoor is actually the source of most of General Software Corporation's profits as it actually barely breaks even on its code writing and maintenance work. In this situation, General Software Corporation could probably take legal action to put a gag order on you to protect their trade secret, because if this trade secret became public, its value would be destroyed because the companies affected would shut down this valuable back door. (In my practice, most of the trade secret disputes involve living people in the legal marijuana industry, but if one of them died, this kind of thing could come up.)
Under the First Sale doctrine, when intellectual property is imparted to an actual physical thing, the first commercial buyer of that actual physical thing (that is made with proper intellectual property licensing or permission) is entitled to use it without further intellectual property limitations. As Wikipedia explains at the link: The first-sale doctrine (also sometimes referred to as the &quot;right of first sale&quot; or the &quot;first sale rule&quot;) is an American legal concept that limits the rights of an intellectual property owner to control resale of products embodying its intellectual property. The doctrine enables the distribution chain of copyrighted products, library lending, giving, video rentals and secondary markets for copyrighted works (for example, enabling individuals to sell their legally purchased books or CDs to others). In trademark law, this same doctrine enables reselling of trademarked products after the trademark holder puts the products on the market. In the case of patented products, the doctrine allows resale of patented products without any control from the patent holder. A different analysis applies if the goods when first made were already infringing. But, in practice, the aggrieved IP owner usually sues the primary infringer or an importer of the infringing goods, rather than a retail purchaser, in those case.
I'm not sure about USA law, it's probably similar to UK law. In the UK a trademark is registered for a particular business activity, and you can't just blanket register for "all" activities as that would be anti-competitive. I have a trademark "Dreamcraft" for dream interpretation and related activities. However, the name "Dreamcraft" is also a registered trademark for a company selling luxury yachts, and again for a company selling up-market craft materials. A website or organisation that is a gripe-site using the same name would not be in breach of any of these trademarks because it wouldn't be in direct competition with any of these companies.
Tricky. First, what is better for you? You usually start an LLC to protect yourself (the person) from liability in case things go wrong. Worst case, you lose all the assets of the LLC. So if the LLC owns the copyright, that is an asset, which can be lost if the LLC goes bankrupt. So I'd say it's better for your protection if you own the copyright personally. If you created the software in your own time, before the LLC was started, then you own the copyright. You should create a proper contract saying that the LLC has the non-exclusive right to market the software and keep profits from the sale of the software, and that this agreement can be cancelled by you at any time. Signed by you, as a private citizen, and by the director of the LLC, which happens to be you as well, on behalf of the LLC. That will give you maximum personal protection. On the other hand, investors won't be willing to invest in your LLC, because it basically owns nothing of any value. So if you want investments, then you may be less able to protect your assets, because the investors want to protect their assets as well.
You can't patent an algorithm, but I'll assume you are talking about the case where you have patented a machine or process that uses an algorithm, but that adds significantly more, and that the software being distributed implements much of this process. Courts might find an implied licence or promissory estoppel when distributing software under an open source licence that doesn't explicitly exclude patent licencing as part of its terms. It would be prudent to state your patent rights and explicitly exclude a patent licence if you intend to enforce your patent rights. As an example, this software implicates a patent , so they allow "permission to use, copy, modify, and distribute this software and its documentation for educational, research, and non-commercial" purposes. Users that want to use the software commercially need to contact the authors who also happen to be the patent owners, and I assume would negotiate a patent licence at that point.
