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Security Rights in Intellectual Property in England and Wales

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Part of the book series: Ius Comparatum - Global Studies in Comparative Law ((GSCL,volume 45))

Abstract

In this contribution, the author analyses the interaction between secured transaction law and intellectual property law in England and Wales. The interaction between these two areas of law is complex and not well-coordinated.

English secured transaction law can be categorized as formal as opposed to functional, meaning that the effects of a security interest differ depending on what form this security interest takes. Different attachment, perfection and priority rules apply depending on whether the security interest is a legal or an equitable security interest.

The rules relating to the attachment and perfection of a security interest, particularly a legal security interest, will depend on the rules applying to the specific intellectual property right—they are a function of intellectual property law, not secured transactions law; these rules differ between different intellectual property rights. The statutory provisions applying to the different intellectual property rights take little account of common law and equity property rules and lead to a differential treatment of security interests depending on what type of property constitutes the object of security.

A number of intellectual property rights are registrable in a specific registry, depending on the type of intellectual property. In that case, registration of the security interest in the relevent intellectual property right registry influences priority.

Floating charges are security interests in present and future property that allow the debtor to retain the right to deal with the property in the ordinary course of business. In practice, only businesses will grant a floating charge. Floating charges add an additional layer of complexity to the priority framework, as the otherwise applicable priority rules are modified by the rules in relation to floating charges. As well, floating charges by an incorporated business trigger an additional registration requirement in the company register that is not synchronised with the specific intellectual property law registration system.

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Notes

  1. 1.

    Namely the Copyright, Designs and Patents Act 1986 (UK).

  2. 2.

    Copyright, Designs and Patents Act 1986 (UK), ss 180–205B.

  3. 3.

    Database Regulation 1986, ss 12–25.

  4. 4.

    Copyright, Designs and Patents Act 1986 (UK), s 191A (“The following rights conferred by this Chapter on a performer – reproduction right (section 182A), distribution right (section 182B), rental right and lending right (section 182C), making available right (section 182CA), – are property rights”).

  5. 5.

    Database Regulation 1986, s 13(1) (“A property right (“database right”) subsists, in accordance with this Part, in a database if there has been a substantial investment in obtaining, verifying or presenting the contents of the database.”).

  6. 6.

    Database Regulation 1986, s 23 (“The following provisions of the 1988 Act: sections 90 to 93 (dealing with rights in copyright works); sections 96 to 98 (rights and remedies of copyright owner); sections 101 and 102 (rights and remedies of exclusive licensee); apply in relation to database right and databases in which that right subsists as they apply in relation to copyright and copyright works.”).

  7. 7.

    Copyright, Designs and Patents Act 1986 (UK) and Registered Designs Act, 1949 (UK).

  8. 8.

    Community Design Regulation.

  9. 9.

    Trade Marks Act 1994 (UK).

  10. 10.

    EU Trade Mark Regulation (2017 Recast).

  11. 11.

    Patents Act 1977 (UK).

  12. 12.

    Convention on the Grant of European Patents.

  13. 13.

    See EU, Council (2018), passim.

  14. 14.

    Legal Tribune Online (2017), passim.

  15. 15.

    UPC Convention, art 89(1) provides that the agreement only enters into force four months after the ratification by, amongst others, the three Member States with the largest number of European patents in effect. This includes Germany.

  16. 16.

    See Lamping and Ullrich (2018), passim.

  17. 17.

    Goode (2013), para 1.04. See also Bridge et al. (1999), passim.

  18. 18.

    See Re Cosslett (Contractors) Ltd. (C.A. Civ.), 508, per Millett LJ; Goode (2013), paras 1.05, 1.46; Tosato (2011), p. 94.

  19. 19.

    Goode (2013), para 1.08.

  20. 20.

    Goode (2013), para 1.54; Tosato (2011), p. 95. Thomas (2017), p. 222 suggests that it is also a necessary requirement that the mortgagee receive a right to possession, but this does not seem to be the generally accepted definition of a legal mortgage and it is unclear what this requirement adds other than denying the existence of legal mortgages for all pure intangible assets.

  21. 21.

    See Goode (2013), para 1.54.

  22. 22.

    See Goode (2013), para 1.54; Tosato (2011), p. 95.

  23. 23.

    Bridge et al. (1999), p. 589, there note 72.

  24. 24.

    See Goode (2013), para 1.56.

  25. 25.

    See Goode (2013), para 1.36, ref’g to Re George Inglefield Ltd. (C.A.).

  26. 26.

    See Goode (2013), para 1.11. See also Tosato (2011), p. 95, calling it a “a ‘shadow’ cast over the collateral until the obligation is discharged or the security is realized.”

  27. 27.

    See Goode (2013), para 1.11. See Sects. 2.3 and 4.1.2.

  28. 28.

    Goode (2013), para 1.12. See Sect. 4.1.

  29. 29.

    See subsection “Attachment of a Legal Security Interest” within Sect. 3.1.1.

  30. 30.

    See subsection “Attachment of a Legal Security Interest” within Sect. 3.1.1.

  31. 31.

    Goode (2013), para 1.12. The priority scheme is discussed in Sect. 4.

