Insolvency and Intellectual Property Rights Protection and Enforcement Issues in Bankruptcy Proceedings

Abstract

This research paper explores the intricate relationship between intellectual property (“IP”) rights and insolvency proceedings, particularly within the framework of the Insolvency and Bankruptcy Code (“IBC”) in India. Intellectual property assets, including trademarks, patents, copyrights, and other intangible assets, hold significant value for companies, often becoming pivotal factors in insolvency resolution outcomes. Despite the critical role of IP, the IBC lacks explicit provisions addressing the treatment of IP licenses during insolvency, leading to uncertainties and gaps in legal guidance. Through a comprehensive examination of relevant sections of the IBC, such as Section 18 and Section 29, alongside comparative analysis with international insolvency laws, this paper elucidates the complexities surrounding the treatment of IP licenses in insolvency scenarios. It delves into concepts like the disclaimer of onerous property, avoidance powers, and the role of resolution professionals in managing IP assets during insolvency resolution processes. Furthermore, this paper identifies the absence of clear guidelines for cross-border insolvency cases involving intellectual property licenses, highlighting the need for harmonization and regulatory clarity to address potential conflicts between different insolvency regimes. The research underscores the importance of administrative inquiry and legislative action to provide robust protection for IP rights within insolvency frameworks, ensuring equitable treatment for all stakeholders involved. Keywords: Intellectual Property, Insolvency, Insolvency and Bankruptcy Code, IP Licenses, Cross-border Insolvency