During a bankruptcy or a restructuring, the goal of bankruptcy
law is at odds with the goal of intellectual property law. Recent
developments in bankruptcy law have sought to provide more
certainty to licensees. However, there is still a lot of
uncertainty.
Intellectual property laws are designed to promote the
dissemination and implementation of new technology. On the other
hand, bankruptcy law is designed to improve the recovery of funds
to pay out debtors. Accordingly, a trustee in bankruptcy is
generally entitled to walk away from a contract if the contract is
onerous or if the trustee believes that the value of an asset may
be increased by repudiating a contract.
A patent license may provide a licensee with a critical
technology to enable a product to be manufactured or a process to
be operated. A licensee may invest substantial amounts to build a
plant or to develop and tool a product. The loss of the license may
result in the now former licensee having to
