The Dynamic and Challenges of Intellectual Property Securitization for Financing Intenational Business in Creative and Technology Sectors

• Main Author: Mas Rahmah
• Format: Book Section PeerReviewed
• Language: English; English; English
• Published: AIS, MITI Malaysia KPT dan Pusat Pengajian Antarbangsa Universiti Utara Malaysia 2012
• Subjects: K Law; K1401-1578 Intellectual property
• Online Access: http://repository.unair.ac.id/98893/1/5%20THE%20DYNAMIC%20AND%20CHALLENGES%20OF.pdf; http://repository.unair.ac.id/98893/2/5%20PG%20kadep.pdf; http://repository.unair.ac.id/98893/3/5t%20THE%20DYNAMIC%20AND%20CHALLENGES%20OF%20INTELLECTUAL%20PROPERTY%20SECURITIZATION%20FOR%20FINANCING%20INTERNATIONAL%20BUSINESS%20IN%20CREATIVE%20AND%20TECHNOLOGY%20SECTORS.pdf; http://repository.unair.ac.id/98893/
• Institution: Universitas Airlangga

This paper aims at exploring the dynamic of Intellectual Property (IP) securitization as a feasible financing for the technology and creative businesses which need ready capital to operate and develop products as well as market expansions. This idea is dedicated to analyze the prospect of IP assets for financing international business start-ups, development and expansions. To visualize the above idea, this work will explain IP securitization and show how technology and creative companies can use it to gain direct and indirect benefits. This paper demonstrates that IP securitization enables the technology and creative companies to achieve a reduction in financial cost by providing access to lower cost capital market funding. It also explores why a corporation might prefer to use IP securitization as a new vehicle for raising funds by showing the benefit, cost and flourish associated with IP securitization. It is realized that this idea may spark some challenges at doctrinal, normative and practical level. At doctrinal level, the challenge refers to the philosophical issue related to exclusive right doctrine. At the normative level, the challenges are caused by the absence of the regulation concerning IP securitization in some countries influencing the validity and viability of IP securitization transaction. At the practical level, this idea may not guarantee the certainty of IP valuation as a unique asset involving complex procedures and matrix of supporting elements as well as interdisciplinary laws and so forth. In addition, while IP securitization has been growing rapidly in the United States after the success securitization of ‘Bowie Bond’, it has not taken off on a cross border basis because of diversity of laws and practices. In order to overcome the challenges, this work offers the need of government involvement in developing and promoting IP securitization. Governments must pay particular attention to the development of the necessary economic and legal framework for supporting IP securitization. This idea starts with the enactment and enforcement regulation and the establishment of elements and infrastructures for the transaction.