Wednesday 23 June 2010
Securitised trade marks: a quick question
A sudden and somewhat random thought occurred to me yesterday in the course of a conversation with Craig Bailey of Questel Edital.
We understand that the securitisation of trade marks is a convenient means by which lending institutions can protect their position when advancing money to a business which needs to borrow funds. The legal framework for this is known and understood. The question however is this: do lending institutions employ any due diligence or watching routines of their own, to ensure that the integrity or value of a securitised trade mark portfolio is not compromised by subsequent applications by third parties to register similar or conflicting trade marks -- or do they leave it to the borrower? While the latter is the more natural party to discharge the duty of monitoring and protecting securitised interests which it may be using on a daily basis, its failure to do so may weaken the lender's position -- and the borrower may not have enough assets to make it worth suing on a warranty in the event that it fails to keep a proper eye on the securitised rights.
Any thoughts or comments?