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12 J. Open Access L. 1 (2024)

handle is hein.journals/jopacc12 and id is 1 raw text is: Utilising IP as Security for Financing in South Africa Mohammed Amusa LLM Candidate, University of Cape Town Abstract. Companies or Small Medium Enterprises (SMEs) have the ability to raise funding for their objects either by selling their shares or through direct debt finance which means approaching banks or financial institutions for external financing. These finan- cial institutions or individual creditors such as moneylenders, in order to mitigate their own risk, would typically require some form of security or collateral which could be in form of valuable tangibles such as land, buildings or intangibles such as stocks, shares and intellectual property (IP). This paper examines the nature and classification of IP and the various ways security interests could be created over various forms of IP in South Africa. It examines the various challenges that could be faced in the utilisation of IP as security especially with regards valuation and it recommends possible ways to enhance the utility of the value of IP through securitisation. Keywords: Intellectual Property, Security, Financing 1. Nature and Classification of Intellectual Property Security can be created over tangible and intangible property, security as a concept can be divided into real and personal security, a real security gives the creditor a limited real right in property whether mov- able or immovable that belongs to the debtor while personal security gives the creditor a personal right against a third party who undertakes personally to settle the debt of the debtor where the debtor fails to do so.' IP are creative works which reward creators with exclusive rights which often yield economic value, the purpose is to provide an incentive for these creators to innovate more. IP are intangible assets which are non-monetary assets which are not identifiable and without physical substance' (either being separable or arising from contractual or other legal rights).2 IP can be defined as A category of intangible rights protecting commercially viable products of the human intellect. The category comprises primarily trademark, copy- 1 H Mostert, A Pope and PJ Badenhorst, The Principles of the Law of Property in South Africa 1st ed (2010) at 356. 2 International Accounting Standards IAS 38 Intangible Assets' available at https://www.iasplus.com/en/standards/ias/ias38 accessed on 17 September 2021.

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