UNCITRAL Considering Model Law of IP Licensing

The United Nations Commission on International Trade Law (UNCITRAL) is considering creating a model law concerning intellectual property licensing/transactions.  The Note by the Secretariat outlines the potential need and benefits from such a model law:

[T]he panel noted a gap in the law with respect to contractual matters. While some intellectual property laws contain a few provisions addressing contract terms, there is no general commercial law directed specifically to intellectual property licensing. Instead, contracting parties must rely on a general intellectual law merchant based on ad hoc rules and practices that often require specialized knowledge and experience. This causes increased transaction costs and barriers to international trade, and puts small and medium-size enterprises at a disadvantage.

. . . The panel referred to studies that show the benefits that States derive from increased intellectual property commerce. These benefits include: (a) superior access to finance and venture capital; (b) higher quality utilization of national human capital; (c) increased local inventive activity; (d) better access for local firms to technology: and (e) streamlined and enhanced access for the public to creative content. Realizing these benefits also requires legal support for commercial transactions in intellectual property, e.g. “licensing.” The lack of a general commercial law text specially crafted to the unique needs of intellectual property licensing constitute a barrier to realization of these benefits.

The Note by the Secretariat also lays out issues related to the feasibility of developing an international model law on intellectual property transactions similar to the CISG: 

"59. To establish the feasibility of the preparation of a uniform law text on intellectual property licensing, the panel then discussed a range of commercial issues that arise in typical intellectual property licensing contracts and ways in which they could be usefully addressed. These issues include the following: 

  (a) Scope of work: the proposed text should address intellectual property licensing issues that could be addressed with non-mandatory law rules that the parties could vary or derogate from, with the understanding that the text is not intended to alter provisions of intellectual property law;

  (b) Definitions and rules of interpretation: terms, such as “assignment”, “licence”, “exclusive”, “scope”, “use”, and other terms that would appear in the text, would need to be defined; also reference would need to be made to the general obligation of good faith and reasonable conduct;

(c) Contract formation: the question would need to be addressed whether there should be any special rules for the formation of an intellectual property licensing contract apart from a State’s general contract law rules on matters, such as written form and contract formation by electronic means; in this regard, it may be useful to review the Unidroit Principles of International Commercial Contracts;

  (d) Contract interpretation: a number of questions would need to be addressed, including whether: (i) the parties may agree to limit interpretation solely to the terms of a written instrument; (ii) if the written instrument is ambiguous, it is then proper to look to the conduct of the parties; (iii) a contract should be interpreted by neutral rules or whether there should be a rule in favour of one party (e.g. an author); and (iv) it is necessary to address interpretation of terms that call for successive performances, or that require performance to the satisfaction of the other party; 

  (e) Implied terms: the text would need to address the question whether an intellectual property licensing contract should be deemed to include implied terms, such as an implied representation about ownership or control of the intellectual property by the licensor, or a duty of cooperation, or mutual obligations to act in good faith;

  (f) Obligations and their performance: it may be necessary to address the general obligations of the parties (e.g. the licensor to enable use and the licensee to use according to the terms of the licence and pay royalties) and their performance; 

  (g) Transfer of rights and acceptance of duties: it may be necessary to address transfers of intellectual property rights by a licence agreement and transfers of contractual rights, for example, by an assignment of a right to payment, and to distinguish acceptance of duties from a transfer of rights; 

  (h) Breach of contract and remedies: it may be necessary to address situations that would constitute breach of an intellectual property licensing contract and the relevant remedies (e.g. whether exact or substantial performance is required, whether a distinction would need to be made between a breach that allows ending the contract and one that only allows damages, the measure and type of damages); and

  (i) Conflict-of-laws issues: the law applicable to an intellectual property licensing contract may also need to be discussed and in particular whether the parties may choose it and, if so, what matters may be covered by the law chosen by the parties. "

UNCITRAL, IP and security interests

The most recent issue of the Uniform Commercial Code Law Journal, Vol. 43, No. 2 April 2011, published in coordination with the Penn State Dickinson School of Law, contains at p.601 a most interesting article by UNCITRAL Senior Legal Officer Spiros Bazinas, "Intellectual Property Financing Under The UNICTRAL Guide". To give readers some idea of its contents, the IP Finance blog quotes from the article's conclusions:

"The Guide and the Supplement are designed to facilitate intellectual property financing, without interfering with intellectual property law. This result is achieved by commentary and recommendations that deal with the creation, third-party effectiveness, priority, enforcement (even within insolvency) of a security interest in an intellectual property right, and the law applicable to such matters. 

