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Qimonda's Impact on Patent Licenses When a Licensor Goes Bankrupt in a Foreign Land by Randall E. Colson
Haynes and Boone, LLP - Dallas Office
Andrew S. Ehmke
Haynes and Boone, LLP - Dallas Office
Autumn D. Highsmith
Haynes and Boone, LLP - Dallas Office
Robin E. Phelan
Haynes and Boone, LLP - Dallas Office
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December 26, 2011
Previously published on December 22, 2011
Can a U.S. patent licensee whose license has been rejected by a licensor under foreign law in a foreign bankruptcy rely on the protections of § 365(n) of the U.S. Bankruptcy Code? On October 28, 2011, the United States Bankruptcy Court for the Eastern District of Virginia issued an opinion addressing this in the Chapter 15 case of Qimonda AG (“Qimonda”). The bankruptcy court held that the application of § 365(n) to executory licenses to U.S. patents was required to sufficiently protect the interests of U.S. patent licensees under Chapter 15 of the Bankruptcy Code, and that the failure of German insolvency law to protect patent licensees was “manifestly contrary” to United States public policy. Bankruptcy Code § 365(n) provides that if a trustee or debtor-in-possession (or in this case a foreign representative under Chapter 15) rejects an intellectual property contract between a debtor/licensor and a licensee, the licensee may elect to either treat the contract as terminated or retain its rights under the contract (including the right to enforce any exclusivity provision of the contract, but excluding any rights to specific performance) for the duration of the contract and any extension period available to the licensee under non-bankruptcy law.
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The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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