Secured Transactions and IP licenses: comparative observations and reform suggestions

The information age has heralded formidable technological progress in all segments of society. Miniaturization, communication networks, social media, and cloud computing have ushered in new business models that have disrupted existing commercial sectors and spawned new ones. Knowledge has become the key factor of production in mature economies, elevating IPRs to one of the most economically and strategically valuable asset classes. In this evolving landscape, attention has drifted away from the rules governing the creation and transfer of proprietary rights in tangible assets and documentary intangibles and gravitated towards the legal tenets that regulate private law dealings involving IPRs. This paradigm shift has brought unprecedented focus on the legal regime for the taking of security over such assets, reflecting the mounting desire to realize their full value as means to facilitate access to credit and reduce associated costs. At a national level, legal reform initiatives seeking to overhaul the outdated laws that presently govern the use of IPRs as collateral have gained traction both in common and civil law jurisdictions. Internationally, the United Nations Commission on International Trade Law (UNCITRAL) has developed a suite of legislative texts on secured transactions law that jointly articulate a sophisticated normative model for the taking of security in IPRs. This article aspires to make a contribution to this discourse by investigating a specific challenge that the twenty-first century levels at the legal framework governing the taking of security over intellectual property: the use of IP licenses as collateral.