The commentary of the Supplement explains how the recommendations of the Guide and the Supplement would apply in the context of an intellectual property financing transaction. They do so in a way that ensures better coordination between secured transactions and intellectual
property law. With the same goal in mind, the recommendations of the Supplement modify the general recommendations of the Guide as they apply to security interests in intellectual property
rights. 

The Supplement is intended to provide guidance to States as to issues relating to security interests in intellectual property rights. It is not intended to deal with purely intellectual property law issues. However, it includes mild suggestions as to how States that may wish to enact the recommendations of the Guide and the Supplement could coordinate their intellectual property laws with their enactment of the recommendations of the Guide and the Supplement. 

The integrity of intellectual property law is preserved through a general rule that gives precedence to intellectual property law where it deals in an asset-specific and different way with a matter addressed in the Guide and the Supplement. 

The creation of a security interest in an intellectual property right is simplified by requiring only a written security agreement. At the same time, the rights of third parties are protected by third-party effectiveness requirements that refer to the registration of a notice of a security interest in an intellectual property right in the general security interests registry (or, if there is a specialized intellectual property registry, in that registry). 

Similarly, the interests of competing claimants are protected by a set of rules according to which priority among competing claimants is to be determined on the basis of the time of registration of a notice of the security interest in the general security interest registry, with appropriate exceptions (for example, giving priority to a security interest registered in an Intellectual property registry over a security interest registered in the general security interest registry). 

A comprehensive set of enforcement provisions in the Guide and the Supplement is designed to ensure certainty as to the remedies of the secured creditor in the case of default with due protection of the rights of the grantor and other parties with interests in the encumbered intellectual property, and with due recognition being given to the basic principles of intellectual property law. 

Discussion of applicable law issues completes the treatment of security interests in intellectual property rights in the Guide and the Supplement in a practical way that is consistent with intellectual property law. The recommendation adopted breaks new ground and should enhance
certainty of the law applicable to security interests in intellectual property rights and thus facilitate intellectual property financing. 

Finally, the discussion of insolvency-related issues is intended to supplement the regime of security interests in intellectual property with an analysis of the impact of the licensor's or licensee's insolvency on a security right in that party's rights under a licence agreement. It can be reasonably expected that the Guide will become a common reference tool in all secured transactions reform efforts. The reference to the Guide in the Australian and South Korean secured transactions law reform initiatives, as well as the use of the Guide in the Draft Common Frame of Reference and in World Bank secured transaction law reform documents justify such an expectation. 

The expectation of the Supplement can be no less, in particular, as it is the first text of its kind that deals with the issues at the intersection of secured transactions, insolvency, conflict-of-laws and intellectual property law, and cuts in an Alexandrian way many Gordian knots in that respect or even breaks new ground with rules that attracted a great deal of consensus among experts who initially were not of one mind".

Meanwhile, preparations for next week's Commission session (Vienna, 27 June to 8 July 2011) are going well. You can find the provisional agenda (A/CN.9/711) is here.  This blog is indebted to Spiros for letting us know that

"On security interests, we have just a brief report on the progress of WG VI and on the coordination with: (i) the security interests texts of Unidroit and the Hague Conference; (ii) the WB in preparing a joint UNCITRAL/WB set of standards on ST; and (iii) the EU Commission on the law applicable to the proprietary effects of assignments (the BIICL is preparing a study). Security interests will probably be discussed between 4 and 6 July".

