Time is running out to register transitional security interests under the Personal Property Securiti
If you are a holder of security interests in personal property, including IP assets and transferable IP licences, you have a 31 January 2014 deadline to record your interests on the Personal Properties Security Register (“PPSR”) in order to maintain the priority of your interests.
IP assets include:
- registered trade marks;
- registered designs;
- registered plant breeders’ rights; and
- circuit layout rights.
Failure to register these interests on the PPSR by 31 January 2014 may result in the priority of your interests being lost to other parties with competing interests. This is the case even if your security interests have already been recorded on the IP Registers maintained by IP Australia.
What is the PPSR?
Established on 30 January 2012, the PPSR is a national, electronic register of security interests in personal property, which includes intellectual property and any other personal property except land. A “security interest” includes any interest in personal property which is created by an agreement that secures a payment or performance of an obligation to another person (eg. a fixed and floating charge over an IP asset).
It is still possible to register security interests on the IP registers with IP Australia, and this is recommended to ensure that the holder of the security interest is notified of certain events regarding the IP assets (such as notice that the registered owner of a trade mark has requested cancellation of the registration, or notice of an application to record assignment of a registration) or otherwise obtains the benefits bestowed on registered interest holders under Australian IP legislation.
However, the PPSR is the only register which determines whether a security interest:
- is enforceable;
- takes priority over other interests.
What do you need to do?
Security interests in IP assets recorded on the registers of IP Australia before 30 January 2012 were not automatically transitioned to the PPSR. Similarly, security interests created or registered on an IP register after that date will not be migrated to the PPSR automatically.
Therefore, you need to:
- identify any security interests you hold over IP assets or IP licences;
- check whether those interests have been recorded on the PPSR; and
- record any security interests that arose before 30 January 2012 (or pursuant to a security agreement in force before that date) (known as “transitional security interests”) on the PPSR prior to 31 January 2014.
Failure to do so means that the priority in your security interest may be lost, and the competing interests of third parties may take priority.
We can assist you with your due diligence enquiries and with recording your interests on the PPSR and the IP Australia registers.