Restructuring Dilemmas for the High Technology Licensee: Will "Plain Meaning" Bring Order to the Chaotic Bankruptcy Law for Assumption and Assignment of Technology Licenses?

David R Kuney


This article examines an unresolved tension between intellectual property law, which is premised on the power of an owner or creator to exclude others from the use of a patent or copyright (the "monopoly power"), and the principle that property should be freely assignable, which is intrinsic to restructuring under U.S. bankruptcy law. This tension manifests itself when a troubled company, which is heavily reliant upon copyright or patent licenses for its core business operations, files for relief under Chapter 11 of the Code only to discover that its legal right to either use, sell or assign its intellectual property is circumscribed or prohibited, thus making reorganization either untenable, or more costly and less likely. In short, prevailing bankruptcy law, contains "perverse and anomalous consequences... under which a debtor may lose the benefit of a non-assignable contract vital to its economic future solely because it filed for bankruptcy."

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