Przemek KUCHARSKI, Alice MORRISON, Rebecca SADLEIR, Michael POPKIN, Natalie TALIA, Grant FISHER

Transcription

1 Question Q241 National Group: Title: Contributors: Australia IP licensing and insolvency Przemek KUCHARSKI, Alice MORRISON, Rebecca SADLEIR, Michael POPKIN, Natalie TALIA, Grant FISHER Reporter within Working Committee: Grant FISHER Date: 15 August DOES YOUR COUNTRY HAVE A REGISTRATION SYSTEM FOR IP LICENSES? IF YES, PLEASE DESCRIBE THIS SYSTEM There is no registration system specifically for IP licences. There are public registers for patents, trade marks and designs. Licensees of these registered forms of IP may record their licence interests on the applicable register. In some instances, such recordal may have substantive legal significance eg, a recorded exclusive licensee of a patent and a recorded authorised user of a registered trade mark each have standing to sue for infringement (among other rights). In the case of patents, an unregistered licence is not generally admissible in proceedings as proof of the licensee's interest. 2. DESCRIBE THE TYPE OR TYPES OF BANKRUPTCY AND INSOLVENCY PROCEEDINGS THAT ARE AVAILABLE IN YOUR COUNTRY. In Australia, the term "bankruptcy" is most commonly applied to individuals (ie, natural persons) whilst "insolvency" refers to corporate entities. In both cases, the test is whether the individual or corporate entity is unable to pay debts as and when they fall. The following formal insolvency proceedings are available in Australia in respect to corporate entities. 2.1 Voluntary administration (a) Voluntary administration is a statutory process which provides a temporary (not necessarily terminal) external administration process for companies in 1

2 financial distress. Administration may be instigated by the board of directors if they are of the opinion that the company is insolvent or is likely to become insolvent or by a creditor with an enforceable security interest over all or substantially all of the company's property. (b) The key features of the voluntary administration process are: (i) (ii) (iii) (iv) an external administrator (a qualified insolvency professional) is appointed to assume control of the insolvent entity; the general effect of an administrator's appointment is that the control of and responsibility for the conduct of the company's affairs is vested in the administrator. The administrator's powers supersede those otherwise exercisable by the directors; the administrator is tasked with investigating the affairs of the company and making a recommendation to the creditors as to the future of the company; to permit the administrator the opportunity to assess the company's situation and its options, during the administration there is a moratorium upon the enforcement of creditors' claims and actions against the company and its property (subject to certain exceptions) and also a stay on legal proceedings which will prevent, amongst other things, security being enforced (subject to certain exceptions). (c) The Corporations Act 2001 (Cth) ("Corporations Act") provides for the conclusion of the voluntary administration process in approximately 1 month, though this is often extended by resolution of the company's creditors or the court (a 3 month period is common). At the conclusion of a voluntary administration, the creditors vote on the fate of the Company, which may be: (i) (i) (ii) to enter into a deed of company arrangement (discussed further below); to liquidate or 'wind up' the company (ie, implement the Australian equivalent of Chapter 7 of the US Bankruptcy Code); or the company should revert to normal operations under its directors. (d) The resolutions of creditors with respect to the fate of the company is passed if a majority of creditors, both in number and value, vote in favour of the resolution at a meeting of creditors, with the administrator holding a casting vote in the event of a deadlock. 1.2 Deed of company arrangement (a) (b) A deed of company arrangement ("DOCA") is a statutory reorganisation plan that is binding on all unsecured creditors once passed by the requisite majorities described above. Generally, DOCAs are used where the company in question is considered viable for a going concern for example, they may involve the directors, 2

