Question

Pharm-Ace holds a patent on a drug. Pharm-Ace used the patent (evidenced by the patent certificate) to secure a $1 million loan from First Bank. The patent is chattel paper.True / False.

Answer 1

False

Step-by-step explanation:

A chattel paper is a record which shows that or reveals that there is a monetary obligation and security interest in particular goods. In this case, Pharm-Ace holds a patent on a drug and have used it to secure a loan. The patent in this case serves as a collateral as it can be sold by the bank to recover their money back, but it is not a chattel paper because there isn't a security interest.