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New registry for security interests

By Ricardo Cadena
Managing Intellectual Property, December 2010 / January 2011
Enforcing security interests is not always as simple as we may want it to be, especially when it comes to chasing debtors who retain title or possession of secured IP, or any movable asset colateral, where the debtor can assign or set that asset as collateral in other credits. This situation has driven creditors to refuse to take movable assets as security interests unless they are left in consignment with a creditor or third-party depositary.
On October 7 2010 the Mexican Ministry of Economy launched the Asset Security Interest Registry (RUG), where any potential buyer or creditor may verify if a certain good is currently set as collateral. Additionally any creditors, Mexican or foreign, can now register a security interest at the RUG, giving the creditor a way to perfect the security interest and obtain priority over other creditors, however, its effectiveness is questionable, as registration at the RUG is not mandatory.

The Civil Law regulates intangible assets like IP as movable assets, so the question is: should you register security interests at the RUG? Any security interests on IP rights are recorded at the Mexican Institute of Intellectual Property (IMPI) to make them enforceable upon third parties. So registration at RUG may not be seen as necessary. However, it might be helpful to provide legal certainty to creditors when a specific security may not be registered at IMPI or if registered, is not public (such as patent applications, which are kept confidential), thus making it impossible for creditors to determine if a partner application has already been set up as collateral.