Pub. 6 2011-2012 Issue 6

www.nebankers.org 20 Extraordinary Service for Extraordinary Members. T HIS IS TRUE NOT JUST FOR TECHNOL- ogy companies, but also for retailers, manufacturers, and service providers. As such, commercial lenders are increasingly taking security over borrowers’ IP portfolios as part of a security pack- age. Even if a borrower’s IP is not in- dependently valuable, it is oftentimes an essential piece of a commercial lender’s ability to realize upon an- other asset that may be the primary collateral for the financing. Com- mercial lenders, if not aware of the pitfalls surrounding the structuring and perfection of a security interest in IP assets, may find themselves with- out an enforceable security interest in a valuable part of the business which they are funding. Security Interests in IP – Part I Tangible Problems in an Intangible World Jeff Makovicka & Chris Bikus, Husch Blackwell LLP COUNSELOR’S CORNER This article discusses perfecting security interests in three of the primary types of IP: patents, trade- marks, and copyrights—and to a lim- ited extent, domain names. It is the first of a three-part series on IP as collateral. The second article in the series, to be published in the May/ June issue of Nebraska Banker , will provide tips and practical guidelines to proper documentation of IP as col- lateral. The third and final part in the series, to be published in the July/ August issue of Nebraska Banker , will address what happens when things go wrong and foreclosure on IP is inevitable. Even though all three types of IP are governed in part by federal law, no complete federal preemption ex- ists in this area. To the extent it is not in conflict with federal law, Article 9 of the Uniform Commercial Code (UCC; adopted with minor variations in all states, including Nebraska) plays a role. Patents, trademarks, and copyrights all qualify as “general intangibles” under Article 9’s catchall category of collateral. UCC 9-102(a) (42) and Comment 5d. A financing statement describ- ing the collateral as “all assets of the debtor, now owned or hereafter acquired” will suffice to perfect a security interest in any IP owned by the debtor, as long as the “general intangibles” category or some more precise description is used in the security agreement. UCC 9-504(2); UCC 9-108(c). Generally, absent other considerations (discussed below), the UCC governs the creation, perfection, priority, and enforcement of IP col- lateral. It should be noted, however, that ordinary-course licensees under a nonexclusive license take free of a security interest in IP created by a licensor. UCC 9-321(a) and (b). This super-priority rule, which could have a major impact on disputes involv- ing competing claims to IP, will be discussed in more detail in the next article in this series. In today’s business world, the intellectual property (IP)—patents, trademarks, and copyrights—portfolio of many companies forms an important part of company assets.