  32. 32.

    See Sect. 3.1.1. The rule has been modified in relation to certain classes of property, see subsection “Transfer of Title” within Sect. 3.1.1.

  33. 33.

    See Sect. 6.

  34. 34.

    Goode (2013), para 1.56.

  35. 35.

    See e.g. Sheehan (2017), p. 2. See also Elphinstone (1893), passim.

  36. 36.

    Tosato (2011), p. 95. See also Pollock and Wright (1888), passim.

  37. 37.

    See Thomas (2017), pp. 221–222.

  38. 38.

    See Tosato (2011), p. 95, there note 19.

  39. 39.

    Tosato (2011), pp. 94–95. See Brodhurst (1895), passim; Colonial Bank v. Whinney (C.A.), 283–284; Elphinstone (1893), passim; Sweet (1894), passim; Sweet (1895), passim; Williams (1894), passim; Williams (1895), passim. But see Holdsworth (1920), pp. 1013–1014, pointing out that IPRs are originally conceptually closer to real property, and that their treatment as choses in action and thus as personal property is an historical accident.

  40. 40.

    Patents Act 1977 (UK), s 30(1) (“Any patent or application for a patent is personal property (without being a thing in action), and any patent or any such application and rights in or under it may be transferred, created or granted in accordance with subsections (2) to (7) below.”).

  41. 41.

    See the table in Sheehan (2017), p. 2.

  42. 42.

    Elphinstone (1893), p. 312; Tosato (2011), pp. 94–95.

  43. 43.

    See Tosato (2011), p. 95.

  44. 44.

    Van Gelder Apsimon & Co v. Sowerby Bridge United District Flour Society (C.A.). See also Thomas (2017), p. 222.

  45. 45.

    Cf. Thomas (2017), pp. 221–222, describing patents as “functionally” equivalent to choses in action.

  46. 46.

    Namely, the application of the writing requirements for assignments in the Law of Property Act, 1925 (UK), s 136 to registered designs.

  47. 47.

    See Goode (2013), paras 1.05, 1.08, 1.48, 1.59; Tosato (2011), p. 94.

  48. 48.

    Re Lehman Brothers International (Europe) (Ch. D.), para 34–46, per Briggs J; Goode (2013), para 1.53.

  49. 49.

    Copyright, Designs and Patents Act 1986 (UK), s 90(3).

  50. 50.

    Thomas (2017), p. 224.

  51. 51.

    Copyright, Designs and Patents Act 1986 (UK), s 191B(1) (“A performer’s property rights are transmissible by assignment, by testamentary disposition or by operation of law, as personal or moveable property.”).

  52. 52.

    Registered Designs Act, 1949 (UK), s 2(2) (“Where a design becomes vested, whether by assignment, transmission or operation of law, in any person other than the original proprietor, either alone or jointly with the original proprietor, that other person, or as the case may be the original proprietor and that other person, shall be treated for the purposes of this Act as the proprietor of the design.”) and s 19(1) (“Where any person becomes entitled by assignment, transmission or operation of law to a registered design or to a share in a registered design, or becomes entitled as mortgagee, licensee or otherwise to any other interest in a registered design, he shall apply to the registrar in the prescribed manner for the registration of his title as proprietor or co—proprietor or, as the case may be, of notice of his interest, in the register of designs.”).

  53. 53.

    Copyright, Designs and Patents Act 1986 (UK), s 222(1) (“Design right is transmissible by assignment, by testamentary disposition or by operation of law, as personal or moveable property.”).

  54. 54.

    Trade Marks Act 1994 (UK), s 24(4) (“The above provisions apply to assignment by way of security as in relation to any other assignment.”) and s 24(5) (“A registered trade mark may be the subject of a charge (in Scotland, security) in the same way as other personal or moveable property.”). See also Thomas (2017), p. 223.

  55. 55.

    Thomas (2017), p. 223.

  56. 56.

    Patents Act 1977 (UK), s 30(2) (“Subject to section 36(3) below, any patent or any such application, or any right in it, may be assigned or mortgaged.”). See also Bently and Sherman (2014), p. 645.

  57. 57.

    Patents Act 1977 (UK), s 130 (“’[M]ortgage’, when used as a noun, includes a charge for securing money or money’s worth and, when used as a verb, shall be construed accordingly[.]”).

  58. 58.

    Bently and Sherman (2014), p. 645.

  59. 59.

    Thomas (2017), p. 223.

  60. 60.

    See Brown v. North (C.A.); New Ixion Tyre and Cycle Co v. Spilsbury (C.A.); Steers v. Rogers (H.L.). See also Tosato (2011), p. 93, pointing out that these cases were “isolated” and “not common practice.”

  61. 61.

    Community Design Regulation, art 29(1) (“A registered Community design may be given as security or be the subject of rights in rem.” [Emphasis original).

  62. 62.

    EU Trade Mark Regulation (2017 Recast), art 22(1) (“An EU trade mark may, independently of the undertaking, be given as security or be the subject of rights in rem.” [Emphasis original]).

  63. 63.

