Intellectual Property Agreements: The Assumption/Rejection Risk

Summary

This practice note provides an overview of the treatment of intellectual property agreements in bankruptcy. Once a debtor files for bankruptcy, an intellectual property license generally is considered to be an executory contract which may be assumed or rejected. However, as set forth below, the Bankruptcy Code and case law provide special protections for parties to intellectual property agreements in some circumstances. This practice note also discusses the effect of a bankruptcy case filed by a defendant in a patent infringement case on the prosecution of the case by the plaintiff complaining of an infringement.