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Intellectual Property and the new PPS Register

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Earlier in the year, MST reported on the new Personal Property Securities (“PPS”) regime commencing in May 2011 and its potential impact on businesses. MST currently assists its clients in registering security interests on IP Australia databases, which causes any dealings with the intellectual property to be subject to the interest registered. With the introduction of the federal PPS regime, MST will also assist its clients with registering their interests under the new system.

A PPS is a secured interest over property other than land which prevents an owner from dealing with the property in a manner inconsistent with the interest. Forms of personal property include tangible property such as cars, boats and machinery and intangible property such as shares, contract rights and intellectual property.

The overhaul being undertaken will have critical consequences for holders of security interests in both existing and future intellectual property rights. Presently, IP Australia administers Australia’s intellectual property rights system. The new PPS system will put in place a single federal┬áregister (“the PPS Register”) that will record security interests in all types of personal property, including intellectual property. One of the aims of the PPS Register is to amalgamate many of the current federal and state based registries of security interests. To effect this, the new rules will provide that in order for security interests to maintain their priority they must be registered on the PPS Register. As such, registration on the PPS Register, not the IP Australia registers, will be decisive.

As part of the transition, the government has indicated that data on some of the existing registers will be automatically transferred to the PPS Register. We have been advised that this will not be the case in relation to the registers administered by IP Australia. Once registration on the PPS Register is possible, IP Australia will be advising the existing registrants on their databases to register their interests on the PPS Register. They will also advise all new registrants to do the same. If you have a security over intellection property in existence today, you will need to consider also registering that interest on the PPS register.

IP Australia will still continue to operate its registers once the new PPS regime is fully in place. The data on the IP Australia registers will not be removed and new registrations will continue to be accepted. This is because there will continue to be benefits for being registered with IP Australia, even if priority is determined by the PPS Register.

For further information please contact one of our Intellectual Property lawyers.

Authors: Darren Sommers, Noelene Treloar and Richard Lim