This study deals with all the problematic issues surrounding the use of intellectual property as "collateral," analyzing two legal systems, and addressing that the time has come for the enactment of laws which regulate how security interest in intellectual property should effect. This study also points out the importance of intellectual property rights as another asset in business transactions and the difficulties that the valuation process presents. The central idea of this work is that if lenders and borrowers can successfully utilize IP assets for collateral, borrowers can tap and additional source of funding, and creditors can finance a broader range of customers, leading to continued economic growth and development when the law is no longer used as an obstacle, but rather as a tool for clarification.