Singapore’s deputy prime minister Teo Chee Hean has announced plans to introduce a scheme that allows banks to accept IP as collateral when granting business loans.
Aimed at encouraging banks to recognise IP as an asset, the scheme is due to launch in the first quarter of 2014.
Under the scheme the government will partially underwrite the value of companies’ IP so that banks will not bear all the risk if companies cannot pay back their loans.
Announced at the 4th Global Forum for Intellectual Property on August 27, the scheme is one of the initiatives hoped to strengthen Singapore’s standing as a global IP hub, whose position at the “crossroads of Asia” allows innovators to use the country as a base to test and market new ideas, Teo said.
Jim Greene-Kelly, managing partner at Marks & Clerk LLP’s Singapore office, said the move is a “step in the right direction” for Singaporean businesses and "presages the widespread use of IP rights as assets in their own right, not just as defensive tools”.
"IP rights can be traded like other kinds of assets, but they can also be licensed out and monetised in a range of uniquely beneficial ways,” he added.
Greene-Kelly said that a similar scheme has been announced in Malaysia, and Marks & Clerk LLP’s Asian offices are seeing a “huge increase in non-traditional uses of IP rights, as the region follows the lead established by the US.
"Our consultants, who value IP rights so they can be monetised and securitised, have consequently experienced a real upturn in business coming from Asia,” he said.
Greene-Kelly added that a thorough review of an organisation’s IP portfolio now forms a key part of the due diligence process for transactions including investment, mergers and acquisitions.
(Source: WIPR)
