Brazilian Patent and Trademark Office publishes report on IP finance in Brazil

The Brazilian Patent and Trademark Office (BPTO) has released a new study on IP Finance in Brazil, exploring the potential of intellectual property as collateral for financing and outlining strategies to boost this practice in the country.

The study, titled “Unlocking IP Finance in Brazil: How the Experience of Relevant Markets Can Help Brazil Advance“, says IP Finance faces significant challenges in Brazil, and then explores how advances in other countries around the world might best be adapted to Brazil’s needs.

BPTO’s research reveals that the use of intellectual property assets as collateral for financing in Brazil faces obstacles such as:

• Difficulty in Valuing Intangible Assets: The complexity in measuring the value of intellectual property assets hinders their acceptance as collateral.

• Perception of High Risk: Investors and financial institutions often associate these assets with a high level of risk, due to the volatility of their value and the uncertainty regarding their legal protection.

• Lack of Integration with Banking Regulations: The absence of clear guidelines that integrate intellectual property into the norms of the financial system impedes greater adoption of this practice.

The study analysed the development of IP Finance in the United States, Canada, and various Asian and European countries. It explores the challenges faced in these markets and the strategies implemented to overcome them, which the report’s authors say offer valuable insights for Brazil.

In the review of the state of IP finance in the UK, there is extensive reference to the IP-backed finance solution launched by NatWest in January 2024, which uses Inngot’s tools for IP identification, valuation and checking suitability for use as collateral for lending, and includes links to a number of case studies on how individual companies successfully used their IP to secure debt funding, including Propello Cloud, LoveAdmin, EarthSense, Sci-Net, and SixFive Networks.

The BPTO study presents a set of recommendations to unlock the potential of IP Finance in Brazil, aiming to promote a more dynamic and competitive environment for startups and innovative companies. Among the suggestions, the following stand out:

• Development of Valuation Methodologies: Create standards for the valuation of intangible assets, facilitating their acceptance as collateral.

• Education and Awareness: Promote awareness among financial institutions and companies about the benefits and mechanisms of IP Finance.

• Regulatory Adjustments: Adapt the legal and regulatory framework to incorporate intellectual property into financial practices in a safe and efficient manner.

BPTO intends to promote an open dialogue with society, the financial sector, and the government to implement the study’s recommendations and create a more favourable environment for IP Finance in Brazil. The BPTO says that if Brazil adapts the best international practices to the local context, the country will be able to create financing opportunities for companies that invest in intellectual property, fostering a more robust and competitive innovation ecosystem.