Investors, tech lenders and licensees should be thinking about how insolvency can affect their IP rights. IP is a corporate asset and given that no company is immune to an economic slowdown, understanding how IP assets and related IP licences can be affected in an insolvency and restructuring scenario, should be on your radar.
Following recent amendments expanding the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act , licensees of IP now have wider protections in the event an owner and licensor of IP becomes insolvent. Those amendments will not only impact licensees but also investors and lenders.
Companies invest significant resources when they collaborate with other companies – knowing underlying rights and vulnerabilities to your investment, is essential. Overall, we will see further insolvency scenarios in the near or distant future where IP assets of licensors will be impacted. Licensees and investors alike should be aware of how the IP assets of a company and the rights to use IP can be affected in an insolvency proceeding in order to make informed decisions for more commercial certainty.