Long-standing readers of this weblog will recall that it was UNCITRAL's first efforts regarding the IP-security interests zone of interest which triggered its being founded in January 2008.  The blog and UNCITRAL have both grown through the experience which, initially filled with friction, suspicion and misunderstanding, has brought a good deal of benefit to both the IP and the finance communities. Thank you, Spiros and UNCITRAL, for taking our comments, and our commitment, so seriously.

Pre-release UNCITRAL IP Supplement now out

Last Friday this weblog published this short piece announcing the adoption of the UNCITRAL Legislative Guide on Secured Transactions, Supplement on Security Rights in Intellectual Property. We've now heard from Spiros V. Bazinas (Senior Legal Officer in UNCITRAL's International Trade Law Division) that the pre-release version of the IP Supplement is now available. You can access it on the UNCITRAL website here.

UNCITRAL: now there's a Supplement

According to a United Nations Commission on International Trade Law (UNCITRAL) press release, on 29 June the "UNCITRAL Legislative Guide on Secured Transactions, Supplement on Security Rights in Intellectual Property" was adopted. This Supplement is the third text prepared by the Commission in the field of secured transactions law, following (i) the UNCITRAL Legislative Guide on Secured Transactions and (ii) the United Nations Convention on the Assignment of Receivables in International Trade (2001).

The Commission's Working Group VI (Security Interests) has been working towards this draft since 2007, recognizing that States need guidance as to how the recommendations of the Guide apply to IP and as to the adjustments they must make in order to avoid inconsistencies between secured transactions law and law relating to intellectual property. The Working Group, after five one-week sessions, completed its work in February 2010 and the Commission, at its forty-third session, finalized and adopted the Supplement. According to the press release

"The overall objective of the Guide is to promote low-cost credit by promoting access to secured credit. In line with this objective, the Supplement is intended to make secured credit more available and at lower cost to intellectual property owners and other intellectual property right holders, thus enhancing the value of intellectual property rights as security for credit. The Supplement, however, seeks to achieve this objective without interfering with fundamental policies of law relating to intellectual property. States are recommended to utilize the Guide and the Supplement to assess the economic efficiency of their secured transactions regimes as well as their intellectual property regimes and to give favourable consideration to the Guide and the Supplement when revising or adopting legislation relevant to secured transactions and intellectual property ...".

I've not yet read this Supplement, but wonder if anyone who has read it might be able to shed any light on its content and on whether it has addressed the anxieties that IP owners have consistently expressed in the recent past over the apparent mismatch between lenders' and IP-ers' interests. A 17 March draft is available on the UNCITRAL website here, and it has various appendices which are listed here, together with comments by governments and international organisations (including WIPO), but I don't know if these represent the final form of the Supplement. Can any reader please advise?

Update on the UNCITRAL secured transaction project

It has been a while since we last reported on where things stand with the proposed IP Supplement to the 2007 UNCITRAL Legislative Guide on Secured Transactions setting out recommendations for a uniform legal regime for secured financing. The following is an update on this project since our last update in October.

Working Group session in Vienna, November 2009

Following the London seminar of 14 October 2009 on IP rights and the UNCITRAL secured transaction project, the Working Group (“WG”) session in Vienna last November improved the language of the IP Supplement considerably, adding some helpful explanations regarding a number of points that were discussed at the seminar. The improved wording concerns in particular the issues of automatic termination clauses and acceleration clauses in licence agreements, as well as the integrity of licence agreement provisions and the secured creditor’s inability to acquire greater rights in an encumbered asset than the rights the grantor has. However, the WG did not reach agreement on two remaining issues of concern that were also discussed at the October seminar: 1) the issue of “ordinary course of business” exceptions, and 2) the choice of law question.

Working Group session in New York, February 2010

This session – the final WG session where the IP Supplement was scheduled for discussion on substance - was mainly about finding a solution on the two key remaining issues:

Issue # 1: Ordinary course of business: the “ordinary course of business” exception (an exception unknown under IP law) on the purchase of IP, intended for consumers to take copyrighted software free of any security interests that the vendor might have granted in the IP.

