Bankruptcy Treatment of Intellectual Property Assets: An Economic Analysis

With the rise of intellectual property in the modern economy, bankruptcy treatment of intellectual property assets has taken on ever greater importance. The law in this area must balance different approaches to asset management. Viewing the world from an ex ante perspective, intellectual property laws seek to foster investment in research and development. Freedom of contract plays a central role in maximizing the potential value of intellectual property by encouraging a robust licensing market to exploit the value of intellectual creativity. By contrast, the bankruptcy system generally views asset management from an ex post standpoint, focusing narrowly on how to maximize the value of a failing or failed enterprise. Thus, bankruptcy law affords trustees and debtors substantial leeway to rescind contracts and reorder the affairs of the failed entity. This article examines the rather complex rules governing the treatment of intellectual property assets in bankruptcy and suggests various reforms that could better promote economic efficiency

Is Silence Really Golden - Assumption and Assignment of Intellectual Property Licenses in Bankruptcy

A debtor-licensee often desires to assume or assume and assign intellectual property licenses to which it is a party-an action to which the non-debtor licensor may object. This article examines a debtor-licensee\u27s ability to assume and assign such licenses in the context of bankruptcy. Courts that have considered the issue have held that, notwithstanding the general authority granted under 11 U.S.C. § 365, consent is likely required before a debtor-licensee can assume and assign a non-exclusive patent license, copyright license, or a trademark license if any such license contains an express restriction on assignment or is silent on the issue. But it remains unsettled whether consent is needed to assume and assign an exclusive patent license, copyright license, or trademark license that either restricts assignment or is silent on the issue. This Article provides a review and analysis of the current state of the relevant case law and further attempts to predict how courts might decide the unsettled issues in a matter consistent with intellectual property law principles