    Community Design Regulation, art 27; EU Trade Mark Regulation (2017 Recast), art 19. See also Bariatti (2010), pp. 403–404.

  64. 64.

    See Bariatti (2010), pp. 400–401.

  65. 65.

    See Goode (2013), para 2.02. On perfection see Sect. 3.1.2. On the priority scheme see Sect. 4.

  66. 66.

    See Goode (2013), paras 2.03, 2.07.

  67. 67.

    Goode (2013), para 1.12.

  68. 68.

    See Goode (2013), para 1.55. Regarding the legal charge in land see Law of Property Act, 1925 (UK), s 85(1): “A mortgage of an estate in fee simple shall only be capable of being effected at law either by a demise for a term of years absolute, subject to a provision for cesser on redemption, or by a charge by deed expressed to be by way of legal mortgage[.].”

  69. 69.

    See also Tosato (2011), p. 95.

  70. 70.

    Goode (2013), para 1.19, 2.04.

  71. 71.

    See subsection “Transfer of Equitable Title” within Sect. 3.1.1.

  72. 72.

    See Sect. 3.1.1.

  73. 73.

    Goode (2013), paras 2.04, 2.11.

  74. 74.

    Tosato (2011), p. 95.

  75. 75.

    Goode (2013), para 1.12.

  76. 76.

    Law of Property Act, 1925 (UK), s 53(1)(c) (“Subject to the provision hereinafter contained with respect to the creation of interests in land by parol […] a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.”).

  77. 77.

    See Garnett et al. (2013), paras 5.195, 5.201; Wang Industrial Co v. Takmay Industrial Co Ltd. (Hong Kong C.A.); Roban Jig & Tool Co Ltd. v. Taylor (C.A. Civ.); Garnett et al. (2013), paras 5.195, 5.201, all relying on Law of Property Act, 1925 (UK), s 53(1)(c) respectively the Hong Kong equivalent, the now repealed Law Amendment and Reform (Consolidation) Ordinance, s 6(1)(c).

  78. 78.

    Goode (2013), para 2.11.

  79. 79.

    See Goode (2013), paras 1.56, 2.11.

  80. 80.

    Goode (2013), para 2.04.

  81. 81.

    Holroyd v. Marshall. See Goode (2013), para 2.12 and Thomas (2017), p. 222, ref’g to Gorringe v. Irwell India Rubber and Gutta Percha Works (C.A.); William Brandt’s Sons & Co v. Dunlop Rubber Co Ltd. (H.L.); Swiss Bank Corp. v. Lloyds Bank Ltd. (H.L.), 613; Baxter International Inc. v. Nederlands Produktielaboratorium voor Bloedtransfusiapparatuur BV (Engl. and W. Pat.).

  82. 82.

    See Harrison (1952), passim on the restrictions against assignments of future property.

  83. 83.

    Tosato (2011), p. 95.

  84. 84.

    Goode (2013), para 2.13.

  85. 85.

    Goode (2013), para 2.13.

  86. 86.

    See Sect. 4.

  87. 87.

    Goode (2013), para 2.13.

  88. 88.

    Goode (2013), para 1.57.

  89. 89.

    Goode (2013), para 2.23.

  90. 90.

    Re Monolithic Building Co (C.A.).

  91. 91.

    Victoria Housing Estates Ltd. v. Ashpurton Estates Ltd. (C.A. Civ.), 123, per curiam.

  92. 92.

    Goode (2013), para 2.16, 2.23; Gullifer and Raczynska (2016), p. 282.

  93. 93.

    Cf. Goode (2013), para 2.16.

  94. 94.

    See Goode (2013), para 1.19.

  95. 95.

    See Sect. 4.1.

  96. 96.

    See Gullifer and Raczynska (2016), pp. 273–274. The Companies Act 2006 (UK) refers to security interests as charges, regardless of whether they are charges or mortgages.

  97. 97.

    Goode (2013), para 5.24.

  98. 98.

    As was the case under the previous version of the Company Act. See Stroud Architectural Systems Ltd. v. John Laing Construction Ltd. (Engl. and W. Ref.). See also Goode (2013), para 2.23; Gullifer and Raczynska (2016), p. 284.

  99. 99.

    Goode (2013), para 2.22.

  100. 100.

    Companies Act 2006 (UK), s 859D [Text ommitted due to length].

  101. 101.

    On the registration process see Goode (2013), paras 2.23–2.24; Gullifer and Raczynska (2016), pp. 276–277.

  102. 102.

    Goode (2013), paras 2.16, 2.21, 2.32; Tosato (2011), p. 98.

  103. 103.

    See Sect. 4.2.

  104. 104.

    Thomas (2017), pp. 222–223; Tosato (2011), p. 95.

  105. 105.

    This differs from the situation in relation to land, where Law of Property Act, 1925 (UK), s 53(1)(b) is a form requirement affecting the creation of equitable interests.

  106. 106.

    Copyright, Designs and Patents Act 1986 (UK), s 90(3) (“An assignment of copyright is not effective unless it is in writing signed by or on behalf of the assignor.”).

  107. 107.

