IP Security Interest Registration Begins in 2011
06 December 2012
The long awaited federal Personal Property Securities (PPS) regime is to start in May 2011, notes the Griffith Hack newsletter Breakthrough. The regime aims to establish a national personal property securities register that will have electronic registration and search functions.
“In Australia, IP rights are personal property and can attract security interests,” writes special counsel Geraldine Farrell. “However, only some forms of IP have a register (patents, designs, trade marks and plant breeder’s rights) and the ability to record security interests (such as mortgages) is limited. Registration is voluntary and not often undertaken.”
For companies that own IP assets, the Corporations Act 2001 (Cth) requires registration of security interests over certain IP assets in the Australian Register of Company Charges, writes Farrell. This charge register is not applicable though for all forms of IP. The charge register can also not be used when charges are created over IP assets owned by an individual.
“The registration of security interests in personal property, including IP rights, is inefficient in Australia, hence the move to introduce a new PPS register,” says Farrell. “Under the regime, personal property includes all forms of IP rights, including copyright. The only way to register a security interest in copyright previously was if it was in the form of a charge over a company’s assets.”
Personal property also includes licences, provided the licensee is able to transfer the licence. The PPS register will provide a public alert system of security interests for priority purposes. If there is more than one security interest on a personal property item, the rules will set out which party has priority over other security interests, says Farrell. A purchaser or entity wishing to take security over the personal property will be deemed to have notice of security interests already registered on the property.
“Registration will be voluntary, but the Government hopes that using the register to determine priority will encourage registrations,” says Farrell. “Owners of IP rights who are granting security interests over their property are likely to see the holders of the security interests registering their interests on the PPS register. Similarly, entities that are taking security interests over personal property should take steps to ensure that their interest is recorded in the PPS register.”
The Government will provide further information on the register as it is being set up.
