trademark as security ?

No, a trademark is an intangible asset, that is why it cannot be mortgaged. The bank has no provison to accept that. 

Dear Mr. Anand,

Tangible properties can create only good will, nothing beyond that.  if it is a good brand, it can be sold for a huge value. It comes Valuation of IP during mergers and acquisitions.

Feel free to contact me, if you need further details.

Thanks

Nagaraj

Trademark Attorney & IP Lawyer

IP Lex Global Services

Email: nagaraja_bs@iplexglobal.in

Mob: 9902007635

If it can not be mortgaged then can it be hypothecated?  i have come across a case wherein a leading private bank sanctioned loan to a company wherein company's one of the trademarks was hypothecated. A deed of hypothecation was also executed.

Is there any provision in law where it mandates that intangible asset like trademark can not be mortgaged or hypothecated ?

pls guide

one more point, In the above case, the trademark was given as a collateral security. i want to know it's legality.
 

As trade mark is also a kind of property, it can be mortaged or hypothecated through mortgage or hypothecation deed. Even the right of usage can be assigned through deed. 

Same in copyright matters too. There royalty can be shared on decided propertions by both the parties or it can be assigned to the other party altogether depending on the terms agreed upon. 

Same with Patent matters too. 

Hi!

Yes Trademarks can be offered as collateral. In fact Kingfisher is the first company in India who has been given loan based on the valuation of its Trademarks.

Summit Aggarwal

www.iprindia.in

A Company has a Brand registered in Mumbai. The Co. is also registered in Mumbai however it has a Factory in Delhi. Can it sign hypothecation Deed  for charging such Brand in favour of a Bank at Delhi instead of Mumbai?

Well since the mark is registered for the whole of India. The same can be done. However if the Delhi Bank is offering the loan against the same, the stamp duty for the docs will be according to Delhi ofcourse.

This is not a question of law its a question of commerce. If the bank is willing to apportion value to the trademark and grat you a loan with the trademark as security then yes, its possible. Just out of curiosity, what would they do in case you default? How will they enforce the security? Will they auction your trademark (presumably for the goodwill it carries) to the highest bidder? Seems commercially unviable, however, if the bank is willing to do it it's their neck not yours.

This is not a question of law its a question of commerce. If the bank is willing to apportion value to the trademark and grat you a loan with the trademark as security then yes, its possible. Just out of curiosity, what would they do in case you default? How will they enforce the security? Will they auction your trademark (presumably for the goodwill it carries) to the highest bidder? Seems commercially unviable, however, if the bank is willing to do it it's their neck not yours.

Dear Anand,

As of rights of trademark owners,Trademarks are essentially limited monopolies over the use of symbols in business. The government grants trademark owners the right to exclude all other businesses from using a similar mark on related goods or services. For instance, nobody in the computer industry is allowed to use the name "apple" as a way of identifying themselves, except for Apple Computers, Inc., who was the first to use that symbol to sell computers. If someone selling computers uses "apple," Apple Computers, Inc. has the right to sue immediately in court and force that company to stop using the mark immediately, and without compensation. In fact, they may even be able to make the other party pay monetary compensation for their losses, and have them pay attorneys fees as well.

One when selling related goods or products. Because the government can enforce this exclusivity, trademarks are considered assets of a business, and thus can be licensed or even mortgaged as collateral.