Security Interests in Intellectual Property, Personal Property, General Intangibles

Security Interests in Intellectual Property, Personal Property, General Intangibles
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Supposedly, knowing the problem is half of the solution. The problem, then? Security interests in intellectual property? Security interests in personal property? Security interests in general intangibles? Security interests? It seems that depending on where you look, who you find, how you frame the question and, of course, the length or substance of the interaction, the answer to the question---itself being a question, will be different. So, what becomes obvious to a few is perceived as misaligned by others, even though only faintly shifted from the real coordinates. Indeed, while several individuals, institutions and organizations recognize or necessarily believe that a problem exists between the state and federal perfection and priority of personal property rights, still many do not seem even mildly concerned. . .

The intended approach during the length of this monologue concerns the current condition of each state as well as projects underway to integrate multi-state interactions and consequential recognition of those interactions with applicable federal statutes. It is human nature to shy away from things we don't understand since such things often confound our already stable beliefs and comforts. Perchance a bridge might be formed between those who believe and those who still find it difficult to understand or even care.

N.B.-If you immediately identified yourself with the latter group and are considering treatment options, you might try http://www.law.upenn.edu/library/ulc/ucc9/ctfdstm4.htm. There are 20 examples given under the Reporter's Explanatory notes of 9-103 of the Uniform Commercial Code which detail compromising circumstances derived from Multiple State Transactions.

Revised Article 9 (July 8, 1998 Draft Revised Article 9) of the Uniform Commercial Code (RA9) puts the responsibility on the filer of filing UCC forms correct in naming the debtor. Presumably, lenders consider themselves clever and cautious in their transactions and take care to make worthy discoveries of persons and factors having of either necessary or anticipated bearing on the transaction. An argument blooms from the concern that irresponsible lenders do minimal investigation and the burden of identifying & reconstructing priority in collateral falls on the court in either state or federal proceedings or is otherwise resolved by mutual compromise and sacrifice on the part of original lenders, debtors and, most probably, previous lien creditors with priority in the collateral.

A lender who is perceived as irresponsible in dealing has many potential excuses (defenses): no knowledge of existence of previous lien creditor, collateral was vulnerable as poorly defined property, property value did not appreciate to expected terms.

What of the debtor? Is the debtor or the debtor's property rights endangered by lack of security in multi-state transactions? Is there lack of security in multi-state transactions? The nature of the animal mutates with opinion.

If you sit on that side of the spectrum which is deeply concerned and highly motivated to effectuate the type of changes necessary to secure multi-state transactions and complete integration nationally (for starters) by the implementation of an electronic filing system, then you may or may not be aware of the existence of the Secured Transaction Section (STS) of the International Association of Corporation Administrators (IACA). This association has a website at http://www.sos.state.tx.us/sts/sts.htm. The association defines itself through By-Laws and has an extensive member listing, e-mail directory and news & resolutions pages that are frequently updated and seemingly conclusive. Quite conceivably, after reading the contents of this site you may decide that the solution has been found and we simply need wait for the results. The members comprise UCC administrators from almost every jurisdiction along with several corporate representatives. They regularly convene and record the minutes, which can then be downloaded or accessed by interested outsiders. Their mission is to "provide improved services to the public by promoting uniformity among jurisdictions in all aspects related to Uniform Commercial Code and Personal Property Security Act. . . ." ?

By decision and design, IACA resolves the infinite array of questions that impart anxiety on non-believers by simply stating that "[H]uman judgment does not play a role in determining the results of the [filing] search." Their standardized search rules cover both individual and entity names.

Fears concerning digital signatures may or may not be allayed by knowing that "digital signature laws don't and shouldn't apply to an Article 9 transaction." STS Draft Minutes 5/26/98, Boston, Massachusetts. Persons concerned over the nature or validity of digital signatures might try Couriers Without Luggage: Negotiable Instruments and Digital Signatures, Jane Kaufman Winn. http://www.law.sc.edu/sclr/WINN.HTM. Total non-believers might try http://www2.echo.lu.legal/en/ecommerce/digsig.html. Members of IACA emphasize that under RA9 "a financing statement is not a form but rather, a collection of data, a record." The site previously listed provides extensive information as well as other links concerning encryption of digital signatures.

