Trade Secrets and Non-Traditional Categories of Intellectual Property as Collateral
By: Jeffrey D. Dunn (Co-speaker) and Paul F. Seiler (Co-speaker) I. Introduction Traditional types of “intellectual property” used in secured transactions include trademarks, patents, and copyrights. This paper describes trade secrets and non-traditional types of intellectual property as collateral in commercial secured transactions, and discusses whether such assets can and should be included within a national secured transactions law regime as advocated in the Report on UNCITRAL International Colloquium on Secured Transactions (Vienna, 20-22 March 2002). The authors are business law practitioners, each with over 24 years experience, who routinely represent lenders and debtors in documenting, negotiating, and restructuring secured transactions in the United States. Since discussion has been held in the previous presentations on trademarks, patents, and copyrights regarding (a) creation of the security right, (b) effectiveness of the security right against third parties, (c) priority, (d) third party rights, (e) default remedies and (f) conflict of laws, we do not believe it is necessary to examine these items again. In our view, those items do not substantively differ with respect to non-traditional categories of intellectual property. II. Executive Summary Trade secrets, industrial designs, website and domain names, consumer databases, geographical indications, plant variety rights, publicity rights, and moral rights are often described as non-traditional types of intellectual property. In contrast to patents, copyrights and trademarks, these non-traditional types of intellectual property are not frequently utilized as collateral in secured transactions, but they can be valuable and marketable assets. New technologies and laws that better define and protect these types of assets will encourage and enhance their marketability in the 21st century. Indeed, with the rise of the Internet and new technology companies, coupled with increased globalization of business opportunities, many businesses in the future may have relatively few assets capable of collateralization other than their intellectual property. TO READ MORE, CLICK THE PDF ICON BELOW: View as PDF |