Register your security interest for personal property or you could lose it. The Personal Property Securities Act 2009 (PPSA) provides security for personal property through registration.
Did you know intellectual property (IP) and IP licenses are included in personal property? Next time you think of purchasing the rights to intellectual property, it might be a good idea to check the Personal Property Security Register (PPSR).
What is IP under the PPSA? It is trade marks, patents, designs and Copyrights. What are intellectual property licences? This is defined under the PPSA as authority or license to exercise rights comprising intellectual property. So it is not the IP license that is the security interest, rather it is the personal property over which a security interest can be taken.
It is also important to remember that if something is a registered Trade Mark, Patent or on the Design Register it does not automatically become registered on the PPSR. All security interests in IP should be recorded on the PPSR and the relevant IP Australia Register ensuring the best position to protect and enforce an interest.
Why is registration so important? When IP is taken and sold to an innocent third party you may, if you have registered your security interest in the IP on the PPSR, have a chance of getting it back. Generally registration will be enforceable against a third party.
For example if you assign your IP in a script to a production company and the Assignment Agreement contains a ‘reversion of rights’ clause (i.e. that the IP in the script can be given back to you if there is a breach or the production company becomes insolvent), you can register your interest in the IP within the script on the PPSR. That way if the production company takes out a loan and allows the financier to take security over the IP in the script, your registered security interest in the IP in the script will have priority against theirs. Otherwise, if you did not register your interest on the PPSR and the production company went insolvent and the film was never made, you would not be able to claim ownership of the IP in the script, despite your “reversion of rights” clause in the Assignment Agreement, instead the financier (if they registered their interest on the PPSR) would claim ownership of the IP in the script.
Use it or lose it! Don’t forget to register, the PPSA provides valuable benefits.