What Can The Chaos At Rangers FC Teach Us About Trade Marks?

If you have been following the saga at fallen Scottish football club Rangers you will know that their fall from elite ranks to ignominy is all but complete.

The once great Club overspent and then sold up to man who promised the Earth and delivered nothing which ultimately led to its liquidation.

The majority of the Club was then bought by investors who, true to Rangers recent heritage have spent more than their income.  The club was once again facing bankruptcy then entered controversial business man Mike Ashley, the owner of Newcastle United FC and founder of the Sports Direct empire.  In various guises, through himself and his company MASH Holdings, Mike Ashley currently owns approximately 9% of the shares in Rangers.  Rangers need money and Mike has it in spades.

So what has that got to do with Trade Marks?  Well today Rangers announced that Sports Direct had advanced a loan of £10 million to the Club in return for 26% of the share capital in Rangers Retail Limited.  You can read the announcement here.  The loan is a secured loan and is secured on "fixed charges over Murray Park, Edmiston House, Albion Car Park, and the Club's registered trademarks"

It highlights the point that trade marks (and other intellectual property) are valuable assets which can be used not only to secure markets by excluding others but may also be used as collateral for loans and even assets in pension funds.  The security works in the same way as a mortgage on a house. The loan is secured against the registered trade mark(s) and you continue to use the asset(s). Of course as with any loan secured against as asset if you fail to pay the loan as it falls due the trade mark(s) are taken by the bank or institution that lent the money in the first place.

If you are considering using your IP as collateral for a loan or would like to learn more about it contact Niall Head-Rapson at nhr@mcdanielslaw.com or 0191 281 4000.