    Copyright, Designs and Patents Act 1986 (UK), s 91(1): “Where by an agreement made in relation to future copyright, and signed by or on behalf of the prospective owner of the copyright, the prospective owner purports to assign the future copyright (wholly or partially) to another person, then if, on the copyright coming into existence, the assignee or another person claiming under him would be entitled as against all other persons to require the copyright to be vested in him, the copyright shall vest in the assignee or his successor in title by virtue of this subsection.” See Performing Right Society Ltd. v. B4U Network (Europe) Ltd. (Ch. D.); Bently and Sherman (2014), p. 294 and Thomas (2017), p. 224.

  108. 108.

    Tosato (2011), pp. 99–100.

  109. 109.

    See subsection “Transfer of Future Property” within Sect. 3.1.1.

  110. 110.

    The leading case is Performing Right Society Ltd. v. London Theatre of Varieties Ltd. (H.L.), noting that an assignment of future copyright were at the time invalid at common law, but valid in equity. It is unclear whether the assignment would have been formally valid.

  111. 111.

    Garnett et al. (2013), para 5.201.

  112. 112.

    Goode (2013), para 2.06. See also Goode (2003), passim.

  113. 113.

    Copyright, Designs and Patents Act 1986 (UK), s 191B(3) (“An assignment of a performer’s property rights is not effective unless it is in writing signed by or on behalf of the assignor.”).

  114. 114.

    Copyright, Designs and Patents Act 1986 (UK), s 191C(3) (“If on the rights coming into existence the assignee or another person claiming under him would be entitled as against all other persons to require the rights to be vested in him, they shall vest in the assignee or his successor in title by virtue of this subsection.”).

  115. 115.

    Copyright, Designs and Patents Act 1986 (UK), s 222(3) “An assignment of design right is not effective unless it is in writing signed by or on behalf of the assignor.”).

  116. 116.

    Copyright of Designs Act, 1842 (UK). Jewitt v. Eckhardt (Ch. D.).

  117. 117.

    Registered Designs Act, 1949 (UK), s 19(3).

  118. 118.

    See e.g.Ifejika v. Ifejika, paras 25–26, per Patten LJ, who goes from finding that Registered Designs Act, 1949 (UK), s 2(2) imposes no form requirement for legal assignments to a discussion of an equitable assignment without giving reasons for rejecting a legal assignment. See also Bently and Sherman (2014), p. 751.

  119. 119.

    See Sect. 2.4.1.

  120. 120.

    Bently and Sherman (2014), p. 752.

  121. 121.

    Copyright, Designs and Patents Act 1986 (UK), s 223(1) (“Where by an agreement made in relation to future design right, and signed by or on behalf of the prospective owner of the design right, the prospective owner purports to assign the future design right (wholly or partially) to another person, then if, on the right coming into existence, the assignee or another person claiming under him would be entitled as against all other persons to require the right to be vested in him, the right shall vest in him by virtue of this section.”).

  122. 122.

    Trade Marks Act 1994 (UK), s 24(3) (“An assignment of a registered trade mark, or an assent relating to a registered trade mark, is not effective unless it is in writing signed by or on behalf of the assignor or, as the case may be, a personal representative. Except in Scotland, this requirement may be satisfied in a case where the assignor or personal representative is a body corporate by the affixing of its seal.”).

  123. 123.

    See Tosato (2011), p. 95.

  124. 124.

    Thomas (2017), p. 223; Tosato (2011), p. 95.

  125. 125.

    Cf. Bently and Sherman (2014), p. 1098.

  126. 126.

    Patents Act 1977 (UK), s 30(6) (“Any of the following transactions, that is to say (a) any assignment or mortgage of a patent or any such application, or any right in a patent or any such application; (b) any assent relating to any patent or any such application or right; shall be void unless it is in writing and is signed by or on behalf of the assignor or mortgagor.”).

  127. 127.

    Cf. Beale et al. (2012), para 14.61; Bently and Sherman (2014), p. 645. But see Thomas (2017), p. 222, who argues it is unclear whether registration is necessary, but there is no further argument as to why. Later, he states “[r]egistration of a patent mortgage is not compulsory, nor is it a perfection requirement” (Thomas 2017, p. 225). If registration is not necessary for perfection, it is hard to see why it would be required for attachment, as perfection presupposes attachment.

  128. 128.

    See Tosato (2011), p. 95.

  129. 129.

    Thomas (2017), p. 223; Tosato (2011), p. 95.

  130. 130.

    Patents Act 1977 (UK), s 130. See text in footnote 57.

  131. 131.

    Making this point in relation to equitable assignments of patents Thomas (2017), p. 222.

  132. 132.

    For example, Law of Property Act, 1925 (UK), s 53(1)(b) provides that a trust in land must be created in writing.

  133. 133.

    See Sect. 4.2.

  134. 134.

    Community Design Regulation, art 33(2); EU Trade Mark Regulation (2017 Recast), art 27(1) See Bariatti (2010), pp. 405–406; Bently and Sherman (2014), p. 1101.

  135. 135.

    Cf. Bently and Sherman (2014), p. 1101.

  136. 136.

    These rules have been summarized in Macmillan Inc. v. Bishopsgate Investment Trust Plc. (No. 3) (Ch. D.), 999–1005, per Millet J.

