This document discusses intellectual property assets in bankruptcy proceedings and provides strategies for maximizing their value. It notes that distressed IP assets can be undervalued, as was the case with Nortel's patent portfolio which sold for $4.5 billion despite an estimated value of only $950 million. The document outlines key questions to determine what IP is involved, who owns it, and the debtor's relationship to it. It also explains how IP licenses are treated as executory contracts in bankruptcy and the options for rejection, assumption, or assignment of such licenses. The overall message is that distressed IP assets present unique opportunities for valuation and acquisition, but purchasers must navigate complex bankruptcy laws and considerations.
This presentation was given at the American Bankruptcy Institute Annual Spring Meeting on April 26, 2014. We address pre-petition and post-petition issues where intellectual property assets are owned or licensed by the debtor.
In the current legal environment, with patent litigation on the decline (especially in the U.S.), patent licensing (and related transactions) are heating up. Experts in patent licensing discuss how to negotiate patent license agreements, review examples of best (and, in some cases, worst) practices, and share current legal developments affecting patent licensing. Practical tips for structuring, negotiating and drafting patent licenses, with strategies for both the licensor and licensee, will be emphasized.
This presentation was given at the American Bankruptcy Institute Annual Spring Meeting on April 26, 2014. We address pre-petition and post-petition issues where intellectual property assets are owned or licensed by the debtor.
In the current legal environment, with patent litigation on the decline (especially in the U.S.), patent licensing (and related transactions) are heating up. Experts in patent licensing discuss how to negotiate patent license agreements, review examples of best (and, in some cases, worst) practices, and share current legal developments affecting patent licensing. Practical tips for structuring, negotiating and drafting patent licenses, with strategies for both the licensor and licensee, will be emphasized.
The Gannons Intellectual Property Technology seminar brings together respected professionals from the legal and commercial technology sectors.
Our seminar covers:
Tech and Software: Discover how businesses navigate, embrace and compete with the deluge of disruptive technologies.
IP Tech from a Legal perspective: Resolve the major legal challenges faced by tech firms. We share our knowledge and expertise.
IP Insurance: Intellectual property insurance needn't be expensive. We demonstrate the options available for Tech businesses.
The Speakers:
Jimmy Vestbirk - a technologist with a focus on LawTech and works with start ups.
Graham Bell - a technical consultant specialising in product development, and has extensive international experience advising clients in the creation, application and exploitation of technology with a core focus in telecommunications and consumer electronics.
Amardeep Dhillon - a barrister who specialises in IP. Amardeep is regularly instructed in matters in the High Court, Companies Court and has appeared before the Court of Appeal. He will discuss case studies on IP and Technology.
An IP Expert in ATE (after the event) and BTE (before the event) insurance solutions helping businesses to reduce their financial risks in litigation.
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/buying-selling-ip-2020/
Buying & Selling IP (Series: Intellectual Property 201)Financial Poise
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IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/buying-selling-ip-2021/
Patent prosecution, process and pitfalls by Benjamin Kuo (Wed, August 22, 2018)L15A
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On Wed, August 22, 2018 Benjamin Kuo presented Intellectual Property "Patent Prosecution, Process and Pitfalls" CRASH Space.
https://blog.crashspace.org/events/intellectual-property-topics/
__________________________________________
Patent Prosecution, Process and Pitfalls
Eventually, every inventor is confronted with the decision to protect his technology by ways of a utility patent. Understanding the magnitude of the undertaking as well as the process and pitfalls involved can greatly reduce costs and (worse) avoid obtaining a useless patent.
In this talk, given by a patent attorney and former USPTO Examiner, the informed inventor will learn to distinguish patents from other forms of intellectual property, how to read a patent disclosure, the patent prosecution process and timeline, decide when and what to file, inner workings of the PTO black box, and how to find and work with a patent attorney.
__________________________________________
About the Presenter
Benjamin Kuo is a patent attorney and former computer engineer with a solo IP practice based in Los Angeles, specializing in helping smaller entities obtain IP protection. In addition to patent filings, he also supports litigation and consults with practitioners on Patent and Trademark Office issues. Before forming his own practice, he was a patent examiner for the USPTO, examining hundreds of computer networking applications and conducting numerous interviews with outside attorneys. Before working at the USPTO, he practiced at various law firms in the fields of patent prosecution, IP litigation, antitrust litigation, and federal corrupt practices act investigations. He is fluent in Mandarin Chinese and is licensed in California and before the USPTO. See more at benasaur.com/law.
Business Law & Order - January 21, 2012AnnArborSPARK
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This is the sequel to SPARK’s popular IP–1 session in October 2012. In this installment, we will provide the keys to technology licensing and university technology transfer. Jeanne Moploney of Dykema Gossett PLLC will start by explaining the essentials entrepreneurs need to understand about technology licensing. Brian Copple from the UofM Tech Transfer Office will then talk about the many opportunities that exist for entrepreneurs to acquire cutting edge technology from universities, and how to work with university tech transfer offices.
