Legal Definitions - proprietary right

A proprietary right is a legal entitlement that an individual or entity holds over a specific piece of property. This property can be tangible, such as land, buildings, or physical goods, or intangible, like intellectual property (e.g., patents, copyrights, trademarks), shares in a company, or certain financial assets. These rights are characterized by being generally transferable (meaning they can be bought, sold, or inherited) and enforceable against third parties, not just against a specific person. They represent a form of ownership or a significant interest in an asset that can be valued and protected by law.

Here are some examples illustrating proprietary rights:

• Example 1: Owning a Commercial Building

  Imagine a small business owner who purchases a storefront building for their bakery. The owner holds a proprietary right to that building and the land it sits on. This right allows them to operate their business there, renovate the premises, lease parts of it to other tenants, or sell the property entirely. They can also prevent others from using or occupying the building without their permission. This right is tied directly to the physical property and is enforceable against anyone who might try to claim it or interfere with its use.

• Example 2: A Patented Invention

  Consider an engineer who invents a unique, energy-efficient engine design and successfully obtains a patent for it. This patent grants the engineer a proprietary right over their invention. This means they have the exclusive legal right to make, use, and sell the engine design for a specified period. They can license this right to manufacturing companies for a fee, sell the patent outright, or prevent competitors from copying their design. The right is an intangible asset that has significant commercial value and is legally protected.

• Example 3: Shares in a Public Company

  An individual invests in the stock market and buys shares of a large technology company. These shares represent a proprietary right in the company. As a shareholder, the individual has a claim on a portion of the company's assets and earnings, the right to vote on certain corporate matters, and the ability to sell their shares to other investors on the stock exchange. This right is a transferable financial asset that can increase or decrease in value and is protected by securities laws.