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Securitization May Work Beyond Music Royalty Income Stream
A securitization is a process whereby an individual or entity pools the right to future payments that it is owed, and sells this right as a security. The first individual to capitalize on the concept of securitization of intellectual property (IP) assets was musician David Bowie. He issued a bond offering backed by his copyright royalties in 25 of his albums comprising approximately 250 songs. Although industry experts expected a flood of music rights securitizations following the launch of the “Bowie Bonds” in 1997, this did not come to pass. However, securitization as a concept is not limited to just music copyright royalties. Any IP right with a proven revenue stream could be used as the underlying asset in a securitization. Therefore, there is a huge potential for extending the concept of IP securitizations to other areas of the entertainment industry.
Securitization of IP rights can offer a variety of financing and economic opportunities. One of the major advantages is that it allows the issuer of the security to raise money at a much lower cost than that of other conventional means of financing. There are several other benefits of securitization of IP rights as well. Among these are an immediate tax-free infusion of capital, diversification of assets and the fact that the issuer regains ultimate control over the asset following expiration of the term of the issuance. In addition, a New York court recently ruled that how the Bowie Bonds were accomplished was not a protectible trade secret. (See Bowie Bonds Formula Not Protectible).
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Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
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