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
Part of the webinar series: INTELLECTUAL PROPERTY 201 - 2022
See more at https://www.financialpoise.com/webinars/
The Gannons Intellectual Property Technology seminar brings together respected professionals from the legal and commercial technology sectors.
Our seminar covers:
Tech and Software: Discover how businesses navigate, embrace and compete with the deluge of disruptive technologies.
IP Tech from a Legal perspective: Resolve the major legal challenges faced by tech firms. We share our knowledge and expertise.
IP Insurance: Intellectual property insurance needn't be expensive. We demonstrate the options available for Tech businesses.
The Speakers:
Jimmy Vestbirk - a technologist with a focus on LawTech and works with start ups.
Graham Bell - a technical consultant specialising in product development, and has extensive international experience advising clients in the creation, application and exploitation of technology with a core focus in telecommunications and consumer electronics.
Amardeep Dhillon - a barrister who specialises in IP. Amardeep is regularly instructed in matters in the High Court, Companies Court and has appeared before the Court of Appeal. He will discuss case studies on IP and Technology.
An IP Expert in ATE (after the event) and BTE (before the event) insurance solutions helping businesses to reduce their financial risks in litigation.
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/buying-selling-ip-2020/
Buying & Selling IP (Series: Intellectual Property 201)Financial Poise
Â
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/buying-selling-ip-2021/
Patent prosecution, process and pitfalls by Benjamin Kuo (Wed, August 22, 2018)L15A
Â
On Wed, August 22, 2018 Benjamin Kuo presented Intellectual Property "Patent Prosecution, Process and Pitfalls" CRASH Space.
https://blog.crashspace.org/events/intellectual-property-topics/
__________________________________________
Patent Prosecution, Process and Pitfalls
Eventually, every inventor is confronted with the decision to protect his technology by ways of a utility patent. Understanding the magnitude of the undertaking as well as the process and pitfalls involved can greatly reduce costs and (worse) avoid obtaining a useless patent.
In this talk, given by a patent attorney and former USPTO Examiner, the informed inventor will learn to distinguish patents from other forms of intellectual property, how to read a patent disclosure, the patent prosecution process and timeline, decide when and what to file, inner workings of the PTO black box, and how to find and work with a patent attorney.
__________________________________________
About the Presenter
Benjamin Kuo is a patent attorney and former computer engineer with a solo IP practice based in Los Angeles, specializing in helping smaller entities obtain IP protection. In addition to patent filings, he also supports litigation and consults with practitioners on Patent and Trademark Office issues. Before forming his own practice, he was a patent examiner for the USPTO, examining hundreds of computer networking applications and conducting numerous interviews with outside attorneys. Before working at the USPTO, he practiced at various law firms in the fields of patent prosecution, IP litigation, antitrust litigation, and federal corrupt practices act investigations. He is fluent in Mandarin Chinese and is licensed in California and before the USPTO. See more at benasaur.com/law.
Business Law & Order - January 21, 2012AnnArborSPARK
Â
This is the sequel to SPARK’s popular IP–1 session in October 2012. In this installment, we will provide the keys to technology licensing and university technology transfer. Jeanne Moploney of Dykema Gossett PLLC will start by explaining the essentials entrepreneurs need to understand about technology licensing. Brian Copple from the UofM Tech Transfer Office will then talk about the many opportunities that exist for entrepreneurs to acquire cutting edge technology from universities, and how to work with university tech transfer offices.
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
Part of the webinar series: INTELLECTUAL PROPERTY 201 - 2022
See more at https://www.financialpoise.com/webinars/
Spotlight on Licensing - Avoiding and Limiting Risk in Agreements
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IP Assets in Bankruptcy - How to Take Advantage of Another's Misfortune and Avoid Your Own
1. Intellectual Property Assets in
Bankruptcy: How to Take
Advantage of Another’s
Misfortune & Avoid Your Own
Mike Annis
2. IP in Bankruptcy – is there value?
 Nortel
– How can $950 million turn into $4.5 billion?
– Strategic value of portfolio rather than
licensing income opportunity.
 Kodak
– Can patent sale fund reorganization?
– Can others prevent a proposed sale?
3. Distress Leads to Unique
Valuation Issues
 What exactly does the debtor own?
– GAAP does not reflect internally-developed IP
on financial statements.
– GAAP does require valuation of acquired IP –
FAS 141.
– Management may not know all types of IP the
debtor owns.
3
4. Distress Leads to Unique
Valuation Issues
 Must ensure you purchase all relevant IP out of
entity to make a go of it
– Obtain the know-how necessary to turn the IP
into cash flow.
– Employees with know-how may have
departed long ago.
– Further investment beyond your sale price
may therefore be necessary.
4
5. Case Study from Another World
 Circuit City trademark and website
– Purchased in May 2009 by Systemax for $14
million.
