Taking security over intellectual property—practical points

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The following IP practice note Produced in partnership with CMS provides comprehensive and up to date legal information covering:

Taking security over intellectual property—practical points
Introduction
Issues when taking security
Introduction
Due diligence
Security Interests over specific types of IP
Patent
Trade mark
Copyright
UK and Community design rights

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Effectiveness of security in practice
Maintaining security

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for intellectual property?

Introduction

It is increasingly recognised that all businesses own and use IP of some kind. Lenders in sectors which include IP-rich businesses are focusing increasingly on ensuring that their security captures the value of this IP.

The law relating to security over IP is uncertain, and lenders must manage their way through the uncertainty. In addition, security over IP rights may be costly to put in place and difficult to enforce.

A lender must first identify and value its borrower’s IP. It will distinguish between types of IP, for example IP with proprietary qualities and IP comprised in contractual rights. It will recognise that IP within a business is usually interrelated, such as a patent and the associated know-how which makes the patent valuable in practice. A practitioner of financial law must also be aware of the substantive character

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