IP's role as a financing tool

The use of intellectual property (IP) assets to raise finance - "IP financing" - will be the subject of an information meeting organized by the World Intellectual Property Organization at its Geneva headquarters on March 10.

The ability to use IP assets - copyright, patents, trademarks and designs - as collateral, particularly for small- and medium-sized enterprises which depend on know-how and IP assets to bolster company value, is of growing importance. Using untapped intangible assets to secure finance is all the more crucial for companies in the current economic environment.

Global commerce in IP assets has expanded in recent years across a range of industries. Intangible assets are estimated to account for the bulk of corporate value today. However, the financial potential of IP assets has yet to be fully realized, largely because systems of financial accounting remain primarily tailored to tangible assets. The continued growth and success of IP financing hinges on legal and regulatory support, the awareness of the banking industry and sophistication of capital markets. Unleashing the full potential of IP financing offers an opportunity to boost business growth, innovation and creativity.

The information meeting aims to raise awareness within the intellectual property community, including creators and rightholders, as well as the wider financial services community, of the opportunities and challenges of IP financing. It will examine current practices in different countries and different industries, including in the copyright, patent and trademark fields. The meeting will highlight the ways in which improvements in law and financing practices may assist right holders in maximizing the value of their IP assets.

World Intellectual Property Organization

(China Daily 03/02/2009 page11)