The intersection of bankruptcy law and intellectual property law is not a very nice neighborhood. Anyone dealing with intellectual property license agreements must think about how these agreements are affected if one party to the agreement becomes insolvent. Below are strategies to help parties draft license agreements that will pass through this intersection relatively safely.
Bankruptcy Concepts -
Bankruptcy Code Section 101(35A) defines trade secrets, patents and patent applications, copyrights, and mask works as intellectual property. It is important to note that trademarks do not fall within the definition of intellectual property under Section 101(35A). An executory contract, a bankruptcy law term of art, is a contract whereby the parties’ obligations are so underperformed that the failure of one party to complete performance would be considered a material breach, thus excusing performance by the other party.
Originally published in Community Banker on August 27, 2014.
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Topics: Bankruptcy Code, Business Assets, Commercial Bankruptcy, Copyright, Executory Contracts, Insolvency, License Agreements, Patents, Trade Secrets, Trademarks
Published In: Bankruptcy Updates, General Business Updates, Intellectual Property Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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