New regulations on the financialization of intellectual property rights under the draft Law amending and supplementing the Law on Intellectual Property

The Draft Law amending and supplementing the Law on Intellectual Property introduces an important policy direction on the financialization of intellectual property (“IP”) rights. Accordingly, IP rights are not only recognised as legal rights but are also treated as assets having economic value, capable of valuation, commercialisation and use in financial transactions. The Draft Law clearly provides that: “Intellectual property assets are property rights attached to intellectual property objects protected by law, having economic value and capable of commercial exploitation.” This definition establishes the legal basis for enterprises and individuals to utilise IP rights in financial activities such as borrowing, mortgaging, capital contribution and capital mobilisation. 

The relevant provisions introduced in the Draft Law include: 

1. IP-based finance

The Draft Law provides that IP rights must be recognised in the accounting books and allows the owner to re-determine their fair value at the end of each financial reporting period in accordance with detailed regulations to be issued by the Minister of Finance. The Ministry of Finance shall assume the prime responsibility and coordinate with the Ministry of Science and Technology and other relevant ministries and agencies in developing a national database on the prices of IP rights that have been lawfully transacted, together with detailed guidelines on valuation methodologies. 

The Government shall implement pilot policies on the financialization of IP rights, including: (a) providing support or guarantees for loans secured by mortgages over IP rights; (b) using IP rights as a basis for capital mobilisation on the securities market; and (c) developing insurance products and other financial products related to IP rights. 

With respect to tax incentives, enterprises are entitled to the highest level of deductible expenses for the costs of creation and establishment of IP rights over objects protected as copyright, patents, industrial designs, layout-designs and plant varieties in accordance with the law on corporate income tax. Enterprises are also entitled to the most preferential tax rate applicable to income derived from the commercial exploitation of such rights. Likewise, intermediary institutions are entitled to the most preferential tax rate with respect to income derived from services that successfully support the commercial exploitation of the above-mentioned IP rights. 

2. Provisions on the mortgage of intellectual property rights

Where property rights related to copyright or related rights are used as mortgaged assets for securing loans, the owner may still license such rights to other organisations or individuals, provided that (i) the licensee is notified of the mortgaged status of the rights and (ii) the mortgagee is notified of such licensing. 

A similar regime applies to industrial property rights. The owner may license the use of an industrial property object which is being mortgaged in favour of a third party, but must ensure that both the licensee and the mortgagee are duly notified. 

3. Mortgage of copyright and related rights

Economic rights arising from copyright and related rights are recognised as eligible collateral for bank loans, subject to compliance with the current regulations on secured transactions. In order to be effective against third parties, a mortgage agreement must be made in writing and registered with the competent state authority. 

Such mortgage agreement must provide detailed information on the protection status of the rights, including information on any ongoing assignment or licensing of such rights. In respect of economic rights under co-ownership, the creation of a mortgage requires the written consent of all co-owners, unless the respective ownership interests can be separated and exploited independently. 

In the event that the mortgagor breaches its repayment obligations, the mortgagee is entitled to exploit, assign or auction the mortgaged economic rights in accordance with the law. However, the process of enforcing the mortgaged assets must not infringe upon the moral rights of the author or performer. Specific measures for the implementation of this provision shall be stipulated by the Government. 

4. Mortgage of industrial property rights

Industrial property rights (except for rights to geographical indications) may be used as mortgaged assets for bank loans, in compliance with the current regulations on secured transactions. To be effective against third parties, a mortgage agreement over industrial property rights must be made in writing and registered with the competent authority. 

The mortgage agreement must provide full information on the protection status of the industrial property rights, including any existing agreements on licensing such rights. Where industrial property rights are under co-ownership, the creation of a mortgage requires the written consent of all co-owners, except where the respective ownership interests can be separated and exploited independently. 

In particular, where the mortgaged asset consists of rights to inventions, industrial designs or trademarks, the mortgagor is obliged to carry out procedures for maintenance and renewal of validity in accordance with the law. In case the mortgagor breaches its repayment obligations, the mortgagee is entitled to exploit, assign or license the industrial property rights through auction in accordance with the law. The Government shall issue detailed regulations for the implementation of this provision. 

Date Written: 20/11/2025

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