At this session, the WG was able to resolve this issue fairly quickly, agreeing on compromise wording to replace the previous, rather detailed recommendation focusing on software (included in doc. no. A/CN.9/WG.VI/WP.42/Add.4 dated 26 November 2009), as follows:

"The law should provide that the rule in Recommendation 81(c) applies to the rights and remedies of a secured credit under this law and does not affect the rights and remedies the secured creditor may have under the law relating to intellectual property."

The Guide in Recommendation 81, subparagraph (c) provides that an ordinary course licensee takes its rights unaffected by a security right previously granted by the licensor. The effect of this rule is that in the case of enforcement of the security right by the licensor’s secured creditor, the secured creditor cannot terminate the “ordinary course” licensee, as long as the licensee performs the terms of the licence agreement. All the secured creditor can do is to continue to collect royalties owed by the licensee to the licensor.

The new compromise wording essentially refers matters to the Guide’s Recommendation 4(b) - the overall rule clarifying that where the Guide is inconsistent with IP law, it does not apply. IP commentators have noted that this constitutes an acceptable compromise as it leaves the secured creditor with the possibility to sue the licensee in case of infringement of the IP right in question – with the important proviso that the underlying financing agreement must be drafted in a way that allows the secured creditor to do so.

Issue # 2: Choice of law: the question of which law is to apply, the law of the state(s) in which the IP is protected or the law of the state where the grantor of the security interest is located, which could create problems with chain of title searches and debtor allocation where there are multiple rightholders and/or creditors in different countries.

The WG could reach no consensus on this issue and a decision was made to defer the matter for further consideration to the UNCITRAL Commission which is to make a final decision at its next meeting in June/July when the IP Supplement is scheduled for finalisation and adoption. At the WG session a total of 6 different options to deal with the issue were discussed. All options would apply a different mix of lex protectionis and the grantor’s location law for the different proprietary matters the Guide deals with (the law applicable to the creation; effectiveness against third parties; priority as against the rights of competing claimants; and enforcement of a security right). Some of the options would also differentiate between registered and unregistered IP rights. Out of the 6 options discussed, the WG agreed that 4 options (with one option entailing two different versions) should be presented to the Commission.

Spring time at UNCITRAL ?

It will be interesting to see how the Commission will deal with this impasse. At the WG session it was noted that it is important to reach agreement on one option only, as otherwise a different rule would apply depending on the conflict-of-laws rule of the forum state, a situation which would perpetuate the currently prevailing uncertainty. If no agreement can be reached on an IP-specific recommendation, the general recommendations of the Guide as to the law applicable to security rights in intangible assets would apply - see recommendations 208 and 218, subparagraph (b) of the Guide.

Those IP security interests again: calling all stakeholders!

Following what was an extremely interesting and constructive seminar earlier this week on the UNCITRAL proposals for dealing with securitised interests in IP rights, the Intellectual Property Office (that's the operating name of the Patent Office in the UK) would like to hear further views from stakeholders on the principal outstanding issues, which we will feed into the next round of negotiations beginning on 2 November.

Right: stakeholder or steak holder? It's difficult to decide after so many 'meatings' ...

To this end the IPO has set up a dedicated e-mail address (uncitral@ipo.gov.uk) and would like to receive opinions and comments on the current draft text by 30 October -- that's pretty close, but time is of the essence. The text of the UNCITRAL proposals can be found at http://www.uncitral.org/uncitral/en/commission/working_groups/6Security_Interests.html

A very short note on the seminar appears here and a fuller report will be produced next week when time permits. Anyone wanting to read the fascinating history of the UNCITRAL proposals, as viewed through the eyes of this blog -- which was founded in response to them -- can read the whole story in reverse chronological order by clicking here.

That seminar ... and some expressions of thanks

A fuller report on today's seminar, "IP rights and the UNCITRAL secured transaction project: the draft recommendations and their potential consequences for British lenders and IP owners", will follow on this weblog in due course -- and before I post it I should add that I'd welcome comments from those present, since my organisational responsibilities caused me to miss some of the contributions.