3 related parties or a white knight investor contributing additional funds to the company in return for the creditors agreeing to compromise their claims sufficiently to enable the company to continue to trade. (c) (d) DOCAs have also been used in terminal scenarios to enable a company to operate under a modified liquidation regime for a period. However, ultimately such companies often do also go through a formal liquidation in part to avail the company of the benefit of voidable transaction claims (see Section 588FE, Chapter 5, Part 5.7B, Division 2 of the Corporations Act) which are only available in the liquidation context. Generally, a DOCA must offer to creditors at least the possibility of better return than would otherwise be available to them on an immediate liquidation of the company. 1.3 Receivership (a) A company goes into receivership where a suitably qualified person (a receiver) is appointed (generally by a secured creditor) to take control of some or all of the company's assets. (b) (c) (d) The typically broad powers of a receiver are set out in the document(s) (eg, a fixed and floating charge) pursuant to which they are appointed. The Corporations Act also sets out additional powers and duties of a receiver. If a receiver has the power to manage the company's affairs under the terms of their appointment, they are known as a receiver and manager. "Dual" appointments are possible so that a receiver and manager can be appointed to a company which is also in administration or liquidation. Except in cases of a dual appointment with an administrator, there is no statutory moratorium during the period of a receivership. However, if a receiver is appointed pursuant to a general security interest, there may be questions of priority which arise for licensees seeking to issue proceedings to enforce rights under an IP contract. Under the Corporations Act, a receiver: (i) (ii) (iii) (iv) is empowered to enter into or take possession of relevant company property; has broad powers to deal with company assets and business; may, if a receiver and manager, continue to trade the company's business; will generally enter into a sale of the company's business or assets and distribute the proceeds of that sale in accordance with the terms of their appointment and the law. (e) A receiver's primary duty is to act in the interests of their appointor (a secured creditor) and seek to satisfy that creditor's debts from the proceeds of sale of 3

4 1.4 Liquidation secured assets subject to various duties and obligations under the Corporations Act (for example, a duty of care in exercising a power of sale). (a) (b) (c) Liquidation is a terminal process, which may be instigated by members (ie, shareholders) of the company or the court, or is the terminal outcome of the administration process. An external insolvency practitioner (usually the former administrator where the liquidation has been preceded by an administration) is appointed to realise the assets of the company (including by prosecuting any claims the company may have against third parties) and distribute the proceeds to the creditors in accordance with the statutory order of priority. Any proceeds from the realisation of secured assets go first to secured creditors, subject to a deduction for any liquidation costs attributable to those assets (but note that secured creditors with a "circulating security interest" only, such as a floating charge, will receive proceeds only after certain employee entitlements have been paid out). Any surplus in secured asset realisations and any proceeds from the realisation of unsecured assets (including the proceeds of voidable transaction claims) are then distributed in accordance with the statutory waterfall, which can be broadly summarised as follows (see section 556 of the Corporations Act): (i) (ii) (iii) (iv) (v) first expenses incurred by the liquidator in carrying on the company and administering the assets; then debts incurred by a previous administrator, if any, for which he or she is indemnified; then the liquidator's fees; then employee entitlements (such as wages, superannuation and leave entitlements); then the balance is paid equally to all remaining unsecured creditors. 3. DOES THE LAW THAT GOVERNS BANKRUPTCY AND INSOLVENCY PROCEEDINGS IN YOUR COUNTRY ADDRESS IP RIGHTS OR IP LICENSES AS DISTINCT FROM OTHER TYPES OF CONTRACTS, ASSETS, AND PROPERTY RIGHTS? IF YES, IS THE LAW STATUTORY, REGULATORY, OR BASED ON PRECEDENT? PLEASE IDENTIFY ANY RELEVANT STATUTES OR REGULATIONS. Patents, registered trade marks, copyright, designs, plant breeder's rights and circuit layouts are personal property under Australian law. The corporate insolvency law in Australia does not distinguish between IP rights or IP licences and other types of contracts, assets and property rights. 4

