WIPO posts video of IP-based finance panel discussion from Singapore IP Week

September 30, 2021

IP in the news

The World Intellectual Property Organisation (WIPO) continues to emphasise its commitment to unlocking IP-backed finance globally with the posting of a video of a panel discussion on the topic from the recent Singapore IP Week. The session was titled 'The Role of IP Assets in Strengthening Business Access to Finance'.

The online panel was organised by WIPO in association with the Intellectual Property Office of Singapore (IPOS), which runs Singapore IP Week. At the heart of the panel session was the publication of highlights of a report exploring initiatives to drive the availability of IP-based finance in Singapore.

Due for official release shortly, this is the first in a series of country reports commissioned by WIPO’s IP for Business Division, part of its IP and Innovation Ecosystems Sector. The project will look at how different countries are introducing policies to help enterprises use IP as a financial asset. At the same time, the reports will identify obstacles to making this type of financing more widely available. The project aims to bridge the information gap about the IP finance.

In his introduction to the online session, WIPO Director General Daren Tang explained that the motivation behind building the evidence base is “to move the international conversation forward so that more innovators and creators from around the world can begin to find tools and policies that can help them maximize and leverage the value of their IP.” he said.

Mr. Tang then discussed a “blind spot” that complicates the policymaking process in the area of IP-backed financing. With no standard way to value intellectual property or use it to access capital, enterprises cannot realize the full benefit of their IP. Mr. Tang also stressed that “the complexities involved in valuing intangible assets prevents many firms from leveraging what is often their most strategic asset – their IP – to access the financing they need to scale up and to grow.”

Inngot CEO Martin Brassell, an expert on IP monetization and IP-based finance, was on the panel. He highlighted two main issues which need to be addressed.

The first is high transaction costs, which are magnified by the complex and unique nature of IP and intangible assets which currently mean lenders must engage specialist due diligence and valuation of the assets being relied upon for the loan.

The second problem is a lack of information about how much IP and intangible assets fetch when bought and sold. “Transparent secondary markets for IP are actually quite hard to achieve,” he said. While IP is widely recognised as a key driver of enterprise value, and IP licensing deals happen regularly, in many cases, transaction details will not be made public.

In passing, he referenced a recent project completed by Inngot and its partner, international IP services firm Rouse, for Chinese online company Alibaba. This involved analysing significant volumes of sales data from Alibaba’s patent auction service, with the aim of helping users, Chinese insolvency practitioners, set a more accurate base price for patents owned by insolvent companies. This should allow them to recover more money for creditors.

However, while data driven analysis will play a major role in expanding the use of IP-based finance around the world, Martin Brassell stressed that other elements, including the availability of insurance for IP asset value, thus giving lenders more confidence in the use of IP as collateral. Finally, there needs to be a careful balance between setting international standards for regulating IP-backed finance and the danger of stifling its use through over-regulation.

WIPO’s report on the panel session, and a link to a recording of it, has just been published on its website. Martin Brassell’s presentation starts at the 29 minute mark and last for 20 minutes, during which he reviews challenges to implementing IP-backed finance as well as policy and market developments in the US, China, and South Korea.

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