## Facts

- Together Development Corporation (TDC) operated dating services franchises in the United States and Canada.
- Horace Trimarchi previously owned 25% of TDC’s shares.
- In 1986, TDC repurchased Trimarchi’s stock and issued two promissory notes to him.
- The notes were secured by a security agreement granting an interest in, among other collateral, TDC’s accounts receivable, franchise fees and royalties, and the “Together” trademark and related goodwill.
- TDC provided a signed UCC-1 financing statement describing the trademark as collateral.
- Trimarchi filed the UCC-1 with the U.S. Patent and Trademark Office (PTO), which acknowledged the filing.
- Trimarchi did not file a UCC-1 in the state filing office where TDC was located (Connecticut) or any other state or local office.
- In 1997, TDC filed for Chapter 11 bankruptcy protection.
- The Bankruptcy Court authorized a sale of substantially all assets, including the trademark, over Trimarchi’s objection that his security interest prevented a sale free and clear.

## Issues

1. Whether recording a UCC-1 financing statement (or similar document) with the PTO, without a state UCC filing, perfects a security interest in a federally registered trademark.
2. Whether the Lanham Act’s recording provisions preempt or displace state Article 9 filing requirements for perfection and priority of trademark security interests in bankruptcy.

## Decision

- The District Court affirmed the Bankruptcy Court’s determination that Trimarchi did not hold a perfected security interest in the trademark.
- Filing only with the PTO was insufficient to perfect a security interest in a trademark.
- Perfection was governed by state law under UCC Article 9, requiring filing in the proper state office (here, the Connecticut Secretary of State).
- Because the security interest was unperfected, it was ineffective against the debtor-in-possession and could not prevent the estate from selling the trademark free and clear.

## Legal Principles

- A security interest in a trademark is generally treated as an interest in a “general intangible” governed by UCC Article 9.
- Perfection of a security interest in a trademark is achieved through compliance with state Article 9 filing rules, not by PTO recordation alone.
- The Lanham Act’s recordation provisions address transfers of trademark ownership (assignments) and do not establish a secured-transactions perfection system for priority disputes among creditors.
- In bankruptcy, an unperfected security interest is subordinate to the debtor-in-possession’s strong-arm status and may be treated as unsecured as to the collateral.

## Conclusion

The court held that a creditor seeking priority in a registered trademark must perfect under state UCC Article 9 by filing in the appropriate state office; recording with the PTO alone does not perfect the lien, leaving it unperfected and subordinate in bankruptcy.


Trimarchi v. Together Dev. Corp., 255 B.R. 606 (D. Mass. 2000)