– Systemax reported a $67 million sales
increase in 2009 related to acquisition of
brand, trademark and website.
5
6. IP Involved in Bankruptcy Proceeding
 Three Critical Questions to Answer
1. What type of asset is involved?
- Patent, copyright, trademark, trade secret?
- Each how there own unique issues in bankruptcy
2. Who “owns” the asset?
- Debtor? Third-party?
3. What is the debtor’s relationship to the asset?
- Fee-title owner? Licensee?
6
7. Licensed IP in Bankruptcy Proceeding
 Do you have an “executory contract?”
– Most IP licenses are considered “executory”
– Some future performance by both parties
– Material obligation
 Recent 8th Circuit case Confirms
– In re Interstate Brands, 690 F.3d 1069 (8th Cir. 2012)
– Even if exclusive, prepaid and perpetual
8. Licensed IP in Bankruptcy Proceeding
 Section 365 is the key Code provision
– Rejection (Section 356(n))
• Can you treat the contract as terminated?
– Assumption (Section 365(a))
• Can debtor continue on your licensee?
– Assumption and Assignment (Section 365(a))
• Can your licensee effectively transfer its license
rights to another?
9. Example – (1) debtor owns IP, and
(2)is licensor
• Buyer beware -- Prospective purchaser may be
required to purchase the asset subject to existing
agreements.
• If existing license is “exclusive,” it will only give
purchaser the right to receive royalties and at the
rate previously agreed to between the licensee
and former owner.
• If existing license is “non-exclusive,” buyer can
practice and receive royalties from licensee.
10. Rejection –Section 365(n)
– If the IP is owned by the debtor, the trustee
or DIP may “reject” the license.
– Big questions:
• What effect does rejection have on an existing
license?
• Does rejection terminate the license and allow
Debtor to sell the asset free and clear?
11. Rejection –Section 365(n)
Answer likely depends upon the type of
asset.
• Clearly covers patents and copyrights
• “Trademarks” are not “IP” as defined in BR Act
• Much debate on the subject – Circuit Split
– 4th Circuit – Trademarks not subject to 365(n)
– 7th Circuit – Trademarks are subject to 365(n)
12. Rejection –Section 365(n)
 Options Available to Existing Licensee Subsequent to
Court’s Rejection of License
– Section 365(n) basically provides the licensee two
options:
(1) Treat license as terminated by the rejection
-- walk away
(2) Licensee can retain its rights under the license
so long as it continues to pay required royalty
payments
13. Rejection –Section 365(n)
Scenario –
(1) Debtor owns IP Encumbered by License,
(2) Trustee/DIP Reject License,
(3) You Buy the IP from BR Estate and;
(4) Licensee Continues to Use the IP over your Objection.
Options Available to New Owner –
– Rejection may not prohibit licensee’s ability to practice patents,
copyrights or trade secrets.
– If licensee does not confirm properly, sue the holdover licensee
to stop using the IP and seek damages for holdover’s
exploitation of IP after “rejection.”
14. Rejection –Section 365(n)
Options Available to New Owner Subsequent to a
Purchase of IP After Rejection of License
– If license rejected included trademark rights,
holdover’s continued use of trademark could amount
to counterfeiting under the Lanham Act – provides
special remedies for owner of trademark.
– Could initiate civil action against holdover in State or
Federal Court.
15. Assumption/Assumption and
Assignment – Section 365(a)
Perspective Well-settled bankruptcy law permits debtor to assume
and assign an executory contract over the objection of
the owner (Sections 365(a)&(f))
 Debtor must:
(1) Cure existing defaults/assurances
(2) Compensate for monetary losses caused by
existing defaults/assurances
(3) Adequate assurances that contract will be
performed on prospective basis
16. Assumption/Assumption and
Assignment – Section 365(a)
– However, if IP license is “non-exclusive,” need
to look at license assignability - to be
effective, the assignment will likely need the
owner’s consent.
– If the IP license is “exclusive,” may be
assignable without licensor/owner’s consent.
17. Assumption/Assumption and
Assignment – Section 365(a)
 Patents
• Non-exclusive – no assignment w/o consent
• Exclusive – less than clear
 Copyrights
• Non-exclusive – no assignment w/o consent
• Exclusive – usually assignable w/o consent
 Trademarks
• Non-exclusive – not assignable w/o consent
• Exclusive – not assignable w/o consent
18. Other Issues to Consider
 TRADE SECRETS
– Potential Problems
• Disclosure in bankruptcy proceedings without
appropriate retrictions may likely kill “secret” nature
of Trade Secret
• May then be unable to enforce against any third
parties
19. Avoiding Bankruptcy Pitfalls
 Pre-bankruptcy drafting tips:
– Think through the issue of exclusive/non-
exclusive license
– Assignability – bigger deal than you think
– Bankruptcy/insolvency as trigger for
termination?