Secured Transactions and IP licenses: comparative observations and reform suggestions

Intellectual property licenses represent a crucial source of value in the modern economy, yet the law governing security interests in these licenses remains underdeveloped and fragmented. This Article examines how secured transactions law treats IP licenses as collateral, comparing approaches across different jurisdictions and identifying significant gaps in the current legal framework. The analysis reveals fundamental tensions between the policies underlying intellectual property law and the principles of secured transactions law. While IP law emphasizes the licensor's control and the personal nature of licensing relationships, secured transactions law seeks to maximize the availability of assets as collateral and to provide clear priority rules for competing claimants. These competing policies create uncertainty about core questions: Can a licensee grant a security interest in its license? What rights does a secured creditor acquire? How do these rights interact with the licensor's interests? The Article demonstrates that existing legal frameworks—including UCC Article 9 in the United States and comparable regimes in other jurisdictions—provide inadequate answers to these questions. Through comparative analysis of approaches in the United States, United Kingdom, and civil law jurisdictions, the Article identifies best practices and pitfalls. It also examines recent international efforts to harmonize the law of secured transactions and explains why these initiatives have struggled to address IP licenses adequately. The Article concludes with concrete reform proposals, including model statutory language, that would clarify the rights of all parties while respecting the distinct policies underlying both IP law and secured transactions law.