5 There are general provisions in insolvency law that modify the pre-insolvency legal position with regards to a contract that may apply to IP contracts in some instances (discussed further below). Additionally, Part 3.5 of the Personal Property Securities Act 2009 (Cth) ("PPSA") applies particular rules to security interests in IP licences, to the effect that: (a) (b) if the exercise of rights by a secured party in relation to goods necessarily involves the exercise of IP rights covered by the security interest, the PPSA applies to the IP rights in the same way as it applies to the goods; and where there is a transfer of IP that is the subject of a licence or sub-licence in which a security interest is granted, the security agreement binds the successors in title to the licensor or sub-licensor. Separately, section 301 of the Bankruptcy Act 1966 (Cth) does specifically deal with IP rights. However, this Act only applies in the context of personal bankruptcy and does not apply in the context of insolvency proceedings over a corporate entity that is party to an IP contract. 4. PLEASE ANSWER THE FOLLOWING SUB-QUESTIONS BASED UPON THE LAW AND JURISPRUDENCE IN YOUR COUNTRY THAT GOVERNS BANKRUPTCY AND INSOLVENCY PROCEEDINGS: (a) Describe the law and its effects on a bankruptcy administrator s ability to adopt, assign, modify, or terminate an IP license. Australian corporate insolvency law does not treat IP licences differently from other contracts and, subject to the provisos discussed below, does not for the most part modify the pre-insolvency position with regards to an IP licence, and accordingly the terms of the IP licence, as with other contracts, will continue to govern an insolvent party's ability to assign, modify or terminate an IP licence. For example, it is very common in Australia for commercial contracts, including IP licences, to contain standard terms (often referred to as 'ipso facto' clauses) allowing any party to the contract to elect to terminate the contract if another party suffers an insolvency event. An insolvent party's ability (through an administrator, receiver or liquidator) to assign or modify any IP licence may therefore, as a matter of contract, be subject to the willingness of counterparties to continue on with the arrangement. The following provisos should be noted: (i) General: Australian insolvency law may render void arrangements that circumvent the statutory priority regime or serve to strip a company of assets on the onset of insolvency (discussed further below). (ii) Administration: (A) Administrators have the power to cause the company to either continue to perform any pre-appointment IP licence or to breach 5

6 it. The decision will depend on the administrator's views of what is best for the company and its creditors. (B) The appointment of an administrator automatically leads to a statutory moratorium (section 440D of the Corporations Act). This means that (without the leave of the court or consent of the administrator) a party to a licence with a company in administration cannot commence or continue proceedings against that company during the course of the administration. Accordingly, the licence may be terminated if the contract allows, but no resulting damages can be pursued by way of legal proceedings during the course of the administration. (Though the non-insolvent party may be entitled to prove and vote as a creditor in the administration). (iii) Receivership: (A) (B) A receiver may elect whether or not to 'adopt' (ie, agree to be personally liable under) any pre-appointment contract, including any IP licence, to which the insolvent company is a party and which is covered by the security agreement pursuant to which the receiver was appointed. The receiver also has the power to cause the company to either continue to perform any such preappointment contract or to breach or repudiate it (where this will not adversely affect the realisation of assets or seriously affect the trading prospects of the company), which may make the company liable in damages. The decision will depend on the receiver's views of what will produce the best return for the secured creditor. This 'power' of repudiation may be subject to certain negative stipulations, such as a third party lien or a right that a counterparty to an IP licence or other contract may have to obtain equitable relief such as specific performance or injunction (eg, to restrain a breach of a negative stipulation in a franchise agreement dealing with territorial exclusivity). (iv) Liquidation: Pursuant to section 568(1) of the Corporations Act, a liquidator is entitled to disclaim onerous property of the company to which they have been appointed. Such property may include a contract (such as an IP licence). In the case of a contract, the liquidator may disclaim the contract unilaterally if it is unprofitable or with leave from the court otherwise. The effect of such a disclaimer is that the insolvent company's rights, interests, liabilities and property in or in respect of the disclaimed property (such as a contract containing an IP licence) are taken to be terminated from the time at which the disclaimer takes effect. The 6

7 disclaimer does not affect any other person's rights or liabilities except so far as necessary in order to release the company. A person aggrieved by any disclaimer of property may seek to have it set aside in court and/or may prove as a creditor in the winding-up of the company. (b) Are equitable or public policy considerations relevant to how an IP license is treated? Given that the corporate insolvency law in Australia does not distinguish between IP rights or IP licences and other types of contracts, assets and property rights, there are no specific public policy considerations which inform the treatment of IP in an insolvency context. However, if an issue arises in an external administration with respect to IP (for example, the potential for a liquidator to disclaim a licensing contract as discussed above), the treatment of the IP licence would be governed by the public policy considerations which informed the development of the Australian insolvency law. (c) Is the law different for different types of bankruptcy and insolvency proceedings in your country? Yes see (a) above. (d) Does the law require, or give preference to, IP licenses that have been registered according to a registration scheme? The purpose of recording a licence interest on the public IP registers is to ensure that anyone acquiring the underlying IP from the licensor is on notice of, and takes the IP subject to, the licensee's interest under the licence according to equitable principles. It also facilitates the notification of recorded licensees of events affecting the IP asset, such as changes in ownership or filing of oppositions by third parties. Recorded licensees may even be invited to make submissions and/or appearances in proceedings where the validity of the registered IP asset is under challenge. While these principles will be relevant to the transfer of IP in the insolvency context, it is not specifically an insolvency issue and the insolvency law otherwise does not distinguish between licences that are noted on the public IP registers and those that are not. (e) Would the existence of a pledge of or security interest in the IP rights for the benefit of the licensee affect application of the law in the case of an insolvent licensor? It is possible under Australian law for a licensee to take (and perfect by registration on the Personal Property Security Register established under the PPSA) a security interest in the underlying IP in order to secure the licensor's obligations under the IP licence. In general terms, a licensee would improve its position in insolvency by having a security interest in the underlying IP. Subject to the caveats below, benefits that a secured licensee would enjoy in the insolvency context include: 7

