It has been fascinating to observe and report on developments in the intellectual property finance and insurance markets in the past three years. We have seen growth in patent litigation funding availability, and the emergence of IP-backed lending and collateral protection insurance coverage. Serious financial markets now see the immense value of IP as a critical business asset.

IAM’s “Special Report 2024 Q2: Money, money, money”, published today, reports deeply on the growing breadth of IP financial products spreading across the globe.

The first part traces the history of IP finance around the world, explains the current offerings and makes predictions of where the market might head in the future. More lenders are interested in IP-backed loan products because of the trend of IP insurance which hedges their risk, and we explain four common IP insurance policy types and their uses. The collateralisation of intellectual property works differently for patents, trademarks and copyrights, which is why we have outlined the factors that lenders consider when loaning against these collaterals. 

Yet these products are only solid if the IP valuations underpinning them are accurate, which explains why experts are fiercely debating valuation methods – pointing out that valuators considering the same IP often differ vastly on its worth. But there are counterpoints here that signal the diligent way for IP valuations to move forward.

The special report’s second section will be highly useful to chief IP officers whose interest in IP finance and insurance has moved past examination into experimentation. We offer practical primers and guides to teach IP professionals how to tell their IP stories to secure investment. 

Many new companies are keen on grabbing venture capital dollars – and we show how they can highlight the strengths of their IP strategy and quality of their portfolio to land deals with investors. More mature companies may spurn the idea of diluting their equity through VC money; we guide them to apply for IP-backed debt finance wrapped with insurance cover. Finally, there are times a patent holder must turn to courts to enforce their rights, and it can benefit them to explore legal finance solutions to share the risk and court costs. We give step-by-step instructions on how to secure lawsuit funding, showing how the maths work.

Different jurisdictions around the world have grown their own unique flavours of IP finance products. Our last section takes readers on a global tour to show how the United States finance and insurance markets – arguably the most developed to date – have hit a snag requiring a reset due to some debtors defaulting on loans and making claims on insurance policies. Is it possible the US will not always be the prime market for lawsuit lending? 

We consider how the Unified Patent Court is set to revolutionise the market. It covers a population to rival that of the US – making many patent holders and litigation finance firms keenly exciting about participating – and the critical thing to be seen is how large that damages awards will be in the UPC.

Asia is so unique in its IP finance landscape because governments there have played a leading role in developing a vibrant ecosystem. China is the clear leader and we trace developments there, along with second-place finisher South Korea, as well as Japan, India, Singapore and Indonesia.

Here is IAM’s “Special Report 2024 Q2: Money, money, money“.