  137. 137.

    Goode (2013), para 5.04.

  138. 138.

    Goode (2013), para 5.04.

  139. 139.

    Goode (2013), paras 5.07, 5.09.

  140. 140.

    Bailey v. Barnes (C.A.); Taylor v. Russell (H.L.). See Goode (2013), para 5.09.

  141. 141.

    Goode (2013), para 5.16.

  142. 142.

    Goode (2013), para 5.15. On the bona fide rule see “4.1.2 Bona Fide Purchaser of Legal Title for Value without Notice.”

  143. 143.

    See Re Monolithic Building Co (C.A.), 662, per Lord Cozens-Hardy MR and Goode (2013), para 5.26.

  144. 144.

    Goode (2013), para 5.28.

  145. 145.

    Goode (2013), para 5.22.

  146. 146.

    See Re Pyle Works (No.1) (C.A.), 577–578, per Cotton LJ; Goode (2011), para 6.45; Buchler v. Talbot, para 15, per Lord Nicholls.

  147. 147.

    See e.g. Palmer and Morse (2017), para 15.441, making no reference to the ranking of a fixed charge in insolvency.

  148. 148.

    For patents, this is a function of Patents Act 1977 (UK), s 33(1) (“Any person who claims to have acquired the property in a patent or application for a patent by virtue of any transaction, instrument or event to which this section applies shall be entitled as against any other person who claims to have acquired that property by virtue of an earlier transaction, instrument or event to which this section applies if, at the time of the later transaction, instrument or event (a) the earlier transaction, instrument or event was not registered, or (b) in the case of any application which has not been published, notice of the earlier transaction, instrument or event had not been given to the comptroller, and (c)in any case, the person claiming under the later transaction, instrument or event, did not know of the earlier transaction, instrument or event.”), s 33(2) (“Subsection (1) above shall apply equally to the case where any person claims to have acquired any right in or under a patent or application for a patent, by virtue of a transaction, instrument or event to which this section applies, and that right is incompatible with any such right acquired by virtue of an earlier transaction, instrument or event to which this section applies.”) and s 33(3)(b) (“This section applies to the following transactions, instruments and events: […] (b) the mortgage of a patent or application or the granting of security over it[.]”). See Finecard International Ltd. v. Urquhart Dyke & Lorri (Ch. D.), para 15, per Smith J. See also Goode (2013), para 5.16 and Bently and Sherman (2014), p. 646.

  149. 149.

    Trade Marks Act 1994 (UK), s 25(2)(c) (“The following are registrable transactions: […] the granting of any security interest (whether fixed or floating) over a registered trade mark or any right in or under it[.]”) and s 25(3) (“Until an application has been made for registration of the prescribed particulars of a registrable transaction (a) the transaction is ineffective as against a person acquiring a conflicting interest in or under the registered trade mark in ignorance of it[.]”). See also Goode (2013), para 5.16; Thomas (2017), p. 223; Tosato (2011), pp. 96–97. The situation was different under Trade Marks Act, 1938 (UK), s 28(6), which contained a prohibition against “traficking in trade marks.” See American Greetings Corp’s Application (Holly Hobbie) (H.L.).

  150. 150.

    Registered Designs Act, 1949 (UK), s 19(4) (“Subject to any rights vested in any other person of which notice is entered in the register of designs, the person or persons registered as proprietor of a registered design shall have power to assign, grant licences under, or otherwise deal with the design, and to give effectual receipts for any consideration for any such assignment, licence or dealing: Provided that any equities in respect of the design may be enforced in like manner as in respect of any other personal property.”) and s 19(1) (“Where any person becomes entitled by assignment, transmission or operation of law to a registered design or to a share in a registered design, or becomes entitled as mortgagee, licensee or otherwise to any other interest in a registered design, he shall apply to the registrar in the prescribed manner for the registration of his title as proprietor or co-proprietor or, as the case may be, of notice of his interest, in the register of designs.”). See Goode (2013), para 5.16.

  151. 151.

    Bently and Sherman (2014), p. 646; Thomas (2017), p. 225.

  152. 152.

    Tosato (2011), pp. 97–98.

  153. 153.

    Cf. Goode (2013), para 5.16, there note 64, ref’g to Fraser v. Oystertec Plc. (Pat.); and Finecard International Ltd. v. Urquhart Dyke & Lorri (Ch. D.).

  154. 154.

    Thomas (2017), pp. 225–226.

  155. 155.

    Tosato (2011), p. 98.

  156. 156.

    See Goode (2013), para 1.12 and Davies (2006), p. 567, suggesting that “since the Patents Act and the Trade Marks Act do not actually establish a compulsory system of registration, legal interests are treated as equitable interests because they have no effect against a subsequent interest holder who does not have actual notice of their existence.”

  157. 157.

    Tosato (2011), p. 98.

  158. 158.

    Sale of Goods Act 1979 (UK), s 24 (“Where a person having sold goods continues or is in possession of the goods, or of the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of the previous sale, has the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same.”) and s 25(1) (“Where a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, has the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner.”). These provisions allow certain people in possession of goods to transfer a better title to the goods than they have without given the authority to do that by the holder of the higher-ranking title.

