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IP Securitisation

IP Securitization is a financing technique for monetizing intellectual property. IP securitization allows right holders to obtain financial benefits in return for the right to receive royalties from their innovations over a predetermined time.

PROCEDURE:
When a client comes to the office with a request for IP securitization following steps have to be followed:
Step 1: Signing of the non-disclosure agreement between ITAG and the client.
Step 2: Documentation and information related to all the patents in possession of the client to be collected.
Step 3: Due diligence of IP to be conducted by ITAG
For conducting due diligence investigation, the following checklist to be followed:

  • Understand the IP being commercialized, and the obligations of ITAG towards the buyer or seller.
  • To confirm information validity, search should be conducted on the ownership of IP, IP history and renewal fees to ensure that rights are still in force.
  • Information related to other assets which are required for exploitation of an IP shall be collected from the client.
  •  Copyright implication to be checked as to who owns the literally and artistic works.
  • To determine if any mortgage is there on the IP.
  • To collect details related to any improvement in patents that might exist.
  • To determine whether the IP is the subject of any litigation or infringement suits.
  • Understand and request details such as the duration of the license if any and all significant timeframes involved with the IP.
  • Details related to safeguards to capture the new developments in the technology may be collected from the client as in the technical scenario patents become outdated very quickly.
  • Request details on significant third parties that may have some kind of right in the IP asset and ensure whether seller is entitled to sell the IP.

Step 4: List of assets that can be securitised should be sent to the client
Step 5:IP Valuation of the patents to be predicted. IP Valuation can be done mainly by three methods. They are

  • Cost Approach
  • Market Approach
  • Income Approach

It is always advisable to follow the methodology depending upon the conditions. Also a comparison should always be done between the methodologies to verify the findings.

Step 6: Sending valuation report to the client.
Step 7: Finding suitable investors for the patents.
Step 8: Signing of non-disclosure agreement by the investor.
Step 9: Signing of securitization agreement between the client and the investor.
Step 10: ITAG to act as an issuer of the securities based on the receivables from the client.
Step 11: Debt or equity to be issued to the investors from the clients.
Step 12: ITAG utilises the proceeds from the investor to pay the client.
Step 13: Debt issued to the investors to be serviced by the client.
Step 14: Equity interests issued will be utilized in passing through the revenues produced by the receivables.
Step 15: In case of default property may be seized and proceeds to be transferred to the investors.
Step 16: After maturity, rights to be transferred back to the client.

CORNISH PASTY NAME GIVEN EUROPEAN PROTECTED STATUS

The term "Cornish pasty" has been given protected status by the European Commission. Pasties made only in Cornwall from an established traditional recipe can now be called "Cornish pasties", according to the Cornish Pasty Association (CPA).

Authentic Cornish pasties will now be marked with a special logo because of the Protected Geographical Indication (PGI) tag ............
.....more

GOVERNMENT PROPOSES COMPULSORY E-FILING OF PATENTS

The Indian government in its effort to bring transparency and efficiency in the filing of patents, has proposed to amend the Patent Rules and make e-filing of applications compulsory. The e-filing of patent & trademark applications was launched on July 21, 2007.

The commerce ministry's Department of Industrial Policy & Promotion (DIPP) has prepared a draft proposal and asked sought suggestions from stakeholders to amend.
..............more

JOY CREATORS RESTRAINED FROM USING P&G'S 'TOTAL EFFECTS' TRADEMARK

The Delhi High Court has held back Joy Creators from using the term 'Total Effects' on its products. The Court found that the words were similar to Procter & Gamble's (P&G) registered trade mark- Olay Total Effects.

The multinational company had filed a petition seeking directions to Joy Creators to not use its trade mark 'Olay Total Effects' or any other deceivingly similar mark and questioned their unfair intentions to benefit from an established brand.............more