Intangible goods give rise to difficulties. Difficulties arise in relation to the situation of intangible assets. The particular issues will depend on the class of asset concerned.
An intangible asset is usually situated where it can be recovered or enforced. Generally intellectual property rights are situated where they are registered. Shares are situated where registered. Debts are situated where the debtor resides. In particular situations complications may arise.
The question of which law governs the intangible transfer is uncertain. The EU Convention has introduced reasonable certainty for EU cases.
Where an intangible interest is created under the law of a particular country, for example a contract such as a life policy, the question of assignability is decided by that law. Where the debt arises from a contract outside the Convention the law is probably the same.
In the case of intangibles determined by legal rights in a particular country e.g., registered intellectual property rights the place of registration governs assignability.
The validity of the assignment will be usually decided by the choice of law for the contract. If there is no choice the country with which the contract is most closely connected will apply.Certain contracts are not affected by the EU Convention.
The legal effect of the transfer i.e., property questions raise a number of issues. The law which governs the agreement to assign does not necessarily govern the ownership of property issues.
It may be possible to have a contract in Ireland to transfer UK or US registered intellectual property. The property question insofar as third parties are concerned is governed by the law of the place is usually governed by the law of the place where the property is situated.
The two possible options are that the law of the place where the asset is situated or where the interest was created apply. One position is that the law of the place of situation applies. This is straightforward in the case of immovable property.
However in the case of some kind of assets such as shares or debts or in the case of a company register it is normally the place where the register is kept or the place of incorporation that determines. Similarly in relation to registered intellectual property the place of registration will usually determine.
In the case of debts, the location is deemed to be where the debtor resides. In this case the application of the law of the place is artificial as the debtor\’s residence may change.
In EU cases the law governing the rights to which the assignment relates applies. The law governing the relationship between the assignee and debtor and the conditions under which the assignment an be invoked against the debtor apply.
In non-EU cases. There are different views. One view is that the law of the place of the obligation applies. There is also support for the view similar to that under the Convention namely the law under which the interest was created to be the applicable law.