The plant is taken, and it keeps running. It produces the same bags of cement, under the same brand, with the same formulations, served by the same teams trained over eight years by the dispossessed group. That group has lost a physical asset, which its policy addresses; it has also lost a royalty stream and it suffers something nothing in its contract names, namely goods of unknown quality sold under its name. This module deals with those two losses the first reflex leaves aside.
One must begin with a question of ownership that decides everything and was settled long before the decree: in whose name is the trademark registered in that country? If it is registered in the local subsidiary's name, it forms part of its assets, and expropriating it carries the mark away with the rest. The group finds itself with no enforceable right in the country where it most needs one, and cannot even prohibit the use it is suffering. If it is registered in the parent's name and licensed to the subsidiary, it falls outside the perimeter of the expropriation and the group keeps a right it can assert. That difference turns on a form filled in years earlier by a legal department that was not thinking about political risk.
Then comes the fate of the licence itself, and it puts the insured before an uncomfortable choice better seen coming. Expropriating the licensee company does not end the licence: the entity continues to exist, now run by the state, and it may argue that it succeeds to the rights as to the obligations, so that it remains licensee and liable for royalties. The group may then either maintain the licence, and find itself creditor of royalties it will not manage to collect, or terminate it to stop the use of its mark.
That choice deserves to be put coldly, because both branches cost. Terminating stops a use being suffered and turns the continuation into infringement, ground on which the group acts rather than claims; but terminating destroys the royalty claim and weakens the calculation of the expropriation indemnity, since the going concern value of the asset taken assumed a licence in force. Maintaining preserves the amount and lets the mark circulate on goods nobody controls. Neither branch is good, and the wrong answer is not to choose, which happens often because the question belongs neither to the insurance legal team nor to the trademark one.
Know how poses a problem of another nature and must be named without illusion: it cannot be taken back. A formulation, a kiln setting, a quality control protocol live in the heads of forty people who are still there. No judicial decision makes them forget, no confidentiality clause is enforceable against an employer that has become public in a country whose courts will not cooperate. What is lost there is lost for good, and the only real protection precedes it: never transfer the whole of a process on site, keep one link outside, a raw material, a component, control software, whose absence makes reproduction imperfect.
It remains to know what the policy does with those losses, and the answer depends on a definition. Where the insured investment is defined as comprising contractual rights and royalties due, the licence flow falls within the cover and is claimed like the rest. Where it targets assets and shareholdings, it does not, and the loss of royalties becomes an uncovered damage whose effect the insured bears alone. That difference is invisible when reading a schedule of covers: it is read in the definition, and that is once again where what a buyer thinks it bought is decided.
One last consequence deserves flagging because it arrives late and surprises. If the group obtains an expropriation indemnity calculated on a going concern value, and if that value incorporated the royalties it was receiving, it has been indemnified once for that flow. Claiming the unpaid royalties in addition would be recovering the same loss twice, which the principle of indemnity refuses. Sorting what has been absorbed into the calculation from what remains due must be done at the costing stage, on pain of losing the second claim after winning the first.
What this module teaches therefore plays out at two moments far apart. Years before, by registering the trademarks in the parent's name and keeping one link of the process outside the country, which costs a few thousand euros and a minor industrial constraint. And in the weeks following the taking, by deciding the fate of the licence rather than leaving the question open, because a licence nobody attends to keeps running for the benefit of whoever operates the plant.
An Italian food group held a pasta plant in a North African country, expropriated by decree in April 2025. The trademark, well known locally, is registered in that country in the expropriated subsidiary's name. A 2016 licence agreement between the Italian parent and the subsidiary provided for a royalty of 4 per cent of turnover, about 1.9 million euros a year, of which 2.8 million remain unpaid. The seized plant keeps producing under the brand, sourcing lower grade wheat, and two European distributors have reported consumer complaints about products imported in parallel. The policy defines the insured investment as comprising contributions, shareholdings and the insured's contractual rights. What must be dealt with, and in what order?
The heaviest point is neither the royalty nor the plant, it is the registration of the trademark in the subsidiary's name, and it must be said at once because it governs the rest. The mark formed part of the expropriated company's assets, so it was taken with it: the Italian group has no enforceable right in that country and cannot prohibit the use it is suffering there. Its value must on the other hand enter the costing of the expropriation indemnity, which the insurer will not do spontaneously since the mark probably does not appear in the accounts at its real value. That is the first claim to build, and it is likely worth more than the royalties. The royalties come next and the policy covers them, the insured investment comprising contractual rights: the 2.8 million unpaid can be claimed, provided one thing is checked at the costing stage, namely that the going concern value adopted for the plant did not already incorporate that flow, failing which the same loss would be indemnified twice and the second claim would fall. The fate of the licence is the decision to take now rather than leave open. Maintaining it preserves the debt and lets the mark circulate; terminating it ends the right of use and turns continuation into infringement, but destroys the royalty claim and weakens the calculation. In this file the balance tilts towards termination for a reason outside insurance: lower grade goods are already circulating in Europe under the brand, and the reputational damage there is infinitely more costly than 2.8 million, whereas the group's European rights are intact and enforceable. Three steps follow immediately. Have the parallel imported goods recorded by a bailiff or through test purchases, before they leave the channels. Sue for infringement in Europe, where the group is the owner and where courts cooperate, rather than in the host country where it is not. And notify the insurer of the loss of the local trademark as a head distinct from the loss of the plant, with a valuation, because nobody will bring it forward on its behalf.
- 01A trademark registered in the subsidiary's name is taken with it: the group loses every enforceable right where it most needs one, and that was decided on a form years earlier.
- 02Expropriation does not end the licence: the entity, now public, may claim to hold it and owe under it, which puts the insured before a choice whose branches both cost.
- 03Terminating stops the use and opens infringement, but destroys the royalty claim and weakens the indemnity calculation; the wrong answer is not to choose.
- 04Know how cannot be taken back: the only protection precedes the event and consists in keeping one link of the process outside the country.
- 05If the going concern value adopted incorporated the royalties, claiming them in addition is double recovery: the sorting is done at costing, not after.