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Rangers claim they remain the ‘rightful and legal owners’ of the badges

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Move along, all is calm, nothing to see here, don’t believe everything you read…. that is the crux of Rangers’ latest statement.

Despite the Intellectual Property Office stating quite clearly that Sportsdirect.com Retail Limited owns the trademarks to Rangers Football Club, Rangers News, Broxi Bear, Follow Follow among others – Rangers issued a statement claiming that they are the righthful and legal owners of the trademarks, despite the overwhelming evidence to the contrary.

The statement read: “It has been widely reported that the trademarks, the iconic symbols of our Club, are now in the possession of Sports Direct. Although the trademarks are registered in Sports Direct’s name, the position is not as alarming as it may first appear.

“Let us all be absolutely clear on this matter. Rangers remain the rightful and legal owners of their trademarks and Interim Chairman Paul Murray has clarified this position with Sports Direct. In fact, both parties will come together within the next two weeks for talks.

“Confusion over ownership arose last week when it was noticed on a Government Intellectual Property site that they appeared to be the possessions of Sports Direct but this was as a consequence of the loan facility entered into by the Club’s previous Board in January of this year. In return for the loan, Sports Direct took security over all Rangers assets – but not Ibrox – including intellectual property owned by the Club.”

“In England, it is possible to secure such rights by a fixed charge but in Scotland the equivalent of an English fixed charge (a standard security) can only be granted over heritable property – land and buildings. Intellectual Property is counted as moveable property for these purposes and Scots Law doesn’t allow fixed security to be granted over moveable property.

“Accordingly a practice has developed of lenders taking absolute transfers subject to a back letter setting out that the transfer is in security and the property will be returned when the facility has been repaid. This is a common device adopted by most of the UK banks and other main commercial lenders.

“Rangers supporters can be reassured that Sports Direct fully accept that all of the IP rights registered in their name will be returned to the Club when the loan facility – the previous Board drew down £5m – is repaid.”

The transfer of ownership from Rangers Football Club Ltd to Sports Direct was completed on 25th March, just under a month after Dave King and Paul Murray had overthrown the previous regime.

With the new board with their feet now firmly under the table, they are slowly working through the contractual agreements with Sports Direct and Mike Ashley with finances at the club still bad – given the recent emergency loan of £1.5 million from the Three Bears.  Specific loan details can be found on https://qvcredit.sg/.

If it was as simple – as Rangers say – to regain ownership of the trademarks by paying back the £5 million owed to Ashley then surely King and co. would have dipped into their deep pockets already?

Or are they looking for a legal loophole that will see them rip up the contracts and not have to pay Ashley back at all?

Despite the latest statement, Dave King – speaking to the media in Augusta – admitted that Rangers do not own the trademarks.

He commented: “I’m confident this can all be resolved, of course. It’s obviously important Rangers has the ownership of its own brands. The issue of abhorrence is, for me, nothing to do with it quite frankly.

“We are looking at all of the commercial contracts that were put in place with the club, that exercise has not yet been completed but once it has been completed we will proceed as what we think is in the interests of Rangers Football Club.

“But it’s certainly not something, as I’ve said before, that should be debated in the media.It’s time that Rangers operated board issues at board level. In previous regimes the board has spent more time in the media than the football team. I think we’ve got to reverse that, we’ve got to become professionals.

“Yes, there are issues that we are looking at just now with all these contracts – but it’s got to be done properly.”

With Ashley having a stranglehold on Rangers’ assets and commercial business, King added: “I don’t think there has to be more dialogue because for me Mike Ashley is not an issue and never has been. The relationship is with Sports Direct, it’s a commercial set of relationships and there is certainly a sense within the fans that these relationships are not fair to the club. It’s something that is getting a lot of attention at the moment, not for the immediate impact but for the long term impact on the club. So it’s something that we are looking at very, very carefully.”