At this point all I'll say is this:

* The main speaker, Spiros V. Bazinas (Senior Legal Officer at UNCITRAL secretariat), set out the project's aim and purpose, with a particular focus on IP financing and the UNCITRAL IP Supplement. This meant that he was on his feet and speaking/responding for the best part of three hours. The fact that he did so, dealing with some very tough questions from IP and banking interests alike, was hugely appreciated. Thanks, Spiros.

* The chairman (Professor Graham Penn) and the panellists -- Ben Goodger (Rouse Legal), Mark Bezant (LCI) and Nigel Page (Finance Editor, Intellectual Asset Management) -- took the time and trouble to turn up an hour before the event and discuss the main issues in some detail, to facilitate the smooth running of the seminar. Thanks, all of you.

* Further thanks are due to the volunteers who have served on an informal basis to promote interest in IP securitisation and to inject some urgency into its consideration by rights owners, licensees and their professional advisors. These include but are not limited to Eva Lehnert, Dawn Franklin and Lorin Brennan. The London office of Olswang gave us a room with a panoramic view, large enough to hold nearly 100 people, with coffee and biscuits too, for which we were all very grateful. Amazingly, the list of those attending incurred only four no-shows -- something of a record.

* The proceedings have been recorded and, assuming that the recording is audible, will be made available via this weblog to all who are interested.

Memo on some UNCITRAL issues now available

Ahead of tomorrow's seminar on the UNCITRAL proposals on secured interests in intellectual property rights (details here), a memorandum has been prepared which addresses some of the issues that are thought to cause concern or reflect practical problems and which are likely to raised in the course of the afternoon. While this document is being sent to all registrants for the seminar, it can also be downloaded by IP Finance readers here.

If everyone turns up, there will be over 90 people present -- an amazing number for what until recently was seen as an obscure, uninteresting and almost irrelevant issue for many businesses. There's still room for a few more participants: email Sandra Holloway here if you'd like to come. There is no charge for registration.

UNCITRAL and security rights in IP

Last month this weblog gave advance notice of a seminar it proposed to hold in Central London on the afternoon of 14 October on UNCITRAL and Security Rights in IP. Further details are now available from the IPKat weblog here.

Seminar on UNCITRAL and security rights in IP: advance notice

As previously reported on this weblog (see here, with links to all the previous articles on this topic), work has been continuing on a Draft Supplement to the UNCITRAL Legislative Guide on Secured Transactions dealing with security rights in intellectual property, as revised further to the April-May 2009 session of the UNCITRAL Working Group VI (Security Interests) and the approval of the insolvency discussion by the UNCITRAL Working Group V (Insolvency Law) at its May 2009 session. This Draft Supplement forms the basis for discussions at the next session of Working Group VI (Vienna, 2-6 November 2009).

As an aid to better understanding of the proposed Supplement and the practical issues which it raises for both lenders and IP borrowers, this weblog is pleased to announce that a seminar has been arranged for the afternoon of 14 October 2009 in Central London. Spiros Bazinas (Senior Legal Officer, UNCITRAL's International Trade Law Division) has kindly agreed to address the seminar, following which a panel comprising both financial and IP interests will comment. There will then follow a question-and-answer session in which all participants will be invited to seek explanations and clarification. To aid the smooth running of the seminar, all who attend will receive two 4-side memos, one written from the perspective of the lender, the other from the perspective of the IP sector, which will crystallise the issues.

Professor Graham Penn, a banking partner in Sidley Austin LLP with particular expertise in securitisation, will chair the seminar. Membership of the panel is still being finalised. As soon as further details are available, they will be announced on this blog. If you hope to attend, please mark the date in your diary now. If you want to read up, all the publicly available UNCITRAL documents on the subject can be accessed here.

IP securitisation and UNCITRAL: it's not too late to comment!

