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IP and research and development

Register now from $6.80

What may be affected? : 

  • selling or buying goods on credit terms, including software
  • a licence to use or deal in intellectual property (eg copyright, patents, designs) may be property which is covered by a security interest
  • supply of computer hardware and equipment, software, or any goods, under retention of title arrangements.
  • leasing or bailing of equipment where the arrangement is (or does last) for more than two years
  • provision of finance to businesses which have IP and/or IP licences, or where the finance enables them to acquire such property, or other personal property
  • contractual arrangements for R&D where IP can be reassigned if obligations are not fulfilled.

What is not affected?: 

  • land

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How does it benefit my business?: 

Protection when dealing with your goods

When selling on retention of title or consignment, or hiring or leasing out goods – properly registering can protect your interest should any of your customers not pay and go broke. Even if the goods or assets are sold on, mixed or installed onto other goods.

If you don’t make a registration of your interest in those goods and your customer goes broke before they have fully paid you, your stuff may be sold to pay secured creditors first. If you are not registered, you will be an unsecured creditor in an insolvency and may not recover much, if anything, of what you are owed.

It is important to note that the PPSR is only a noticeboard of security interests, so if you claim any type of interest other than a security interest over IP, be aware that ownership or transfers of the IP (like trademarks) do not appear on the PPSR.

Visit IP Australia for information on IP rights and legislation relating to patents, trademarks, designs and plant breeder's rights.

Registration tips

As the PPSR acts as ‘noticeboard’ it shows you are claiming a security interest in the property of your customer. To have a security interest there must be written evidence of the security agreement (eg terms and conditions), and the grantor must have signed their acceptance of the writing, or done something which shows that they intended to accept (eg sending a purchase order before or after receiving your terms on a quote, or dealing with you on the same terms for several orders over time).

An email exchange can be written evidence.

Puts you first in line – jump the queue

The PPSR does not replace the need to have protection in your contract terms.

If those terms provide for leasing, selling on retention of title terms or on consignment of personal property (personal property includes IP and IP licences), then they will likely be a PPSA security interest, but you need to register them on the PPSR to protect your contractual position and priority.

The arrangements listed above are also purchase money security interests (PMSI).There are certain procedural requirements and timelines for a PMSI, but it’s important to claim a PMSI on the PPSR to put you ‘first in line’ to the collateral, even if you’re ‘second in time’ to register.

Protection when buying goods

You can check whether valuable second-hand goods you want to buy, such as computers and electrical equipment, are being used as security for a debt or other obligation. The PPSR won't tell you the value of the obligation, but it lets you know who the obligation is owed to so you can find out more.

Where you buy or lease property from a seller/lessor – such as a wholesaler or retailer who ordinarily sells/leases that kind of property in their business, ‘taking free’ protections will usually apply so that you don’t need to worry about whether there is any interest (eg of a financier or lessor) in those goods – you will take the property free of it.

However, searching the PPSR will give you additional peace of mind, particularly for larger value transactions, or sale or lease arrangements through private channels, including for used goods.

Increased financing options

PPSR assists you with increased financing opportunities. For example, you may borrow against a broader range of collateral such as your trademark, patent, design or copyright in a file or musical work, and any intellectual property licences which you have been granted.

Financiers now can protect their interest in such collateral on the PPSR so that they know they have the best possible protection and priority they can achieve, should things go wrong.

Financiers can view security interests registered by others against your goods, and that makes it easier for them to decide whether or not to lend to you.