2009_UNCITRAL_en_03 - ELSA Germany

ELSA Delegation 

ELSA Delegation to UNCITRAL 

Working Group VI in New York 

April 27 th to Mai 1 st 2009 

ELSA International, 239 Blvd. Général Jacques, 1050, Brussels, Belgium 1


1. Introduction and general notes .................................................................................. 3 

2. ELSA Delegation to the 15 th session of the Working Group VI ............................... 5 

3. Provisional agenda .................................................................................................... 6 

4. Discussion ................................................................................................................. 6 

4.1 Opening of the session and election of officers ................................................... 6 

4.2 Security interests in intellectual property ........................................................... 6 

5. Contact list ............................................................................................................... 12 

5.1 Delegates of states that are members of UNCITRAL .................................... 12 

5.2 Delegates of observer states .......................................................................... 13 

5.3 Delegates of International Organizations ..................................................... 13 

6. Final note from the Delegation ................................................................................ 14 



1. Introduction and general notes 

From April 27 th until Mai 1 st , a Delegation consisting of the Head of Delegation Meri-Katriina 

Kanervisto (ELSA Finland), Barbara Sandfuchs, Johanna Schweiz, Lutz Heidelberg and 

Gregor Ludwig (all ELSA Germany) had the privilege to be joining as an observer the semiannual 

session of the United Nations Commission on International Trade Law (UNCITRAL, 

Working Group VI: Security Interests) in New York. 

Working Group VI is one of the six Working Groups of UNCITRAL. It performs substantive 

preparatory work on security rights for the Commission (UNCITRAL). 

The 15 th session of the Working Group was held at the United Nations Headquarters in New 

York from April 27 th until May 1 st 2009. The aim of the Working Group was to continue the 

work on a draft Annex to the UNCITRAL Legislative Guide on Secured Transactions dealing 

with security rights in intellectual property. The Guide was used as a starting point and 

background of the discussions that took place. 

The Working Group had started drafting the Annex in previous sessions; however, as noted in 

the 14 th session of the Working Group, every effort was to be made in this session to conclude 

discussion about open questions in order to include the results in the draft Annex by the fall of 

2009 or early spring of 2010. The draft Annex will be submitted to the Commission for final 

approval and adoption at its 43 rd session in 2010. 

The Delegation’s general task was to represent ELSA in a professional way at UNCITRAL. 

We participated in the meetings of the Working Group and worked with the relevant 

materials. At UNCITRAL, we established contacts to delegations of other NGOs, states, 

experts and other participants. 

It was an invaluable experience for all members of the Delegation not only to participate in 

the Working Group’s sessions themselves and get an impression of how (in part) very 

complex and conflicting issues of international law are dealt with, but also to find that we, as 

law students, were met with great interest and openness by members of national delegations 

as well as other NGOs. 

There is, in general, no difficulty in making first acquaintances with national delegates and 

observers from other NGOs, particularly as some of them consist of only one person. We 

discovered that ELSA is generally well known by other delegations and that ELSA 

Delegations are very welcome to join UNCITRAL’s meetings as well as to participate in the 

”informal consultations” (coffee breaks). 

We were surprised to find that it seems to be common for other (affluent) NGOs such as the 

New York City Bar Association or the Commercial Finance Association to invite all members 

and observers of the Working Group to informal receptions and dinner parties after the 

meetings. In light of the fact that most networking is done during such informal events (as 

well as during lunch and coffee breaks), we can only recommend that ELSA-delegates follow 

such invitations. 

We can therefore only recommend applying for a place in one of the ELSA Delegations to 

everyone, despite the considerable amount of preparation and time (and money) such an 



undertaking, of course, requires. There are few chances for students to get this kind of first 

hand impression of how legal decision-making works on an international level. Besides, the 

networking potential for members of the Delegation is considerable, both as a representative 

of ELSA and, more personally, as a law student possibly interested in internships, for 

example. 

