An Analysis On Strengthening IP-Backed Financing In India And Comparison With Asian Models
- IJLLR Journal
- Aug 13
- 2 min read
Manoj Prakash S, Tamilnadu National Law University
ABSTRACT
Intellectual Property serves an important role in the society. It is not just a mere legal right, but a substantial economic asset to a nation. These intangible assets, namely the patents, copyrights, trademarks, trade secrets, industrial designs, geographical indications contribute to the IP holder by enabling access to finance. Most companies require capital and finance to develop themselves. Due to the evolving IP era, companies now hold both tangible and intangible assets. Companies felt the need to maximize those intangible assets through identification, protection, valuation and leverage of such IP assets, which became to known as IP asset management. These assets are also utilized to increase access to credit. The strategic use of this assets to acquire fund can help the IP firms to achieve a better position in the market, which is known as IP Financing. This mechanism enables Small and Medium enterprises (SMEs) and Startups to raise funds as they potentially holds certain intangible assets on their own. Successful models highlights the potential of this mechanism. There are various components involved in IP backed financing ecosystem. IP Insurance and IP Exchange are two such important components. Despite the benefits that can be acquired from these components, IP Financing has its own set of barriers such as information asymmetry, lack of secondary markets for trading IP and lack of professionals, which undermines the value of this mechanism. India is also susceptible to such barriers. Regardless of having the National IPR Policy of 2016 which has an objective of commercialization of IP for the benefit of investors & IP holders, the concept has not ripen its benefits at the fullest. In contrast, certain other Asian countries have a better mechanism and institutional framework that utilizes the IP backed financing in its complete sense. This study intends to understand what constitutes IP backed financing, especially how IP insurance and IP Exchanges offers advantage to the economy of a nation. It also aims to analyze the different mechanisms used to secure IP finance by other Asian countries, particularly with China, Hong Kong and Singapore. By such comparison, the institutional or legal barriers or lack of efficient schemes or government support can be tackled by incorporating other better practices into Indian IP backed financing ecosystem.
Keywords: Intellectual Property, IP asset management, IP – backed financing, IP Insurance, IP Exchange.
