Intellectual Property Financing: Collateralizing a Trademark in India

Authors

  • Murielle Rodrigues
  • Dr. Rupal Rautdesai
  • Ujwal Prabhakar Nandekar

Abstract

Intellectual Property is treated as an asset in developed countries, in developing countries however this view is little less accepted, but globally innovation is boosting and pumping economies to grow, as a result of this innovative companies are scaling market indexes. While these companies often start up with minimum funding requirements as they scale in size their need for capital increases. For example, Singapore is arguably one of the most innovative countries in Asia if not in the world, the government along with the IP office charted out a 10 year growth plan to ensure IP is valued in their economy, and unsurprisingly IP Financing was one of the major focus points. The Indian perspective on IP financing is not as concentrated, owing to the fact that we are still a developing nation. That being said India was the home to discovery and invention in the old world, it would be sad to see India lose its innovative edge and a chance at competing with developed nations. Indian financial institutions are weary of lending against Intellectual Property like Trademarks, they are more comfortable with tangible assets which are more easily monetized. The process for creating a security and enforcement are not streamlined, the legal regime and the practical utilization do not match. All in all the business of debt finance against Trademark as a collateral is unexplored and uncharted territory. This hiccup has left Indian start up and innovation driven, IP asset rich companies under financed, which leads them to knock on doors of capitalist from neighboring countries, as witnessed in the recent splurge by Chinese Venture Capitalist in the Indian economy. This research is an attempt to understand the Indian scenario of debt finance against trademark as a collateral security. The application of current legal provisions and laws for setting up and enforcement of a trademark as a collateral security is analyzed and detailed in this paper. Through empirical research researchers showcase the collected views of industry professionals and interpreted in light of the existing theory on the subject. Keywords: IP Financing, Trademark, Collateralization, Licensing.

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Published

2019-11-28

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Section

Articles