IP experts use EU Innovation Act to press Austrian Government to change laws to facilitate IP-backed finance
Author
Martin Croft
PR & Marketing Manager
The EU Innovation Act, proposed last month, aims to unlock €10.2 billion per year in IP-backed finance – and IP and legal experts in Austria are using it to increase pressure on the Austrian Government to move more quickly to change the country’s laws to make it easier for companies to borrow against their Intellectual Property.
At the moment, Austrian law does allow formal IP rights, such as registered patents, trade marks, and designs, to be used as collateral. However, the country also legally recognises a range of unregistered intangible assets, including copyright, but also covering some trade marks and business names which have acquired distinctiveness through long us, and some designs. These rights are more difficult to use as collateral for finance. In addition, proprietary data and trade secrets are legally protected via Austrian laws that enact the EU Trade Secrets Directive.
A key challenge is that Austria, like many countries around the world, has laws that restrict how lenders can take possession of a borrower’s assets. In effect, taking security over moveable assets (which include IP and other intangibles, but also equipment, machinery, accounts receivable and the like) is complicated by the Austrian legal principle of ‘Faustpfandprinzip’ which demands actual physical possession of a pledged asset.
As this post on law firm Taylor Wessing’s site explains:
“In Austria, a pledge needs to be 'made public' to be effective. What this means in practice is different for each type of asset – where feasible, movable assets need to be handed over to the pledgee, where this is not feasible (e.g. for large scale machines) the pledge must be made evident by some form of sign fixed to the pledged asset. This requirement repeatedly creates unpleasant surprises for creditors in insolvency proceedings, for example where the signs showing that large scale production machines are pledged, get 'misplaced' leading to the pledge becoming arguably ineffective in insolvency proceedings.”
“Austria can go a long way towards closing that gap through its planned movable pledge register (Mobiliarpfandregister), delivering at national level the type of security infrastructure that Brussels, for now, intends only to examine at EU level. Waiting for Brussels is no alternative: any EU-wide IP pledge register is, at best, years away and would be limited to IP, whereas Austrian businesses require a register for all movable collateral. A national register designed to work alongside any future EU solution would serve both purposes.”
Proposals for a Mobiliarpfandregister (movable pledge register) were included in the legislative plans published by the new Austrian Government which took power in March 2025. However, the issue is still being discussed and no formal draft of any proposed law on moveable property has appeared as of November 2026.
The Austrian need for a moveable property register is an issue that faces or has faced a number of countries looking to make it easier for IP-rich companies to get the funds they need to grow – including Scotland, where the Moveable Transactions (Scotland) Act 2023 came into force in April 2025.
The Scottish legislation included the creation of two new registries of IP and other moveable intangible property, making it possible for Scots companies to use IP and other intangibles as collateral for loans.
In June this year, Royal Bank of Scotland became the first bank in Scotland to allow companies to borrow up to £10 million against the value of their IP. Royal Bank’s IP-backed loan scheme is based on the scheme which sister bank, NatWest, launched in England and Wales in January 2024, but adapted to reflect Scottish law.
Inngot worked with NatWest to develop the original IP-backed loan concept as well as the Royal Bank version, and continues to provide specialist IP valuation and collateral suitability checking services, via its online platform to both NatWest and Royal Bank.
Hofburg Palace, Vienna, Austria Photo by Beatriz Miller on Unsplash
