UNCITRAL Begins Debate On Harmonising Secured Financing, IP Laws 20/05/2008 by Liza Porteus Viana, Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)By Liza Porteus Viana for Intellectual Property Watch NEW YORK – A United Nations group on Monday began debate on a publication aimed at helping the world’s governments harmonise their secured financing and intellectual property laws. The UN Commission on International Trade Law (UNCITRAL) Working Group VI is meeting in New York this week to hammer out differences various parties have on issues including transfer of intellectual property rights, creation of a security right, registries, and intellectual property rights related to tangible assets when those rights are used as collateral to secure credit. More than 60 state delegations, along with the World Intellectual Property Organisation, World Bank, and non-governmental organisations including the Commercial Finance Association, International Federation of Phonographic Industry (IFPI) and International Trademark Association, are involved in developing an intellectual property-specific annex to a broader UNCITRAL Secured Transactions Guide. UN officials stressed that the guide, which is intended to be the default for nations in developing their secured transactions law, defers to national law and international agreements relating to intellectual property and should not aim to reinvent the wheel. “Our job is to find ways to accommodate the specificities of the intellectual property rights within the scope of the legislative guide,” said Working Group Chairperson Kathryn Sabo of Canada. India’s delegation voiced concern that the annex recognise the transfer of intellectual property rights in favour of the lender, who is financing the security, while Switzerland and Canada said the issue of third-party effectiveness in the creation of a security right should be further clarified. France’s delegation, meanwhile, suggested that the annex encourage legislation in various countries to fill in the gaps between securities and intellectual property law. “We think that it would be desirable,” said France’s representative. “Based on the supposition that there are no specific rules for intellectual property relating to securities, in that case, [let’s] see how the guide can be applied [to current law], rather than if pre-existing rules could be applied within the guide,” the latter of which, he said, could lead to long, useless discussions. Participants also debated just how specific the description of an encumbered asset (an inventory of television sets, for example) should be in a security agreement when outlining exactly what the lending institution can do with the intellectual property in, say, the case of a loan default. Intellectual property law allows the rights holder to control many uses of the tangible asset – such as allowing a rights holder to prevent unauthorised copying of a book – but not others, such as preventing an authorised bookstore to sell the book or the consumer to write on the pages. A security right in the intellectual property right does not extend to the tangible asset unless specified in the lending agreement. Some, including IFPI, argued that the security agreement should outline limits to exactly what, and how, intellectual property rights can be used as collateral. “The law should, we believe, make clear, what sort of description is sufficient,” said a Canadian representative. Some delegations suggested the annex address who has the right to sue intellectual property infringers, while others want it to emphasise the need to register the creation of a security interest in respect to intellectual property rights. “In my view, this is where the danger lies. The essence of registration … is to publicise the type of security that has been created, as well as intrusion by third parties,” said the Nigerian representative, who stressed that registration is particularly important in developing countries, where the law is often uncertain. “The idea is to make sure that what has been created is protected and can be used effectively for purposes of collaterals and other security regimes,” the representative added. But officials noted that harmonising intellectual property law is the mandate of organisations like WIPO and is addressed by various international treaties. The Working Group needs to instead focus on who has the security right when intellectual property is involved in financing transactions. “We’re not trying to change intellectual property law, we’re trying to respect intellectual property law and see how it fits with the guide, where the guide is the default, really,” said Sabo. “I think we have to be careful about going in that direction.” “It is not our business to determine whether it’s right or not to call for registration in order for the creation of intellectual property rights – this is a matter of national law, not our purview,” added Argentina’s representative. “We should not meddle in the business of creation of intellectual property rights.” Liza Porteus Viana may be reached at email@example.com. 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