The participation in a Delegation to an international body and in particular to UNCITRAL is 

an experience you will probably never forget. It enriches the academic studies and provides 

practical insights you can find nowhere else. 

UN grounds passes 

In order to enter the UN-Complex, all members of the Delegation have to get their 

personalized grounds passes (the necessary data will be sent to the Identification Office in 

advance). The Identification Office is across the street from the visitors’ entrance (44 th St / 1 st 

Av) and opens at 9am. As it is usually very busy on Monday mornings, it might be worth 

getting there a few minutes before 9am. It is also necessary to bring identification in order to 

get the pass. 

Delegates must then use the visitors’ entrance, not the entrance for permanent cardholders a 

few blocks further south. 

UN-Cafeteria 

On the first level of the UN-Complex, there is a cafeteria where a broad selection of lunch 

options can be purchased. As there are few affordable lunch places right outside the UN- 

Complex, we can only recommend going to the cafeteria. Also, the tables at the window 

overlooking the East River provide a very nice view of Queens/ Long Island. 

UN Delegates Lounge (Café) 

On the second floor of the UN-Complex there is another cafeteria that sells good coffee. It is 

also, of course, the place where a lot of networking happens, so it’s really one of the places to 

go. The problem is that with the temporary grounds passes that observers get we are not 

allowed to enter the Lounge on our own (except after 5pm). Therefore, make sure you find 

someone with a delegate’s grounds pass that will take you inside. 

Wi-Fi 

It is actually worth bringing your laptop to the UN as there is free Wi-Fi throughout the 

building (so you can also use it for skype-calls during breaks etc.). If you do bring it, 

remember to also bring an adapter for American power sockets. 

ELSA Marketing Material 

Unfortunately, it seems to not have been common for Delegations to be provided with 

marketing material designed for their purpose by ELSA International. As far as our 

experience goes, it would be very helpful for the members of the Delegation to have some 

kind of material that they could give out to people they are in contact with. This may be a 

flyer containing information about ELSA and its activities or even a specially designed 

business card (stating some kind of contact address and ELSA’s web address). Without such 

material, it is much harder to get people to actually remember ELSA and establish lasting 

relations to people. 



Apart from these general remarks, we recommend for everyone to bring whatever ELSA 

marketing material they have in their own national groups, such as Synergy magazines, own 

business cards, flyers etc. 

Informal Meetings 

Be prepared for invitations by other NGOs to receptions and dinner parties. If you do, make 

sure you do some (online) research about the hosting organization or institution. 

Accommodation 

When it comes to accommodation, participants will soon notice that it is very difficult to find 

reasonable ways to stay in New York. Two members of our Delegation decided to stay at 

Manhattan Inn (close to Penn Station). The location of the hostel is very nice and one is surely 

able to discover many shops, restaurants and sights. To get to the UN Headquarters, it takes 

you a very nice 40 minutes walk (If you decide not to use public transportation). On your way 

to the UN Headquarters, you will discover Manhattan and enjoy the great variety of shops. 

Still, you have to be prepared to stay in a very simple hostel with very small rooms, which for 

example not even offer anything to store your belongings (or to lock them). 

2. ELSA Delegation to the 15 th session of the Working Group VI 

Meri-Katriina Kanervisto, Head of Delegation 

Finland 

Lutz Heidelberg 

Germany 

Gregor Ludwig 


Barbara Sandfuchs 


Johanna Schweiz 




3. Provisional agenda 

1. Opening of the session and scheduling of meetings 

2. Election of officers 

3. Adoption of the agenda 

4. Security interests in intellectual property 

5. Other business 

6. Adoption of the report 

4. Discussion 

4.1 Opening of the session and election of officers 

An introduction to the topics of the 15 th Session was made by the secretary of UNCITRAL 

Working Group VI, Mr. Spiros V. Bazinas. Ms. Kathryn Sabo, the representative of Canada, 

was nominated as Chairperson. Ms. Sabo works as the General Council in the Department of 

Justice in Ottawa, Canada and has been serving as chairperson of Working Group VI for 

several years. 

