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Forced Sales of Intellectual Property, Domain Names and Licences

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Forced Sales of Intellectual Property, Domain Names and Licences

Asset page. Legal information, not legal advice. Last verified: 2026-10-16.

What it is

Brands, technology, content, web addresses and regulatory permissions are often the most valuable part of a distressed business, and they are sold in every forced-sale channel: a § 363 sale (see businesses-and-going-concerns), a receiver’s or assignee’s sale (receivership-sales, assignment-for-the-benefit-of-creditors), and an Article 9 disposition (ucc-article-9-sales-of-a-business). Each class of intangible has its own title system and its own transferability rule, and a buyer’s title fails if either is ignored.

AssetWhere title is recordedTransfer ruleKey risk at a forced sale
TrademarkUSPTO Assignment Recordation BranchAssignable only “with the good will of the business” (15 U.S.C. § 1060(a)(1))Assignment “in gross” (without goodwill) is invalid
PatentUSPTO”assignable in law by an instrument in writing” (35 U.S.C. § 261)Unrecorded assignment void against later purchaser without notice
CopyrightU.S. Copyright OfficeTransfer requires a signed writing “other than by operation of law” (17 U.S.C. § 204(a))Recordation priority; involuntary transfer bar for individual authors (§ 201(e))
Domain nameRegistrar / registry (contract)Registrar’s account-transfer process; court orderTreated as property in some courts, as a services contract in others
Licence held by the business (inbound IP licence)ContractOften non-assignable without licensor consent§ 365(c)(1) and state law may bar transfer
Regulatory licence (liquor, FCC)AgencyAgency consent requiredBuyer must independently qualify

Trademarks

  • Goodwill requirement. “A registered mark or a mark for which an application to register has been filed shall be assignable with the good will of the business in which the mark is used, or with that part of the good will of the business connected with the use of and symbolized by the mark.” An intent-to-use application cannot be assigned before an allegation of use is filed “except for an assignment to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing.” — 15 U.S.C. § 1060(a)(1) (https://www.law.cornell.edu/uscode/text/15/1060 , retrieved 2026-10-16); 37 CFR 3.16 (https://www.ecfr.gov/current/title-37/part-3 , retrieved 2026-10-16).
  • Writing and recording. “Assignments shall be by instruments in writing duly executed.” “An assignment shall be void against any subsequent purchaser for valuable consideration without notice, unless the prescribed information reporting the assignment is recorded in the United States Patent and Trademark Office within 3 months after the date of the assignment or prior to the subsequent purchase.” — 15 U.S.C. § 1060(a)(3)–(4).
  • Naked-assignment risk. “[A] trademark cannot be sold or assigned apart from the goodwill it symbolizes”; courts uphold an assignment where “the assignee is producing a product or performing a service substantially similar to that of the assignor and … consumers would not be deceived or harmed.” The Fifth Circuit held the assignment of the SUGARBUSTERS service mark (used for a retail store) to a diet-book publisher was “in gross and was therefore invalid” — sugar-busters-v-brennan-1999, 177 F.3d 258 (5th Cir. 1999). A buyer that acquires marks at a liquidation but not the product line, recipes, customer relationships or other goodwill carries this risk.
  • Licences granted by the debtor survive rejection. A debtor-licensor’s rejection of a trademark licence “has the same effect as a breach of that contract outside bankruptcy” and “cannot rescind rights that the contract previously granted” — mission-product-holdings-v-tempnology-2019. A buyer of a bankrupt brand owner’s marks may therefore take them subject to existing licensees’ continuing rights.

Patents

  • “Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing.” “An interest that constitutes an assignment, grant or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.” — 35 U.S.C. § 261 (https://www.law.cornell.edu/uscode/text/35/261 , retrieved 2026-10-16).
  • Security interests. Section 261 does not require a lender to record a patent security interest at the PTO to perfect against a later lien creditor; a UCC filing suffices for that purpose. “The Patent Act does not require parties to record documents in order to provide constructive notice to subsequent lien creditors who do not hold title to the patent.” — in-re-cybernetic-services-2001, 252 F.3d 1039 (9th Cir. 2001). Searches for liens on patents therefore require both a PTO assignment search and a UCC search.
  • Inbound patent licences held by the debtor may be non-assignable without the licensor’s consent; under the Ninth Circuit’s “hypothetical test” a debtor-in-possession cannot even assume such a licence over the licensor’s objection — perlman-v-catapult-entertainment-1999, 165 F.3d 747 (9th Cir. 1999), construing 11 U.S.C. § 365(c)(1).

