Tiếng Việt
中文 (中国)
In today’s technological age, intellectual property (IP) has become a valuable asset not only for creative individuals but also for businesses and nations. To maximize the value of patents, technologies, and artistic works, entities often choose to protect their intellectual property rights through patent registration, copyright registration, or trademark registration.
However, in practice, comprehensive protection of intellectual property often proves challenging, especially for small and new businesses, due to substantial costs, patience, and significant investment capital required. Large to medium-sized companies are better equipped to afford and maintain intellectual property rights.
Conversely, IP owners can utilize their intellectual property assets to raise capital through IP-backed securitization. Instead of allocating resources to maintain IP protection, owners can leverage these assets to raise substantial capital for other business ventures, such as innovative research in other intellectual property areas.
IP-backed securitization has emerged as a potential capital mobilization method in many countries, including Vietnam. The fundamental concept of IP-backed securitization involves transforming intellectual property assets into tradable securities on the stock market.
This approach offers financial benefits to IP owners and provides investors with opportunities to actively explore the potential of intellectual property assets, enabling informed investment decisions.
In Vietnam, the development of the IP-backed securitization market has captured the attention of both the business community and investors. This development not only opens new opportunities for businesses seeking capital but also offers investors the chance to invest in innovative and promising projects, providing ample opportunities for creators to thrive.
However, despite the advantages, IP-backed securitization presents considerable challenges and risks. Uncertainty regarding the true value of intellectual property, the risk of intellectual property infringement domestically and internationally, and potential legal disputes in the absence of certainty about the uniqueness of intellectual property assets are crucial issues requiring careful consideration.
In this context, studying and analyzing IP-backed securitization in Vietnam not only enhances our understanding of the potential and risks associated with this model but also provides insights into sustainable and transparent market management and development.
A Perspective on Intellectual Property Securitization
To understand the common methods of IP-backed securitization in Vietnam and internationally, we first need to clarify two concepts: Asset-Backed Security and IP-Backed Securitization.
Asset-Backed Security
Asset-Backed Security (ABS) is a financial instrument issued by financial institutions or organizations to raise capital based on collateralized assets. ABS is created by aggregating various types of collateralized assets and securitizing them. These assets can include mortgage loans, auto loans, student loans, or other types of collateralized assets.
These assets are bundled into a financial product, which is then issued on the market for purchase by investors who perceive the potential development of these assets and a group of speculative investors who anticipate the potential price increase of this financial product.
ABS is essentially a type of financial security backed by real assets, often either real estate (such as mortgage contracts or physical assets) or financial assets (such as futures contracts, options contracts, or collateralized debt obligations).
ABS is usually created through a process called securitization, where real assets are converted into securities that investors can purchase. These assets become collateral behind ABS. When an investor purchases an ABS, they are investing in a small portion of the money that the borrowers will repay, including interest and principal.
Some speculative investors may not be interested in the potential development of ABS but instead focus primarily on the underlying collateral, desiring to own it when businesses fail to repay the principal and interest by the due date.
ABS is often used for capital mobilization. Financial organizations (such as banks or financial companies) typically create ABS by transferring assets they have held in their portfolios into securities. Investors then purchase these securities, providing capital to the initial financial institution and transferring the responsibility of collecting interest and principal payments from these loans to the ABS buyers.
ABS benefits both parties: the securities buyers receive profits from the liquidity generated by the loans, while the ABS sellers can efficiently raise capital and mitigate risks associated with incomplete loan repayments.
IP-Backed Securitization
IP-backed securitization is the process of creating financial securities based on the value of intellectual property rights, such as copyrights, trademarks, or patents. IP-backed securitization often involves converting usage rights from intellectual property assets into securities that investors can purchase.
In this process, the IP owner transfers the usage rights of the intellectual property to a financial institution. The financial institution then creates securities based on the expected value derived from using this intellectual property. Investors subsequently buy these securities, providing capital to the IP owner.
For IP owners, this method enables them to raise capital without entirely relinquishing their intellectual property rights. Instead, they only transfer a portion of the usage rights of the intellectual property.
However, this approach is risky if the institution issuing these securities cannot fulfill its obligations to repay the principal and interest by the due date. For instance, in the case of corporate bonds, when the principal and interest payments are overdue, the intellectual property might be liquidated to repay investors.
For investors, IP-backed securitization provides an opportunity to invest directly in high-value intellectual property assets. Their profits depend on the intellectual property generating revenue through activities such as product sales or licensing agreements. Additionally, some investors might have the intention to own the guaranteed intellectual property, as discussed earlier.
Securitization of Intellectual Property Through Bond Models
As a form of ABS, IP-backed securitization can be executed through bond models. In Vietnam, this method is not widespread due to the limited attention given to the intellectual property transfer market compared to more familiar assets such as real estate, gold, or stocks. However, in developed countries like the United States and Europe, IP-backed securitization has become prevalent, especially during economic crises, serving as an alternative capital mobilization method when other forms of capital mobilization are restricted or limited.
When other forms of capital mobilization face restrictions, intellectual property owners have turned to securitization as an alternative. Specifically, IP owners can choose to securitize their assets by issuing bonds.
In this process, the key parties involved typically include the intellectual property owner, a specialized securitization company (Special Purpose Vehicle or SPV), and a group of investors interested in investing in the profit potential of the intellectual property assets.
To raise capital, the intellectual property owner transfers, licenses, or temporarily assigns the intellectual property rights to the SPV. Once the SPV gains access to the intellectual property assets, it pays the intellectual property owner an agreed-upon amount. The SPV then uses funds it already possesses or relies on future transactions with investors to make the payment to them.
Investors purchase the bonds based on their belief that the SPV can strongly develop the intellectual property assets and will be able to repay them the principal and interest when the bonds mature.
In some cases, intellectual property owners may need to assign the operational rights of the intellectual property to the SPV to utilize them in business activities. If there is a predetermined agreement, the intellectual property owner regains the rights to the initial intellectual property assets after a specified period.
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