New law expands types of assets that may be provided as guarantees

A recent development concerning IP rights in Costa Rica involved the pledging of all types of IP rights. The new Law on Secured Transactions was published on May 20 2014 in the official newspaper La Gaceta, and will come into force on May 20 2015. The main object of this new law is to increase the access to credit, especially for small businesses, by expanding the category of assets that may be provided as guarantees.

A secured transaction consists of a loan or credit transaction in which the lender acquires a security interest in a property or good owned by the borrower. This property is held by either the lender or the borrower to ensure against loss in the event that the borrower cannot fulfil the obligations set forth in the transaction agreement. When the secured transaction is published, the lender has the preferential right to be paid with the proceeds of the sale of the property or good given as guarantee.

The new law expressly allows the use as guarantees of intangible assets such as trademarks, commercial names, copyrights, patents, licences of use, assignments and all other types of IP rights. These rights may be provided as guarantees via an agreement executed before a notary public. This agreement must set forth the obligations which affect the IP right at issue and declare its monetary value. Under the new law, all rights involved in a secured transaction will have to be registered in the Secured Transactions System, which will be part of the National Registry. With this system, third parties will have access to information regarding the assets provided as guarantees.

The new law broadens the scope of IP rights, since the Trademark Law does not include any reference to obligations related to personal rights and the granting of IP rights as a guarantee for such obligations.

María del Pilar López and Laura Valverde, Zürcher Lawyers, San Jose