In re World Auxiliary Power Co. (2002)
Citation: 303 F.3d 1120 · Court: U.S. Court of Appeals for the Ninth Circuit · Decided: Sept. 11, 2002 · Opinion: Kleinfeld, Circuit Judge.
Source note (2026-10-18):
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https://static.case.law/f3d/303/cases/1120-02.jsonare an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.
Case page. Legal information, not legal advice. Last verified: 2026-10-16.
Facts
“[T]his is a bankruptcy contest over unregistered copyrights between a bank that got a security interest in the copyrights from the owners and perfected it under state law, and a company that bought the copyrights from the bankruptcy trustees after the copyright owners went bankrupt.” The bank had filed UCC-1 financing statements with the California Secretary of State. The buyer, Aerocon, argued that federal law required recording in the Copyright Office. (Source: https://static.case.law/f3d/303/cases/1120-02.json , retrieved 2026-10-16.)
Holding
State Article 9 governs perfection of security interests in unregistered copyrights; the bank’s UCC filing was effective and the bankruptcy court’s judgment for the bank was upheld. “Since an unregistered work doesn’t have a title or registration number that would be ‘revealed by a reasonable search,’ recording a security interest in an unregistered copyright in the Copyright Office wouldn’t give ‘constructive notice’ under the Copyright Act, and, because it wouldn’t, it couldn’t preserve a creditor’s priority.” “There just isn’t any way for a secured creditor to preserve a priority in an unregistered copyright by recording anything in the Copyright Office.”
Reasoning
The court distinguished National Peregrine, Inc. v. Capitol Federal Savings & Loan Ass’n (In re
Peregrine Entertainment, Ltd.), a district-court decision concerning registered copyrights (not
separately retrieved; needs_verification), and analyzed Article 9’s two “step-back provisions,”
“by which state law steps back and out of the way of conflicting federal law,” concluding that the
Copyright Act offers no recording system for unregistered works that would displace Article 9.
Judgment AFFIRMED.
Practical impact
A buyer of software or other unregistered copyrights out of a bankruptcy or other forced sale
takes subject to a security interest perfected by a UCC filing. Searches must cover both the
Copyright Office and the UCC records. For registered works, the Copyright Office record may control
(needs_verification).
Good-law status
No citator check run this session (needs_verification).
Applies in →
intellectual-property-and-licenses, ucc-article-9-sales-of-a-business
Legal information, not legal advice. Verify against the current primary source before relying on this summary.