4.2 Security interests in intellectual property 

Terminology 

The first session started with an introduction of the context of the working papers. At first, the 

Working Group needed to reach a consensus on the terminology used in the draft Annex. 

Some clarifications were made regarding the terminology in order to avoid misunderstandings 

and misinterpretation. 

For example, the differences between licence and licence agreement have been pointed out by 

The International Trademark Association (INTA) to clarify the understanding and its 

separation. It was agreed to keep licence agreements and licence as two separated terms. 

Adjustments were suggested on the terminology about “encumbered asset” as well. The aim is 

that unnecessary explanations with respect to intangible assets are deleted from the 

“encumbered asset” section. 

Examples of intellectual property financing practises 

Examples of intellectual property (IP) financing practises were discussed in order to help 

understanding occurring problems. WIPO suggested putting certain examples to separated 

categories. 



Application of the Guide 

There was basic discussion about the broad scope of application of the Guide. The main issue 

was to clarify transfers and to avoid any contradictions between the paragraphs. Adjustments 

to patents were suggested by WIPO because of the many difficulties related to this topic. 

Party Autonomy 

The Working Group discussed whether and to what extent the principle of party autonomy 

also applies to the establishment of security rights in IP. There was general agreement that the 

principle of private autonomy, being a fundamental principle of law, does of course apply to 

security rights in IP. Nevertheless, the Guide elaborates a number of exceptions (rec. 10 and 

111/112). 

Specificity of the security agreement 

The extent to which the encumbered asset needs to be exactly specified in a security 

agreement was at length discussed with regard to assets in the field of IP. Concerns were 

voiced by the German delegation that the same level of specificity that is (under German 

copyright law) required in an agreement concerning e.g. a license with regard to IP should 

also be required by the Guide and its recommendations. As a general rule, a lack of 

specification should result in affected rights staying with the original right owner. 

A requirement of specificity may, however, clash with the right of the owner to divide his 

rights of ownership into a bundle of different rights (e.g. several non-exclusive licenses) he 

can then separately use as a security. Demanding requirements of specificity will become a 

burden when dividing and using these rights and may thus detract from the attractiveness 

from such action. It must also be noted that such requirements would be a (substantial) 

restriction of party autonomy, application of which to IP as security interests was agreed 

upon. Careful examination, therefore, is needed whether such requirements are indeed 

necessary for the protection for debtors against creditors with a dominant market position. 

It was brought up by the delegate of Norway as well as the representative of the WIPO that 

the objective of the Guide is, after all, to give guidance and certainty to all parties involved 

when dealing with IP as security instruments. In order to achieve the objective of providing 

and ensuring that lending and borrowing with IP as security takes place at all. 

Third party effectiveness 

Questions regarding the third party effectiveness of IP security rights are a sensitive issue as 

they often arise in an international context. There are considerable differences in the practices 

regarding such effectiveness in the law regarding IP in different countries. There is thus, 

without doubt, great need for a common understanding of third party effectiveness that may, 

ideally, provided by UNCITRAL’s recommendations. 

One of the instruments of ensuring that IP security rights may be taken to have third party 

effectiveness would be a general registry that comprises such rights as recommended by the 

Guide (rec. 54-57). Such a registry is supposed to provide an efficient method to ensure that 

third parties can be expected to have knowledge of the security rights that might be effective 

against them. If a common understanding could be found by the Working Group, it may also 

serve as a reference point for priority rules regarding different security rights in an 

encumbered asset. 



The problems that arise within that discussion are that there is a great variety of different 

registry systems within various countries. In some of these countries, security rights may also 

be filed and registered. Furthermore, in some states the registration of a notice of a security 

right or some other right does not produce third-party effects. Keeping in mind these different 

systems, it appears as a crucial goal of the Working Group to come up with a recommendation 

for a feasible common system. 

