Legal Literacy - This article discusses intellectual property rights in the form of trademark rights that can be used as collateral. Let's look at the explanation below.

Intellectual Property

Intellectual Property itself is a right arising from thought processes that produce a product or process that is useful for humans, in this case intellectual property is the right to economically enjoy intellectual creativity.1 The brand itself is also a popular intellectual property in society because the brand is also the spearhead when a business or business is engaged in by the community.

The definition of a brand itself has been regulated in the Article Article 1 number 1 of Law Number 20 of 2016 concerning Trademarks and Geographical Indications (hereinafter referred to as the Trademark Law), namely a sign displayed in graphic form in the form of images, logos, names, words, letters, numbers, arrangement of colors, in two-dimensional or three-dimensional form, sound, holograms, or a combination of two or more of these elements to distinguish goods.

Legal protection for Brands in Indonesia arises when the brand has been registered with the Directorate General of Intellectual Property, because legal protection for brands in Indonesia adheres to the system first to file or constitutive, and these provisions have been regulated in Article 3 of the Trademark Law.

Utilization of intellectual property rights such as copyright and patents as collateral objects have clearly been explicitly regulated in Article 16 paragraph 3 of Law Number 28 of 2014 concerning Copyright Jo. Article 108 of Law Number 13 of 2016 concerning Patents, but in the Trademark Law there is no explicit regulation regarding brands that can be used as fiduciary collateral.

Characteristics of Material Properties

According to J. Satrio, normatively a brand can be said to be an intangible movable object because the brand itself has characteristics of material properties, namely:2

  1. Having a direct relationship with certain objects controlled by the debtor
  2. The nature of the object can be maintained its rights or transferred to a certain party
  3. Having properties droit de suite;
  4. Transferable or assignable to a specific party or other person
  5. Hamzah and Senjun Manulang define fiduciary guarantee as follows: A transfer of ownership from the owner based on a principal agreement of accounts payable to the creditor, but the rights transferred are not actually but juridically delivered, only owned by the creditor but the object remains controlled by the debtor.3

Trademark Rights have material properties

Trademarks in property law based on article 499 BW jo. Article 50 Bw includes objects attached to it the right to enjoy and the right to transfer, and based on the nature of property and the transfer of trademark rights that already exists in Article 41 of Law Number 20 of 2016, the right to a trademark is included in the category of intangible movable objects.4 Therefore, because trademarks are included in intangible objects, the appropriate guarantee for trademark rights is a fiduciary guarantee based on Article 1 paragraph 4, Article 9, Article 10, and Article 20 of Law Number 42 of 1999 concerning fiduciary guarantees, because trademark rights have material properties and have economic value and are categorized as intangible objects.5

The use of trademark rights as credit collateral has been used in various countries, one of which is the United States, which has added a new guarantee in the form of intangible assets (intangible) which is regulated in the revised article 9 Uniform Commercial Code in 1998.6 Various other countries have also made other intellectual property rights as collateral objects in credit, namely in Denmark, where intellectual property rights owners can access information regarding the valuation of IPR values and get an overview of the prices of patents and copyrights on the market, however, the use of intellectual property rights must be registered and valued first by a registered and certified appraisal institution in order to be used as collateral.7

Intellectual Property Rights that can be used as Material Collateral

Intellectual property rights consisting of copyrights, trademarks, patents, industrial designs, integrated circuit layout designs, trade secrets, and plant variety protection are included in movable objects which in principle can be used as collateral for debt through fiduciary and pawn schemes.8 [8]intellectual property rights that are included in the nature of objects and are tangible can be bound by fiduciary guarantees and also pawns, while intellectual property rights that are intangible and intangible can only be bound through fiduciary guarantees.9 Trademark rights can be accepted as collateral objects in credit agreements, but what is accepted is as additional collateral and not the main collateral.

Right trademark can be used as a guarantee tool on bank credit agreement, but must pay attention to the bank's precautionary principles. In a situation that causes caution in accepting trademark guarantees in banking credit because there is no standard assessment of the brand, and the uncertainty of the economic value of the brand, and the difficulty of carrying out execution if the debtor defaults, the application of the precautionary principle must be prioritized by the Bank by applying a 5C analysis appropriately and strictly.

When looking at the future perspective regarding Intellectual Property Rights (IPR) as bank credit collateral, with the enactment of Government Regulation Number 24 of 2022, a legal basis has been provided for inventors or creative industry players to obtain credit from financial institutions, both banks and non-banks, using IPR as collateral.

This shows the potential for Indonesian economic growth through the creative economy sector. This regulation is not balanced by the readiness of financial institutions, both banks and non-banks, which do not yet have a sufficient legal basis related to the use of IPR as credit collateral. Considering the precautionary principle applied in the banking world and the need for credit analysis before providing guarantees to prospective debtors, there needs to be harmonization between regulations and the readiness of financial institutions.10

So normatively, trademark rights are movable objects, because ownership of the trademark can be transferred to other parties by means of grants, inheritance, or transfers that do not conflict with statutory regulations. The presence of article 41 of Law Number 20 of 2016 also makes it possible for trademarks to be used as fiduciary collateral objects in accordance with article 9 of Law Number 42 of 1999. However, until now, trademark rights that can be used as collateral have not been explicitly regulated in statutory regulations.

Reference list:

  1. Directorate General of Intellectual Property, Ki-Lat Module for Beginners Get to Know Intellectual Property Briefly and Appropriately: Copyright, Trademark, Industrial Design and Patents, vol 44 (2011) 7. Available at: <http://arxiv.org/abs/1011.1669>, <http://dx.doi.org/10.1088/1751-8113/44/8/085201>, <https://iopscience.iop.org/article/10.1088/1751-8113/44/8/085201>.
  2. Satrio, J., Guarantee Law of Rights Property (PT Citra Aditya Bakti 2002), pp. 11-12.
  3. Manulang, Senjum and Hamzah, 'Guarantee Law' (Rineka Cipta), p. 167.
  4. Besar, 'Trademark as Collateral Related to Guarantee Law', business law Binus, (2018).
  5. Rizki, Muhammad, et al., 'Implementation of Trademark Rights as Collateral in Banking Credit' (2022), 10, pp. 322, 325.
  6. Rizkiawan, Teguh, 'Intellectual Property As Banking Credit Guarantee Object: Prospects and Constraints', Journal UII, (2022), 4, p. 889.