<PAGE>   1
                                                                Exhibit: 10.46FT


                        COLLATERAL ASSIGNMENT OF PATENTS

         THIS COLLATERAL ASSIGNMENT OF PATENTS (the "Assignment"), dated as of
March 31, 1998, is by and between FUTECH INTERACTIVE PRODUCTS, INC., an Arizona
corporation (the "Assignor") and U.S. BANCORP REPUBLIC COMMERCIAL FINANCE, INC.,
a Minnesota corporation (the "Assignee").

                                   WITNESSETH

         WHEREAS, the Assignor and the Assignee have entered into a Financing
Agreement of even date herewith (the "Financing, Agreement"), pursuant to which
the Assignee has agreed to extend certain credit accommodations to the Assignor
under the terms and conditions set forth therein (all terms capitalized and used
herein without being defined shall have the meaning given them in the Financing
Agreement);

         WHEREAS, the Assignor has pledged and granted to the Assignee a
security interest in the property described in a Security Agreement of even date
herewith (the "Security Agreement") by and between Assignor and Assignee which
property includes general intangibles, including, without limitation,
applications for patents, applications for trademarks, trade names, copyrights,
patents, inventions and trade secrets;

         WHEREAS, the Assignor owns the patents set forth in Exhibit A attached
hereto, and the patents so listed are registered or application has been made
for such registration as noted in Exhibit A in the United States Patent and
Trademark Office; and

         WHEREAS, in order to induce the Assignee to enter into the Financing
Agreement and extend the credit accommodations to the Assignor thereunder, and
in order to secure the payment and performance of (a) all indebtedness,
liabilities and obligations of the Assignor to the Assignee of every kind,
nature or description under the Financing Agreement, including the Assignor's
obligation on any promissory note or notes under the Financing Agreement and any
note or notes hereafter issued in substitution or replacement thereof, (b) all
liabilities of the Assignor under this Agreement, the Security Agreement or any
other Loan Document, and (c) any and all liabilities and obligations of the
Assignor to the Assignee of every kind, nature and description, whether direct
or indirect or hereafter acquired by the Assignee from any Person, absolute or
contingent, regardless of how such liabilities arise or by what agreement or
instrument they may be evidenced, and in all of the foregoing cases whether due
or to become due, and whether now existing or hereafter arising or incurred (the
"Liabilities"), the Assignor is willing to enter into this Assignment.

         NOW, THEREFORE, in consideration of the premises and to induce the
Assignee to extend credit accommodations under the Financing Agreement, the
parties hereto agree as follows:

         1.  The Assignor does hereby assign all of its right, title and
interest in and to all of the present United States patents and the
registrations and applications therefor owned by the Assignor (the "Patents"),
including but not limited to those set forth on Exhibit A, and including,
without limitation, all proceeds thereof together with the right to recover for
past, present and future infringements, all rights corresponding thereto
throughout the world and all renewals and extensions thereof, said Patents to be
held and enjoyed by the Assignee, for its own use and behalf, and for its legal
representatives, successors and assigns, as fully and entirely as the same would
have been held by the Assignor had this Assignment not been made. The foregoing
<PAGE>   2
assignment shall be effective only upon the occurrence of an Event of Default
under the Security Agreement and upon written notice by the Assignee to the
Assignor of the acceptance by the Assignee of this Assignment; unless and until
the acceptance of this Assignment, this Assignment shall have no effect. After
the occurrence and continuation of an Event of Default under the Security
Agreement, the Assignee shall be entitled to transfer the Patents pursuant to an
Assignment of Patents substantially in the form of Exhibit B. Assignor hereby
irrevocably authorizes the Assignee to date these undated Assignments of Patents
and otherwise complete such Assignment at time of transfer.

