First, some context

Like any other intellectual property asset, EU trade marks can be and are often used as collateral in financial transactions. However, reconciling the EU trade mark regulation (the “EU TM Regulation”) with the applicable national laws on “rights in rem” is not always straightforward, especially when the EU trade mark owner is located outside the EU.

Take, for example, Spain:  it is not uncommon for the (non-EU) secured parties (in order to avoid the complexities and costs associated with doing so under Spanish law) to allow and even encourage the grant of the security interest under the rules and formalities of their own non-EU country (usually also that of the EU trade mark owner), even though Article 19(2) of the EU TM Regulation makes it clear (as does the EUIPO Trade mark and Design Guidelines) that security interests over EU trade marks registered in the name of non-EU residents must comply with the laws of the country where the EUIPO is located, i.e., Spain. Moreover, because the EUIPO does not examine the validity/enforceability of these security interests, the truth is that they are usually registered and published in the Official Journal of the EUIPO when the registration formalities are complied with, whether or not the national laws have been complied with.

Does this mean that there is a way around the EU law?

The plain and simple answer is no. The registration of security interests over EU trade marks that are registered in the name of non-EU owners and granted under any law other than Spanish law, even if published by the EUIPO, do not provide any protection to the secured party(ies).

Understanding the glitch under Spanish Law

Spanish law, specifically Article 12 of Law of 16 December 1954 on moveable property mortgage and nonpossessory pledge, provides that security interests over intellectual property assets must be granted in the form of a chattel mortgage, which (pursuant to the same law) requires: valuation of the asset, notarization, registration in the Spanish Movable Assets Registry and payment of the corresponding tax on documented legal acts.

Failure to comply with these formalities will prevent the secured party(ies) from being able to enforce the chattel mortgage against the owner of the trademark. This is because, under Spanish law, enforcement must be carried out either in court or by a Spanish notary, and neither will be able to enforce a mortgage that has not been granted in accordance with Spanish law.

Even if, in order to circumvent this obstacle, enforcement were sought in the country where the registered owner is domiciled and under whose legal regime the security interest was granted, the relevant judicial decision would not pass through the exequatur procedure in Spain, which does not allow the recognition of a decision on a matter that is exclusive of the Spanish jurisdiction, as expressly provided in Article 46(1)(c) of Law 29/2015, of July 30, 2015, on international legal cooperation in civil matters.

Spanish law is intricate and so the process is costly

The Spanish legal framework applicable to rights in rem is highly protective and, as a result, very formalistic. Consequently, it is relatively expensive compared to other legal frameworks.

The mortgage must be granted before a Spanish Notary and be recorded in a public deed. This means that the relevant mortgagor and the secured parties (all secured parties) must appear before a Spanish notary with sufficient powers of attorney to grant the mortgage. These powers of attorney must be notarized, apostilled and sworn translated in order to be accepted and even if so, in some cases, where the Spanish Notary considers that the representativeness of the grantor of the powers was not properly verified in origin, he/ she may refuse their validity.

For the granting of the mortgage, the valuation of the relevant EU trademark(s) is required. If the trademark has been licensed on the open market, the valuation process may be simpler, but otherwise, and in the absence of an official procedure or valuation system to be followed, a proper valuation process may become more complex and require the involvement of a valuation consultant, which may add additional cost to the process.

The valuation must be submitted with the chattel mortgage to the Spanish Moveable Assets Registry, where it must be registered, as a condition of perfecting the mortgage. The Moveable Assets Registry will, in turn, notify the granting of the security interest to the EUIPO for publication in the Official Journal.

The execution and subsequent filing and registration of the mortgage in the Moveable Assets Registry will trigger other costs: (i) notary fees based on the maximum amount secured by the mortgage (this must be calculated and agreed with the Spanish notary public); (ii) registration fees to be paid to the Moveable Assets Registry based on the maximum amount secured by the mortgage; and (iii) stamp duty based on the maximum amount secured by the mortgage (0.75% of the total amount of the secured debt stated in the mortgage deed).


Navigating the complexities of securing EU trademarks, especially when the owner is located outside the EU, requires a proper understanding of the interplay between the EU TM Regulation and national laws. As the above example under Spanish law depicts, despite the apparent convenience for non-EU secured parties to rely on their own legal frameworks, it is crucial to recognize that Article 19(2) of the EU TM Regulation explicitly mandates compliance with national laws, like Spanish law, and that, in the case of Spain, failure to comply with its formalities, including those of the chattel mortgage procedure, will render such security interests unenforceable against the trademark owner, even if they are registered with the EUIPO, which may leave the secured party(ies) in a much worse situation than having to deal with the formalities of the Spanish system and, where not borne by the grantor, incurring the costs of formalizing the security interest in Spain.

If you want further information on this or any related matter, please contact us.