Intellectual Property Securitization: How Far Possible and Effective

Abstract

Over the past decade and a half, there has been a steadily increasing focus on intellectual property (IP) and its proceeds as sources of funding and collateral security. More than ever, IP is being recognized as a valuable component of a company’s asset portfolio due in large measure to the growth in IP as a strategic investment. The use of IP collateral is often more attractive than other types of collateral because there is generally a lower credit risk, which results in a lower cost of financing, and pledging IP collateral will often allow a borrower to secure financing without the need to alter its capital structure. The present paper discusses the issues related to patent securitization and concludes with a statement of how far patent securitization is possible and effective.