                  2. The Assignor hereby covenants and warrants that:

                  (a) except for applications pending, to the best of the
         Assignor's knowledge, the Patents listed on Exhibit A have been duly
         issued and are registered and subsisting and have not been adjudged
         invalid or unenforceable in whole or in part;

                  (b) to the best of the Assignor's knowledge, each of the
         Patents listed on Exhibit A is valid and enforceable;

                  (c) no claim has been made to the Assignor or, to the
         knowledge of the Assignor, to any other person, that any of the Patents
         or use of the inventions described therein does or may violate the
         rights of any third person and no claim has been made by the Assignor
         that any other person is infringing upon the rights of the Assignor
         under the Patents;

                  (d) the Assignor has the unqualified right to enter into this
         Assignment and perform its terms;

                  (e) the Assignor will be, until the Liabilities shall have
         been satisfied in full and the Loan Documents shall have been
         terminated, in compliance with statutory notice requirements relating
         to the Patents;

                  (f) to the best of Assignor's knowledge, the Assignor is the
         sole and exclusive owner of the entire and unencumbered right, title
         and interest in and to each of the Patents listed on Exhibit A, free
         and clear of any liens, charges and encumbrances, including without
         limitation, licenses and covenants by the Assignor not to sue third
         persons;

                  (g) the Patents listed on Exhibit A are all of the United
         States Patents and applications therefor now owned by the Assignor; and

                  (h) the Assignor will, at any time upon request, communicate
         to the Assignee, its successors and assigns, any facts relating to the
         Patents or the history thereof as may be known to the Assignor or its
         officers, employees and agents, and cause such officers, employees and
         agents to testify as to the same in any infringement or other
         litigation at the request of the Assignee.

                  3. The Assignor agrees that, until the rights of the Assignee
in the Patents are terminated pursuant to Section 6, it will not enter into any
agreement that is in conflict with its obligations under this Assignment.

                  4. If, before the Liabilities shall have been satisfied in
full, the Assignor shall obtain rights to any new patent, or become entitled to
the benefit of any patent application,

                                        2
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registration or any renewal or extension of any patent registration, such shall
be included in the definition of "Patents" as used in this Assignment (except
for purposes of Section 2 hereof), Section I hereof shall automatically apply
thereto, and the Assignor shall give to the Assignee prompt notice thereof in
writing. The Assignor authorizes the Assignee to modify this Assignment by
amending Exhibit A to include any future patent.

                  5. The Assignor agrees not to sell, assign or encumber its
interest in, or grant any license with respect to, any of the Patents, except
for the licenses listed on Exhibit C attached hereto.

                  6. The Assignor agrees that it will authorize, execute and
deliver to Assignee all documents requested by Assignee to facilitate the
purposes of this Assignment, including, but not limited to, documents required
to record Assignee's interest in any appropriate office in any domestic or
foreign jurisdiction. At such time as the Financing Agreement and the other Loan
Documents shall have been terminated in accordance with their terms, the
Assignee shall on demand of the Assignor execute and deliver to the Assignor all
termination statements and other instruments as may be necessary or proper to
terminate this Assignment and assign to the Assignor all the Assignee's rights
in the Patents, subject to any disposition thereof which may have been made by
the Assignee pursuant hereto or pursuant to the Loan Documents.

                  7. The Assignor shall have the duty, through counsel
reasonably acceptable to the Assignee, (i) to prosecute diligently any pending
Patent application as of the date of this Assignment or thereafter until the
Financing Agreement and the Loan Documents shall have been terminated in
accordance with their terms; provided, that the Assignor may abandon any such
application upon thirty days' written notice to the Assignee, (ii) to make
application on those patentable inventions, products and processes which are
unregistered but capable of being registered and which a prudent person would
reasonably cause to be registered and (iii) to preserve and maintain all rights
in all Patents which a prudent person would reasonably preserve and maintain.
Any expenses incurred in connection with applications that constitute Patents
shall be borne by the Assignor. The Assignor shall not abandon any application
presently pending that constitutes a Patent without the written consent of the
Assignee.

                  8. The Assignee shall have the right but shall in no way be
obligated to bring suit in its own name to enforce or to defend the Patents and
any license thereunder if the Assignor has failed to bring such suit in
circumstances in which a prudent person would have brought such suit. The
Assignor shall at the request of the Assignee do any and all lawful acts and
execute any and all proper documents required by the Assignee in aid of such
enforcement or defense (including, without limitation, participation as a
plaintiff or defendant in any proceeding) and, if Assignor has failed to bring
such suit in circumstances in which a prudent person would have brought such
suit, the Assignor shall promptly, upon demand, reimburse and indemnify the
Assignee for all reasonable costs and expenses incurred by the Assignee in the
exercise of its rights under this Section.

