Saturday 23 July 2011
Security interests in Intellectual Property under the new PPS regime
The Personal Property Securities Act 2009 (Cth) (PPSA) is now expected to commence in October 2011, and will see the establishment of a federal Personal Property Securities Register (PPSR) for registration of security interests in personal property.
This article provides a preliminary guide to some of the impacts this will have on intellectual property rights.
For the purposes of the PPSA, personal property includes intellectual property in the form of:
- patents;
- designs;
- trade marks;
- plant breeders’ rights;
- copyright; and
- circuit layouts.
The PPSA can also apply to security interests in relation to:
- intellectual property licences;
- inventory;
- goods;
- contractual rights; and
- the right to take legal action with respect to intellectual property.
New register for security interests
The new PPSR will be maintained by the Insolvency and Trustee Service of Australia, and will serve as a central, publicly accessible, searchable register for securities in personal property.
The Personal Property Securities (Consequential Amendment) Act 2009 amended the Patents Act 1990 (Cth), the Trade Marks Act 1995 (Cth), the Designs Act 2003 (Cth) and the Plant Breeders Rights Act 1994 (Cth) to require registration of security interests in intellectual property on the PPSR, and to standardise rules of priority.
Where intellectual property rights are the subject of a security interest, the PPSA will provide the rules for:
- taking property free of security interests;
- priority between competing security interests; and
- enforcement of security interests.
It is important to appreciate that personal property (in the nature of a registered patent or trade mark, or an intellectual property licence for example) is not itself a security interest capable of registration on the PPSR. It is the “security interest”, not the “collateral”, that is registered. For example, a charge may be given over assets consisting of or including a patent portfolio or a patent licence. It is the charge that is the security interest, not the patents or the patent licence which form the collateral.
The following arrangements may also constitute security interests registrable on the PPSR:
- retention of title clauses such as might be found in supply agreements or terms of trade;
- intellectual property re-assignment provisions or reversionary rights (such as in copyright licences); commercial consignments of goods;
- hire purchase agreements; and
- operating or finance leases or bailments of plant or equipment (that constitute a PPS lease for more than 1 year or an indefinite term).
This might include supply of equipment or goods in an agency or franchise relationship (e.g. goods provided to a business to use free of charge).
Click here to read the full article
Article supplied by Katrina Chambers, Partner - Flower and Hart Lawyers
Disclaimer
This article is intended to provide a general guide only and does not constitute legal advice. While care has been taken in the preparation of these materials, they should not be relied upon as a substitute for advice about specific circumstances. Flower and Hart does not warrant or represent that the information provided in this article is sufficiently complete, detailed or accurate, or fit for any particular purpose.
© 2011, Flower and Hart Lawyers