  159. 159.

    See Sect. 4.1.3.

  160. 160.

    See above text at footnote 156.

  161. 161.

    See Tosato (2011), p. 99.

  162. 162.

    Re Panama, New Zealand & Australian Royal Mail Company; Re Yorkshire Woolcombers Association (C.A.).

  163. 163.

    Evans v. Rival Granite Quarries, Ltd. (C.A.), 999, per Buckley LJ. See also Goode (2013), para 4.03.

  164. 164.

    See Agnew & Kevin James Bearsley v. The Commissioner of Inland Revenue (Re Birtwhistle) (N.Z.), para 34, per Lord Millett. For further details see Goode (2013), para 4.05.

  165. 165.

    Re Yorkshire Woolcombers Association (C.A.), 294, per Vaughan Williams LJ; Siebe Gorman & Co. Ltd. v. Barclays Bank Ltd. (Ch. D.). This aspect has not been overruled by National Westminster Bank plc v. Spectrum Plus Limited. See Goode (2013), paras 1.10, 4.01–4.04, 4.08, 4.11.

  166. 166.

    Bills of Sale Act, 1878 (UK), s 4: “The expression ‘bill of sale’ shall include bills of sale, assignments, transfers, declarations of trust without transfer, inventories of goods with receipt thereto attached, or receipts for purchase moneys of goods, and other assurances of personal chattels, and also powers of attorney, authorities, or licenses to take possession of personal chattels as security for any debt, and also any agreement, whether intended or not to be followed by the execution of any other instrument, by which a right in equity to any personal chattels, or to any charge or security thereon, shall be conferred[.].”

  167. 167.

    Bills of Sale Act (1878) Amendment Act, 1882 (UK), s 5: “Save as herein-after mentioned, a bill of sale shall be void, except as against the grantor, in respect of any personal chattels specifically described in the schedule thereto of which the grantor was not the true owner at the time of the execution of the bill of sale.”

  168. 168.

    Insolvency Act 1986 (UK), s 344(1) and s 344(2): “(1) The following applies where a person engaged in any business makes a general assignment to another person of his existing or future book debts, or any class of them, and is subsequently adjudged bankrupt. (2) The assignment is void against the trustee of the bankrupt’s estate as regards book debts which were not paid before the presentation of the bankruptcy petition, unless the assignment has been registered under the Bills of Sale Act 1878.”

  169. 169.

    See subsection “Transfer of Future Property” within Sect. 3.1.1.

  170. 170.

    Turner (2006), p. 207, ref’g to Swiss Bank Corp. v. Lloyds Bank Ltd. (C.A. Civ.), 466–467, per Buckley LJ.

  171. 171.

    For example, in Gordon Mackay & Co., Ltd. v. Capital Trust Corp., Ltd., 384–385 Duff J writes that “I have not been able to satisfy myself that you cannot have a floating security by way of mortgage. Nobody doubts that you can have a mortgage of after acquired property: the statute, indeed, recognizes that itself. You can have, for example, a valid mortgage of chattels to be afterwards brought upon certain premises. As soon as the property is brought there and identified, the equitable right of the mortgagee attaches.” [Emphasis added.] In that case, the class of assets contemplated was one in which no legal assignment of future property was permissible.

  172. 172.

    The possibility of a floating charge by way of legal mortgage is potentially mentioned in Goode (2013), para 5.42, there note 188, ref’g to Taylor v. M’Keand (C.P.D.) and Payne v. Fern (Q.B.D.) as possible examples of floating charges by way of a legal mortgage; however, it is also possible that these are supposed to be examples of a fixed charge over a class of assets. The text is unclear at that point.

  173. 173.

    There is some debate on what crystallization actually means and the nature of the floating charge, see Goode (2013), paras 4.06, 4.31; Nolan (2004), passim; Worthington (1996), pp. 78–86.

  174. 174.

    Goode (2013), para 4.31.

  175. 175.

    See Goode (2013), para 4.63; Grantham (1997), passim; Tan (1998), passim.

  176. 176.

    Fire Nymph Products Ltd. v. Heating Centre Pty Ltd. (N.S.W. C.A.); Re Woodroffes (Musical Instruments) Ltd. (Ch. D.); Re Brightlife Ltd. (Ch. D.); Covacich v. Riordan (H.C.); DFC Financial Services Ltd. v. Coffey (P.C.); Re Manurewa Transport Limited (S.C.); Deputy Commissioner of Taxation (Cth) v. Horsburgh (No 2) (S.C.). See Goode (2013), paras 2.09, 4.52–4.54, 4.56–4.57.

  177. 177.

    Evans v. Rival Granite Quarries, Ltd. (C.A.), 998, per Fletcher Moulton LJ; Robson v. Smith (Ch. D.), 126, per Romer J; Re Caroma Enterprises Ltd. (Alta. Q.B.); Evans v. Rival Granite Quarries, Ltd. (C.A.), 1000, per Buckley LJ. See Goode (2013), para 4.49.

  178. 178.