For those who have been following the ongoing drama of IP securitisation over the past couple of years (see IP Finance posts here, here, here, here, here, here, here, here, here, here and here), there's further news. Work has been continuing on a Draft Supplement to the UNCITRAL Legislative Guide on Secured Transactions dealing with security rights in intellectual property, as revised further to the April-May 2009 session of the UNCITRAL Working Group VI (Security Interests) and the approval of the insolvency discussion by the UNCITRAL Working Group V (Insolvency Law) at its May 2009 session. This Draft Supplement forms the basis for discussions at the next session of Working Group VI (Vienna, 2-6 November 2009).

UNCITRAL documents are available on the UNCITRAL website. Informal drafts for discussion with experts are not publicly available. However, UNCITRAL encourages interested organizations with expertise and experts to contact them, if they wish to examine and comment on such informal drafts, which are then finalized in accordance with the instructions of the relevant UNCITRAL (inter-governmental) Working Group and submitted to that Working Group for consideration. Interested organizations with expertise and experts may email the UNCITRAL secretariat here, or Spiros Bazinas (Senior Legal Officer, UNCITRAL's International Trade Law Division) here, if they'd like further information.

UNCITRAL – IP security

As previously reported on this blog, the UK's Intellectual Property Office requested comments on the latest draft Annex on security rights in intellectual property. Here are some of the comments the UKIPO has received:

1. Registration: the proposed creation of a Security Rights Register, which will increase the searching required to check the title to IP rights, will cause significant problems in identifying the parties against whom a search is made. It will also cause problems in that it is unlikely to identify the rights actually covered by the security documentation.

2. Integrity of licence terms: the possibility that a lender to a licensee may be able to obtain greater rights over the licensed IP than the rights licensed to the licensee remains a problem. There is concern that the Guide will overrule the written terms of a licence agreement, particularly in the event of insolvency and regarding termination terms.

3. Ordinary course of business: the concept of granting/taking a licence in the “ordinary course of business” referred to in the Annex is not known under IP law. There is an expectation that a buyer purchasing tangible goods in “ordinary commerce” under an authorised transaction takes the goods’ title free of any prior claims. For IP assets however, there usually is a common understanding that the use of the IP may be subject to some other, pre-existing rights.

For those who want to spot more issues, the Annex is available on the UNCITRAL website.

IP security and an absurdly tight deadline for response

An email has been sent today by the UK's Intellectual Property Office to an circular list named as "Policy". It reads as follows [with my comments in red]:

"UNCITRAL - Security Interests Working Group

Dear Interest [am I alone in not liking to be called 'Interest'?], 

A working group of The United Nations Commission on Trade Law (UNCITRAL) was established in 2002 to develop "an efficient legal regime for security rights in goods involved in a commercial activity". The Commission subsequently noted that intellectual property rights were increasingly becoming an extremely important source of credit and should not be excluded from a modern secured transactions law. The Working Group on Security Interests has held a number of sessions to discuss the issue [one of which resulted in the establishment of this weblog] and is developing an Annex to the UNCITRAL Legislative Guide on Secured Transactions dealing with security rights in intellectual property [an internal search of this blog will reveal numerous items and documents related to this initiative]. The Annex will discuss how the principles of the Guide apply where the encumbered asset consists of an intellectual property right. The latest draft to be discussed at the next Session beginning on 27th April 2009 in New York can be found here. [No it can't. Readers have complained that this link doesn't work. All the papers relating to the IP Annex to the Guide seem to be available here]

If you would like to comment on the draft Annex before the 15th session or require further information, please e-mail policy@ipo.gov.uk no later than Friday 17th April [this means just 14 days, inclusive of two weekends one of which is a major holiday, to get one's head round the complex issues and then articulate some sort of response; not much time, is it?]."

I'm going to be effectively out of action between 8 April and 17 April, but I do hope that readers of this blog will be able to coordinate some sort of response.  Can I suggest that readers who want to be involved, but who have not yet identified themselves, should post their names and email addresses as contacts below this post, so that someone can contact them or they can at least contact one another.