Other aspects of the loan agreement between Sports Direct and Rangers, involved two representatives being appointed to the Rangers board to look after Mike Ashley’s interests. The suspended duo of Derek Llambias and Barry Leach, were Ashley’s representatives on the board – surely then the new Rangers board are in breach of the loan agreement?

If that is the case then surely Ashley could play hard ball and retain the trademarks – even if Rangers attempt to pay off the £5 million debt they owe to the Englishman.

Rangers’ claims come just days after former chairman Alastair Johnston – who just happens to be an expert in the field of corporate branding – claimed that the Ibrox side’s only possible course of action is to concoct a new badge to adorn the light blue jersey and other merchandise. Easier said than done.

More information on loans secured against Intellectual Property:

Common forms of security

Floating charges are commonly taken over IP, as for other forms of property (Common forms of security: Floating charges).

It is relatively rare to take fixed security over IP, unless it is particularly significant in a particular transaction and the disadvantages of a floating charge cannot be addressed adequately in other ways. However, fixed security can be taken over registered IP.

IP licences are treated as contractual rights. Fixed security is taken in the same way as for claims and receivables, by assignation to the security holder.

Fixed security can be taken over copyright by assignation. However, there is no clear mechanism to take fixed security over other forms of non-contractual unregistered IP.

Formalities

Floating charges over intellectual property are taken in the same way as for other assets (Formalities: Floating charges).

Fixed security over registered IP is taken by transferring the IP in question to the security holder (or its nominee) and registering the transfer in the relevant public register under the relevant statutory regime, such as the Trade Marks Register (Trade Marks Act 1994) or Patents Register (Patents Act 1977, Patents Rules 1990 and Copyright, Designs and Patents Act 1988).

In practice, assignations are often signed up and delivered as conditions precedent, but not perfected until required by the lender (for example, on default or if default is likely). However, perfection of a security on insolvency may give rise to issues concerning hardening periods, alienations and preferences. In addition, given the need for the debtor to continue to deal with its IP, fully perfected assignations of IP are rare in Scotland, and are generally considered uncommercial.

The relevant IP must be specifically identified and owned by the grantor of the security at the time it is secured. No fixed security is created unless and until the transfer is registered.

The security document usually provides for:

– The manner in which the security holder must deal with its title to the IP.
– A licence back to the grantor of the security to use the IP.
– The management of infringement actions.

Formalities for the assignation of IP licences are the same as for claims and receivables (Formalities). No security is created unless and until notice of the assignation is given to and acknowledged by the relevant licensor, and any further steps required under the licence have been taken.

It is not necessary to give notice of an assignation of copyright. There is no clear mechanism to take fixed security over other unregistered non-contractual unregistered IP.

All securities granted by a UK company or limited liability partnership (LLP) over IP must be registered at Companies House within 21 days of their creation.

www.uk.practicallaw.com

The £5 million owed to Ashley is mere change in the grand scheme of things at Ibrox, if they want to rid themselves of the Englishman for good.

They have to regain full control of Rangers Retail – which Ashley currently holds a 75% shareholding in – they then need to get out of the commercial and advertising deals that are favourable to the Newcastle United owner.

As well as that they also have to replace or re-sign the 12 first team players out of contract in the summer, pay the £10 million bill to fix a multitude of maintenance issues at Murray Park and Ibrox Stadium – according to Dave King pre-EGM.

Looking back at the football side of the club – they also need to fund and create a brand new scouting network as well as a new physio team, that has been missing from Ibrox since Charles Green closed shop on the departments when he was Chief Executive.

So King and Murray may need to dig deeper into their coffers to sort out all the issues at Ibrox – and that is before they fund a possible first season in the Premiership.

£30 million minimum would be a good start – but can the fans, Murray and King really have the money to plough that amount in with no return on their ‘investment’.

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About Author

scotzine

Andy Muirhead is the Editor of Scotzine and the Scottish Football fanzine FITBA. He is the Scottish Football columnist for The Morning Star and has written for a number of other publications including ESPN, Huffington Post UK, BT Life's a Pitch and has had his work featured in the Daily Record, The Scotsman and the Daily Mail.

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