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David Kupetz Speaks with Managing Intellectual Property on the Impact of Insolvency on License Agreements
Managing Intellectual Property turned to David Kupetz to explain the key issues involving intellectual property rights in the U.S. in the article, “The Impact of Insolvency on License Agreements.”
Mr. Kupetz went into detail on how the U.S. bankruptcy courts have found IP license agreements to be executory contracts, as well as the various options a debtor in possession in a chapter 11 bankruptcy has for dealing with executory contracts.
When asked about the primary issues faced by a licensee of intellectual property when it files for chapter 11 relief, Mr. Kupetz draws from the cases Footstar and Trump Entertainment Resorts (2015). “Footstar reasoned that Section 365(c) limitation on assignment of license agreements, based on statutory language, only applies to a “trustee” and not to a debtor in possession,” explained Mr. Kupetz. “In the recent case of Trump Entertainment Resorts (2015), a bankruptcy court addressed a trade mark license agreement that had originally been entered by Donald and Ivanka Trump with three entities that operated hotel casinos located in Atlantic City, New Jersey. The court found that for section 365(c) to apply, the applicable law must specifically state that the contracting party is excused from accepting performance from a third party under circumstances where it is clear from the statute that the identity of the contracting party is crucial to the contract. Applicable law in this instance was U.S. trade mark law.”