8 (i) Administration: (A) (B) If the licensee had enforced the security (eg, appointed a receiver to the IP) before the commencement of an administration, the appointment of an administrator to the licensor will not prevent the continuance of that action - section 441B(1) of the Corporations Act (subject to any court order the administrator is able to obtain to the contrary). A secured licensee that has not enforced its security prior to the appointment of an administrator will generally be prevented from enforcing during the period of administration (absent the consent of the administrator or leave of the court) section 440B of the Corporations Act. The Administrator would, however, be prohibited from disposing of the secured IP other than in the ordinary course of business (unlikely to apply in this instance), the consent of the licensee or the leave of the Court, which must be satisfied that the interests of the licensees are protected in the disposal (section 442C of the Corporations Act). (ii) Liquidation does not interfere with the rights of a secured creditor ie, the licensee would be able to enforce its security of the IP notwithstanding that the licensor is in liquidation. A licensee's security interest may, however, be found to be ineffective in the context of an insolvent licensor in certain circumstances. The position is particularly complex in this context because the security secures obligations of the licensor (to provide access to the IP) rather than a debt. Some key areas where issues may arise include: (A) (B) Interaction with other security interests: It is commonplace for corporate entities to provide their key financier with a general security interest over all assets, which would include IP. If such a security interest ranked ahead of the registered security over the IP, it may have priority. Enforcement rights: Any enforcement rights that have the effect of stripping assets out of the insolvent licensor's estate for less than market value and/or provide a windfall to the licensee are likely to lead to the security being held to be unenforceable in the insolvency context. (f) Is the law limited to or applied differently among certain types of IP rights (eg, patents versus trademarks or copyrights)? If yes, please explain. No, all are personal property. (g) Does the law apply differently to sub-licenses versus main licenses? No. 8

9 (h) Does the law apply differently to sole or exclusive licenses versus nonexclusive licenses? No. (i) Does the law apply differently if the bankrupt party is the licensee versus the licensor? No. (j) Please explain any other pertinent aspects of this law that have not been addressed in the sub-questions above. N/A. 5. WOULD A CHOICE OF LAW PROVISION IN AN IP LICENSE AGREEMENT BE CONSIDERED DURING A BANKRUPTCY OR INSOLVENCY PROCEEDING IN YOUR COUNTRY? IS THIS AFFECTED BY THE NATIONALITIES OF THE PARTIES TO THE IP LICENSE OR BY THE PHYSICAL LOCATION OF THE ASSETS INVOLVED? An external administration commenced in Australia would be governed by Australian law. A choice of law provision agreed between the parties would not generally be effective to circumvent that application of Australian insolvency law to the administration. However, a choice of law provision will be relevant in proceedings that are commenced against a company in an external administration to enforce the terms of an IP licence agreement (where such proceedings are capable of being issued and not subject to a statutory moratorium). A choice of law provision will be considered by a court in interpreting such an agreement in an insolvency context just as it would in the context of a solvent entity. 6. WOULD A CLAUSE PROVIDING THE SOLVENT PARTY IN AN IP LICENSE AGREEMENT THE RIGHT TO TERMINATE OR ALTER AN IP LICENSE BE CONSIDERED ENFORCEABLE DURING A BANKRUPTCY OR INSOLVENCY PROCEEDING IN YOUR COUNTRY? Where the insolvent party is a corporate entity yes. Where the insolvent party is an individual person no. WOULD THE ANSWER BE DIFFERENT IF THE CLAUSE PROVIDES FOR AUTOMATIC TERMINATION AS OPPOSED TO AN OPTIONAL RIGHT TO TERMINATE? No 7. WOULD A CLAUSE IN AN IP LICENSE AGREEMENT THAT RESTRICTS OR PROHIBITS TRANSFER OR ASSIGNMENT OF THE IP LICENSE BE CONSIDERED ENFORCEABLE DURING A BANKRUPTCY OR INSOLVENCY PROCEEDING IN YOUR COUNTRY? Where the insolvent party is a corporate entity yes. 9

