Security Interest Recording

Question 1
We understand that security interests are not recordable in Malaysia.

Answer 1
Malaysia currently does not have specific laws relating to security interest in Intellectual Property (IP) as compared to other countries. However, both of the involved parties may execute a security agreement/transaction for individual interest without the involvement of the Intellectual Property Corporation of Malaysia (MyIPO). Such a transaction is a private matter between the 2 parties.

IP may be subject to a fixed or floating charge, subject to registration within 30 days of creation. Registrable charges include charges on goodwill, trade mark, patents, design or copyright. The IP asset can be delivered in the possession of a lender to hold as security for payment of a debt or performance of a promise. In the event of default, the lender can bring an action against the pledgor to recover the debt or sell the goods after giving reasonable notice.

Question 2
You say that IP may be subject to a fixed charge subject to registration within 30 days of creation. Where is such a pledge registered?

Answer 2
Please note that you will have to check with your corporate and banking department to see how this is done. We informed you on the alternative avenues since at the Malaysian Registry of Trade Marks and Patents, there is no provision for recordal of security interests. Therefore, may we suggest that you check with the banks / corporate / tax groups to see how best this can be done. We do not have expertise in-house to advise you fully on this. Trust that you understand our position. (please check on this PM)

We trust to above information is sufficient.