Trademarks are less easily pawned than many assets, however, for several reasons. The foremost reason is that trademarks symbolize the good will and reputation of products and businesses. In theory, it is fatal to a trademark to separate control over the nature and quality of the goods or services represented by the mark from legal ownership of the mark. Due diligence A due diligence investigation is a critical preliminary step to any acquisition of a trademark, trademark right, or security interest in a trademark. A prospective purchaser or investor should determine the extent of the rights held by the trademark owner and assess the status of those rights.
Uncertainties can affect the worth of the acquisition.
Keep in mind that past assignments to financial institutions may be naked, and as is explained below, may have resulted in abandonment of the registered mark. There is no good reason to believe that the principle does not apply in cases of abandonment by naked assignment, although we know of no case that has so found. The two types of security interest Security interests in trademarks fall into two types. Conditional assignments and grants of security interest represent a grant of future interests in trademarks, in contrast to security assignments, which grant present interests. Both types of grant have their own particular advantages and disadvantages.