In legal systems in which a security right in IP is registrable in an IP registry and, at the same 

time, under the law recommended in the Guide, that security right is registrable in the general 

security rights registry, there appears to be a need to address the issue of coordination 

between these two registries. 

The Guide furthermore recommends that the secured transactions law should address the 

impact of a transfer of an encumbered asset on the effectiveness of registration of a notice in 

the general security rights registry (rec. 62). 

Priority of a security right in IP 

There has to be a general rule to regulate within competing claimants who as between the 

secured creditor and each competing claimant may receive payment first out of the proceeds 

of the disposition of an encumbered asset in the case of the debtor`s default. Within the 

Guide, ”competing claimant” refers to another secured creditor with a security right in the 

same asset, a transferee, lessee or licensee of the encumbered asset, a judgment creditor with a 

right in the encumbered asset or an insolvency representative in the insolvency of the grantor. 

Potential knowledge of the existence of a prior security right on the part of the competing 

claimant shall generally be irrelevant for determining priority. 

It was stated that a security right with respect to which a document was registered in a 

specialized registry should have priority over a security right with respect to which a notice 

was registered in the general security rights registry. Still, the Guide recognizes the principle 

of subordination (rec. 94), meaning that, as long as the rights of third parties are not affected, 

competing claimants may alter by agreement the priority of their competing claims in an 

encumbered asset. 

In this context, a new idea arose to introduce a concept similar to the concept of purchased 

money financing. This, of course, led to a controversial discussion about the advantages and 

disadvantages of implementing such a system, which are only known for tangible assets, not 

yet for IP. 

Right of the secured creditor to pursue infringers or renew registrations 

The secured creditor should be able to agree with the IP owner that the secured creditor would 

be entitled to pursue infringers and renew registrations (provided that this is permitted under 

law relating to IP). Otherwise, the Working Group was afraid that the encumbered asset could 

lose its value, if the owner of the encumbered IP failed to exercise this right in a timely 

fashion. This result could negatively affect the use of IP as security for credit. 

Super-priority of security rights in IP 

The Working Group started Thursday’s meeting with Wednesday’s two main proposals from 

the delegate from Australia and the observer from the Independent Film and Television 

Alliance (IFTA). Australia proposed that in the context of licenses, there should be additional 



protection through super-priority as a more functional approach. This would e.g. extend to a 

patent that is used in a machine and software used to run the machine and would ease to 

finance a purchase of a patent. Three types of transactions were discussed, (1) developing the 

asset and IPR, (2) buying a right to use the IP asset and (3) buying the IP itself. 

Some delegates found it difficult to respond on a very abstract level, as it would have been 

hard to oversee all consequences and implications. Therefore, the delegate from Australia 

agreed to prepare a written proposal to show the range of factual situations, with the offered 

help of other delegates, which will be subject of discussion at the next session of the Working 

Group. The Working Group expressed interest in further exploring the idea of analogously 

extending the super-priority for tangibles to security rights in IP, and the chair recommended 

doing it soon as the Working Group is supposed to present a report in 2010. 

Ordinary course of business 

One of the main points of substantial disagreement among various delegations and observers 

was the questions whether the Guide should include a recommendation (as it does now) that 

favours the treatment of IP along the lines of the legal concept of “ordinary course of 

business”, which is common only in the United States and Canada and leads to a creditor’s 

loss of his security right under certain transaction conditions. 

As the concept of ordinary-course is not well known in IP law, a majority of Working Group 

members is hesitant to leave it included in the Guide, in order to not change IP laws. The 

majority of the Working Group, in the discussions that took place, favored a narrower redraft 

of one of the alternatives offered in the draft so far in order to limit the supported idea to 

certain off-the-shelf transactions (e.g. consumer walking out of a software shop with the 

bought software). Another alternative was not accepted due to the effect on (inter)national IP 

law. Therefore, a narrower version of the first alternative offered along the lines of the 

comments of the Working Group will be drafted by the Secretariat, also a further commentary 

or explanation for the benefit of the Working Group at the next meeting. 

