Just as developments in technology have revolutionized modern life, so has intellectual property grown in importance as collateral. But IP collateral can be treacherous territory for finance lawyers. While integral to many businesses, it may be difficult to value, or have little to no value separate and apart from the related business. Moreover, the three primary categories of IP collateral—patents, trademarks and copyrights—are subject to federal regulation and registration. The different regimes have different rules. These two areas of law have developed their own vocabulary and distinct layers of complexity, and accordingly, IP lawyers and UCC lawyers do not speak the same language.
All of this adds up to a challenge for lawyers seeking to place liens on intellectual property. Fortunately a joint task force organized by the ABA Commercial Finance and Uniform Commercial Code Committees has come to their rescue. This past month, the Model Intellectual Property Security Agreement Joint Task Force (Task Force) released a Model Intellectual Property Security Agreement (or MIPSA), along with a detailed Introductory Report and Background Considerations.1 This agreement and report represent the culmination of efforts stretching as far back as 2009. Today this column briefly discusses the background considerations, context, framework and highlights of the MIPSA.
Intellectual Property as Collateral
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