Fortunately, bankruptcy law is not entirely one-sided in favour of the licensee. The bankruptcy code recognizes, to some extent, the crucial role of intellectual property licensing in modern commerce. In order to ease the burden on IP takers who might otherwise lose their licence due to the bankruptcy of their licenstant, Section 365 (n) of the Bankruptcy Act was adopted to make it clear that the rights of an intellectual property owner cannot be unilaterally rejected because of the licensee`s refusal under Section 365 (a). The essential termination obligations that have not been met and the granting of a lenient license have made the contract an execution [of the licensee]. In Fenix Cattle Co. v. Silver (In re Select-A-Seat Corp.), 625 F.2d 290, 292 (9 cir. 1980), the court found that the obligation on a debtor to forego the sale of software under an exclusive licensing agreement made a contract enforceable without the debtor`s obligation, regardless of the persistent undertaking, was merely an indulgence. For example, the Third Circuit in In re Exide Technologies, 607 F.3d 957 (3d Cir. 2010) concluded that a trademark licensing agreement was not enforceable, since the licensee had essentially failed to complete its performance under the agreement prior to the debtor`s bankruptcy application.
Thus, the Tribunal found that the agreement could not be accepted or rejected at all. As a result, the third circle never specified whether the rejection of the agreement (if it turns out that it would have been executed) would have terminated the licensee`s right to use the debtor`s marks. Second, the licensee`s obligation to meet quality standards has been limited in that it requires compliance with brand standards for each battery produced; it has not undertaken to transfer the commercial activity of the batteries that the purchaser has acquired from the licensee. In addition, the recording revealed that the licensee never provided quality standards to the licensee. Id. at 964. Finally, with respect to the obligation to compensate under the wealth acquisition contract, all the insurance and collateral that resulted expired in 1994 on the third anniversary of the closure and the licensee provided no evidence that liability assumed by the taker was still outstanding. Therefore, while the debtor had, quite rightly, that because the licence was authorized was “indeterminate” under the licence agreement, it could not be revoked as it pleased, it did not mean that the licensee could not be excused from its obligations if the debtors were to substantially violate the licence agreement. No authority simply found that a “permanent” licence and not “permanent and irrevocable” was irrevocable in the face of a material offence. Despite its broad protection for intellectual property licenses, Section 365 (n) does not make a licensee a whole. In essence, it freezes the licensee`s rights over the rights he could exercise directly on the eve of the licensee`s bankruptcy. In distinguishing the Exide Technologies case in its possession, Eighth Explained that Interstate Brands` remaining commitments through the APA and the licensing agreement (for example).
B, notification and leniency, maintenance and defence, as well as other breach obligations) concerned only one of the many assets included in the sale: the trademark licence. A contract of execution within the meaning of section 365 of the Bankruptcy Act is a contract in which “the benefit is based, to some extent, on both parties.” N.L.R.B v. Bildisco – Bildisco, 465 U.S. 513, 522 n.6, 104 pp.