10 Where the insolvent party is an individual person no. 8. IN THE EVENT OF A TRANSFER OR ASSIGNMENT OF AN IP LICENSE RESULTING FROM A BANKRUPTCY OR INSOLVENCY PROCEEDING, WHAT ARE THE RIGHTS AND OBLIGATIONS BETWEEN THE TRANSFEREE AND THE REMAINING, ORIGINAL PARTY OR PARTIES TO THE IP LICENSE? DOES IT MATTER IF THE INSOLVENT PARTY IS A LICENSOR, A LICENSEE, OR A SUB- LICENSEE? This will generally be a contractual matter which turns on the provisions of the original licence and any subsequent transfer/amendment agreement agreed as between the transferee and the licensor. The Copyright Act 1968 (Cth) provides (at section 196(4)) that a licence granted in respect of a copyright by the owner of that copyright binds every successor in title to the interest in the copyright of the grantor of the licence to the same extent that the licence was binding on the grantor. 10

11 9. IN THE EVENT AN IP LICENSE IS TERMINATED DURING A BANKRUPTCY OR INSOLVENCY PROCEEDING IN YOUR COUNTRY, WOULD THE LICENSEE BE ABLE TO CONTINUE USING THE UNDERLYING IP RIGHTS (AND IF SO, ARE THERE ANY LIMITATIONS ON SUCH USE)? DOES THE (FORMER) LICENSEE HAVE A CLAIM TO OBTAINING A NEW LICENSE? Generally no, but this is subject to the discussion above in relation to the limitations on a receiver's ability to repudiate pre-appointment contracts (see section 4(a)(iii)) and the ability of a party aggrieved by a liquidator's decision to disclaim property to seek to have such a disclaimer set aside (see section 4(a)(iv)). 10. IF IP RIGHTS THAT ARE JOINTLY OWNED BY TWO PARTIES HAVE BEEN LICENSED TO A LICENSEE BY ONE OR BOTH OF THE JOINT OWNERS, AND ONE OF THE JOINT OWNERS BECOMES INSOLVENT, HOW WOULD THE IP LICENSE BE TREATED IN A BANKRUPTCY OR INSOLVENCY PROCEEDING IN YOUR COUNTRY? COULD THE IP LICENSE BE TERMINATED EVEN IF THIS WOULD RESULT IN TERMINATION OF AN AGREEMENT BETWEEN THE SOLVENT, JOINT RIGHTS OWNER AND THE SOLVENT LICENSEE? This will be a contractual matter which turns on the provisions of the licence. If the licence enables termination by any party on one of the licensors becoming insolvent then this will be upheld under Australian law. 11. ARE THERE NON-STATUTORY BASED STEPS THAT LICENSORS AND LICENSEES SHOULD CONSIDER IN YOUR COUNTRY TO PROTECT THEMSELVES IN INSOLVENCY SCENARIOS, E.G., THE CREATION OF A DEDICATED IP HOLDING COMPANY, CREATION OF A PLEDGE OR SECURITY INTEREST IN THE LICENSED IP FOR THE BENEFIT OF THE LICENSEE, REGISTRATION OF THE LICENSE, AND/OR INCLUSION OF CERTAIN TRANSFER OR LICENSE CLAUSES? Yes see 1 and 4(d) above. II. POLICY CONSIDERATIONS AND PROPOSALS FOR IMPROVEMENTS TO YOUR CURRENT SYSTEM 12. IF YOUR COUNTRY HAS A REGISTRATION SYSTEM FOR IP LICENSES, IS IT CONSIDERED USEFUL? IS IT CONSIDERED BURDENSOME? ARE THERE ASPECTS OF THE SYSTEM THAT COULD BE IMPROVED? The extent of the registration system in Australia in respect of IP licences is described at 1 and 4(d) above. In as much as registration grants licence holders the additional rights described in those sections, it is considered useful. The registration process is not particularly burdensome. One aspect of the system that could perhaps be improved is to extend and harmonise the IP licence registration regime to cover forms of IP that it presently does not apply to, such as designs and plant breeders' rights. 13. IF THE LAW THAT GOVERNS BANKRUPTCY AND INSOLVENCY PROCEEDINGS IN YOUR COUNTRY DOES NOT ADDRESS IP RIGHTS OR IP LICENSES AS DISTINCT FROM OTHER TYPES OF CONTRACTS, ASSETS, 11