    Re Crompton (Ch. D.), 964–965, per Warrington J; Re Brightlife Ltd. (Ch. D.), 212, per Hoffman J; Re Real Meat Co Ltd. (Ch. D.), 260–261, per Chadwick J. See also Goode (2013), para 4.34.

  179. 179.

    Goode (2013), para 4.34.

  180. 180.

    See Sect. 4.

  181. 181.

    Goode (2013), para 5.40.

  182. 182.

    Goode (2013), para 5.40.

  183. 183.

    See Goode (2013), para 5.42.

  184. 184.

    See Sect. 5.1.1.

  185. 185.

    That appears to be the point made by Goode (2013), para 5.42, there note 188, ref’g to Taylor v. M’Keand (C.P.D.) and Payne v. Fern (Q.B.D.); otherwise, the reference to priority rules for legal interests in the context of floating charge priority rules would be inexplicable.

  186. 186.

    Insolvency Act 1986 (UK), s 175(2)(b) (“(1) In a winding up the company’s preferential debts (within the meaning given by section 386 in Part XII) shall be paid in priority to all other debts. (2) Preferential debt (a) rank equally among themselves after the expenses of the winding up and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions; and (b) so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures secured by, or holders of, any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge.”).

  187. 187.

    Insolvency Act 1986 (UK), ss Schedule B1; para 65(2), applying s 175 to a distribution by an administrator.

  188. 188.

    Tosato (2011), pp. 96–97.

  189. 189.

    See Tosato (2011), p. 96.

  190. 190.

    Tosato (2011), p. 96.

  191. 191.

    Tosato (2011), p. 96.

  192. 192.

    Tosato (2011), pp. 96–97.

  193. 193.

    See Sect. 4.

  194. 194.

    See Thomas (2017), p. 223.

  195. 195.

    See Sect. 2.2.

  196. 196.

    See Goode (2013), para 4.06.

  197. 197.

    See Goode (2013), paras 1.64, 1.67.

  198. 198.

    See Goode (2013), para 1.68.

  199. 199.

    See Goode (2013), para 1.68.

  200. 200.

    See Goode (2013), para 1.68.

  201. 201.

    Goode (2013), para 1.37.

  202. 202.

    Goode (2013), para 4.65. Goode argues that where a charge agreement includes these self-help rights, the agreement is properly characterized as a legal or equitable mortgage, not a mere charge, see Goode (2013), para 1.55, there note 238.

  203. 203.

    Goode (2013), para 4.65.

  204. 204.

    Law of Property Act, 1925 (UK), s 91(2) (“In any action, whether for foreclosure, or for redemption, or for sale, or for the raising and payment in any manner of mortgage money, the court, on the request of the mortgagee, or of any person interested either in the mortgage money or in the right of redemption, and, notwithstanding that (a) any other person dissents; or (b) the mortgagee or any person so interested does not appear in the action;and without allowing any time for redemption or for payment of any mortgage money, may direct a sale of the mortgaged property, on such terms as it thinks fit, including the deposit in court of a reasonable sum fixed by the court to meet the expenses of sale and to secure performance of the terms.”).

  205. 205.

    Law of Property Act, 1925 (UK), s 101(1) (“A mortgagee, where the mortgage is made by deed, shall, by virtue of this Act, have the following powers, to the like extent as if they had been in terms conferred by the mortgage deed, but not further (namely): […] A power, when the mortgage money has become due, to appoint a receiver of the income of the mortgaged property, or any part thereof; or, if the mortgaged property consists of an interest in income, or of a rentcharge or an annual or other periodical sum, a receiver of that property or any part thereof[.]”) and s 205(1)(xvi) (“‘Mortgage’ includes any charge or lien on any property for securing money or money’s worth[….]”).

  206. 206.

    Goode (2013), para 1.65, ref’g to Tucker v. Farm & General Investment Trust (C.A.), where the point is made more broadly: fruits of property belong to the person entitled to the possession.

  207. 207.

    Goode (2013), para 1.37.

  208. 208.

    Hubbuck v. Helms (Ch. D.); Edwards v. Standard Rolling Stock Syndicate (Ch. D.); Re Victoria Steamboats Ltd. (Ch. D.); Re London Pressed Hinge Co Ltd. (Ch. D.).

  209. 209.

    Re London Pressed Hinge Co Ltd. (Ch. D.).

  210. 210.

    Goode (2013), para 4.06.

  211. 211.

    Goode (2013), para 4.65.

  212. 212.

    Goode (2013), para 4.10.

  213. 213.

    See Sect. 4.1.4.

  214. 214.

    Insolvency Act 1986 (UK), ss Schedule B1; para 14.

  215. 215.

    Insolvency Act 1986 (UK), s 175(2)(b) (“(1) In a winding up the company’s preferential debts (within the meaning given by section 386 in Part XII) shall be paid in priority to all other debts. (2) Preferential debt (a) rank equally among themselves after the expenses of the winding up and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions; and (b) so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures secured by, or holders of, any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge.”).

  216. 216.

    Insolvency Act 1986 (UK), ss Schedule B1; para 65(2), applying s 175 to a distribution by an administrator.

