Intellectual Property in Bankruptcy: A Collier Monograph

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Intellectual Property in Bankruptcy: A Collier Monograph offers an in-depth legal analysis of how intellectual property (IP) rights—specifically copyrights, patents, trade secrets and trademarks—are treated within bankruptcy proceedings. It begins by establishing the foundational legal principles for each form of IP, including their governing laws, eligibility criteria, enforceable rights and statutory limitations. The publication explains how these rights become part of the bankruptcy estate and explores the nuances of ownership, co-ownership and employee-created works. It also addresses how IP rights are transferred or encumbered through assignments and security interests and the interplay between federal recordation systems and the Uniform Commercial Code (UCC).

The publication then examines litigation involving IP in bankruptcy, including jurisdictional boundaries, the impact of the automatic stay and the protection of trade secrets in court filings. It discusses how federal courts have exclusive jurisdiction over patent and copyright claims while trademark and trade secret disputes may be heard in either federal or state court. It also explores the nondischargeability of debts arising from IP infringement or misappropriation, particularly under Bankruptcy Code § 523(a)(6), which excludes debts resulting from willful and malicious injury.

A significant portion of the publication is devoted to intellectual property license agreements, which are often treated as executory contracts in bankruptcy. It analyzes how courts determine executory status based on ongoing obligations and the implications of rejection or assumption under § 365. The publication explores federal common law restrictions on the assignability of IP licenses and how these interact with bankruptcy law, including the protections afforded to licensees under § 365(n). It also discusses various judicial interpretations of § 365(c)(1), including the Hypothetical Test, Actual Test, Footstar Test and Ride Through doctrine, each with different implications for debtor rights and reorganization efforts.

The publication further addresses remedies for IP infringement and misappropriation, including actual damages, unjust enrichment, reasonable royalties and statutory damages. It outlines enhanced damages and attorney’s fees for willful conduct and explains the conditions under which equitable relief such as injunctions may be granted. It also covers the treatment of confidential information in bankruptcy, emphasizing the statutory mechanisms available to protect trade secrets and sensitive commercial data from public disclosure.

Finally, the publication explores the sale and disposition of IP assets in bankruptcy under § 363(f), which allows property to be sold free and clear of interests. It warns of potential pitfalls such as failing to object to a sale or improperly separating IP rights from associated licenses. The publication concludes with a detailed discussion of licensing structures, implied licenses and the enforceability of anti-assignment and ipso facto clauses, providing a comprehensive guide for practitioners navigating the complex intersection of IP and bankruptcy law.

This Monograph, originally published in 2012, has been fully updated in a new edition for 2025 and going forward will be offered as an updated annual edition.

The previous edition's ISBN is 9781663321510.

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