The structural legal dissonance that undermines the effective financing of federal intellectual property rights (patents, trademarks registrations, copyrights, and maskworks) is rooted in the prominence of title in both the early conceptual history of personal property financing and in the language of the federal tract recording acts. While genuine ownership transfers have always represented the prototype under the federal intellectual property recording statutes, transfers intended for security were also originally included because of the early judicial thinking about the importance of title to the validity (against third parties) of a “mortgage” right in intangible personal property. As products of their time, the recording provisions of both the Patent Act and the Lanham Trademark Act have as their premise the protection of bona fide purchasers (BFP) against unrecorded transfers of “legal title” (including early conditional title transfers used in mortgage transactions). In the middle of the last century, Article Nine of the Uniform Commercial Code reoriented the state law concept of personal property collateral around the unitary concept of a “security interest.” While Article Nine went through a major revision in 1998, the basic unitary concept of a security interest and the structure that supports it remained unaltered. The “security interest,” as envisioned by both the “old” and the “revised” version of U.C.C. Article Nine, is a kind of functional lien right that can be created and protected in any kind of personal property by using two prototype documents with minimum associated formalities. The principal forms of federal intellectual property (patents, trademarks registrations, copyrights, and maskworks) are “general intangibles” within the broad spectrum of personal property that is brought within the Article Nine scheme for creating, perfecting, and ordering “security interests.” Some intellectual property interests under the “general intangibles” umbrella are created and defined solely under state tort or property law. Some state law notions of intangible property can be created around the use of data necessary to obtain a federal entitlement, even if that data is not protected under the federal law defining the entitlement. These state law rights notwithstanding the debtor's federal intellectual property assets will normally have overriding significance as collateral. As noted above, however, if we fall into the time warp for our orientation and indulge the early title theory in order to conceptualize a mortgage of these federal assets (with the possible exception of trademark registrations), they can easily come to rest under the applicable federal tract recording act—not under the more modern state personal property security law in Article Nine. Therefore, these federal recording statutes seem to be standing above, and to varying degrees displacing, the modern state notice-based filing system that Article Nine provides for “general intangibles.”

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