Secured Financing of Intellectual Property Assets and the Reform of English Personal Property Security Law

The past three decades have seen a decline in traditional industriesin the United Kingdom and there has been a relative declinein the value of physical assets to the UK economy. At the sametime, the value of intangible assets seen in intellectual propertyrights have increased considerably. As such, IP rights representimportant assets for companies and often comprise the foundationfor market dominance and continued profitability. There is astructural uncertainty in the law relating to the use of IPas collateral for the purpose of raising debt finance and thismay impact upon the survival of firms with high ratios of intangibleto tangible assets. This article considers the proper goalsfor an effective credit and security regime in IP. It examinesthe significance of the availability of collateral to the lendingdecision and also considers whether the reluctance to maximisethe use of IP as security reflects inherent difficulties whicharise out of the nature of IP as economic assets. This has implicationsfor the reform of English personal property security law andthe development of bright line priority rules associated withArticle 9 of the US Uniform Commercial Code which is often citedas a model for reform of English law.