Looking for Inside Info on the Automotive Bailout and Other Business Issues? It May Be Hiding in Plain Sight in US Patent Assignment Database

bailoutOne of the under-utilized aspects of available US patent data is the business information effectively “hiding in plain sight” in the U.S. Patent Office Assignment database. While it used to take weeks or months for assignments to be recorded, in recent years, the USPTO has implemented a very efficient electronic filing functionality that results in assignments being available for review almost immediately after being presented for recording. (This is arguably the most efficient process today in the USPTO.) Because most patent owners appear to avail themselves of electronic filing option when recording their assignments, one can find a wealth of information in the USPTO Assignment Branch.

To this end, I recently uncovered an intriguing tidbit of information related to the Automobile Bailout when performing a wholly unrelated patent monetization marketability study for a client. In confirming that a patent was still owned by General Motors, I cross-referenced the patent number in the USPTO assignment database. I found that in December 2001, the U.S. Department of the Treasury recorded a security interest in U.S. Patent Number 7,079,016. In April 2009, a further security interest was recorded in the same patent by Citicorp, “as agent for Hedge Priority Secured Parties.”

Digging a bit deeper, we find that the U.S. Department of the Treasury has recorded security interests in several hundred (perhaps a thousand or more) GM patents, thus establishing the U.S. Government as a significant player in the patent world. Still more digging indicates that these security interests were re-recorded apparently in total in the name of the Hedge Priority Secured Interests, thus indicating that this hedge fund is now also a significant patent owner, at least until GM declares bankruptcy or pays off its loans (more likely the former given recent reports).

(Interestingly, the U.S. government’s security interest was not released prior to recording of the Hedge Fund’s interest. While I don’t even know enough secured lending law to remotely competent to provide an opinion in this regard, it appears that others have identified problems with the way Treasury structured the GM and Chrysler loans last Fall.)

While this information may or may not be interesting to those who are monitoring the status and progress of the Automotive Bailout, the larger point here is that such business information is readily available to those who know where to look. To this end, last year I wrote about how one can follow the investment of companies into alternative energy using patent assignment and filing data. Similarly, one can tell what companies may be leveraging heavily leveraging their IP assets to generate cash by looking into this same information.

A word of caution about using patent assignment data, however. Although creditors are typically very efficient in recording their interests in patents, the companies that own the patents often are not. Moreover, the USPTO will record just about anything that is send to them. As such, the USPTO assignment database is often rife with errors. Because state law regulates the legal effect of patent assignments, one must examine the underlying legal rights as set forth in contracts that may not be readily available in order to understand the true ownership interests related to patents. However, I believe that when properly used, the Assignment database can provide highly valuable directional business intelligence to those who understand how to extract and evaluate such information.

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