365 n bankruptcy software license

Tamietti, technology licenses under the bankruptcy code. First and best is to obtain a present transfer to the licensee of the licensors. Rci contended that its consent was required by 365c of the bankruptcy code, and because rci refused to provide its consent, the license could not be assumed. Section 365 n provides licensees of intellectual property, including software licensees, with a measure of protection against unilateral rejection of the software license by a licensors bankruptcy trustee. Is the software license agreement an executory contract. Bankruptcy code section 365n protects licensees right to. The impact of bankruptcy on ip litigation and licensing. Section 365a of the bankruptcy code allows a debtor or trustee to assume or.

Section 365 n of the united states bankruptcy code 11 u. The parties intend that all licenses that acme grants the licensee under this agreement are, for purposes of section 365 n of the bankruptcy code, licenses of rights to intellectual property, as that term is defined in section 101 of the bankruptcy code. Software licenses through the bankruptcy looking glass. This means that an agreement by the licensor to grant a license to ip at some later date, including a springing license grant on a bankruptcy filing, will likely be unenforceable if a bankruptcy is filed. Protecting licensees and saas customers against software. Bankruptcy court for the district of new hampshire serves as a good reminder that, although helpful, bankruptcy code section 365 n s protection for. Through december of 2009, there have been 60,530 business bankruptcy filingsa 41 per. A reminder of the limits of section 365n protection law360. If youre dealing with a software license agreement that provides for a. Essentially, section 365 n allows a licensee of intellectual property to retain its rights under the license postrejection, if it so elects and continues to perform its obligations under the license e.

Sunterra prevailed in the bankruptcy court as well as the district court. Section 365 n only applies to actual license rights as they existed at the time the bankruptcy case was commenced. Bankruptcy court for the district of new hampshire serves as a good reminder that, although helpful, bankruptcy code section 365 n s protection for intellectual property licensees definitely has its limits. Bankruptcys impact on copyrighted software licenses. Supreme court rules that trademark licensee retains license. If a debtorlicensor rejects an executory license, section 365n of the bankruptcy code provides the licensee with the option of treating the. The recent financial downturn has resulted in an explosion of corporate bankruptcy filings. Thats especially true for a commercial agreement whose central purpose is something other than as a technology license. Section 365 n of the bankruptcy code affords special protection to a licensee of intellectual property when a debtorlicensor rejects its licensing agreement pursuant to section 365 a of the bankruptcy code.