Short Answer No, you may not do this legally without permission in the form of a license from the owners of this intellectual property. Your video game based merch business plan is a horrible, horrible idea. There is no reasonable way that you could have known just how horribly awful and bad an idea this was without talking to someone familiar with the law. So, I'm not saying that this was a stupid or unreasonable question. But, now, you know. And, you should run away from this idea as fast as you can. Long Answer What you are proposing to do is blatant infringement of copyright (and trademarks) through the creation of derviative works, on a systematic basis, for profit, without permission, in a manner that does not constitute a parody or satire or any form of fair use. This kind of economic activity is precisely what copyright and trademark laws are designed to prevent. The case against you for liability could only get more clear if you were selling pirated copies of the game itself. You would have no legal defenses (other than statute of limitations if they waited to many years to sue you, which they almost certainly would not). You would be liable for statutory damages of up to many thousands of dollars per infringing item and the attorneys' fees the intellectual property owners incurred to sue you. The owners of the games could probably get a court order to destroy all of your merchandise, and a restraining order and injunction to force you to immediately shut down your business at any time. They could obtain all of those remedies without sending you a cease and desist letter before suing you. The moderately likely worst case scenario economic liability that you would face would be on the order of 100 times the amount of profits you could hope to make in a best case scenario, and the likelihood that you would incur some significant civil liability is on the order of 85%-90% (with almost of of the little or no civil liability percentage attributed to scenarios in which the company doesn't notice that you are infringing upon its intellectual property rights). Also, the more profitable you are and the higher the volume of goods you sell, the more likely you are to be sued. The liability risk to profit ratio grows with each additional dollar of profit you make. There is a good chance (perhaps 65%-75%) that they could establish that your violation was willful and wanton in these circumstances, which would also prevent you from discharging any part of the massive judgment against you in bankruptcy. So, there is a better than 50% chance that you'd be stuck with an intellectual property rights infringement debt, which could easily run into the high hundreds of thousand or even many millions of dollars, plus post-judgment interest at a rate similar to the market rate for high risk junk bonds, for the rest of your life. In terms of the economic harm involved to you, this would be almost as bad as having all of your property seized and then being sold into slavery for the rest of your life, if a coin toss bet comes up tails, but you get to keep the coin if it comes up heads. A settlement in which you turned over every penny you ever made in the venture, destroyed all of your products, shut down the business and paid them an additional low five figure amount in lieu of penalties and attorneys' fees would be a very generous offer. You would also face a real risk (perhaps 10%-15%) of some low level felony criminal liability (perhaps several years in prison). This is a business plan that is so toxic with immense, near certain liability risks of the worst possible kind that you should put on gloves before picking it up and tossing it into your nearest available fireplace or campfire. This business plan poses more liability risk to you than opening up a nightclub, bribing your contractors and code inspectors to ignore all fire and electrical codes, painting the walls with turpentine, padlocking all of the exit doors from the outside, changing a $1 cover and selling booze at cost to get huge crowds, and then booking bands with lots of fireworks in their stage shows on a nightly basis. (Yes, I really had a client who was stupid enough to come up with this business plan until I talked him out of it.) From a civil liability perspective, you would have less exposure to economic liability if you started a business that involved abducting random cats and dogs and goats off the street and charging customers to forcibly rape and then mutilate them, while filming it for distribution on the Internet with your real name and fingerprints in a watermark on every image and close ups of the animals collar tags and the goats' brands. The likelihood of criminal liability would be quite a bit greater (perhaps 60%-80%), however, even though the punishment if you were convicted of felonies for the bestiality business would be similar to the punishment for a conviction for copyright and trademark infringement. (Thankfully, I have yet to see a client try to implement this business plan.) Go hire someone to secure a license from the intellectual property owner for you (perhaps an IP lawyer or an agent or broker), or forget about it. This is an industry where you absolutely must be legitimate, and you have to go big or go home. The economies of scale are simply too immense to ignore. If your anticipated gross sales aren't at least $500,000 a year or so, you probably shouldn't even consider doing it whether it is legal or not. A license, if you could get it, would probably cost $6,000 to $12,000 in professional fees to negotiate (if you could accomplish this feat at all), perhaps a similar amount for an upfront fee to the intellectual property holder, and probably 10%-35% of your profits on an ongoing basis. This is because the market rate of licenses of this kind are geared towards what large scale distributors selling wholesale to Wal-Marts, department stores, and national mall chains could bear (I have some clients that happily pay these kinds of license fees so they can sell branded products, manufactured in China and then imported, on a high volume national basis.) The license fees would be a huge bargain by comparison to your economic exposure to infringement liability. But, if even the licensing fees (if you could negotiate a deal to pay them) are too expensive, then, this business plan doesn't make economic sense even with permission in the form of a license from the intellectual property owner. In that case, you should instead go into the lemonade stand business or buy a food truck, or become an Uber driver, or open a coffee shop or a liquor store, or something like that, with less liability risk and a more proven business model. If you must make video game merch without permission, do it in a back alley of a small town in rural Mexico on a cash only basis (where lots of people do stuff like this without getting caught), rather than an online store, where any bored paralegal or network manager in the video game company's law firm can find you at a moment's notice and might win a promotion or a raise or a bonus for doing so.