SECURING A LOAN USING INTELLECTUAL PROPERTY: A PRACTICAL FINANCING APPROACH FOR STARTUPS IN NIGERIA

Introduction

The concept of Intellectual Property (IP) is predicated on the notion that certain products of human intellect should be afforded the same protective rights that apply to tangible assets and is therefore, intangible property emanating from creativity and innovation, which can be owned like physical property. It applies to creative ideas, such as inventions; literary and artistic works; designs; symbols, names, and images used in commerce. Furthermore, The World Intellectual Property Organization (WIPO) classifies Intellectual Property Rights (IPR) to include:

Globally, IP has grown into one of the fastest-growing fields of law. In Nigeria, IP is still evolving and can be categorised broadly into four areas namely - copyright, trademarks, patents and designs.

In a general sense, most businesses own potentially valuable but unutilised IP Rights. The ability to raise capital is a major catalyst for economic growth and development and a company's ability to raise capital can either actualize or undermine its goals. The essential nature of funding in business actualisation requires companies to seek funding that requires collateral. With IP's rising importance and value, companies are now exploring how to utilize their IP for revenue generation and how to leverage their IP as collateral to secure funding to support business growth. This article aims to consider IP as security for financing startups in Nigeria.