Today I wanna talk about perfecting a trademark or patent as a security interest.

So what does the term perfecting or perfection in this situation means?

Well it’s a fancy word for filing the right documents with the correct organizations so
everyone knows that the lender has that security interest in intellectual property – and to
make sure that the lender has priority over other parties who might have a future interest
in the Intelectual Property.
The question in here is whether Vietnam Civil Code 2015 regulates Perfecting Security
Interests in Intellectual Property or not?
The answer is Yes
Transferance includes: purchase, sale, gift, inheritance, lease, mortgage, etc.
In essence, both inventions and trade names are industrial property rights, and
industrial property rights are a type of right in intellectual property rights.
According to Article 115 civil cod 2015 the definition of the word property rights
includes intellectual property rights. Therefore, trademarks and patents can enter
into a secured transaction and can be legally mortgaged.
Articles 295 and articles 318
In reality I have a case study: Agribank South of Hanoi branch versus
Lifepro foreign joint venture company
In 2012, Agribank lent a loan to Lifepro company with a total amount of up to
VND 3,099 billion. To secure this loan, Agribank and Lifepro Vietnam established
two mortgage contracts.
1. The first Mortgage contract is worth 1,518 billion VND, the collateral is formed
from borrowed capital and own capital.
2. The second mortgage contract. The collateral of this contract is the right to use 06
trademarks that Lifepro Vietnam joint venture company has licensed from FGF
Industry Spa (Italy). With these 06 brands and brands, Agribank has secured a
loan of up to 70 million USD, equivalent to 1,464 billion VND.

The court sentenced defendant Pham Thi Bich Luong (former Director of
Agribank South Hanoi Branch) and defendant Chu Thi Kim Hien (former Deputy
Director of Agribank South Hanoi Branch) to 20 years in prison for the crime of
"violating regulations". regulations on lending in the operation of credit
institutions" and were both sentenced to 15 years in prison for the crime of
"abusing positions and powers while on official duty."
The total penalty for each defendant is 30 years in prison. In addition, two
defendants Luong and Hien were also banned from practicing credit-related
activities for 5 years after their prison terms were released.

Defendant Pham Thanh Tan (former General Director of Agribank) was sentenced
to 13 years in prison for "abusing positions and powers while performing official
duties" and 9 years in prison for "lack of responsibility causing serious
consequences, " the aggregate penalty is 22 years in prison.

The story of Agribank comes from the reason that the loan mechanism is not
transparent within the bank. However, we should consider that There are many
risks
Firstly,
It is very difficult to evaluate intellectual property because it is often a stand-alone
asset with no comparable assets in the market, so it is also difficult to determine
the discount rate for this type of asset.
Secondly, intellectual property can be difficult due to legal problems Two
examples for this issues are:
(1) Risk of infringement of intellectual property rights
(2) Expiration of protection
From my point of view, the patent or trademark can be perfected as a security
interest, however, in order to reduce the risks we should build up price mechanism
base on some organization for examples: Brand Finaces, InterBrand,