12 AND PROPERTY RIGHTS, SHOULD IT DO SO? IF YES, SHOULD THE LAW BE STATUTORY? There does not at present appear to be a compelling case in Australia for treating IP rights and IP licenses differently from other types of property or contracts in the context of bankruptcy or insolvency proceedings. 12

13 14. WITH REGARD TO A BANKRUPTCY ADMINISTRATOR S ABILITY TO ADOPT, ASSIGN, MODIFY, OR TERMINATE AN IP LICENSE UNDER THE CURRENT LAW OF YOUR COUNTRY, ARE THERE ASPECTS OF THIS LAW THAT COULD OR SHOULD BE IMPROVED TO LIMIT THIS ABILITY? SHOULD EQUITABLE OR PUBLIC POLICY CONSIDERATIONS BE TAKEN INTO ACCOUNT? In Australia, a party's ability to assign, modify or terminate an IP licence will generally be governed by the terms of that licence. The appointment of an administrator, receiver or liquidator to a party will not grant to the party greater rights than the party would otherwise have had under the licence. There does not at present appear to be a compelling case in Australia to introduce laws that would have the effect of changing commercial bargains struck between an IP licensor and licensee. As discussed at 4(a) above, whilst administrators, receivers and liquidators may have the ability to cause a company to which they have been appointed to breach, repudiate or disclaim any IP licence to which the company is a party, such action would allow counterparties to prove in the insolvency of the company in respect of any resulting loss suffered by the counterparty, and in the case of receivers, the ability to repudiate contracts, including IP licence, is already tempered by equitable principles. Present Australian laws would therefore appear to be adequate in this respect. 15. ARE THERE OTHER CHANGES TO THE LAW IN YOUR COUNTRY THAT YOU BELIEVE WOULD BE ADVISABLE TO PROTECT IP LICENSES IN BANKRUPTCY? IF YES, PLEASE EXPLAIN. As stated at 13 above, there does not at present appear to be a compelling case in Australia for treating IP rights and IP licences differently from other types of property or contracts in the context of bankruptcy or insolvency proceedings. III. PROPOSALS FOR SUBSTANTIVE HARMONISATION THE GROUPS ARE INVITED TO PUT FORWARD PROPOSALS FOR THE ADOPTION OF HARMONISED LAWS IN RELATION TO TREATMENT OF IP LICENSES IN BANKRUPTCY AND INSOLVENCY PROCEEDINGS. MORE SPECIFICALLY, THE GROUPS ARE INVITED TO ANSWER THE FOLLOWING QUESTIONS WITHOUT REGARD TO THEIR EXISTING NATIONAL LAWS. 16. IS HARMONIZATION OF LAWS RELATING TO TREATMENT OF IP LICENSING IN BANKRUPTCY AND INSOLVENCY PROCEEDINGS DESIRABLE? In hypothetical terms, a case could be made to argue that greater harmonization of laws as between national jurisdictions in relation to the treatment of IP licensing in bankruptcy and insolvency could be desirable for both IP licensors and licensees. However, in practice, bringing about such changes does not appear feasible at present. 13

14 17. PLEASE PROVIDE A STANDARD THAT YOU CONSIDER TO BE BEST IN EACH OF THE FOLLOWING AREAS: (a) What restrictions, if any, should be placed on a bankruptcy administrator s ability to adopt, assign, modify, or terminate an IP license in the event of bankruptcy of a party to that license? Should these restrictions be statutory? The assignment, modification or termination of IP licences should be governed by the terms of those licences (ie, the commercial bargain struck by the parties to the IP licence). The appointment of an administrator, receiver or liquidator to any party to the IP licence should not grant that party greater rights than the party would otherwise have enjoyed under the terms of the IP licence. In other words, no restrictions should be placed on a bankruptcy administrator s ability to adopt, assign, modify, or terminate an IP licence in the event of bankruptcy of a party to that licence apart from those already contained in the terms of the IP licence in respect of the relevant party. (b) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon pre-bankruptcy registration of the IP license? N/A. (c) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon whether the bankrupt party is the licensor or a licensee? N/A. (d) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon whether the licensee has a security interest in the underlying IP rights? N/A. (e) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon whether the license is a sub-license or a main license? N/A. (f) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon whether the license is sole, exclusive or nonexclusive? N/A. (g) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon the type or types of IP rights that are licensed in the IP license? N/A. 14

