When a licensee of intellectual property becomes insolvent and
enters, either voluntarily or involuntarily, into a restructuring
or insolvency process, there arise two key issues. First is
the issue of the fate of the licence itself. Can the licensee
sell and assign the licence as an asset, or at the very least,
retain the licence in the case of a restructuring to be used by
that licensee upon "exiting" its restructuring? The
licensor would often prefer in these circumstances, to terminate
the license and regain control over its intellectual
property. Of prime importance to most licensors would be to
control the fate of the license. Should the licensor not be
able to prevent the assignment of the license to a competitor or
undesirable third party without its consent? Unfortunately,
from the point of view of the licensor, the answer to that seems,
in general, to be no. This paper explains why below.
