In his opening address at the Global Forum for Intellectual Property held in Singapore in August 2013, Mr Teo Chee Hean, Deputy Prime Minister of Singapore announced that as part of the Singapore Government’s initiatives to strengthen Singapore as an Intellectual Property (“IP”) Hub, Singapore will introduce an IP financing scheme to help companies secure funding with their IP assets, where the Government will partially underwrite the value of their IP to be used as collateral for bank loans. The Government intends to have this financing scheme available from the first quarter of 2014.
The IP financing scheme is one of the features of Singapore’s 10-year Master Plan to guide Singapore’s development into a global IP hub in Asia (the “Master Plan”).
Under the scheme for IP-backed loans described in the Master Plan, the value of the IP assets of the borrower would be partially underwritten by the Singapore Government to encourage banks to accept them as collateral in support of the loan. The banks will undertake their own due diligence processes in assessing the credit worthiness of the applicants and the business case of the applicants.
The introduction of this scheme is to enable Singapore-based companies that are rich in IP to reach the next stage of development and compete in international markets. It is also to help attract regional high-tech or IP companies to relocate their IP and related operations to Singapore to access capital.
IP financing in Master Plan
Aside from IP-backed loans, the Master Plan also listed the following as part of the IP financing scheme:
- IP securitisation: Upfront lump-sum payment in exchange for future royalty streams from the company’s IP assets;
- IP funds: Funds that invest in IP in a strategic manner, e.g. acquiring IP for licensing, investing in the development or commercialisation of IP, and taking equity stakes in companies which own IP.
On 1 April 2013, the Intellectual Property Office of Singapore (the “IPOS”) and the Ministry of Law issued a joint press release to announce the Government’s acceptance of the recommendations made by the IP Steering Committee (the “Committee”) in the Master Plan. The Government set up the Committee in May 2012 to formulate the Master Plan which was submitted to the Government in early March 2013. The Committee was supported by two sub-committees. Dr Stanley Lai, SC, Head of the Allen & Gledhill Intellectual Property practice, was co-chair of one of the sub-committees.
The following materials are available from the IPOS website www.ipos.gov.sg: