Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Bankruptcy and Intellectual Property Executory Contracts
The economic impact of the pandemic has been catastrophic. As of the end of August, bankruptcy filings by companies with at least a half-billion dollars in liabilities had surged 120% year-over-year, according to the investment bank Jefferies. For many of these companies, their intellectual property, including patents and trademarks, are significant assets, and counsel for these businesses, as well as counsel for their creditors, licensees and licensors, will need to understand these issues that arise to avoid pitfalls and take full advantage of opportunities to exploit the full value of a company's IP for the benefit of their clients.
This article focuses on rights with respect to executory contracts — that is, contracts under which the corporation and the counter-party still have material obligations to each other. Under Section 365 of the Bankruptcy Code, the debtor can assume an executory contract and continue to perform its obligations during and after emerging from bankruptcy; assume the contract and assign it to a third party; or reject the contract and pay contract damages. If it assumes or assigns the contract, however, it must convince the bankruptcy court that the license will continue to be performed, which is known as "adequate assurance of future performance."
Most types of IP licenses are treated as executory contracts because the licensor and the licensee usually owe continuing material obligations to one another. On the licensee's side, the duty to pay royalties, adhere to confidentiality provisions and indemnify the licensor have all been held to be material ongoing obligations. For its part, the licensor will have ongoing obligations to forbear from suing the licensee and may have other continuing duties such as providing updates that would make the contract executory.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers
In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
CoStar Wins Injunction for Breach-of-Contract Damages In CRE Database Access Lawsuit
Latham & Watkins helped the largest U.S. commercial real estate research company prevail in a breach-of-contract dispute in District of Columbia federal court.