UNCITRAL draft: expert group meeting ahead

I have learned from Spiros V. Bazinas, Senior Legal Officer in the International Trade Law Division of the UNCITRAL secretariat, that an expert group meeting is to be held on 11 and 12 December 2008 to discuss a revised draft of the Annex on security interests in intellectual property rights (for earlier posts on this controversial and technically complex topic see here, here, here, here and here). Discussions at the expert group meeting will be based on a draft working paper which will be sent to you at least a week before the meeting. Spiros has furnished the first draft of the Annex and the report of the session during which this draft was discussed. There are three documents in all:

* Annex to the UNCITRAL Legislative Guide on Secured Transactions dealing with security rights in intellectual property (Part 1) (32 pages, covering the Introduction; Scope of application and party autonomy; Creation of a security right in intellectual property)

* Annex to the UNCITRAL Legislative Guide on Secured Transactions dealing with security rights in intellectual property (Part 2) (33 pages, covering Effectiveness of a security right in intellectual property against third parties; The registry system; Rights and obligations of the parties to a security agreement relating to intellectual property; Rights and obligations of third-party obligors in intellectual property financing transactions; Enforcement of a security right in intellectual property; Law applicable to a security right in intellectual property; The impact of insolvency on a security right in intellectual property);

* Report of Working Group VI (Security Interests) on the work of its fourteenth session (Vienna, 20-24 October 2008).

Any reader who wishes to attend the December session should email Spiros or phone him in Vienna on +43-1-26060 4072, so that his request can be considered. More importantly, if any reader would like to study the documents listed above in order to make any constructive and informed comments upon them, they can be obtained directly from Spiros or by emailing me here.

International bodies to discuss IP securitisation, leasing issues

Intellectual Property Watch previews this week's meeting of IP and financial stakeholders, representatives from developing and developed countries and nongovernmental organisations in Vienna under the aegis of the United Nations Commission on International Trade Law (UNCITRAL). This meeting is intended to finalise a global guide on how to use IP as collateral in commerce. At the core of the discussions is the work of the UNCITRAL Working Group VI (Security Interests) on an intellectual property annex to the UNCITRAL Legislative Guide on Secured Transactions. Issues that remain unresolved include

"the scope of the rights of a licensor when it comes to intellectual property; how specific property descriptions should be in registries; what happens to the rights of both the licensee and licensor when one or the other cannot pay their debts; and which country’s laws should apply in transactions where intellectual property is involved".
IP Watch also reports that the International Institute for the Unification of Private Law (UNIDROIT) meets in Rome next month to put the finishing touches on a model leasing law. Outstanding issues include that of whether software should be included as an “asset” in proposed model:

"There is concern among some in the IP community that if software is included, or even implied, to be an asset in a leasing law geared toward tangible goods, it could pull other forms of intellectual property that are intangible into a world where they should not be. For example, movies these days look a lot like software, with many DVDs offering extended viewing capabilities through the latest technology".

Source: "Governments, Financial Stakeholders Meet On Policy For IP As Collateral" by Liza Porteus Viana.

Confused by the UNCITRAL Guide? Try this!

Lorin Brennan has prepared an excellent memorandum describing quite specifically the interaction between the UNCITRAL Insolvency and Secured Transactions Guide and intellectual property rights. This memo aims to satisfy the twin aims of “keep it short” and “make it accurate”. If you'd like to see a copy, email me here and I'll send it to you.

UNCITRAL draft: last chance to comment?

IP Finance has received a copy of Working Paper 33 on security rights in intellectual property rights, as revised pursuant to the recent expert group meeting (Vienna, 21-23 January 2008). It's nearly 50 pages in length and runs to over 24,000 words. However, UNCITRAL wants comments on it by not later than 22 February 2008. If you want a copy, email Jeremy here and he'll send it to you (there may be a delay of a day or two, since he's travelling and has limited access to the internet for the next few days). This topic may be finalised at UNCITRAL's meeting in New York this coming May, in which case this may be the IP community's final fling.