Intellectual property as collateral
Date Issued
2010
Date
2010
Author(s)
Chen, Tzu-Hsuan
Abstract
In recent years, knowledge-intensive industry has started to play an important role in the economy of Taiwan. All companies, regardless of their size, have begun to devote themselves to developing new technologies and creating innovative business models which have led to the invention and accumulation of numerous valuable intellectual properties. Banks in Taiwan, however, have never accepted these intangible properties as collateral or pledge for furthering financing. Consequently, many companies in Taiwan are unable to exert the full value of their intellectual properties and fail to acquire needed capital.
The difficulty of using intellectual properties as financing tools is derived from incomplete regulation, immature market practice and unclear appraisal technique. This essay, however, will only focus on the legal aspect of this problem.
For our current legislation, although there are already provisions covering the use of intangible rights or properties as pledges, these provisions are simply in conformity mutatis mutandis with provisions governing the use of tangible properties as pledges. Nevertheless, comparing the nature of intellectual property with tangible property, there is a great disparity between the two, which requires separate regulations. This essay would advise legislating new regulations regarding the registration of an intellectual property pledge, establishing the governing department of such registrations and outlining the legal effect of the registrations, etc. These regulations will show companies a clear legal route to use their intellectual properties for financing and lower the cost of doing legal research for related information.
In addition, this essay will review current legislation regarding the appraiser and the appraisal process. A better frame and legislation of appraisal would add confidence to financial institutions in accepting intellectual properties for financing.
Finally, the issue of using intellectual property as a financing tool requires a more comprehensive discussion. Forming supplementary systems such as circulating the information of intellectual property or educating future appraisers would further ripen the whole idea of financing with intellectual properties.
Subjects
Intellectual property
Valuation of Intellectual Property
Collateral
Financing
Type
thesis
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