Subsection (b) [Maine cite subsection (2)] explains when goods become covered by a certificate of title and when they cease to be covered. Goods may become covered by a certificate of title, even though no certificate of title has issued. Former Section 9-103(2)(b) provided that the law of the jurisdiction issuing the certificate ceases to apply upon "surrender" of the certificate. This Article eliminates the concept of "surrender." However, if the certificate is surrendered in conjunction with an appropriate application for a certificate to be issued by another jurisdiction, the law of the original jurisdiction ceases to apply because the goods became covered subsequently by a certificate of title from another jurisdiction. Alternatively, the law of the original jurisdiction ceases to apply when the certificate "ceases to be effective" under the law of that jurisdiction. Given the diversity in certificate-of-title statutes, the term "effective" is not defined.

4. Continued Perfection. The fact that the law of one State ceases to apply under subsection (b) [Maine cite subsection (2)] does not mean that a security interest perfected under that law becomes unperfected automatically. In most cases, the security interest will remain perfected. See Section 9-316(d), (e) [Maine cite section 9-1316, subsection (4), subsection (5)]. Moreover, a perfected security interest may be subject to defeat by certain buyers and secured parties. See Section 9-337 [Maine cite section 9-1337].

5. Inventory. Compliance with a certificate-of-title statute generally is not the method of perfecting security interests in inventory. Section 9-311(d) [Maine cite section 9-1311, subsection (4)] provides that a security interest created in inventory held by a person in the business of selling or