Intellectual Property Financing Overview WIPO Information Meeting 10

  • Slides: 23
Download presentation
Intellectual Property Financing Overview WIPO Information Meeting 10 March 2009 Copyright © 2009 Lorin

Intellectual Property Financing Overview WIPO Information Meeting 10 March 2009 Copyright © 2009 Lorin Brennan 1

Outline • Introduction • IP Financing Examples • Legal Framework • Implementation Issues •

Outline • Introduction • IP Financing Examples • Legal Framework • Implementation Issues • Systemic Opportunities • Conclusion 2

I. Introduction 3

I. Introduction 3

Recent Developments • Intellectual Property Law and Commercial Law • WIPO Initiatives • UNCITRAL

Recent Developments • Intellectual Property Law and Commercial Law • WIPO Initiatives • UNCITRAL Secured Transactions Guide (2008) • UNCITRAL IP Annex 4

II. IP Financing Examples 5

II. IP Financing Examples 5

Example: Production Loan Grantor is a motion picture producer • Wants to produce new

Example: Production Loan Grantor is a motion picture producer • Wants to produce new picture • Movie copyright, talent agreements • Licenses w/ royalty payments • Assets include IP rights and royalty income Seeks loan on specific IP and royalties 6

Asset Financing Illustration Lender 1 Producer Other Transferee Royalties 50% = € 25 Rights

Asset Financing Illustration Lender 1 Producer Other Transferee Royalties 50% = € 25 Rights Lender 2 Licensee Other Subtransferee Royalties 50% = € 50 Rights Lender 3 Sublicensee Other End Users Royalties € 100 Rights End User Lender 4 7

Example: Working Capital Loan Grantor is a fashion house • Makes fashion apparel, cosmetics,

Example: Working Capital Loan Grantor is a fashion house • Makes fashion apparel, cosmetics, accessories • Trademarks, copyrights (fabric), design patent • Licensed IP and Owned IP • Assets: inventory, equipment, receivables, IP Seeks loan on “going concern” value. 8

Enterprise Financing Illustration Bank Security Right “Acquisition Financing” Grantor’s Business “Ordinary Course” Inventory Pre-Purchase

Enterprise Financing Illustration Bank Security Right “Acquisition Financing” Grantor’s Business “Ordinary Course” Inventory Pre-Purchase Item Equipment Receivables Intellectual Property 9 Post-Purchase Item

Comparison of Approaches Asset Due Diligence Risk Chain of Title Enterprise Grantor Asset Value

Comparison of Approaches Asset Due Diligence Risk Chain of Title Enterprise Grantor Asset Value Risk Specific IP Value added Repayment Risk Licensees Going concern Insolvency Risk Segregation Allocation 10

III. Legal Framework 11

III. Legal Framework 11

Secured Financing Developments Basic Policy: Avoiding a “fraudulent conveyance” “Possession” Systems: Non-possessory pledge, registered

Secured Financing Developments Basic Policy: Avoiding a “fraudulent conveyance” “Possession” Systems: Non-possessory pledge, registered pledge “Title” Systems: Mortgage, assignment w/ redemption Focus: Effectiveness and Priority IP Applications: • Possession, No Filing (copyright, trade secret) • Possession, Filing (patent, trademark) • Title, No Filing (copyright, trade secret) • Title, Filing (patent, trademark) 12

Intellectual Property Developments Policy Approach: Specific IP Law and General Financing Laws International Conventions:

Intellectual Property Developments Policy Approach: Specific IP Law and General Financing Laws International Conventions: • Transfers • Exclusivity • Enforcement Secured Creditor: Owner v. Right Holder Royalties: IP Rights and IP Royalties as separate collateral 13

IV. Implementation Issues 14

IV. Implementation Issues 14

How to implement IP financing Guide: • “Unified and functional approach” • One system

How to implement IP financing Guide: • “Unified and functional approach” • One system but adjust specific rules for specific cases IP Annex: • Recommendation 4(b): “ … in so far as … inconsistent with national law or international agreements … relating to intellectual property” • Issue by issue analysis 15

Guide: Effectiveness & Priority Effectiveness: • Recommendation 4(b): IP exclusive effectiveness rules • Alternative

Guide: Effectiveness & Priority Effectiveness: • Recommendation 4(b): IP exclusive effectiveness rules • Alternative 1: File notice in general security rights registry • Alternative 2: File notice in an IP “specialized registry” Priority: • Recommendation 4(b): IP exclusive priority rules • 1 st Priority: First to file in IP specialized registry (whenever filed; knowledge irrelevant) • 2 nd Priority: First to file in general security rights registry (identify competing claimants) 16

IP Implementation No IP filing system: • Possession systems: Effectiveness rule allows filing •

