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Abstract

Commercial asset value today often resides primarily in information assets, rather than in the physical assets that dominated the industrial age (goods and real estate). While tangible assets continue to have value, of course, the shift toward intangibles as value is significant and has been occurring for some time. We have not yet seen its end. More important, we have not yet come to grips with its meaning, either for commercial contract law or for commercial asset-based financing. Attitudes and approaches from the commercial world before intangible assets took center stage continue to influence how modern law treats information assets. Intangible assets take a variety of forms. Some involve contract rights to receive payment from third parties. This type of intangible property has provided a basis for commercial financing arrangements for several generations. But, in the modern economy, sources of intangible asset value go beyond contracts. Information has value. Rights to use or to prevent others' use of information have value. These values do not depend on a contract right to payment. Rather, the value depends on both the situational value of the information itself (e.g., how important is it in light of other sources of similar or the same information) and on a statutory or contractual right to use or to exclude others' use of the information. It is in dealing with this type of asset that modern commercial asset financing law must be judged because it is here that the major share of economic growth in this country will continue to focus. My purpose in this Article is to explore the relationship between information assets and commercial asset-based financing under proposed revisions of U.C.C. Article 9. This relationship entails a structural and philosophical conflict that engenders uncertainty at various levels. Revised Article 9 represents a massive and largely successful effort to solve many previously uncertain issues in asset-based financing. In information financing, however, many questions are left unanswered or the answers are structured in a manner that exacerbates conflict. We have not reached an effective accommodation between information property rights law and state law of secured financing under Article 9.

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