Rights and obligations of the parties and party autonomy 

Afterwards, the Working Group returned to Add. 3. para. 18 ff.: “Rights and obligations of 

the parties to a security agreement relating to intellectual property”. Under A, the 

“Application of the principle of party autonomy”, the Working Group agreed to include 

additional examples what should be addressed by the contract, but not to draft a series of 

default rules which would raise issues with the mandate and be too time-consuming. 

The Netherlands successfully proposed an amendment to recommend states to enable the 

constraint of a patent in their national patent laws under B., “Right of the secured creditor to 

pursue infringers or renew registrations”. 

The US suggested for para. 22, rec. 1, that the language be changed so that it will read, “The 

recommendations of the guide do not as a matter of transactions law prohibit the parties from 

agreeing [previous text].“ This would have changed the recommendation to a simple 

commentary, but the Working Group preferred to leave it in the form of a stronger 

recommendation as decided in the previous meetings. Two alternatives were left, the slightly 

altered US proposal as a recommendation (“The law should not prevent the grantor and the 

secured creditor from agreeing that the secured creditor may pursue infringers or renew 

registrations of the encumbered intellectual property, reference to the circumstances under 

which the secured creditor may do so”) narrowing the party autonomy, only allowing the 



secured creditor to pursue infringers or renew registrations, and the previous text without 

brackets. The WG agreed to let the Secretariat redraft the text as mentioned in those two 

alternatives. 

The recommendation 2 was deleted by the end of the day. 

Enforcement of a security right in intellectual property 

Normally, the general law of secured transactions applies to the enforcement of security rights 

in IP. This applies not only to IP, but also to other rights that are derived from these types of 

IP. 

Enforcement remedies must be tailored to ensure the most effective and efficient enforcement 

while ensuring the appropriate protection of the rights of the grantor and third parties. This 

should apply equally to the enforcement of security rights in the various categories of IP. 

Law applicable to a security right in intellectual property 

One of the main points of disagreement among members of the Working Group concerned the 

question which law will apply to IP as security rights in general. 

So far, there are three alternatives concerning the applicable law to proprietary matters in the 

draft Annex: 

Alternative A 

The law should provide that the law applicable to the creation, effectiveness against third 

parties, priority and enforcement of a security in intellectual property is the law of the State 

[or region] in which the intellectual property is protected. 

Alternative B 

The law should provide that the law applicable to the creation and enforcement of a security 

right in intellectual property is the law of the State in which the grantor is located. However, 

the law applicable to the third-party effectiveness and priority of a security right in 

intellectual property is the law of the State [or region] in which the intellectual property is 

protected. 

Alternative C 

The law should provide that the law applicable to the creation, third-party effectiveness, 

priority and enforcement of a security right in intellectual property is the law of the State in 

which the grantor is located. However, the law applicable to a priority conflict involving the 

right of a transferee or licensee is the law if the State [or region] in which the intellectual 

property is protected. 

The discussion revolved around the fact that there should ideally be only one recommendation 

about the applicable law in the Guide in order to maintain the Guide’s internal consistency. 

The Working Group was quite unanimous about the applicable law. Among the members, 

Alternative A was seen as the best alternative. The Working Group agreed that a complete 

harmonization concerning the provisions would be ideal, but unfortunately impossible to 

realize, since different countries have different ways of creating intellectual rights. 

The question about the recommendation of only one or more applicable law in the Guide was 

left open and postponed to the next meeting in Vienna. 

ELSA International, 239 Blvd. Général Jacques, 1050, Brussels, Belgium 

10


Future work 

Before concluding its final meeting of the 15 th session, the Working Group took a few 

minutes to discuss topics it would like to discuss after the draft Annex on IP as security rights 

has been presented in the summer of 2010. 

