Robert Brady, Sean Beach, and Karen B. Skomorucha
The dot-com company is not your father’s hard asset wielding company. Typical “old economy”or “brick and mortar”companies possess hard or tangible assets like equipment, fixtures, and inventory. Dot-com companies, on the other hand, possess less tangible, but not necessarily less valuable, assets like customer lists, data, software technology, trademark, copyrights, patents, domain names, and other intellectual property. As long as the company remains profitable, so does the company’s intellectual and intangible property.
What comes up, however, must inevitably come down. As the dot-com surge has come tumbling down, many dot-com companies, like their sister “brick and mortar”companies, have sought protection in bankruptcy. Because a dot-com’s primary assets are intangible, however, the value of its primary asset tends to decline with the company. In addition, the Revised U C.C. Article 9 has changed the rules for perfecting security interests in intellectual property. This article presents the problem of determining what assets a dot-com company has at bankruptcy, how to preserve the value of those assets, and who under the Revised Article 9 has a perfected security interest in the assets.