Bone-Fide Purchaser for Value

Bone-fide is latin for  “good faith.” The term usually applies where property (including intellectual property) is subject to a recording of title system, either voluntary or involuntary. One legal consequence is usually that a purchaser of the property, who has properly examined the title records and found no evidence of a third party’s claim, rights, or interest in the property, can gain title without being subject to that third party’s prior rights, provided the purchaser has paid something of value for the property.  To take an example, if the recorded owner of a house sells it to party A, but A fails to record the sale and still recorded owner then sells it a second time to party B, the second buyer has a valid claim to own the house, especially if B records the purchase before A. The principle is that people should be able to trust the official title records.

This rule usually only applies to those rights that can be recorded, but not to rights that could not be recorded and may be subject to the purchaser also having conducted reasonable due diligence. Its application to intellectual property is far from uniform.