Filling of notice of a security interest in a trademark with the U.S. Patent and Trademark office insufficient to perfect such security interest

Secured Lender, The, Nov/Dec 2001 by Bernstein, H Bruce

[t]he terms 'assignment' and `security interest' are terms of art with distinct and different meanings. If Congress intended to provide a means for recording security interests in trademarks in addition to assignments, it would have been simple to so state."

Trimarchi, at 611 (Quoting In re Roman Cleanser Co., 43 B.R. 940, 946 (Bankr. E.D. Mich. 1984), aff'd 802 F. 2d 207 (6th Cir. 1986)). The court held that there is no conflict, either express, implied or intended, between the UCC and federal law regarding security interest in trademarks, and thus the Lanham Act cannot preempt the UCC. This case affirms the proposition that, while filing a security interest in a trademark with the PTO is still prudent to protect against the claims of purchasers of the trademark, security interests in trademarks are to be perfected under state (UCC) law, not federal law.

Restaurant chain is a "dealer" subject to PACA trust provisions

The Eighth Circuit Court of Appeals has held that the definition of "dealer" in PACA, 7 U.S.C. 499a(b)(6), is unambiguous and that restaurants that purchase qualifying amounts of produce are dealers subject to PACA's trust provisions. Demma Fruit Co. v. Old Fashioned Enters. (In re Old Fashioned Enters.), 236 F.3d 422 (8th Cir. 2001).

Old Fashioned Enterprises, Inc. ("Old Fashioned"), a restaurant chain, filed for relief under Chapter I I of the United States Bankruptcy Code. Old Fashioned had purchased produce from Demma Fruit Company, Ltd. ("Demma"), a produce supplier, for use in its restaurant meals; at the time of its filing, Old Fashioned owed Demma $130,161.21. Demma initiated an adversary proceeding in bankruptcy court, claiming that Old Fashioned was a "dealer" under PACA and that Old Fashioned must pay its debt by turning over PACA trust assets in its possession. Old Fashioned argued that it was not a "dealer" subject to PACA's trust provisions.

The bankruptcy court, in considering a summary judgment motion filed by Demma, deferred to the United States Department of Agriculture's longstanding practice of excluding restaurants from PACA and to the Secretary of Agriculture's 1995 statement that a restaurant is not a dealer unless its buying arm is a separate legal entity. The bankruptcy court denied Demma's motion and granted summary judgment to Old Fashioned. The district court affirmed the decision of the bankruptcy court on the ground that the definition of "dealer" in PACA is ambiguous in part and, thus, the bankruptcy court's deference to agency interpretation was appropriate.

On appeal, the Eighth Circuit began its review of the district court's decision with a summary of the statutory background of PACA. The court commented that Congress enacted PACA in 1930 to protect growers and suppliers of perishable agricultural commodities from financially irresponsible buyers. In 1984, Congress amended PACA to provide for a floating trust, requiring "commission merchants," "brokers," or "dealers" to hold produce and related prodi`or the benefit of unpaid product sellers.