                  9. This Assignment shall also serve to evidence the security
interest in the Patents granted by the Assignor to the Assignee pursuant to the
Security Agreement.

                  10. No course of dealing between the Assignor and the
Assignee, failure to exercise, nor any delay in exercising, on the part of the
Assignee, with respect to any right, power or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.

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<PAGE>   4
                  11. All of the Assignee's rights and remedies with respect to
the Patents, whether established hereby, by any other agreements or by law shall
be cumulative and may be exercised singularly or concurrently.

                  12. This Assignment is subject to modification only by a
writing signed by the parties, except as provided in Section 4 hereof.

                  13. This Assignment shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties.

                  14. Upon payment in full of all Liabilities (other than
Assignor's unmatured indemnity obligations under any Loan Document) and the
expiration of any obligation of the Assignee to extend credit accommodations to
the Assignor, this Assignment shall terminate and all rights to the Patents
shall revert to the Assignor.

                  15. THIS ASSIGNMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
(WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF) OF (I) THE
UNITED STATES OF AMERICA AS TO RIGHTS AND INTERESTS HEREUNDER WHICH ARE
REGISTERED OR FOR THE REGISTRATION OF WHICH APPLICATION IS PENDING WITH THE
UNITED STATES PATENT AND TRADEMARK OFFICE AND (II) THE STATE OF MINNESOTA IN ALL
OTHER RESPECTS. WHENEVER POSSIBLE, EACH PROVISION OF THIS ASSIGNMENT AND ANY
OTHER STATEMENT, INSTRUMENT OR TRANSACTION CONTEMPLATED HEREBY OR RELATING
HERETO SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS ASSIGNMENT OR ANY OTHER STATEMENT,
INSTRUMENT OR TRANSACTION CONTEMPLATED HEREBY OR RELATING HERETO SHALL BE HELD
TO BE PROHIBITED OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE ONLY TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
ASSIGNMENT OR ANY OTHER STATEMENT, INSTRUMENT OR TRANSACTION CONTEMPLATED
HEREBY OR RELATING HERETO. IN THE EVENT OF ANY CONFLICT WITHIN, BETWEEN OR AMONG
THE PROVISIONS OF THIS ASSIGNMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER
STATEMENT, INSTRUMENT OR TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR RELATING
HERETO OR THERETO, THOSE PROVISIONS GIVING THE ASSIGNEE THE GREATER RIGHT SHALL
GOVERN.

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                  IN WITNESS WHEREOF, the Assignor has executed this instrument.

                                             FUTECH INTERACTIVE PRODUCTS, INC.

                                             By     /s/ Vincent W. Goett

                                             Title     CEO

               Signature Page to Collateral Assignment of Patents

                                       5
<PAGE>   6
                                                                    EXHIBIT A TO
                                                COLLATERAL ASSIGNMENT OF PATENTS

                              UNITED STATES PATENTS

<TABLE>
<CAPTION>
Title                                         Patent No./App. No.                         Issue Date                Filing Date
-----                                         -------------------                         ----------                -----------
<S>                                           <C>                                         <C>                       <C>
Gick
  Decorative Novelty Articles                      5,735,453                                  4/7/98                11/14/95
Futech
  Method of combining audio
  and visual indicia                               5,609,488                                 3/11/97                 2/14/94
  Apparatus for combining
  audio and visual indicia                         5,484,292                                 1/16/96                11/24/92
  Electronic book                                  5,417,575                                 5/23/95                 4/14/92
  Electronic book                                  5,167,508                                 12/1/92                 4/14/91
</TABLE>

                                       A-1
<PAGE>   7
                                                                    EXHIBIT B TO
                                                COLLATERAL ASSIGNMENT OF PATENTS

                              ASSIGNMENT OF PATENTS

                  WHEREAS, FUTECH INTERACTIVE PRODUCTS, INC., an Arizona
corporation (hereinafter "Assignor"), is the owner by assignment of the entire
right, title and interest in and to certain United States Letters Patent,
together with the invention(s) disclosed therein.

                  WHEREAS,                        , of
(hereinafter "Assignee"), is desirous of acquiring the entire right, title, and
interest in and to the aforesaid Letters Patent, together with the invention(s)
disclosed therein, any and all causes of action and rights of recovery for past
infringements of said Letters Patent, and all of the rights vested in said
Assignor herein by virtue of the instruments of assignment and/or by virtue of
other instruments pursuant to which Assignor became vested with said ownership,
including the right, title, and interest in and to any and all improvements
acquired pursuant to the terms of said instruments of assignment.

