Pub. 6 2011-2012 Issue 6

March/April 2012 23 Extraordinary Service for Extraordinary Members. For more information, contact Jeff Makovicka or Chris Bikus at Husch Blackwell LLP at (402) 964-5000 or jeff. makovicka@huschblackwell.com or chris.bikus@ huschblackwell.com. Makovicka is a member of Husch Blackwell LLP’s Banking & Finance practice where he concentrates on bank regulatory matters. Bikus is a member of Husch Blackwell LLP’s Intellectual Property practice and has significant experience in trademark and copyright matters. He has worked on numerous acquisitions and divestitures of intellectual property assets and specializes in intellectual property counseling and trademarks and copyrights. nebraskablue.com MEMBERS AINSWORTH Protecting your family and future... today and tomorrow. Blue Cross and Blue Shield of Nebraska is an Independent Licensee of the Blue Cross and Blue Shield Association. Domain Names Domain names are the commonly used form of Internet address or Uniform Resource Locator. A domain name is a critical asset of many businesses and, therefore, essential col- lateral for their secured lenders. While it is debatable whether a domain name is IP or merely a contractual right sold by a registrar company to a domain owner, security agreements often include domain names as collateral. Some courts have concluded that a domain name is a formof intangible personal property (e.g., CRS Recovery, Inc. v. Laxton , 600 F.3d 1138 (9th Cir. 2010)) and other courts have found a conditional contractual right in the agreement between the registrant and the registrar for exclusive association of the domain name for the term of the registration ( e.g., Dorer v. Arel , 60 F.Supp. 2d 558 (E.D.Va. 1999)). However, at this time, the best practice is to treat do- main names as “general intangibles,” in which security interests are perfected pursuant to a filing under the UCC. UCC 9-310. What This Means to You In sum, to perfect a security interest in a registered copy- right, a lender should record the security interest with the Copyright Office. A filing under the UCC may be adequate for perfecting a security interest in an unregistered copyright, although the best practice may be to require registration of the unregistered copyright. For all other IP assets, a lender should record its security interests with the Secretary of State of the state where the borrower resides through a UCC-1 financing statement (except that in the case of a domain name, it may be advisable to also file in the state where the webserver is located). In connection with registered federal trademarks and patents, though, it is also advisable that a lender take the additional step of recording its security in- terests with the USPTO in order to protect against later bona fide purchasers. Generally, as a best practice for IP collateral, it may be advisable to record under both the UCC and with the applicable federal agency. Z 1 A good practice is to insert protective covenants and warranties in loan documents which compel the borrower to disclose registrations of previously unregistered copyrights (this will be discussed in greater detail in Part II of this series).