Obtaining a court judgment is only the first step toward restoring a violated right. Equally important is ensuring its effective enforcement, as the effectiveness of justice is determined not only by the quality of judicial decisions, but also by their actual enforceability.
Debt recovery is typically carried out against the debtor’s funds or tangible assets. However, in practice, it is often the case that the debtor lacks traditional assets such as real estate, vehicles, or funds in bank accounts.
In such situations, intellectual property (IP) assets — such as trademarks, patents, and copyrights—may become instrumental. These assets can serve as an effective means of satisfying a creditor’s claims, as they possess economic value and may be realized in enforcement proceedings on an equal footing with other types of the debtor’s property.
Moreover, the existence of IP rights can be promptly verified through official public registers, including the database of the Ukrainian IP Office (UANIPIO). Such verification enables the identification of potential debtor assets that may be subject to seizure and sale for the purpose of debt recovery.
Pursuant to Part 1 of Article 10 of the Law of Ukraine “On Enforcement Proceedings”, measures of compulsory enforcement include, inter alia, attachment of funds, securities, other property (property rights), corporate rights, intellectual property rights, objects of intellectual and creative activity, as well as other assets of the debtor, including those held by third parties, owed to the debtor, or jointly owned.
DEGA PARTNERS has successfully handled a case involving debt recovery through the realization of proprietary rights to the debtor’s trademarks. Using this case as an example, we outline the procedure for the attachment and realization of intellectual property objects in enforcement proceedings.
Trademarks constitute objects of intellectual property rights pursuant to Part 1 of Article 420 of the Civil Code of Ukraine. Other IP objects include literary and artistic works, computer programs, phonograms, videograms, broadcasting programs, scientific discoveries, inventions, utility models, industrial designs, rationalization proposals, plant varieties, animal breeds, trade names, geographical indications, and others.
Proprietary intellectual property rights include, in particular, the right to use an IP object, the exclusive right to authorize its use, and the right to prevent or prohibit its unlawful use.
Under Ukrainian civil law, intellectual property rights qualify as property. Property is understood to include tangible items, sets of items, as well as property rights and obligations. Accordingly, IP rights may be subject to civil circulation and may be used in contractual and other civil law relationships.
Therefore, proprietary IP rights constitute transferable assets, including within the framework of enforcement proceedings.
For the purpose of ensuring effective enforcement, an enforcement officer is entitled to impose an attachment on a trademark (as was done in the case handled by DEGA PARTNERS) or other IP object in accordance with Article 56 of the Law of Ukraine “On Enforcement Proceedings” dated 2 June 2016 No. 1404-VIII.
Prior to disposal, it is necessary to determine the value of the relevant IP assets.
Pursuant to Article 57 of the Law of Ukraine “On Enforcement Proceedings”, the value of the debtor’s property is determined by mutual agreement of the parties to the enforcement proceedings. In practice, however, debtors rarely cooperate or agree to voluntary transfer of assets in satisfaction of the debt.
Where the parties fail to reach agreement, the value is determined by the enforcement officer based on market prices. Where valuation is complex, the enforcement officer may engage an independent valuation expert (appraiser).
In the case handled by DEGA PARTNERS, a qualified valuation expert was engaged to determine the value of the trademark, as intellectual property constitutes a специфічний and complex asset class requiring specialized valuation.
The valuation of IP assets is governed by the Law of Ukraine “On Valuation of Property, Property Rights and Professional Valuation Activity in Ukraine”.
Valuation is defined as the process of determining the value of property or property rights as of a specific valuation date in accordance with applicable legal procedures and constitutes the result of professional appraisal activity.
Assets subject to valuation include both tangible assets (such as buildings, equipment, vehicles) and intangible assets, including intellectual property.
Property rights subject to valuation include any rights related to property other than ownership, including components of ownership (possession, use, disposal), rights to unfinished construction objects, future real estate, as well as other specific rights (e.g., rights to conduct business activities, use natural resources) and claims.
In accordance with generally accepted valuation principles, independent valuation aims to determine the fair (market) value—i.e., the value reflecting the equilibrium between supply and demand.
Valuation is conducted in compliance with the principles of utility, supply and demand, substitution, expectation, marginal productivity, and highest and best use.
The main valuation approaches include:
The cost approach is applied where reproduction or replacement of the asset is feasible and is based on calculating the costs required to recreate the asset, adjusted for depreciation.
The income approach is used where it is possible to determine the income generated or expected to be generated by the IP rights holder.
The market approach is applied where sufficient reliable data is available on comparable transactions involving similar assets.
Where the debtor fails to provide information on income derived from IP rights, the cost approach is typically applied.
The sale of intellectual property rights in enforcement proceedings is carried out in accordance with the procedure for the sale of seized property approved by Order of the Ministry of Justice of Ukraine No. 2831/5 dated 29 September 2016 (as amended).
Electronic auctions are conducted by the state enterprise “SETAM”. The auction report serves as proof of transfer of title to the purchaser, while the proceeds from the sale are used to satisfy the debtor’s obligations.
Using this mechanism, and with legal support from DEGA PARTNERS, the debtor’s trademark was successfully sold through an electronic auction, and the proceeds were used to satisfy the creditor’s claims.
The sale of a debtor’s trademark within enforcement proceedings thus constitutes an important precedent confirming that intellectual property rights can and should be treated as полноценні assets for the satisfaction of creditors’ claims.
DEGA PARTNERS successfully ensured the effective realization of this asset, protected the rights and legitimate interests of the creditor, and demonstrated that even complex and non-standard assets may be successfully enforced through execution proceedings.
This case further confirms that a well-structured legal strategy, systematic cooperation with enforcement authorities, and professional legal support can ensure the actual enforcement of court decisions—even where the debtor lacks traditional assets.