Imperfections of law of perfection-of-security system in India

Dr. Lawwellman P
Assistant Professor (Law),
Government Law College, Kozhikode


Abstract

It is well accepted that access to credit is crucial for economic growth. Intellectual Property is recognised as a valuable asset world over and it is considered that use of intellectual property as security asset can increase available credit. When a security ** interest is created by borrower/other person interested in the borrower, in favour of lender, it becomes enforceable against the borrower/that other person who created security interest. But the existence of the security interest will not necessarily be known to third parties who propose to acquire an interest in the asset, or to other unsecured creditors. To safeguard such people law usually requires the secured party to give some form of public notice. This requirement of public notice is known as perfection requirement for third party effectiveness. The perfection systems presently existing in India are Registration/Filing/Noting with Authorities under Intellectual Property Statutes and Laws Other Than Intellectual Property Statutes; and Possession/deposit of title document based perfection systems. Attempt in the article is to survey the existing system(s) of perfection of security interest recognised in India to see its appropriateness to IP secured Financing and bring out imperfections thereof.

** The term ‘Security’ means either the mode security or the asset in respect of which security right is created, depending on the context.

Keywords: Security Systems, Intellectual Property, IP Security, Unsecured Creditors, Lawwellman

Preferred Citation

Dr. Lawwellman P, Imperfections of law of perfection-of-security system in India, The Lex-Warrier: Online Law Journal (2018) 1, pp. 1 – 18, ISSN (O): 2319-8338

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