Taking security over intellectual property rights

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Taking security over intellectual property rights
  • Scope of this Practice Note
  • The nature of intellectual property rights
  • Intellectual property registration systems
  • What is secured?
  • Overview of relevant types of security
  • Mortgage
  • Charge
  • Taking security over a UK registered patent
  • What is a patent?
  • More...

Taking security over intellectual property rights

Scope of this Practice Note

A company's intellectual property (IP) rights can be offered as security for a loan.

In commercial lending transactions, IP rights are commonly offered as security for a loan:

  1. as part of a package of security over the whole of a company's assets (see Practice Note: Key features of debentures)

  2. in transactions that involve lending to a borrower in an industry where IP rights are particularly valuable, for example:

    1. biotechnology, pharmaceutical, electronics and telecommunications industries (where patents are particularly key)

    2. global retail industries (where trade marks are particularly key), or

    3. film production and software manufacturing industries (where copyright is particularly key)

This Practice Note does not cover taking security over IP rights in the EU or other overseas jurisdictions. Lenders should seek appropriate local law advice when taking security over a multi-jurisdictional IP portfolio. However, we address below the impact of Brexit on security over IP rights registered in the EU before IP completion day, as action may need to be taken in the UK to protect the security rights. See: Brexit Impact on security over IP.

The nature of intellectual property rights

IP rights are intangible assets. They are a type of chose in action, ie something that is recoverable by legal action as opposed to something that is physically possessed.

Legislation in the UK gives IP rights equivalent status

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