Copyrights

  • Transfer. “The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law” (17 U.S.C. § 201(d)(1), https://www.law.cornell.edu/uscode/text/17/201 , retrieved 2026-10-16). “A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent” (17 U.S.C. § 204(a), https://www.law.cornell.edu/uscode/text/17/204 , retrieved 2026-10-16).
  • Involuntary transfer bar for individual authors. Where an individual author’s copyright “has not previously been transferred voluntarily by that individual author, no action by any governmental body or other official or organization purporting to seize, expropriate, transfer, or exercise rights of ownership … shall be given effect under this title, except as provided under title 11” (§ 201(e)). The House Report reproduced with the section states that bankruptcy proceedings and mortgage foreclosures “are not within the scope of this subsection; the authors in such cases have voluntarily consented to these legal processes.” Whether an execution sale of an individual author’s copyright is barred by § 201(e) was not researched in case law (needs_verification).
  • Recordation and priority. Recordation “gives all persons constructive notice of the facts stated in the recorded document,” but only if the document identifies the work and the work is registered (§ 205(c)). Between conflicting transfers, the first executed prevails if recorded “within one month after its execution in the United States … or at any time before recordation … of the later transfer”; otherwise a later good-faith transferee for value who records first prevails (§ 205(d)). A signed nonexclusive licence can prevail over a conflicting transfer (§ 205(e)). — 17 U.S.C. § 205 (https://www.law.cornell.edu/uscode/text/17/205 , retrieved 2026-10-16).
  • Security interests in unregistered copyrights are perfected under state Article 9, because “[t]here just isn’t any way for a secured creditor to preserve a priority in an unregistered copyright by recording anything in the Copyright Office” — in-re-world-auxiliary-power-2002, 303 F.3d 1120 (9th Cir. 2002). The same opinion describes the district court decision in In re Peregrine Entertainment as treating registered copyrights differently; that decision was not separately retrieved (needs_verification).

Recording costs (federal)

OfficeFeeSource
USPTO — trademark assignmentUSD 40 first property in a document; USD 25 each additional37 CFR 2.6(b)(6) (https://www.ecfr.gov/current/title-37/section-2.6 , retrieved 2026-10-16)
USPTO — patent assignmentUSD 0 if submitted electronically; USD 54 on paper (per property)37 CFR 1.21(h) (https://www.ecfr.gov/current/title-37/section-1.21 , retrieved 2026-10-16)
Copyright Office — recordationUSD 95 electronic / USD 125 paper base fee (one work); additional works on paper USD 60 per group of 10 or fewer, electronic USD 60 for 1–50 additional works (higher tiers above 50); additional transfer USD 9537 CFR 201.3(c)(24) (https://www.ecfr.gov/current/title-37/section-201.3 , retrieved 2026-10-16)

Recording at the USPTO is ministerial: it “is not a determination by the Office of the validity of the document or the effect that document has on the title” (37 CFR 3.54, https://www.ecfr.gov/current/title-37/part-3 , retrieved 2026-10-16). A buyer at a forced sale records the sale order or the trustee’s/assignee’s/secured party’s assignment with a cover sheet (37 CFR 3.25, 3.31); a registration certificate may issue to an assignee whose assignment is recorded (37 CFR 3.85).

Domain names

No federal statute governs ordinary transfer of a domain name; transfer runs through the registrar’s account and transfer procedures under the registration agreement, which were not retrieved (needs_verification). Courts differ on the nature of the asset:

  • Property. “Like a share of corporate stock or a plot of land, a domain name is a well-defined interest”; the registrant “had an intangible property right in his domain name,” and a registrar could be liable in conversion for giving it away on a forged letter — kremen-v-cohen-2003, 337 F.3d 1024 (9th Cir. 2003) (California law).
  • Services contract, not garnishable. A “contractual right to use an Internet domain name” is “the product of a contract for services” and “not subject to garnishment” — network-solutions-v-umbro-2000, 259 Va. 759 (2000).
  • Court-ordered transfer under trademark law. In a cybersquatting action “a court may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark,” and an in rem action may be brought where the registrar or registry is located; on receiving a filed complaint the registrar must “deposit with the court documents sufficient to establish the court’s control and authority regarding the disposition” — 15 U.S.C. § 1125(d)(1)(C), (d)(2) (https://www.law.cornell.edu/uscode/text/15/1125 , retrieved 2026-10-16).

In a bankruptcy, receivership or ABC sale the buyer usually obtains the domain through the sale order plus the seller’s cooperation in the registrar’s push or authorization-code transfer; the court order is the authority if the former principals do not cooperate. Account credentials, registrar locks and DNS control are diligence items.

Licences and permits held by the business

General rule in secured transactions

UCC § 9-408 makes contract and statutory anti-assignment rules “ineffective” to prevent a security interest from attaching to a “general intangible, including a contract, permit, license, or franchise,” but then limits the result: the security interest “is not enforceable against” the licensor or government, “does not entitle the secured party to use or assign the debtor’s rights,” and “does not entitle the secured party to enforce the security interest” — UCC § 9-408(a), (c), (d) (https://www.law.cornell.edu/ucc/9/9-408 , retrieved 2026-10-16). An Article 9 buyer therefore receives the proceeds value of a non-assignable licence only to the extent the licensor or agency consents to the transfer.

Bankruptcy

Section 365(f) overrides contractual and many statutory anti-assignment rules, but not where “applicable law excuses a party … from accepting performance from or rendering performance to an entity other than the debtor” and that party does not consent (11 U.S.C. § 365(c)(1), https://www.law.cornell.edu/uscode/text/11/365 , retrieved 2026-10-16). Nonexclusive patent licences are “personal and nondelegable” under federal law, so § 365(c)(1) applies to them (perlman-v-catapult-entertainment-1999); the federal-law rule for trademark and copyright licences was not retrieved (needs_verification).

