As discussed previously in this series, there are inherent
challenges in valuing intellectual property (IP) assets. Valuation
requires an understanding of the marketability and commercial
potential of the assets, as well as an awareness of the unique
risks associated with them. This entails a more exhaustive due
diligence process that can be time-intensive and challenging to
complete.
In addition to valuing IP, lenders must also understand the
process for registering a security interest in IP. There are
different systems for provincial, federal and U.S. registrations.
Each presents unique features.
Many forms of IP rights exist without any formal governmental
approval or registration of the IP. As previously addressed in this
series, virtually all companies in Canada have IP rights that are
not registered with the Canadian Intellectual Property Office
(CIPO). In particular, while some types of IP rights require
registration (such as patents and industrial designs),
