Qimonda Ruling Protects Licensees of U.S. Patents, Holding that Application of German Insolvency Law to Cancel Licenses is “Manifestly Contrary” to U.S. Public Policy


In a case of first impression, a U.S. bankruptcy court charged with enforcing the rights of a foreign insolvency administrator against assets in the United States has held that foreign insolvency law may not be invoked to cancel the rights of licensees of U.S. patents.

Licensees of U.S. patents rely on § 365(n) of the U.S. Bankruptcy Code for assurance that licensed rights will continue notwithstanding a bankruptcy of the licensor. Section 365(n) permits a licensee, in exchange for continued payment of royalties, to elect to continue to use licensed intellectual property in the event that the license is rejected in bankruptcy. Conventional wisdom among intellectual property lawyers identifies two important limitations on the protections of § 365(n): (i) the statute does not protect a licensee’s rights to trademarks or to non-U.S. intellectual property, and (ii) the statute, as a provision of the U.S. Bankruptcy Code, is not applicable if a licensor files for bankruptcy outside of the United States.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Bankruptcy Updates, Conflict of Laws Updates, Intellectual Property Updates, International Trade 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.

© Ropes & Gray LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »