A TRANSFORMATIONAL APPROACH TOWARDS COLLATERIZATION OF INTELLECTUAL PROPERTY

Abstract

Almost everyone is familiar with the mortgaging of immoveable property under the Transfer of Property Act and also with pledge and hypothecation of movables but Collaterization of Intellectual Property Rights is a seed which yet to germinate in its full capacity. The author in this Article has therefore dealt with the Collaterization of Intellectual Property Rights delving upon its benefits and challenges. One of the ways of IP financing is through IP backed loans which can be very beneficial for Big Companies which have different Intellectual Property as their assets but there are many challenges faced by Companies in this process of Collaterization primarily being that of Valuation of the IP asset. Lack of expertise in this field like lack of experts in IP Valuation in India poses a major problem. Consequently, if the asset is not valued properly and not given appropriate rating by the Credit rating agencies then investors would be reluctant in investing in such assets of the Intellect. 

 Law in India relating to IP Collaterization is in a nascent stage of development as compared to the law in US, Singapore, Malaysia and Indonesia. In India, though various statutes do make a passing reference to Collaterization of Intellectual Property like the SARFAESI Act, 2002, the Companies Act, 2013 but none of the statutes deal with the intricacies of the subject. In this realm the researcher has mainly focused on the following research questions:

• What are the challenges faced in the process of IPR Collaterization in India?
• What is the Regulatory framework regarding IPR Collaterization?
• How has the other jurisdictions dealt with the same?

Keywords: Intellectual Property, Collaterization, Securitization, challenges, Regulatory framework