Although the formulation of effective topical drug delivery system is one of the most sophisticated pharmaceutical preparations, it has attracted researchers due to many medical advantages associated with it. Topical drug delivery systems can act superficially on skin surface, locally in dermal layer of the skin or transdermally to provide successful delivery of drug molecules to the systemic circulation avoiding the traditional problems and limitations of conventional routes of drug delivery. Many novel formulations have been utilized topically to enhance either permeability or drug targeting to a specific layer of the skin such as Liposomes, ethosomes, transfersomes, niosomes and catezomes. The main problem with all of these formulations is that there is no distinct barrier between the targeting and localization action to a certain layer of the skin and the transdermal action to the circulation of these preparations. Any minimal change in the formulation could transform it from a local targeting preparation to a systemic one. This article deals with the innovations pertaining to the use of various types of liposomal preparations and liposomal like preparations for topical drug delivery and the patents associated with it.