Liquor licences (state examples)

  • Florida. Beverage-law licences “shall not be transferable except” on a bona fide sale of the business with the purchaser’s application approved by the Division; “[a] person holding a lien against an alcoholic beverage license may have his or her rights enforced in a judicial proceeding,” but a secured party “shall be disclosed to the division and shall be subject to the qualifications of the Beverage Law as a precondition to the enforcement of the security interest”; foreclosure or judicial transfer does not prevent the Division from suspending the licence or fining the prior licensee — Fla. Stat. § 561.32(1)(a)–(b). The transferee pays a transfer fee, generally 10 percent of the annual licence tax, with a separate formula (capped at USD 5,000) for quota licences — § 561.32(3)(a) (http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0500-0599/0561/Sections/0561.32.html , retrieved 2026-10-16).
  • California. A licence of a “debtor in a bankruptcy case, person for whose estate a receiver is appointed, or assignor for the benefit of creditors may be transferred by or to … the trustee …, a receiver …, or an assignee for the benefit of creditors of a licensee with the consent of the assignor,” or “by or to a receiver appointed for a judgment debtor” — Cal. Bus. & Prof. Code § 24071(a). Where a transfer involves consideration, the parties must open an escrow and deposit the full purchase price before filing the transfer application, and the escrow pays claims in a statutory order (federal income and withholding taxes; certain other taxes; wages; secured creditors to the extent of their security; and so on) — § 24074 (https://california.public.law/codes/business_and_professions_code_section_24074 , retrieved 2026-10-16, unofficial reproduction; official site returned HTTP 403). Whether § 24074’s escrow applies to court-ordered transfers was not verified (needs_verification).

FCC licences

“No construction permit or station license, or any rights thereunder, shall be transferred, assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such permit or license, to any person except upon application to the Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby” (47 U.S.C. § 310(d), https://www.law.cornell.edu/uscode/text/47/310 , retrieved 2026-10-16). For Wireless Radio Services, “[i]n the case of an involuntary assignment or transfer, FCC Form 603 must be filed no later than 30 days after the event causing the involuntary assignment or transfer” (47 CFR 1.948, https://www.ecfr.gov/current/title-47/section-1.948 , retrieved 2026-10-16). A bankruptcy or receivership buyer of a station therefore closes subject to FCC approval. For broadcast stations, 47 CFR 73.3540 governs voluntary assignments (“Prior consent of the FCC must be obtained”; application “at least 45 days prior” to the contemplated effective date), and 47 CFR 73.3541 governs involuntary assignments, but its text addresses only “death or legal disability” of a licensee or controlling person (application within 30 days); how the FCC processes a bankruptcy-trustee or receiver assignment of a broadcast licence was not verified (needs_verification) (https://www.ecfr.gov/current/title-47/section-73.3540 and https://www.ecfr.gov/current/title-47/section-73.3541 , retrieved 2026-10-16).

▸ For Buyers / Operators — For each intangible, confirm (1) chain of title in the federal register (USPTO assignment database; Copyright Office records), (2) liens in both the federal register and the UCC records of the owner’s state of organization, (3) whether the asset can legally be transferred without a third party’s or agency’s consent, and (4) for trademarks, that enough of the business’s goodwill comes with the mark. Record the transfer within the statutory windows (3 months for trademarks and patents; 1 month for copyright priority).

▸ For Owners / Debtors — Licensees of the debtor keep their contractual rights after rejection in bankruptcy (mission-product-holdings-v-tempnology-2019; 11 U.S.C. § 365(n)). An individual author’s never-transferred copyright cannot be taken by governmental seizure except in bankruptcy (17 U.S.C. § 201(e)).

Leading cases

businesses-and-going-concerns, ucc-article-9-sales-of-a-business, equity-interests-stock-llc-charging-orders, buying-a-business-at-a-forced-sale, bankruptcy-363-sales

needs_verification

  • Federal-law rule on assignability of trademark and copyright licences in bankruptcy (§ 365(c)(1)).
  • Perfection of security interests in registered trademarks (UCC versus USPTO) and in registered copyrights (Peregrine), from primary sources.
  • Whether execution sale of an individual author’s copyright is barred by § 201(e).
  • Registrar transfer policies and ICANN transfer rules for domain names.
  • FCC treatment of bankruptcy-trustee and receiver assignments of broadcast licences (47 CFR 73.3540/73.3541 text verified; practice not).
  • Other states’ liquor-licence rules (California’s § 24074 escrow and current fees are in california 12.5).

Sources

▸ For Buyers / Operators — Title register, lien register, transferability, goodwill: check all four for every intangible.

▸ For Owners / Debtors — Licensee rights and the author’s involuntary-transfer protection are summarized above.

This page provides general legal information, not legal advice. Intellectual-property, bankruptcy and licensing law is technical, changes, and varies by circuit, state and agency; its application is fact-specific. Nothing here creates an attorney-client relationship. Verify every statute, rule and holding against the current primary source and consult a licensed attorney before acting. Last verified: 2026-10-16.

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