Capitalizing IP– Security Interest and Securitization of Trademarks Eslam Shaaban A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of the Ph.D. in Law Faculty of Law University of Ottawa © Eslam Shaaban, Ottawa, Canada, 2020 Table of Contents: Abstract .......................................................................................................................... v Acknowledgements ........................................................................................................ vi Dedication .................................................................................................................... vii 1 CHAPTER ONE: Capitalizing IP—Security Interest and Securitization of Trademarks .................................................................................................................... 1 1.1 Introduction ................................................................................................................. 1 1.2 Research Outline .......................................................................................................... 4 1.3 The Importance and Originality of the Research .......................................................... 6 1.4 Research Objective ....................................................................................................... 9 1.5 Literature Review ......................................................................................................... 9 1.5.1 Introduction ..................................................................................................................................... 9 1.5.2 Review Methods, Data Sources and Search Strategy .................................................................... 11 1.5.3 Additional Resources .................................................................................................................... 12 1.5.4 Findings ........................................................................................................................................ 14 1.5.5 Analysis of the Literature Review ................................................................................................. 37 1.6 Theoretical Framework .............................................................................................. 41 1.6.1 The Rise of Law and Economics .................................................................................................. 50 1.6.2 Overview of the Law and Economics Approach........................................................................... 51 1.6.3 Positive Law and Economics ........................................................................................................ 54 1.6.4 Economic Incentive Theory .......................................................................................................... 56 1.6.5 How the Law and Economics Approach will be Used to Answer my Research Questions .......... 57 1.7 Methodology ............................................................................................................... 58 1.7.1 Semi-Structured Interviewing: ...................................................................................................... 60 1.8 Thesis Road Map ........................................................................................................ 61 2 CHAPTER TWO: The Legal Framework for Security Interests in Trademarks in Canada & the United States .......................................................................................... 63 2.1 Introduction ............................................................................................................... 63 2.2 Legal Framework ....................................................................................................... 65 2.2.1 Attachment .................................................................................................................................... 70 2.2.2 Perfection ...................................................................................................................................... 70 2.3 The Canadian Legal Framework ................................................................................ 71 2.3.1 Constitutional Overview of the Grounds of Security Interests in Trademarks ............................. 74 2.3.2 Personal Property Security Act ..................................................................................................... 77 2.3.3 Trade-marks Act ............................................................................................................................ 80 2.3.4 Bank Act ........................................................................................................................................ 90 2.3.5 Recent Developments in Canadian Trademarks Regulation and Policy ....................................... 96 ii 2.3.6 Recent Changes in Canadian IP Policy ....................................................................................... 101 2.3.7 The Intellectual Property Security Act (IPSA) ........................................................................... 102 2.3.8 Legal Framework of Security Interests in Trademarks in United States of America .................. 103 2.3.9 Valuation as one of the Common Non-Legal Barriers to Security Interests in Trademarks ....... 114 2.3.10 WIPO Questionnaire on Security Interests in IP Assets ......................................................... 131 2.4 Reform Proposal ....................................................................................................... 135 2.5 Conclusion ................................................................................................................ 139 3 CHAPTER THREE: Canadian Professionals’ Perception of Security Interests in Trademarks ................................................................................................................ 142 3.1 Introduction ............................................................................................................. 142 3.2 Interview Outcome Classification ............................................................................. 145 3.2.1 IP Lawyers and Agents ............................................................................................................... 146 3.2.2 Bankers and Finance Professionals ............................................................................................. 153 3.2.3 Government Officials .................................................................................................................. 159 3.2.4 Other Professionals and IP Owners ............................................................................................. 162 3.3 Discussion ................................................................................................................. 162 4 CHAPTER FOUR: Findings and Recommendations ............................................ 168 4.1 Introduction ............................................................................................................. 168 4.2 Main Findings........................................................................................................... 171 4.2.1 Canadian Financial Institutions Tend not to Accept Trademarks as Collateral .......................... 171 4.2.2 The Canadian Community Lacks IP Education and Literacy ..................................................... 174 4.2.3 The Security Interest Perfection Process is Uncertain ................................................................ 176 4.2.4 The Economic Incentive as a Main Motive for all Parties .......................................................... 178 4.3 Recommendations for Change .................................................................................. 180 4.3.1 Increase IP Literacy and Build Knowledge ................................................................................. 180 4.3.2 Resolve the Ambiguities of the System for Registering Security Interests in Trademarks ......... 183 4.3.3 Enhancing the Law and Economics Balance as a Primary Method of Developing a Trademarks Legal Paradigm ........................................................................................................................................ 194 4.4 What Did this Research Add to the Existing Literature? .......................................... 199 4.4.1 The Risk of Valuation of IP Assets Associated with Security Interests in IP Assets .................. 200 4.4.2 The Lack of Certainty in the Legal Framework Governing Security Interests in IP Assets ....... 200 4.4.3 Reform of the Ambiguity Related to the IP Ownership Title ..................................................... 201 4.4.4 The Law of Debtor and the Choice of Applicable Law .............................................................. 202 4.4.5 The Federal Registration of IP Security Interests as an Alternative to the Choice of Law ......... 202 4.5 Conclusion and Future Research .............................................................................. 203 4.5.1 Conclusion .................................................................................................................................. 203 4.5.2 Future Research .......................................................................................................................... 206 4.5.3 Where Do We Stand? .................................................................................................................