## Facts

- Together Development Corporation (debtor) operated a dating-service business and owned a federally registered trademark for “Together Dating Service.”
- In a 1986 stock buyout, the debtor issued promissory notes to a former shareholder, Horace Trimarchi, and granted him a security interest in collateral including accounts receivable, franchise fees, royalties, and the trademark.
- The debtor executed a UCC-1 financing statement identifying, among other collateral, the “TOGETHER” trademark by federal registration number.
- At the time of the transaction, the debtor’s principal office was in Connecticut.
- Trimarchi did not file a financing statement in Connecticut (or any state filing office); he mailed the financing statement to the U.S. Patent and Trademark Office (PTO), which acknowledged receipt.
- The debtor later filed Chapter 11 and obtained authorization to sell substantially all assets, including the trademark, free and clear of Trimarchi’s asserted lien, with any valid lien to attach to sale proceeds.
- The court set an evidentiary hearing to determine the validity and perfection of Trimarchi’s asserted security interest.
- The parties agreed Trimarchi’s security interest in collateral other than the trademark was unperfected due to the lack of a state-level UCC filing; the dispute focused solely on the trademark.

## Issues

1. Whether filing a financing statement with the PTO, without filing under applicable state UCC procedures, perfects a security interest in a federally registered trademark.
2. If the trademark security interest was unperfected, whether the debtor-in-possession may avoid it under 11 U.S.C. § 544(a).

## Decision

- The court held that a PTO filing does not perfect a security interest in a trademark.
- The court concluded the Lanham Act’s recordation provisions for trademark assignments do not create an exclusive federal perfection system for trademark security interests that displaces Article 9 filing.
- Because Trimarchi did not perfect under state UCC filing rules, his security interest in the trademark was unperfected.
- The debtor-in-possession, having the rights of a hypothetical lien creditor under § 544(a), could avoid Trimarchi’s unperfected security interest, leaving him unsecured as to the trademark proceeds.

## Legal Principles

- A security interest in a trademark is generally perfected by compliance with applicable state UCC Article 9 filing requirements unless a federal statute provides a distinct perfection and priority regime for such security interests.
- The Lanham Act’s provisions governing recordation of trademark “assignments” do not establish a federal filing system for perfecting consensual security interests in trademarks.
- Filing a financing statement with the PTO may provide notice but does not substitute for state UCC perfection.
- Under 11 U.S.C. § 544(a), a debtor-in-possession may avoid unperfected security interests as of the petition date.

## Conclusion

A creditor who records only with the PTO, and does not file under the relevant state UCC system, does not perfect a security interest in a registered trademark; in bankruptcy, the debtor-in-possession may avoid the unperfected trademark lien under § 544(a), with any sale proceeds distributed as though the creditor were unsecured as to that collateral.


In re Together Dev. Corp., 227 B.R. 439 (Bankr. D. Mass. 1998)