By virtue of Paragraph 1 of Article 334 of the Civil Code of the Russian Federation a pledge of the right to a trademark shall mean a legal relationship pursuant to which the creditor under an obligation secured by the pledge (a pledgee) shall be entitled, in the event of the debtor's failure to fulfill this obligation or an improper fulfillment of it, to get satisfaction from the value of the exclusive right to the trademark preferentially before other creditors of the person to whom the pledged right to the trademark belongs (a pledgor).
The pledge is a common way in the practice of ensuring the fulfillment of the obligations. It is important for the creditors because, while performing a defensive function, it gives the creditor the right to satisfy his interest directly at the expense of the value of the pledged property – the right to the trademark. In addition, the pledge performs a stimulating function, in the case when the pledgor is the very debtor under the principal obligation; he seeks to fulfill the principal obligation properly in order to avoid losing the right to the pledged property.
The provisions on the pledge of the exclusive rights, which are applicable, inter alia, to the pledge of the right to the trademark, are contained in a special norm – Article 358.18 of the Civil Code of the Russian Federation. At the same time, regarding the pledge of right to the trademark, it is necessary to distinguish the situations, when the subject of the pledge is actually the exclusive right to the trademark, and when the rights under an agreement on the alienation of the exclusive rights to the trademark and under a license (sublicense) agreement act as such subject. Depending on this, the issue of the applicable legal norms is solved. The general provisions on the pledge shall be applied to a pledge agreement of the exclusive right to the trademark (Articles 334-356 of the Civil Code of the Russian Federation), and the provisions on the pledge of the obligation rights shall be applied to an pledge agreement of the rights under the agreement on the alienation of the exclusive rights and the license (sublicense) agreement (Articles 358.1-358.8 of the Civil Code of the Russian Federation).
In terms of the legal properties of the pledge to the trademark – all principal properties of the pledge of property are inherent in it in general:
1. The pledge is an accessory (additional to the principal obligation) legal relationship, what is manifested in the following:
– the pledge shall be terminated with the termination of the obligation secured by the pledge (Subparagraph 1 of Paragraph 1 of Article 352 of the Civil Code of the Russian Federation);
– if the obligation secured by the pledge arises in the future, the pledge arises from the moment specified in the agreement, but not earlier than the this obligation arises;
– the law forbids an “isolated” assignment of the right of the pledge.
The important criteria for a possibility of determining a subject matter of intellectual property as a subject of the pledge is the alienability of the rights, as well as a possibility of evaluating this subject matter.
In general, the subjects of the pledge are divided into pledgeable and non-pledgeable. Trademarks, the subject matters of the patent law, manufacturing secrets (know-how), the subject matters of the copyright and related rights, programmes for electronic computing machines, databases, and selection achievements can act as pledgeable. On the contrary, collective marks, the NPOP, company names and commercial designations, as well as secret inventions, act as the non-pledgeable subject matters.
According to Paragraph 1 of Article 341 of the Civil Code of the Russian Federation, the rights of the pledgor in relation to the pledgor arise from the moment of the conclusion of the pledge agreement, unless otherwise is stipulated by the agreement, the Civil Code of the Russian Federation or other laws. The pledge shall be subject to be registered in the cases, when the result of the intellectual activities or the means of individualization shall be also subject to the state registration, in accordance with the Civil Code of the Russian Federation. According to Paragraph 2 of Article 358.18. of the Civil Code of the Russian Federation, the state registration of the pledge of the exclusive rights shall be exercised in accordance with the rules of Section VII of the Civil Code of the Russian Federation.
As to the dynamics of the development of the registration of the pledge of the exclusive rights to trademarks in the Russian Federation, then, despite the total insignificant number of the agreements, it can be said with confidence that the total number of the pledge agreements and the subject matters that are their subject is being increasing steadily. Below, there is a table from the Annual Report of Rospatent for 2017 on the number of the agreements and the trademarks included in their subject.
Considering the possibility of using the subject matters of intellectual property as the subject of the pledge acting in the function of additional benefits and privileges for the banks being the pledgees, the following benefits can be highlighted:
- the pledge agreement is a possibility of getting an additional % income;
- an expansion of a client base represented by borrowers, especially in the field of the small and medium-sized businesses;
- an expansion of a pledge portfolio;
- a reduction of the expenses of the creditor bank under a credit transaction in comparison with the traditional types of the pledge;
- there is no need for on-site checks;
- a possibility of an operational check of the trademark in the register of Rospatent online;
- the pledge of a unique subject matter of intellectual property may appear to be a more effective mechanism of influence on the borrower than the traditional assets (the real estate, the equipment);
- it is beneficial for the company-borrower to reimburse the loan without violating the conditions of the loan agreement in order to prevent a transfer of the property right to the subject matter of intellectual property to a competitor;
- a possibility of achieving to a whole new level in lending and strengthening its position at the complex highly competitive market.
As to the pledgors being the right holders of the trademarks, the possibility of the pledge of their exclusive rights is a possibility of obtaining the additional means for the development of their own production and economic activities, as well as a possibility of obtaining the effective management of the non-current capital and profitability of their business.