Selected Intellectual Property Issues Arising in Bankruptcy Cases
- Topics:
- Bankruptcies
- Tags:
- Bankruptcy,
- Business Operations,
- Debtor,
- Dechert,
- Intellectual Property,
- Litigation,
- Research & Development
- Source:
- Dechert
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Overview: Section 365 of Title 11 of the United States Code (the “Bankruptcy Code”) allows a trustee or debtor in possession to assume and assign or reject an executory contract, in order to maximize the profitability and value of the debtor’s estate. Article displays that the debtor must cure outstanding defaults or provide adequate assurance that it will do so. Accordingly, businesses dependent upon intellectual property lobbied Congress to gain exceptions to section 365 of the Bankruptcy Code. Fearing that the existing law fostered a chilling effect on the licensing of intellectual property, Congress enacted the Intellectual Property Bankruptcy Act of 1988, Pub. L. 100-506. This paper concludes that as the importance of the assumption and assignment of intangible assets in bankruptcy continues to grow, further evaluation and judicial clarification of section 365 may be needed. While section 365(n) is a significant step towards synthesizing the fundamental concerns of two different areas of law, the tension between the Bankruptcy Code’s policy of the free assignability of contracts to maximize the debtor’s estate and federal protections of non-debtors’ interests in intellectual property assets remains unresolved.
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Format: PDF | Size: 219KB | Date: Jan 2003 | Pages: 8
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