Placing a security guarantee on financing of works

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Placing a security guarantee on financing of works

Sponsored by

olivares-400px.jpg
Finance.

It is important not to forget that the Civil Code states that debtors respond to the fulfilment of their obligations with their assets, except for all those assets considered by law as inalienable or which cannot be seized.

Moreover, the Mexican Copyright Law states that economic rights cannot be seized or pledged. However, it recognises the possibility of embargo and having in pledge the revenues and products derived from its exercise.

Therefore, a guarantee on the revenues and products of the exercise of the economic rights of a literary or artistic work can provide legal certainty for creditors for the execution of debt instruments that finance the production of works.

In the execution of debt instruments, there may be accessory contracts, beyond the aforementioned pledge, to guarantee the payment of the debt. Among these are specialised financial and insurance products such as a completion bond.

The purpose of this is to guarantee compliance with the production of the work, to allow the exercise of rights of use or exploitation in order to generate income and to comply with the obligations in favour of creditors.

It is important to mention that the Mexican Copyright Law Regulation recognises that the person who seizes an embargo or exercises a pledge action on the revenues and products derived from the exercise of economic rights can request the judicial authority to authorise the exploitation of the work when the copyright owner refuses to do so.

However, the complexity of the legal structure required for the subscription of debt for the production of literary or artistic works will depend on the magnitude of the investment required.

In addition, there may be distribution agreements that consider advance payments for the exploitation of the work, to guarantee payment to creditors, which can be assigned in favour of them.

The foregoing, must, at all times, follow the formalities required by the Mexican Copyright Law for any transfer of economic rights.

more from across site and SHARED ros bottom lb

More from across our site

Working with Harvey and Microsoft, the firm has been at the forefront of developing AI tools for its lawyers, and is now exploring new projects and business models
The Emotional Perception AI case, which centres on the patentability of an artificial neural network, will be heard next week
Developments included a court order related to InterDigital’s anti-anti-suit injunction against Disney, and clarification on recoverable costs
Partners at Foley Hoag examine how recent CJEU jurisprudence may serve as a catalyst for recalibrating US judicial reluctance to entertain foreign patent claims
International law firms have high hopes for their IP practices in Saudi Arabia, with many opening offices, but recruiting and retaining talent in the Kingdom presents unique challenges
Patrick Ogola joins us for our ‘Five minutes with’ series to discuss helping African entrepreneurs on the global stage, and explains why young lawyers should speak up
Heli Pihlajamaa, the EPO’s principal director for patent law and procedures, joins us to take stock of the unitary patent following its second anniversary
Kelly Thompson, chair of South African firm Adams & Adams, discusses self-belief, self-doubt, and the importance of saying yes
The renowned food brands were represented by a host of lawyers, including members of the firms’ IP teams
Partners at Bird & Bird and Taylor Wessing discuss how Saudi Arabia offers unique opportunities for firms dealing in IP and tech
Gift this article