A+| A| A-

Intellectual Property as Collateral

The scope of using intellectual property as collateral is discussed. Through examples, it is shown here that, owing to its volatile and dynamic nature, IP is not a reliable collateral. There is a pressing need for proper methods of valuation and registration so that confidence in IP as collateral is enhanced.

The question of whether intellectual property (hereafter IP) could be used as collateral for a bank loan is a recent and a controversial one. Cash-strapped entrepreneurs may have the idea, yet at the same time, could lack the money to condense it into reality. To bridge this gap, it would be worth considering whether and under what circumstances—their very idea ­itself should be deemed sufficient for successfully securing a loan.

While such a situation would be ideal for entrepreneurs, when this question is considered from the perspective of a bank; a natural apprehension that comes to mind, pertaining to the use of IP as collateral for a loan, has to do with the fundamental nature of IP itself—in that it is intangible, might not retain its value unlike gold or real estate, and would therefore pose a high amount of risk to any bank accepting it as a valid collateral for a loan.

To read the full text Login

Get instant access

New 3 Month Subscription
to Digital Archives at

₹826for India

$50for overseas users

Updated On : 3rd Aug, 2020

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

The genesis and evolution of the COVID-19-led migrant crisis in India, along with the institutional responses, is discussed. The focus is on the...

C P Bhambri believed that the task of social science, like all other sciences, was to arrive at the truth on the basis of well-established facts....

The COVID-19 pandemic may affect the financing opportunities for innovation. The revenue loss induced by the pandemic is likely to divert the...

When the goods and services tax was introduced in July 2017, states were given a revenue guarantee of 14% per annum on their GST revenue over the...

India’s public health system has struggled to cope with the COVID-19 crisis. Even before the pandemic, India’s public health infrastructure was...

The National Education Policy, 2020 unveiled finally seeks to usher in major structural reforms in higher education. Among many measures,...

The COVID-19 pandemic and the resultant lockdown led to the closure of all markets in Manipur, including the Tribal Market Complex in Imphal East...

Coherent national strategies, backed by regional cooperation efforts, offer a way forward for economic recovery in South Asia, which is rapidly...

Sections 357 and 357-A of the Code of Criminal Procedure, 1973 lay down the procedure for granting compensation to the victims of crime. Under the...

The COVID-19 pandemic has provocatively challenged the extant paradigm of development whose theoretical underpinning is derived from the...

Back to Top