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- Very limited case law on exclusive patents and trademarks
• In re Hernandez, 285 B.R. 435 (Bankr. D. Ariz. 2002): Consent required for exclusive patents.
• In re N.C.P. Marketing Group, Inc., 337 B.R. 230 (D. Nev. 2005): Consent required for non-exclusive trademark license.
Assumption of IP Licenses
- Some courts require licensor’s consent for debtor licensee to assume a license
- Perlman v. Catapult Entertainment, Inc. (In re Catapult Entertainment, Inc.), 165 (9th Cir. 1999):
• The “Hypothetical” Test
F.3d 747
• A debtor may not assume an executory contract (a nonexclusive license to use a patent) over non-debtor licensor’s objection if applicable law, such as patent law, would bar assignment to hypothetical third party.
- Institut Pasteur v. Cambridge Biotech Corp., 104 F.3d 489 (1st Cir. 1997):
• The “Actual” Test.
• Court must determine whether non-debtor licensor is actually being “forced to accept performance under its executory contract from someone other than the debtor party with whom it originally contracted.”
• Note, this case was reversed on jurisdictional grounds.
- In re Footstar, Inc., 323 B.R. 566 (Bankr. S.D.N.Y. 2005):
• The “trustee” to which section 365(c) applies should not include the debtor-in-possession. Thus, prohibition against assumption under section 365(c) is limited to condition where “trustee,” not debtor-in-possession, wants to assume executory contracts.
• Literal reading of section 365(c): Right of non-debtor to object does not affect right of debtor-in- possession to assume executory contract.
• Does not involve IP license.
• Followed by In re Adelphia Communications Corp., 359 B.R. 65 (Bankr. S.D.N.Y. 2007) and Aerobox
Composite Structures, LLC, 373 B.R. 135 (Bankr. M.D.N.M. 2007).
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