Mirroring the American Bankruptcy Code? IP Licences in the European Insolvency Harmonisation Project

Abstract

Abstract With the growth of the licensing of Intellectual Property rights in the global economy, the insolvency treatment of licensing agreements has also taken on greater importance. This paper analyses the treatment of intellectual property licences under the European Commission’s new Directive Proposal 2022/0408/COD, the flagship law of the European insolvency harmonisation project. The paper focuses on the Proposal’s approach in cases where the debtor’s business, or part of it, is sold as a going concern in the pre-pack context. It contrasts the European response to the US Bankruptcy Code, which serves as a significant source of inspiration, and provides examples of how some EU Member States handle such cases. In substance, the paper examines the Commission’s steps towards harmonising the treatment of IP licences in insolvency. Considering the insolvency context and the needs of the parties to the licence, it critically analyses not only the expediency of implementing specific regulations but also the effectiveness of the means employed. Finally, the paper provides some suggestions to amend the Proposal and highlights the necessity to revisit the broader debate over the treatment of IP licences in European insolvency legislation in general.