E-Business 101, Part 4: Security Interests.com - Trademarks and Copyrights
(Page 3 of 4 )
Security Interests In, and Assignments Of, Trademarks
Generally a trademark is a unique name or symbol that identifies a business or product. The federal law that control trademarks is the Lanham Act. When registered with the PTO, a trademark registration remains in force for ten years and may be renewed.
To be effective, an assignment of a trademark must be recorded in the PTO. It should be noted that the Lanham Act appears to apply only to assignments and not security interests in trademarks. This fact has lead some to recommend that secured parties take an assignment of trademarks. However, some courts have held that an assignment of a trademark to a creditor who is not using the mark in business has the effect of voiding the trademark. The better practice is to perfect a security interest in a trademark by filing both in accordance with state law (Article 9 in most jurisdictions) and filing the security agreement with the PTO.
Security Interests In, and Assignments Of, Copyrights
A copyright is used to protect an ownership interest in original works of authorship and can provide rights in software, copy and graphic artwork used in an e-business. To perfect a security interest in a copyright, the lien or security agreement should be recorded at the United States Copyright Office. When taking a security interest in a copyright it is especially important to conduct proper due diligence and adequately describe the copyright and security interest. The procedure to be followed can be found at 17 U.S.C. §205.
When conducting due diligence it is important to ascertain that the copyright owned by the borrower matches the work in which the creditor seeks to take a security interest. In the case of software, this will require an complete comparison of the source code filed with the United States Copyright Office against the operative source code in which the creditor intends to take the interest. As we said above, the "devil is in the details."
We continue to recommend that secured parties keep of copy of the copyrighted material either in their own possession or in the possession of an agreed escrow agent. The security agreement should cover all embodiments of the works.
A system should be implemented to insure that copyright renewals are filed in a timely manner and to enforce rights against copyright infringers. The Copyright statute does not adequately address perfection issues for royalty agreements, content licenses and other related matters.
To maximize protection for secured parties, we recommend that security interests in copyrights be recorded both with the U.S. Copyright Office and in the place otherwise required for standard UCC-1 filings.
Next: Security Interests In Other Intangibles >>
More Website Promotion Articles
More By Myles H. Alderman, Jr.
/ 1 
