1. General Rule. Subsection (a) makes clear that, in general, a financier's interest can be created in any contractual right that can be transferred under general transferability rules. Also, consent by the other party to the contract makes transfer possible.

In determining transferability, however, the act of creating a security interest and the act of enforcing that interest are separate events. Unlike in sales of goods, licenses create a situation where three parties have an interest in what happens to the property and the contractual rights associated with it: the lender, the debtor and the licensor. In many cases, the licensor's property rights dominate. In dealing with these three parties, a material difference may exist between creation of a non-possessory interest and enforcement by repossession, foreclosure, or sale or by creation of a non-possessory interest.

2. Non-exclusive Licenses. For non-exclusive licenses, the transferability of a licensee's rights is constrained in law by federal policy limitations that presume non-transferability without licensor consent. See 2B-502(b). See Everex Systems, Inc. v. Cadtrak Corp., 89 F.3d 673 (9^th Cir. 1996). See also In re Patient Education Media, Inc., 210 BR 237 (Bankr. SD NY 1997) (copyright license). It is also constrained by a general state law policy, reflected in Article 2A, that in three party transactions of this type, the rights owner is entitled to protection. Article 2A-303(3) limits the enforceability of lease provisions restricting security interests, stating: "[The] lessor is entitled to protect its residual interest in the goods by prohibiting anyone other that the lessee from possessing or using them." Article 2A-303, Comment 3. As in Article 2A, the licensor has a right to control who is in effective possession (including use and access) of the subject matter of the license. This policy has been enforced by a number of courts in reference to assignments of a licensee interest to third parties, either by contract or by operation of law.

This Article pushes secured lending in the absence of licensor consent as far are possible in light of that contrary federal policy and traditional (Article 2A) recognition of the rights owner's interests. Subsection (b) sets out a right to create a security interest without the licensor's consent unless creation would be barred by other law or the interest results in either a change of possession or a material impairment of the licensor's interests. However, while an interest can be created under these conditions, enforcement cannot, without the licensor's consent, result in an actual change of control, access or use or any sale of the information. This preserves the licensor's protected interest in controlling the resale market and the identity of the licensee.

3. Enforcement, Possession and the Like. Enforcement rights are measured separately. Consistent with this, subsection (b) allows a financier to enforce rights between it and the licensee, but precludes acts of enforcement to the extent that those acts are prohibited under the standards stated which reflect the dominant rights of the other party. The financier may, for example, obtain a court order prevent further use of the information by its debtor if the licensor consent or that action would not materially impair the non-consenting licensor's interests. The licensor in a case governed by subsection (b) cannot transfer the information or contract rights to a third party without consent of the licensor.

4. Taking Subject to the License. Subsection (c) states the basic principle, applicable to all cases, that the financier and any transferee the takes subject to the limiting terms of the license and the intellectual property rights of the licensor. The license is the dominant agreement in that it defines the licensee's rights. A lender can not abrogate those rights and the limitations that are attached to the rights. This does not mean that the transferee undertakes or is bound by affirmative obligations, such as any duty to pay royalties. However, if through non-payment or otherwise, a breach occurs and the license is cancelled, the cancellation vitiates the fincncier's further rights to use the information.