As explained by the district court,
In opposition to the motion, Raffel argued that its agreements with the banks are nothing more than standard security agreements granting the banks a security interest in the patents, not a conveyance of title.
To analyze the security interest issue, the district court noted that “Courts that have addressed this issue have consistently found that the Patent Act does not address perfection of security interests—it addresses assignments of title. In In re Cybernetic Servs., the court explained that "[b]ecause transferring title no longer has significance in creating a security interest in personal property, most security interests created after adoption of the UCC do not involve the transfer of title." 239 B.R. at 921. The court explained that the Patent Office is concerned with the recording of transfers of title only. Id. The Code of Federal Regulations addressing patents speaks only to "assignments" which are defined as "transfers by a party of all or part of its right, title and interest in a patent or patent application." Id. (citing 37 C.F.R. § 3.1). The court noted that neither the term "security interest" nor the term "lien" are found in any of the provisions governing patents and the reason for this is that "'[a] security interest is not an 'assignment, grant or conveyance of a patent.'" Id. (quoting
After addressing similar, additional cases, the district court concluded that “[i]n sum, because the Patent Act does not address perfection of security interests, the mere act of the banks recording their security interests in Raffel's patents at the USPTO did not transfer title of the patents to the banks. Nothing in the Intellectual Property Security Agreements states that Raffel is assigning title of the patents to the banks; rather, the agreements specifically state that Raffel is granting a "security interest" in its intellectual property. Thus, Raffel's grant of a security interest in its patents to
Accordingly, “[b]ecause Raffel continues to hold title to the patents, it has both constitutional and statutory standing to bring this lawsuit,” the district court denied
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