You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 25, 2016

Commercializing Intellectual Property Through Securitization

Subscribe to Updates
Informed Counsel

The conventional practice to commercialize intellectual property (IP) is to directly exploit or license IP assets. A trend is emerging, however, to commercialize IP through securitization. This trend coincides with the advent of the Secured Transaction Act B.E. 2558 (2015), which allows IP assets to be used as collateral.

Thailand’s Department of Business Development has been tasked with implementing the Act. As part of its duties under the Act, the  Department of Business Development has enacted a number of secondary laws, and it has established the Secured Transaction Registry Division which oversees an online registration system for security agreements.

The registration system is already in use, and it is now legally possible to use IP assets as collateral. Many lenders, however, are reluctant to accept IP assets as collateral. They prefer to accept tangible assets from borrowers, such as real estate, as opposed to intangible assets like IP.

A main concern of lenders is how to value IP assets. IP valuation requires not only gathering substantial information about an IP asset, but it also requires an in-depth understanding of the economies, industries, and specific businesses that directly impact the value of the IP.  IP owners should therefore be prepared to provide this information to persuade lenders of the creditworthiness of their IP assets.

Although IP owners generally know the economic benefit of their IP assets, such as their level of competitiveness in the marketplace, they are often unaware of the strength of their IP assets from a legal perspective. IP owners should seek the assistance of IP lawyers to analyze the factors that affect the value of an IP asset. These factors include, for instance, qualitative characteristics or standards, such as the nature, scope, and validity of protection of an IP asset.

Other factors, such as the duration of validity of an IP asset, the risk of infringement claims, and the strength of possible defenses, are determined on a case-by-case basis, taking into consideration all of the relevant facts. For example, in the context of trademarks, an IP lawyer can help an IP owner determine the legal strength and status of a trademark registration to identify the risk of a third party claiming ownership over a similar trademark.

Taking another example, in the context of patents, an IP lawyer can assist an IP owner to properly draft a patent claim because the value of a patent mainly depends on the scope of its claims (i.e., whether the claims are valid and enforceable). An IP lawyer can also help determine whether existing IP assets owned by third parties could block the development or effective use of a borrower’s IP assets.

In terms of trade secrets, an IP lawyer could help an IP owner determine the measures necessary to protect confidential information and reduce the risk of unauthorized disclosure.

Many organizations, including Thailand’s Department of Intellectual Property, are studying how to effectively value IP. Once IP valuation is effectively standardized, lenders will associate less risk with using IP assets as collateral, and the practice should become more common.

