Trademark pledge is one of pledge types on movable assets.
Decree Law No. 556 dated 1995 Concerning to the Protection of
Trademarks ("TDL") allows pledging the trademark and
refers to the Turkish Civil Code ("TCC") for detailed
regulations. Although a regulation exists, the trademark pledge is
not frequently applied in Turkey and there are some loopholes that
need to be clarified during the application of trademark pledge.
The applicability will increase in the same direction with the
value of the local trademarks of the country.
The trademark pledge means movable pledge under the
TCC. As mentioned, TDL refers to the TCC for trademark
pledge regulations. TCC provides a general rule that the delivery
of movable asset is required for the validity of a pledge. However,
if a movable asset is required to be registered at a specifically
designed registry by law, pledge can be established by registration
to such registry without delivery of the movable. The issue here is
that the TCC states the movables "can" (not
"must") be registered at the registry if there is such
registry designed for such purpose but does not impose this
registration right as a liability. Since the wording of the law
does not mean that registration of a pledge in the relevant
registry is not a condition for a valid pledge, then the question
rises; "What happens if a bona fide third party
purchases a trademark without knowing that there is a valid pledge
on it because such pledge was not registered in the registry?"
The problems that would occur in this case are evident. In our
opinion, to prevent such problems, any pledge on trademarks shall
be also registered at the Turkish Patent Institute
("TPI") for the protection of the pledgee's
Furthermore, it is important to mention that the pledger can
continue to use the trademark. Loyalty rights cannot be pledged
separately and independently from the trademark.
The most important condition of the trademark pledge is
the existence of a debt, which need a security. The
trademark can be pledged in favor of the creditor or any other
third party. The amount of the debt does not need to be
specifically stated. It is enough if the debt amount can be
determined. It is important to note that the pledge does not
automatically cease if a debt ceases because statute of
limitations. The pledgee still can apply to forced sale of the
A written agreement is the condition for validity of the
The pledger must avoid actions decreasing the economic
value of the trademark. For instance, since there is a
regulation in Turkey that a trademark may be cancelled if the owner
does not use such trademark continuously for 5 years, the trademark
owner (pledger), must use the trademark to avoid any invalidity
case arising from non-use for continuous 5 years. Besides the
pledger has to renew the trademark registry in case of
Some are in the opinion that trademark pledge on a trademark
that is not registered before the TPI is also possible. In such a
case the non-registered trademark must have an economic value and
Trademark pledge ceases under four
circumstances: (1) payment of the debt, (2) pledgee's
consent (3) if the pledge depends on any time limitation, the
expiration of such term, (4) forced sale of the trademark. An
important point: The TCC does not allow automatic transfer of
movable assets in case the debt secured with pledge is not paid.
Therefore any provisions in a pledge agreement would not be not
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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