Scenario – wine producer ticks the ‘intellectual property’ box when registering a security interest in its wine sales …
Concepts covered:
- intellectual property/trademark
- wholesaling/selling on terms
- retention of title
- contract/agreement.
The scenario
Winemaker LaPlonk bottles its wine in a signature bottle featuring a duckbill‑shaped neck, which reduces pouring spills. The bottle is popular among restaurants and LaPlonk has protected the design as a trademark.
LaPlonk sells its wine through an exclusive agreement with a wholesaler, based on 30 days’ credit. The agreement’s terms and conditions allow LaPlonk to retain title in the wine it supplies until the goods are paid for in full.
In this scenario, LaPlonk registers a security interest on the PPSR against the wholesaler’s ACN to protect its retention of title arrangement.
LaPlonk doesn’t create a separate registration against its design trademark, even though the trademark falls under the collateral class of ‘intellectual property’.
It chooses the collateral class ‘other goods’ and adds an optional description in the ‘free text’ box which covers ‘all LaPlonk’s bottled wine’.
Tip
In this case, LaPlonk’s registration enables it to retain title to the goods as well as to the trade mark rights incorporated in the design of the bottles.
Where intellectual property - or IP - is part of the goods subject to a security interest, the IP is implied as part of the security without having to be separately registered.
PPSR protection when things go wrong
If the wholesaler goes broke, a PPSR registration can be critical: without it, LaPlonk may be treated as an unsecured creditor and struggle to recover its bottled wine, whereas a properly registered security interest strengthens LaPlonk’s priority to reclaim the goods (or their sale proceeds).
If the wholesaler uses or copies the bottle design:
PPSR registration does not, by itself, stop that conduct; it mainly improves LaPlonk’s ability to repossess the physical stock it supplied so the wholesaler cannot keep selling those units.
Disclaimer
This is a general scenario intended to provide typical examples.
This scenario is not legal advice about how the law applies to your particular business and dealings.
You may wish to seek professional advice from your accountant, financial adviser or lawyer.