IP Implementation No IP filing system: • Possession systems: Effectiveness rule allows filing • Title systems: Effectiveness rule now requires filing • Continuous filing for effectiveness? IP Filing System: • Are IP filing rules exclusive? • Knowledge Priority Rules • Do IP filing rules apply to licenses? • Do IP fling rules apply to royalties? Example: Licensor/Lender vs. Licensee/Lender 17

Choice of Law Rules Guide approach: • Inter parties: lex contractus • Creation &

Choice of Law Rules Guide approach: • Inter parties: lex contractus • Creation & Enforcement: Location of Grantor • Effectiveness & Priority: Location of Grantor • Royalties: Location of grantor IP Issues: • International conventions: lex protectionis • What if IP does not exist in some country? • What if some parties in chain of title in different countries? • What are the rules for royalties? 18

V. Systemic Opportunities 19

V. Systemic Opportunities 19

Registry Co-ordination • IP: needs asset based registries for tracking • SF: needs grantor-based

Registry Co-ordination • IP: needs asset based registries for tracking • SF: needs grantor-based registries for financing • Priority rule harmonization • Hierarchical v. Relational data models • International Register of Audiovisual Works 20

Integrated Structure • Intellectual Property Law for basic protection • Commercial law for creating

Integrated Structure • Intellectual Property Law for basic protection • Commercial law for creating contract assets • Improved valuation and accounting rules • Secured financing law for IP rights and royalties • Export/Import financing support • Title insurance for due diligence risk • International support 21

VI. Conclusion 22

VI. Conclusion 22

Commercial Intellectual Property Law • Commerce in intellectual property will increase globally • Process

Commercial Intellectual Property Law • Commerce in intellectual property will increase globally • Process would benefit from modern commercial rules • Secured financing law is a critical starting point 23

Intellectual Property Financing Overview WIPO Information Meeting 10Intellectual Property Financing Overview WIPO Information Meeting 10
Intellectual Property Intellectual Property Intellectual Property Entrepreneur andIntellectual Property Intellectual Property Intellectual Property Entrepreneur and
Intellectual Property What is intellectual property Intellectual propertyIntellectual Property What is intellectual property Intellectual property
INTELLECTUAL PROPERTY Rights INTELLECTUAL PROPERTY q Intellectual propertyINTELLECTUAL PROPERTY Rights INTELLECTUAL PROPERTY q Intellectual property
Information Meeting On Intellectual Property Financing World IntellectualInformation Meeting On Intellectual Property Financing World Intellectual
Information Meeting On Intellectual Property Financing World IntellectualInformation Meeting On Intellectual Property Financing World Intellectual
Intellectual Property Overview Patents Trademarks Copyright Intellectual PropertyIntellectual Property Overview Patents Trademarks Copyright Intellectual Property
Intellectual Property CS 4020 Overview Intellectual Property andIntellectual Property CS 4020 Overview Intellectual Property and
Financing Financing n n Equity financing Debt financingFinancing Financing n n Equity financing Debt financing
WIPO Arab Regional Meeting on Intellectual Property asWIPO Arab Regional Meeting on Intellectual Property as
CPSC 699 Intellectual Property Intellectual Property Definitions LawsCPSC 699 Intellectual Property Intellectual Property Definitions Laws
Intellectual Property Definition of Intellectual Property Rights TheIntellectual Property Definition of Intellectual Property Rights The
Lecture 27 Intellectual Property Introduction Intellectual Property simplyLecture 27 Intellectual Property Introduction Intellectual Property simply
Professional Practices Intellectual Property Rights Contents Intellectual propertyProfessional Practices Intellectual Property Rights Contents Intellectual property
Intellectual Property Intellectual Property and Changing Technology WhatIntellectual Property Intellectual Property and Changing Technology What
INTELLECTUAL PROPERTY MANAGEMENT Create intellectual property Define researchINTELLECTUAL PROPERTY MANAGEMENT Create intellectual property Define research
Chapter 4 Intellectual Property What is Intellectual PropertyChapter 4 Intellectual Property What is Intellectual Property
Protecting Business Ideas Intellectual Property Intellectual Property lProtecting Business Ideas Intellectual Property Intellectual Property l
Intellectual Property and Standards Interplay of Intellectual PropertyIntellectual Property and Standards Interplay of Intellectual Property
Intellectual Property Definitions Intellectual property is ownership ofIntellectual Property Definitions Intellectual property is ownership of
Intellectual Property CS 495 Group 3 Intellectual PropertyIntellectual Property CS 495 Group 3 Intellectual Property
INTELLECTUAL PROPERTY LICENSING Advantages to Transferring Intellectual PropertyINTELLECTUAL PROPERTY LICENSING Advantages to Transferring Intellectual Property