Parties with security interests currently recorded against patents, trade marks and designs at IP Australia that were first registered before 30 January 2012 need to register these interests on the Personal Properties Securities Register (PPSR) by 31 January 2014.
After this date, IP Australia’s registers will no longer be sufficient for registering personal property security interests, and such registered interests are not being automatically transferred to the PPSR.
Interested parties should still maintain a listing on the IP Australia register in order to take advantage of IP Australia’s notification system. However, listings at IP Australia will not have any legal effect as registered securities and interested parties may lose their priority for payment over other creditors if these listings are not registered on the PPSR.
The Australian PPSR, which was launched in 2012, follows the successful example of (amongst others) the current New Zealand PPSR, and combines multiple registers from different Australian states and territories.
A ‘security interest’ broadly includes any interest in personal property that secures payment of money or another obligation, for example a mortgage, retention of title arrangement, or financing lease. Under the Australian rules ‘personal property’ includes shares, accounts, designs, patents, trade marks, copyright, plant breeders’ rights, and licences, including licenses over intellectual property assets. It specifically excludes real estate.
The benefits of registering a security interest include the ability to get priority for payment over other creditors in certain circumstances if a debtor is unable to pay. As a purchaser, it enables you to check if there are any interests registered against the personal property that would prevent you receiving full ownership rights. The PPSR rules may require the preparation of new company documentation that is consistent with the rules of its operation; for example, standard contracts may need updating to ensure that, where you are a secured party, an appropriate authority is granted to you to enable you to register a security interest over any relevant collateral (a security interest must be granted in writing to be enforceable against third parties). The deadline for the transfer of interests from IP Australia’s register serves as a reminder to ensure that your business documentation meets the requirements of the new rules.
Please click here to view IP Australia’s official notice regarding this change <http://www.ipaustralia.gov.au/about-us/news-and-media/official-notices-listing/securities-register>, or click here to view the Australian Financial Security Authority’s PPSR website <http://www.ppsr.gov.au/Pages/ppsr.aspx>.
If you would like to discuss registration of a new or existing personal property security interest against an intellectual property or business asset in Australia or New Zealand, or if you would like to discuss how the PPSR affects your business, please contact us.
This article is intended to summarise potentially complicated legal issues, and is not intended to be a substitute for legal advice. Please contact a Baldwins attorney or other IP professional before acting on any information contained in this publication.