Unblocking the Arteries at the Heart of IP-backed Debt Finance

New research in the intersecting fields of innovation, finance and law, from Japanese, Asian, European and American perspectives is the subject of Security Interests in Intellectual Property (Perspectives in Law, Business and Innovation), available from 13 September 2017. 

Against the dramatic rise of IP value as a percentage of corporate value, banks struggle to identify, value and register their security interests in corporate IP assets sought to be used as collateral by IP-rich firms. Innovation is generally afforded legal protection by intellectual property (IP) rights, and innovation needs extensive funding to successfully commercialise.  Although access to finance is a universal issue for businesses, how can IP-backed debt finance grow in a globalized world? What IP finance trends and legal initiatives are currently afoot to support national competitive advantage and economic growth? Where the innovation-driven economy is concerned, a process of disruption is occurring within contemporary academia, as traditional approaches and disciplinary boundaries – both within and between disciplines – are being reconfigured.   

This volume explores the IP-backed debt financing as a corporate finance tool to meet the demand for corporate finance following the global financial crisis which began in 2007, when SME access to finance was formally recognised as an issue of pressing importance at the 2009 G20 Summit. Capturing the leading developments from around the globe, the authors set a high-level agenda to inform future policy directions for supporting the innovation ecosystem, and the tech start-ups and IP-rich SMEs at its heart. Chapter 1 by Jan Denoncourt lays out the evolving conceptual, theoretical and international IP-backed debt finance framework. In Chapter 2, Takashi Shimizu presents research as to why the Japanese government’s attempts to introduce IP-backed financing have been less successful than anticipated, in contrast to the experience in the United States. In Chapter 3, Toshiyuki Kono and Claire Wan-Cheung Cheng analyse cross-border enforcement issues that arise when lenders need to enforce collateral consisting of intangible IP rights – which national law will apply to regulate security interests in IP? Spyridon Bazinas sets out the important contributions made by the United Nation’s Commission on International Trade Law (UNCITRAL) to IP financing law. Finally, Toshiyuki Kono and Kazuaki Kagami conduct a functional comparative analysis of private international law rules for determining security interests in IP rights.

As the culmination of the first ever ‘International Symposium on IP and Venture Capital: The Secrets to Building Innovation Ecosystems’ held at the University of Tokyo on 4-5 September 2014, the book draws together the arteries of the innovation ecosystem.  Systemic change involving innovation economics, IP, finance, and private international law is advocated to overcome the various obstacles in the proper use of IP-backed debt finance and to identify under what conditions such change would result in optimal effects. 

Jan Denoncourt is a Senior Lecturer at Nottingham Law School.