Collateralizing Intellectual Property

This Article identifies and critiques the collateralization of intellectual property, revealing the complexity of intersecting secured transaction law, namely Article 9 of the Uniform Commercial Code, and doctrinal intellectual property laws such as patent law, copyright law, and trademark law. The inquiry challenges the silence surrounding the pervasive use of intellectual property as collateral in secured financing and suggests changes to the existing framework on secured financing law. The Article proceeds as follows: Part II discusses the normative intellectual property rights for patents, copyrights, and trademarks and how such rights are utilized as corporate assets. Part III describes different forms of financing available for companies and the use of intellectual property in financing. Part IV explains the UCC-9 regime as the law on secured financing, focusing on the rights of both the debtor and the secured creditor in the event of default. Part V frames the existing debate on security interests in intellectual property assets and analyzes how the revised UCC-9 addresses the debate. Part VI identifies and critiques the collateralization structure and its hidden costs. Finally, Part VII offers a proposal to minimize the hidden costs, provide better notice to all parties, and promote creativity and innovation