It’s Perfect! Or, Perfecting Security Interests in Intellectual Property


In our recent post, we discussed the Seven Secrets of Security Interests relevant for owners or buyers of intellectual property.  But after an IP owner grants a security interest in intellectual property, how do you make it official?

Welcome to the mysterious world known as perfection.  That’s a fancy word for filing the right documents with the correct organizations so everyone knows that the lender has that security interest in intellectual property – and to make sure that the lender has priority over other parties who might have a future interest in the IP.

As our faithful readers know, our blog focuses on the minutiae of trademarks that we all so love.  But when it comes to perfecting security interests, it’s important to consider the rules relating to copyrights and patents as well, because the rules are a little different for each type of intellectual property.  Plus, if there is a security interest in trademarks, the security interest may cover patents and copyrights, too.  So, for a special treat, we’ll branch out in this post and talk about perfecting security interests in all three types of intellectual property.  (For an insider’s view on security interests in foreign intellectual property, see our guest post Trademark Security Interests in Canada.)

Article 9 of the Uniform Commercial Code, or UCC, generally governs U.S. security interests.  The UCC has been adopted by all U.S. states and DC.  But trademarks, patents, and copyrights are all governed by federal law, which makes reconciling the two a little complicated.

Here’s the scoop:


Federal trademark registrations and applications are governed by the Lanham Act.  The Lanham Act doesn’t discuss security interests, so the state-specific Article 9 of the UCC applies.  As a result, filing a document called a UCC-1 financing statement in the state where the trademark owner (and grantor of the security interest) is located is enough to perfect the security interest in the trademarks.

Of course, many lawyers (like us!) are belt-and-suspenders folks.  As such, in addition to the UCC-1, many lenders record with the United States Patent and Trademark Office (“PTO”) a short document confirming the security interest to help put potential purchasers or lenders on notice that the security interest exists.  People may be more likely to check USPTO records to see if a security interest was recorded than to track down a UCC-1 filing, which may not list the specific registrations covered by the security interest.  The security interest, like other documents recorded under the Lanham Act, should be recorded with the USPTO within three months of the effective date.


Patents are governed by the federal Patent Act, which, like the Lanham Act, doesn’t address security interests.  As with trademarks:  to perfect a security interest in patents, file a UCC-1 financing statement; and, as icing on the cake, record a short document detailing the security interest with the USPTO within three months of the effective date (like other documents recorded under the Patent Act).  Here’s a bonus reason to record security interests in patents:  unlike trademarks, there is no USPTO filing fee to record a document against issued patents or pending applications.


You would think that copyrights would be treated just like trademarks and patents.  After all, U.S. copyright registrations are governed by the federal Copyright Act, and both copyrights and patents have their origins in Article I, Section 8, Clause 8 of the Constitution.  However, unlike the Lanham Act and the Patent Act, the Copyright Act discusses recording “transfers of copyright ownership” – which is defined to include mortgages.  While we typically think of mortgages relating to real property, “mortgage” is just another word for a security interest.  That is, the Copyright Act does mention security interests, and, as a result, federal copyright law preempts Article 9 of the UCC.

To perfect the security interest in copyrights, the document detailing the security interest must be filed with the Copyright Office, ideally within one month of the effective date (like other documents recorded pursuant to the Copyright Act).

That’s not to say that your UCC-1 filings should omit copyrights.  On the contrary – most UCC-1 filings reference all intellectual property.  The UCC-1 just won’t perfect the security interest in the registered copyrights.  Also note that the UCC-1 is generally considered necessary to perfect the security interest in unregistered copyrights, since courts have held that there is no federal preemption of state law regarding security interests in those unregistered works.

There you have it.  That wasn’t so hard, was it?  Now you, too, can be perfect when it comes to perfecting security interests in intellectual property!

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