Wednesday, 9 April 2008

Trust law provides fresh route in Japan

There's good news for anyone planning to securitise patents in Japan, according to an article on Intellectual Asset Management magazine's editor's blog. The article, "Securitising patents in the global credit crunch" by Yohei Iwasaki (Uchida & Samejima Law Firm), outlines the new Trust Law (Law 108/2006) which provides an alternative means for patent securitisation to the little-used Law Relating to the Securitisation of Assets. It enables investors to hold risk-manipulated beneficial interests that are related to the trustee, instead of bonds or shares. Moreover, entrusted patents are separated from the risk of an originator and/or a trustee going bankrupt. The author concludes that there is much optimism that securitisation transactions with innovative structures, using the new Trust Law, could become more common in future.

1 comment:

Kirk Meyers said...

As a memeber of the US securitization comunity, I am a little puzzled by all the articles I see that mention securitization as a viable monetization option for IP. There are certainly a handful of deals (Sears, Bill Blass, Candies, restaurant franchise deals...) that have been completed but this financing option typically requires size and some a track record. Now, I am a firm believer that the securitization market should be able to grow and incorporate IP given the stable cash flow associated with it, but right now, its just not there. It wasn't even there before the suprime mess crippled the securitization sector.

So, I ask the folks here, what am I missing? Are there small deals that get done privately that just don't make the headlines? Are people loosely throwing out the phrase securitization but really mean asset backed loan (ABL)? Or are people just being optimistic about this particular financing source?

I'd really like to sell my institution on providing leverage on IP, at least on a short term basis, so any feedback would be much appreciated.

Thanks.