How Safe Is Your Security Interest in Intellectual Property? Five Tips That Protect You

P ALIGN='JUSTIFY'>Unfortunately, it is not uncommon to discover that a lender, whether a financial institution or otherwise, has not properly documented or secured its interest in intellectual property collateral proffered by a borrower to secure a promissory note and loan. In some instances, failure to do so at the outset may impact a lender's priority or security with severe consequences. And, rarely, is there a complete "after the fact" repair available.

Lending against intellectual property assets (including copyrights, trademarks, patents, and domain names, collectively "Intellectual Property") is reemerging as an important financing tool for lenders and intellectual-property holders to maximize the value of their transactions. Lenders get the security of a viable property as collateral and borrowers have something more to offer with their intellectual property. The rules governing the securitization, perfection and foreclosure of intellectual property