Ownership is the cornerstone of enforceable collateral. If the borrower doesn’t own the patent, they can’t legally pledge it. Yet, time and again, we find patents recorded as loan collateral that are, in fact, owned by third parties.

Sometimes the borrower once owned the patent but sold it before the loan was issued. Other times, the patent was never theirs to begin with—belonging instead to a parent company, a subsidiary, or a joint venture partner. In some cases, the named borrower is a licensee, not the titleholder.

Why Does This Happen?
Several factors contribute to these ownership mismatches:

• Corporate restructuring or IP transfers not reflected in updated records.

• Employee-invented patents that were never formally assigned to the company.

• Borrower misunderstandings about what it means to “own” vs. “have rights to” a patent.

• Outdated internal patent lists pulled from spreadsheets instead of official records.

• Shared ownership or co-ownership arrangements that limit enforceability.

These issues may go unnoticed when the borrower self-certifies their patent list—and when the collateral agent has no IP-specific tools to validate ownership.

How PatenTrack Helps
We compare borrower-submitted patent lists with current assignment data from official patent office records. Our tools flag discrepancies between the named owner and the borrowing entity—so collateral agents can spot and correct problems before they become liabilities.

Because when ownership isn’t clear, enforceability isn’t either.