The secretary presented five topics to the Working Group VI: 

1) Work of UNIDROIT: once UNODROIT finishes its work on securities, the Working 

Group VI might need to discuss about the things that were left out of the UNIDROIT 

Convention, 

2) Drafting an agreement about registry system, 

3) Drafting a Licensing Guide, 

4) Drafting a Contractual Guide dealing with security agreements, 

5) The question, whether it is time to convert the recommendations of the Guide into 

model laws. 

The decision about the future topic will be made by UNCITRAL. As the Commission has 

made the decision, it will inform Working Group VI about it. 


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5. Contact list 

5.1 Delegates of states that are members of UNCITRAL 

Ms. Kathryn SABO 

The Chairperson of the meeting 

Department of Justice 

Mr. Carlos Alberto CABEZAS DELGADO 

Instituto Ecuatoriano de Propriedad Intelectual 

Delegation of Ecuador 

Mr. Jean-François RIFFARD 

Université de Clermont-Ferrand 

Delegation of France 

Mr. Sven MITSDÖRFFER 

University of Karlsruhe 

Delegation of Germany 

Mr. Andrea TOSATO 

University of Pavia 

Delegation of Italy 

S. E. Mr. Claude HELLER 

Delegation of Mexico 

Mr. Carlos Sánchez-Mejorada y Velasco 

Sánchez-Mejorada y Asociados, S. C. 

Delegation of Mexico 

Ms. Karine LUTNES 

Grette Law Firm 

Delegation of Norway 

Mr. Wolfgang WIEGAND 

University of Bern 

Delegation of Switzerland 

Mr. Neil B. COHEN 

Brooklyn Law School 

Delegation of the USA 

Mr. Stephen Y. CHOW 

Burns & Levinson LLP 

Delegation of the USA 


12


5.2 Delegates of observer states 

Mr. M. W. D. Marc VAN DER BURG 

Dutch Patent Office 

Delegation of The Netherlands 

5.3 Delegates of International Organizations 

Mr. Luz BECKER 

Representative of the European Space Agency 

Mr. Steven O. WEISE 

Proskauer Rose LLP 

Representative of the American Bar Association 

Mr. Oscar ALCANTRA 

Goldberg Kohn Bell Black Rosenbloom & Moritz, Ltd. 

Representative of the Commercial Finance Association 

Mr. Richard M. KOHN 



Mr. David W. MORSE 

Otterbourg Steindler Houston & Rosen, PC 


Mr. William STARSHAK 



Mr. Lorin BRENNAN 

Representative of the Independent Film and Television Alliance 

Mr. Norman SIEBRASSE 

Representative of the Independent Film and Television Alliance 

Mr. Thilo AGTHE 

Wuersch & Gering 

Representative of the International Trademark Association 

Ms. Carla SCHWARZ 


Ms. Annamaria HACHMEISTER 

Wuersch & Gering 



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Mr. George F. A. PARNELL 

Representative of the New York City Bar Association 

Mr. Steven CANCRO 

Representative of the New York City Bar Association 

Mr. Michael L. SHER 

Law Office of Michael L. Sher 

Representative of Union Internationale des Avocats 

6. Final note from the Delegation 

All members of the ELSA Delegation are grateful for the opportunity to attend the 15 th 

session of the Working Group VI of UNCITRAL. We can highly recommend the Delegation 

work to other ELSA members and hope that next Delegations benefit also from the general 

notes that we have prepared about the work of the ELSA Delegation before and during the 

meetings. Should there be any questions about the work of the Delegation, please do not 

hesitate to contact any of the Delegates. 

On behalf of the whole Delegation, 

Meri-Katriina Kanervisto 

Head of Delegation 


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2009_UNCITRAL_en_03 - ELSA Germany

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