As the world economy enters the twenty-first century, job and wealth creation is increasingly based on innovation and creativity that, in turn, can give rise to important intellectual property rights. For many companies and individuals these intellectual property rights may represent their most valuable assets, or in some cases, their only valuable assets. As a result, intellectual property rights increasingly play a critical the role in financing.

Unlocking the job and wealth creating potential of intellectual property assets requires putting these assets into use, and that often requires a capital investment. Unfortunately, many entrepreneurs and innovators lack the capital necessary to develop business and products based on their creativity and innovation and must turn to outside sources for funding. As part of the funding the providers of capital generally require collateral. This poses little problem if the collateral is in the form of real estate or tangible property. When the assets are in the form of intangible property, specifically patents, copyrights and trademarks, the creation and perfection of a security interest in the assets is significantly more uncertain and difficult. As a result of this increased uncertainty and difficulty, the availability and cost of capital for Information Age individuals and organizations is negatively affected.

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IDEA: The Journal of Law and Technology

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