There is a National Association of the Secretaries of State at http://www.nass.org. This site provides links to the Secretary of State homepages for the majority of states. UCC filing is provided for under the Secretary of State in every state through each states Revised Statutes Annotated. Each state is granted the authority to make minor to moderate revisions in the Federal UCC. Recall, these state agencies and their associated legislature are the port of entry of the entire monologue.

It is recognized that some states already provide electronic filing of UCC forms and electronic searching of forms (Kansas, Indiana, Nebraska, New Mexico, Texas). Other states provide electronic searching but no filing (Alaska, California, Connecticut, Kentucky, Louisiana, Oregon and Vermont). Vermont provides several links to other government agencies and associations that are involved in the movement to create a national electronic searching/filing database (see http://www.sec.state.vt.us/ for more info). Alaska also shows concern for unaware lenders/debtors/lien creditors of intellectual property by including a hyperlink to the USPTO (checkout http://www.commerce.state.ak.us/bsc/fees.htm).

Anthony Stevens of the Corporations Division of the UCC at New Hampshire Secretary of State's office assured me during conversation that NH is in the process of transferring its filed forms to a database file. It is expected to take several more months and when it is finished, electronic searching & filing can be established. Maine has a database through which interested parties can search through filed forms. Maine also has a website. I visited Maine's website at http://www.state.me.us/sos/cec/corp/corp.htm. All of the necessary forms, fees and guides are listed and accessible. Obviously, if just a few more steps were taken filing and searching could be accomplished electronically. It may be that the other states that list their forms and fees on their websites are in the process of compiling their data electronically. Several of those states have representatives that are members of IACA (go to http://www.sos.state.tx.us/sts/e-directory.htm).

Persons desiring to retrieve filing information on others can receive data online from several and/or every state by using services like http://www.cdb.com/public/access/internet.html and http://www.deepdata.com/search/super/superbiz.html. These are private companies, however, and a fee is charged for these online services. IACA intends to create a public access database for performing similar searching services. . ? However, services from Deepdata and CDB Infotek, listed above, do not have access to the USPTO and Copyright Office. Even if they did, it is not altogether certain that they would be able to retrieve and properly ascertain title holdings of the property and the property rights related to whatever general intangible is being researched. Persons can search available data concerning US Copyrights at http://lcweb.loc.gov/copyright/rb.html and can retrieve some marginally fascinating data from the Patent and Trademark Office at http://www.uspto.gov.

Certain states had web sites which were very sparse on information which would be useful to someone who wasn't interested in either vacationing there or buying real property (Rhode Island, New York, Virginia, South Carolina and Hawaii).

Below is a list of the secretaries of the States. Certain Territories (Guam, Puerto Rico, Virgin Islands) are not included. These links will either take you to the Main Page for the Secretary of that page or to a specific UCC site attached to the Secretary's page. Certain states (Hawaii, South Carolina) have not clearly listed any links or do not have much to address on the topic of UCC. Actually, it was difficult to determine if Hawaii even has appointed any one person or department to take up the task. See for yourself.

State / Secretary of State URL / on-line filing? / Searching?

AK http://www.commerce.state.ak.us/bsc/fees.htm no yes

AL http://www.alalinc.net/alsecst/allucc.pdf no no

AR http://www.sosweb.state.ar.us/corp.html no no

AZ http://www.sosaz.com/business_services.htm no no

CA http://www.ss.ca.gov/business/business.htm no yes

CO http://www.state.co.us/gov no no

CT http://www.state.ct.us/dob no yes

DC http://www.dcra.org/ no no

DE http://www.state.de.us/corp/ucc.htm no no

FL http://www.dos.state.fl.us no no

GA http://www.sos.state.ga.us/corporations/trademarks.htm ? ?