When a company goes through bankruptcy, it's a process
that can up-end all of the company's contractual relationships.
When that bankrupt company is a licensor of intellectual property,
then the license agreement can be one of the contracts that is
impacted. A recent decision has clarified the rights of licensees
in the context of bankruptcy.
In our earlier post –
Changes to Canada's Bankruptcy Laws – we
reviewed changes to the Bankruptcy and Insolvency
Act (BIA) back in 2009. These changes have now been
interpreted by the courts, some seven years later.
In Golden
Opportunities Fund Inc. v Phenomenome Discoveries
Inc., 2016 SKQB 306 (CanLII),
the court reviewed a license between a parent and its
wholly-owned subsidiary. Through a license agreement, a startup
licensor, which was the owner of a patent covering an
invention pertaining to the testing and analysis of blood
samples, licensed a patented invention to its wholly-owned
subsidiary, Phenomenome