Download Full Article
Related Professionals

Practices

Intellectual Property

Location

RELATED INSIGHTS​ 

July 25, 2025
Over the first half of 2025, the government of Vietnam has implemented a comprehensive suite of legislative reforms that significantly impact the country’s intellectual property (IP) framework. These amendments, most of which took effect on 1 July 2025, span the criminal, civil, administrative, and judicial sectors, and are part of a broader initiative to modernize Vietnam’s legal infrastructure, strengthen enforcement mechanisms, and harmonize domestic regulations with international standards. A summary of the key legislative changes and their potential implications for IP protection and enforcement across Vietnam is provided below. Criminal Code: Stricter penalties Under the 2025 amendments to Vietnam’s Criminal Code, penalties for offenses involving the manufacturing and trading of counterfeit goods have been significantly escalated. Individuals convicted of such violations now face fines ranging from VND 200 million to VND 2 billion (approximately USD 7,700 to USD 77,000; up from VND 100 million to VND 1 billion). For corporate entities, the penalties are even more severe, with fines ranging from VND 2 billion to VND 40 billion (roughly USD 77,000 to USD 1.54 million; up from VND 1 billion to VND 20 billion). These heightened penalties reflect the government’s intensified efforts to deter counterfeit-related crimes and protect consumer rights. Law on Handling Administrative Violations: Extended statute of limitations and application of electronic procedure The statute of limitations for addressing administrative violations in the IP sector is still two years. However, in cases where such violations are referred by procedural authorities, this period is extended by one year. The time taken by these authorities to process the case is now included within the overall limitation period. In addition, the Law on Handling Administrative Violations facilitates the use of electronic procedures, provided that the necessary infrastructure, technical systems, and information conditions are in place. Specifically, enforcement authorities are now permitted
Read More
July 21, 2025
Distinctiveness is a fundamental requirement for a trademark’s registration and protection under Thai law. The Thai courts typically assess distinctiveness based on a mark’s inherent characteristics rather than its use, as proving acquired distinctiveness through use requires substantial evidence, including the duration of use, extent of distribution and promotional efforts. However, the Intellectual Property and International Trade Court (IP & IT Court) has recently ruled that the figurative mark WEPLAY had acquired distinctiveness through use – an uncommon ruling under Thai trademark law. Subsequently, the Court of Appeal for Specialised Cases affirmed the mark’s inherent distinctiveness based on a holistic assessment of its components. This article discusses the criteria for proving both inherent and acquired distinctiveness, offering examples from both courts to provide valuable insights into case preparation and understanding of how the courts assess distinctiveness. Background In 2017 the plaintiff filed a trademark application for the mark depicted below for goods in Class 28, including toy building blocks: The registrar rejected the application on the grounds of non-distinctiveness under Section 7 of the Trademark Act. The plaintiff appealed to the Board of Trademarks, which considered that, when the term ‘weplay’ is used for goods in Class 28, it is descriptive of the nature of the goods applied for as “playthings”. Therefore, ‘weplay’ was deemed nondistinctive under Section 7, Paragraph 2(2) of the Trademark Act. IP & IT Court decision In 2024 the IP & IT Court ruled that the term ‘weplay’ is not a coined or invented word; instead, it is a combination of ‘we’ and ‘play’, conveying the meaning of ‘we play’. When the term is used for goods in Class 28, it describes the nature of the goods as “playthings”. Consequently, the mark was deemed non-distinctive. However, the court considered the evidence presented by the plaintiff,
Read More
July 14, 2025
Life sciences specialists from Tilleke & Gibbins have updated the firm’s guide to pharmaceutical data exclusivity regulations and practices in Southeast Asia. This guide contains quick-reference information on the availability of data exclusivity protections and limitations in Cambodia, Indonesia, Laos, Malaysia, Myanmar, Thailand, and Vietnam. Developing and launching a new drug on a commercial scale requires an enormous amount of time and investment in research and development (R&D), including pre-clinical testing and clinical trials. When considering the aggregate amount of drug development costs, it is important to recognize that this includes not only the investment in developing new drugs that get approved by a government food and drug regulator and are successfully brought to market, but also the R&D expenditures on a large number of potential pharmaceutical compounds and products that never actually make it to market. In particular, considerable investment is required in order to conduct and produce clinical trial data—to prove safety, efficacy and effectiveness of a new drug—that would warrant marketing approval by the regulatory authority. Such data is proprietary in nature and highly valuable for a research-based pharmaceutical company that develops an original drug. On the other hand, patent law typically confers generic drug manufacturers with the ability to engage in various preparatory activities with a view to obtaining marketing approval for a generic product before the patent for the original drug expires (commonly known as a “Bolar provision”). Since a generic drug maker may submit an application for marketing approval of a generic product before the relevant patent expires, the extent to which the drug originator’s data submitted to the regulatory authority is protected—or in other words, the extent to which the generic company may rely on the drug originator’s previously filed data, which underpins the safety and efficacy of the drug, to support
Read More
June 30, 2025
Vietnam is making notable strides in decentralization, aiming to grant greater autonomy to local government entities to streamline administrative procedures. As part of this effort, the government issued Decree No. 133/2025/ND-CP on decentralization of state management of the Ministry of Science and Technology dated June 12, 2025 (Decree 133). Effective from July 1, 2025, Decree 133 decentralizes and delegates numerous state management functions—including in intellectual property (IP) and technology transfer—to provincial-level People’s Committees (PCs). This reform signals a profound shift in how IP rights are administered and enforced across Vietnam. While this offers new opportunities for IP owners, agents, and innovators, it also introduces additional operational complexities. Impact on IP and Technology Transfer Decree 133 significantly reallocates responsibilities in IP and technology transfer, primarily to provincial-level PCs. Provincial PCs and other provincial authorities are now empowered to handle a wide range of tasks, including but not limited to the following: Issuance of duplicates and reissuance of certificates of registration. Registration of license agreements for the transfer of usage rights for industrial property objects (e.g., trademarks, patents) and recording amendments, extensions, or early terminations of such agreements. Enforcing decisions on compulsory licensing of patent use rights. Evaluation and approval of technology transfer contracts—a key step in facilitating localized technological advancements. Permitting the establishment of foreign-invested scientific organizations and their branches, to encourage foreign direct investment in local R&D and technology development. Approval of provincial-level R&D tasks, aligning with local socio-economic development priorities. Legal Implications The decentralization and delegation brought forth by Decree 133 carry several significant legal implications: Echoing Decree 133, the Intellectual Property Office of Vietnam issued Notification No. 2351/TB-SHTT on June 26, 2025, announcing the cessation of 19 administrative procedures at the national level. Specifically, from July 1, 2025, the IP Office will no longer accept requests related
Read More