The Peregrine decision was followed by two other cases involving similar farms. In re AEG Acquisition Corp., 127 B.R. 34 (Bank. C.D. Cal. 1991), as amended, 161 B.R. 50 (9th Cir. BAP 1993; In re Avalon Software, Inc., 209 B.R. 517 (Bank. D.
Ariz. 1997). Recently, the United States Court of Appeals for the Ninth Circuit ruled in Broadcast Music, Inc. v. Hirsch, 104 F.3d 1163 (9th Cir. 1997) that an assignment of a share of royalties from a copyrighted work to creditors is not a transfer of ownership of copyright or a “copyright document” in Article 205 and should therefore not be covered by the Office`s copyright. The Tribunal distinguished Peregrine as a case in which it is an interest in safeguarding a copyright subject to registration under Section 205. The Peregrine decision suggested a study of the registration system and a reform movement. The Proposed Copyright Reform Act of 1993, H.R. 897, 103rd Cong. 1.
Sess. would have allowed the improvement of security interests, either by filing with the PEK or by registering with the Copyright Office. The bill also proposed other amendments, such as abolishing the requirement that the plant be registered in order to obtain constructive notification. Register of Copyrights Ralph Oman did not refuse to reverse Peregrine`s decision, but advised against making hastily changes without proper studies. The American Bar Association and other interested groups expressed support for reform, but called for a more comprehensive reform that included a registry of security interests in all intellectual property rights, including patents and trademarks. The provisions have been deleted from the proposed legislation in order to consider whether it is possible to develop a uniform system. We also recognize that secured lenders wish to prioritize their pledge rights over other lenders by using the UZK system with which they are familiar. The thinking that led Congress to establish a single filing system for copyright transfers may not require that the federal system be used between them for the purpose of prioritizing creditor rights. Therefore, it may be useful to recognize the perfection of intellectual property rights at the State level for limited purposes of sharing rights among collateral holders. On the other hand, the fact that a secured creditor who simply files a UCC-1 with a Secretary of State may have priority over a bona fide buyer for the value of all the rights in a copyrighted work who has carefully searched the Copyright Office records and discovered that those records demonstrate that the seller clearly owns the rights to sell. A secure creditor who wishes to secure his rights against the whole world, including those who have acquired all the rights to a copyrighted work, should be obliged to use the centralized system put in place to inform the world constructively.
There are two typical scenarios in which intellectual property is used as collateral. In one case, a lender extends the loans by using intellectual property assets as collateral. If the borrower does not stick to his credit obligations, the lender has the right to close the guarantees….