Loans secured by intellectual property rights: problems and prospects

The gradually developing practice of issuing loans secured by intellectual property rights is a very important positive signal for all participants of the Russian intellectual property market.

Firstly, it is a test of the maturity of our legislation, which allows for such an operation, and the literacy of lawyers who are able to properly formalize it. If earlier scientific publications stated that the domestic legislation in the field of intellectual property complies with the best international standards, now we can recognize that such compliance is tested in practice on issues requiring complex application of the current legal provisions.

Secondly, it shows that modern methods of intellectual property valuation are finally being recognized. Until recently, the very necessity of such valuation caused significant problems for specialists due to the lack of generally recognized methods of such valuation.

Finally, thirdly, and most importantly, it shows positive changes towards the gradual recognition of intangible assets as real economic values that can actively participate in turnover, generate income, and be used as collateral, i.e. gradually achieve equality with traditional tangible assets.

Such movement is objectively conditioned, in the modern world it is knowledge and creative achievements that become more significant objects for attracting investments than material objects - "factories, machines, steamships".

Nowadays, creations of the human mind and other objects of intellectual rights (intellectual property) have become essential elements of economic welfare.

Companies and countries that fail to take this into account risk falling irretrievably behind progress, losing ground that may have seemed inviolable not so long ago.

For example, in 2009, the ranking of the most important brands in the world was as follows:

Place in the ratingCompanyEstimated brand value(US$ billion)
4.General Electric47,8

In 2020, there are no "material" (food or iron-producing) brands left in the top five - only technology companies operating in the digital environment and actively using intellectual property rights in their activities:

Place in the ratingCompanyEstimated brand value(US$ billion)

These changes reflect the general trend of "re-evaluation of values", understanding the need to restructure work to meet the requirements of the digital market, for which the results of intellectual activity and means of individualization are the most important assets and at the same time the most important guarantors of protection and defense of interests of modern high-tech companies.

Intangible assets themselves, based on new innovative achievements, are no less reliable than tangible objects, including when used as collateral, if they are properly valued.

The idea of granting a loan secured by intellectual property allows obtaining funds for the development of innovative projects under an interesting "idea" underlying such a project, but only if it is properly formalized in the form of legally protected objects of intellectual rights - intellectual property, because only if this requirement is met, valuable intangible assets - intellectual property - can be formed on the basis of the "idea".

Banks in such cases act both as credit institutions and as investors, while guaranteeing their interests by pledging rights to inventions or other intellectual property rights without taking them away from the right holders. The advantage of such solutions is that, in most cases, intellectual property rights can best be realized by the right holders themselves.

In case the recipients of the loan fail, the bank can return the provided funds at the expense of realization of pledged rights to the result of intellectual activity, which can be much more liquid than a pledged real estate object with an unsuccessful location or a production complex, the work of which is based on outdated technology.

However, the development of lending secured by exclusive rights as an instrument capable of having a significant impact on the intellectual property market of the Russian Federation requires the participation of professional companies - gas pedals of growth of new intellectual-intensive projects.

Such gas pedal companies are able to ensure the selection and verification of interesting innovations, assist authors and rights holders in choosing forms of protection and proper registration of their rights, create conditions for an objective assessment of the value of created intangible assets and the prospects for their commercial use, attract investors and partner banks to lend to the most promising projects, as well as provide the necessary legal and organizational support for the project, including at the stages of subsequent investment attraction, p

We have to admit that in the conditions of insufficiently developed relations in the Russian market of intellectual property rights in the absence of such professional intermediaries as gas pedal companies should be, the lending of innovative projects on the security of exclusive rights is doomed to remain a rather rare phenomenon, occurring in isolated cases and unable to provide significant assistance in solving the problem of using and involving in the market turnover of intellectual property created by Russian authors and belonging to them.

Author of the article: Dmitry Ivanov