  217. 217.

    Goode (2013), para 4.10.

  218. 218.

    Insolvency Act 1986 (UK), s 176A(2) (“The liquidator, administrator or receiver (a)shall make a prescribed part of the company’s net property available for the satisfaction of unsecured debts, and (b)shall not distribute that part to the proprietor of a floating charge except in so far as it exceeds the amount required for the satisfaction of unsecured debts.”).

  219. 219.

    Insolvency Act 1986 (UK), s 251 (“‘[F]loating charge’ means a charge which, as created, was a floating charge […].”); Companies Act 2006 (UK), s 754(1) (“This section applies where debentures of a company registered in England and Wales or Northern Ireland are secured by a charge that, as created, was a floating charge.”). See Goode (2013), para 5.68.

  220. 220.

    Inland Revenue Commissioners v. Goldblatt (Ch. D.).

  221. 221.

    See Mokal (2003), passim.

  222. 222.

    UK, Intellectual Property Office (2019), “Form 24: Application to record or amend a security interest.”

  223. 223.

    UK, Intellectual Property Office (2018b), “Form 21: Application to register or give notice of rights.”

  224. 224.

    UK, Intellectual Property Office (2018a), Form DF12A “Record/cancel a change of ownership, licence or security.”

  225. 225.

    See generally Merrill and Smith (2000), passim.

  226. 226.

    Companies House Form MR1: Particulars of a charge. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/537724/MR01_v2.1.pdf. Accessed July 4, 2017.

  227. 227.

    See Thomas (2017), p. 224; Tosato (2011), p. 93. Edenborough (2009), passim points out that in insolvency, IPRs will often be the last remaining valuable unencumbered assets.

  228. 228.

    Thomas (2017), p. 224.

  229. 229.

    Secured Transactions Law Reform Project (2016), para 3.29.

  230. 230.

    Thomas (2017), p. 215.

  231. 231.

    See Sect. 6.

  232. 232.

    See Tosato (2011), p. 97, making this argument in relation to copyright.

  233. 233.

    Thomas (2017), p. 224; Tosato (2011), pp. 97, 100.

  234. 234.

    Patents, Designs, and Trade Marks Act, 1883 (UK).

  235. 235.

    Patents, Designs, and Trade Marks Act, 1883 (UK), s 87 read as follows: “The person for the time being entered in the register of patents, designs, or trade marks, as proprietor of a patent, copyright in a design or trade mark, as the case may Sect. 87. be, shall, subject to any rights appearing from such register to be vested in any other person, have power absolutely to assign, grant licenses as to, or other- wise deal with, the same, and to give efifectual re- ceipts for any consideration for such assignment, license, or dealing.” But it went on to say that the foregoing only applies “[p]rovided that any equities in respect of such patent, design, or trade mark may be enforced in like manner as in respect of any other personal property.”

  236. 236.

    Hardacre v. Armstrong (K.B.D.).

  237. 237.

    This argument is made by Garnett et al. (2013), para 5.201.

  238. 238.

    See Tosato (2011), p. 97.

  239. 239.

    Tosato (2011), pp. 98–100. See also Thomas (2017), p. 231.

  240. 240.

    See Sect. 4.2.

  241. 241.

    Tosato (2011), p. 98; Townend (1997), p. 182.

  242. 242.

    Tosato (2011), p. 98.

  243. 243.

    Law Commission (2016), passim.

  244. 244.

    UK, Her Majesty’s Government (2017), passim.

  245. 245.

    UK, Her Majesty’s Treasury (2018), passim.

  246. 246.

    See Law Commission (2016), para 4.33, excluding security interests in IPR from the scope of the proposed Goods Mortgages Act because “[i]t is already possible for individuals to grant security over intangible goods, such as shares and intellectual property rights. As the Bills of Sale Acts do not apply to intangible goods, it is in fact easier for individuals to use them as security.”

  247. 247.

    Gullifer and Raczynska (2016), pp. 287–290.

  248. 248.

    See UK, Her Majesty’s Treasury (2018), passim.

  249. 249.

    Secured Transactions Law Reform Project (2016), passim.

  250. 250.

    Gullifer and Raczynska (2016), p. 294; Tosato (2011), pp. 101–102.

  251. 251.

    Goode (2013), para 2.33; Gullifer and Raczynska (2016), pp. 284, 293.

  252. 252.

    Gullifer and Raczynska (2016), pp. 294–295.

  253. 253.

    Gullifer and Raczynska (2016), pp. 292–293.

  254. 254.

    Davies (2006), p. 580; Tosato (2011), pp. 103–104.

  255. 255.

    Goode (2013), para 2.33; Gullifer and Raczynska (2016), p. 284.

  256. 256.

    Gullifer and Raczynska (2016), p. 290.

  257. 257.

    Gullifer and Raczynska (2016), p. 290.

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      Bornheim, J.J. (2020). Security Rights in Intellectual Property in England and Wales. In: Kieninger, EM. (eds) Security Rights in Intellectual Property. Ius Comparatum - Global Studies in Comparative Law, vol 45. Springer, Cham. https://doi.org/10.1007/978-3-030-44191-3_11

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