One of the important themes of Article 9 of the Uniform Commercial Code (UCC) is to protect the rights of secured parties, but in a manner so as to preserve marketability of assets. Accordingly, the superior rights of a “buyer in the ordinary course of business” as against the rights of a secured creditor is a concept familiar to many finance practitioners. What may be less familiar to practitioners is that superior rights are also afforded to licensees under Article 9, and in particular to licensees “in the ordinary course of business,” a fact becoming increasingly relevant to creditors given the explosive growth in intellectual property assets and their use as collateral.

A recent decision by the U.S. District Court for the Southern District of New York examines these rights in the context of trademark licensees and when they may, or may not, prevail against a secured creditor.