                  NOW, THEREFORE, for good and valuable consideration received
by Assignor from Assignee, the receipt in full of which is hereby acknowledged,

                  1. Said Assignor hereby sells, assigns, transfers and conveys
unto said Assignee the entire right, title and interest in and to said Letters
Patent of the United States together with the invention(s) disclosed therein,
including each and every Letters Patent which is granted on any application
which is a division, substitution or continuation of said Letters Patent, and in
and to each and every reissue or extension of said Letters Patent.

                  2. Said Assignor further sells, assigns, transfers and conveys
unto said Assignee the entire right, title and interest in and to any and all
causes of action and rights of recovery for past infringement of the Letters
Patent herein assigned.

                  3. The terms, covenants and provisions of this Assignment
shall inure to the benefit of Assignee, its successors, assigns, and/or legal
representatives, and shall be binding upon said Assignor, its successors,
assigns and/or other legal representatives.

                  4. Said Assignor hereby irrevocably authorizes U.S. Bancorp
Republic Commercial Finance, Inc. to date this undated Assignment and otherwise
complete the Assignment at the time of transfer.

                  IN WITNESS WHEREOF, said                      has executed and
delivered this instrument this               day of                   , 19     .

                                             FUTECH INTERACTIVE PRODUCTS, INC.

                                             By

                                             Title

                                      B-1
<PAGE>   8
                                                                    EXHIBIT C TO
                                                COLLATERAL ASSIGNMENT OF PATENTS

                                PATENT LICENSES

<TABLE>
<S>                                                         <C>
Licensee                                                    Date License Expires
--------                                                    --------------------
Golden Books Family Entertainment, Inc.                           8/14/2001
888 Seventh Ave.
NY, NY 10106-4100
</TABLE>

                                      C-1
<PAGE>   9
                              ASSIGNMENT OF PATENTS

                  WHEREAS, FUTECH INTERACTIVE PRODUCTS, INC., an Arizona
corporation (hereinafter "Assignor"), is the owner by assignment of the entire
right, title and interest in and to certain United States Letters Patent,
together with the invention(s) disclosed therein.

                  WHEREAS,                       , of
(hereinafter "Assignee"), is desirous of acquiring the entire right, title, and
interest in and to the aforesaid Letters Patent, together with the invention(s)
disclosed therein, any and all causes of action and rights of recovery for past
infringements of said Letters Patent, and all of the rights vested in said
Assignor herein by virtue of the instruments of assignment and/or by virtue of
other instruments pursuant to which Assignor became vested with said ownership,
including the right, title, and interest in and to any and all improvements
acquired pursuant to the terms of said instruments of assignment.

                  NOW, THEREFORE, for good and valuable consideration received
by Assignor from Assignee, the receipt in full of which is hereby acknowledged,

                  1. Said Assignor hereby sells, assigns, transfers and conveys
unto said Assignee the entire right, title and interest in and to said Letters
Patent of the United States together with the invention(s) disclosed therein,
including each and every Letters Patent which is granted on any application
which is a division, substitution or continuation of said Letters Patent, and in
and to each and every reissue or extension of said Letters Patent.

                  2. Said Assignor further sells, assigns, transfers and conveys
unto said Assignee the entire right, title and interest in and to any and all
causes of action and rights of recovery for past infringement of the Letters
Patent herein assigned.

                  3. The terms, covenants and provisions of this Assignment
shall inure to the benefit of Assignee, its successors, assigns, and/or legal
representatives, and shall be binding upon said Assignor, its successors,
assigns and/or other legal representatives.

                  4. Said Assignor hereby irrevocably authorizes U.S. Bancorp
Republic Commercial Finance, Inc. to date this undated Assignment and otherwise
complete this Assignment at the time of transfer.

                    IN WITNESS WHEREOF, said CEO, has executed and delivered
this instrument this 31st day of March, 1998.

                                                    FUTECH INTERACTIVE PRODUCTS,
                                                    INC.

                                                    By      /s/ Vincent W. Goett

                                                    Title   /s/ CEO