Intellectual Property Rights in the Financial sector

The present 21st century has been the century known for technological developments and advancements, and this technology-driven productivity has effectively played a significant role in the determination of market power. The countries, which have effectively adopted these advancements in the recognized sectors have acquired an independent position in the world market trade. These developments have also been a fundamental analyst for the productivity and enhancements of economies, businesses, and banks. Intellectual Property rights have been recognized as an integral component for money-related administrations and organizations.

In India, the domain of Intellectual property rights still remains unleashed in respect of the financing sector. The countries that have adopted IPR in their financing sector consider it to be their sixth asset after cash, real estate, stocks, fixed economy and private equity. There are many advantages of using IPR in the financing sector i.e., the IP-based assets could help in increasing value overtimes, whereas other tangible assets keep on decreasing with time. Secondly, the IP-based assets remain valuable and protected even if the businesses fallout, thereby reducing the risk of the lender in cases of default. With these advantages, the area has still not received acceptance. There were several efforts taken by the international organizations for providing a backing of Intellectual Property Rights to the financial sectors. For instance, it was in 2003 when the World Intellectual Property Organization was advised by the UNICTRAL for providing effective guidelines and policies concerning IPR backed financing. With constant efforts, the decision was left to the nation-states, for having an effective system of intellectual property rights in the area of financing. Currently, there are 66 nation-states, that have adopted and prepared guidelines for the same.

India, being a developing country has shown advancement in various fields and also in the various fields of intellectual property rights in the financing sector with the main aim to provide technological funding in entrepreneurial ventures. The security interests have been created under both the general and the specific laws, and among all these Licenses and agreements have been recognized as the most relevant forms of IPR monetization in India. However, the nation-state still lacks Intellectual property rights that can provide backing to the security interests and other assets beneficial to the financing sectors. The laws that can be amended with respect to Intellectual Property Rights can be summarised below:

i. The courts have ruled that the trademarks cannot be assigned to the banks, as this would lead to a conflict of laws. Even if there has been no specification of the registration of trademarks concerning securities and other interests, the same is not mandatory to be registered for providing protection. In cases of any conflicts, the remedy of passing off can be used as a remedy by the third parties.

ii. As per the Patents Act, there have been no restrictions on granting patentability to the security interests and other financial assets, but if the innovation and invention is novel, made for industrial purposes and is useful for the public at large, then it can claim patentability for the same.

Henceforth, it is essential to adopt Intellectual property Rights in the financing sector because the Indian economy has been predominated by the service sectors which are deprived of intangible assets, and among these sectors, it is the start-ups that earn revenues based on the uniqueness of their business models and services, but not upon other physical assets. India can adopt the model laws and guidelines from the other developed countries to provide backing to the financing sector through intellectual property rights.