15 (h) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon equitable or public policy considerations? N/A. (i) With regard to sub-paragraph 17(a) above, to what degree, if at all, should such restrictions depend upon the language of the license itself, eg, a right to terminate upon insolvency or a prohibition against assignment? Any restrictions on the assignment, modification or termination of an IP licence should be governed primarily by the terms of the licence. (j) In the event a bankruptcy or insolvency proceeding in your country involves treatment of an IP license between a domestic entity and a foreign entity, which national bankruptcy laws should be applied? Should this depend on the choice of law clause in the IP license? Should this depend on the physical location of the entities or the assets involved? See above. 15

16 18. TO THE EXTENT NOT ALREADY STATED ABOVE, PLEASE PROPOSE ANY OTHER STANDARDS THAT YOU BELIEVE WOULD BE APPROPRIATE FOR HARMONIZATION OF LAWS RELATING TO TREATMENT OF IP LICENSES IN BANKRUPTCY AND INSOLVENCY PROCEEDINGS. N/A THE GROUPS ARE INVITED TO COMMENT ON ANY ADDITIONAL ISSUES CONCERNING ANY ASPECT OF IP LAW AND INSOLVENCY THAT THEY DEEM RELEVANT. N/A Summary There does not appear to be a compelling case in Australia for treating IP rights and IP Licences differently from other types of property or contracts in the context of corporate insolvency. Generally, corporate insolvency law does not distinguish between IP rights or IP Licences and other types of rights and does not modify the pre-insolvency position. Accordingly, an IP Licence will continue to govern an insolvent party's ability to modify, assign or terminate. It is very common for an IP Licence to allow termination if a party suffers an insolvency event. While there is no registration system specifically for IP Licences, there are public registers for patents, trade marks and designs for recordal eg, a recorded exclusive licensee of a patent and an authorised user of a registered trade mark each have standing to sue for infringement. There are general provisions in corporate insolvency law that modify the pre-insolvency legal position with respect to contracts that may apply to IP contracts (eg voiding arrangements that circumvent the statutory priority regime or serve to strip a company of assets on the onset of insolvency). In the context of bankruptcy (applicable to individuals only) certain contractual provisions relating to IP are deemed to be void. Résumé Il ne semble pas qu il soit envisageable en Australie de traiter les droits de PI et les licences de PI différemment des autres types de propriété ou de contrats dans le cadre de l insolvabilité des entreprises. En règle générale, la loi sur l insolvabilité des entreprises ne distingue pas les droits de PI et les licences de PI des autres types de droits et elle ne modifie pas non plus la procédure de pré-insolvabilité. En conséquence, une licence de PI continuera à déterminer la capacité de 16

17 la partie insolvable à modifier, céder ou résilier un tel contrat. Il est très fréquent qu une licence de PI autorise la résiliation si une partie fait l objet d une procédure d insolvabilité. Alors qu il n existe aucun système d enregistrement spécifique aux licences de PI, il y a des registres publics pour l inscription des brevets, marques, et dessins et modèles. Par exemple, le titulaire inscrit de la licence exclusive d un brevet et un utilisateur habilité d une marque déposée ont chacun qualité pour intenter une action pour violation. La loi sur l insolvabilité des entreprises comprend des dispositions générales modifiant la procédure de pré-insolvabilité en ce qui concerne les contrats qui peuvent s appliquer aux contrats relatifs au droit de PI (par ex. les dispositions qui établissent la nullité et qui contournent le cadre prioritaire réglementaire ou qui servent à démembrer une société de ses actifs dès la survenance de l insolvabilité). Dans le cadre d une procédure de faillite (applicable aux particuliers), certaines dispositions contractuelles en matière de PI sont réputées nulles. Zusammenfassung Es scheint in Australien keine zwingende Notwendigkeit zu bestehen, IP-Rechte und IP- Lizenzen im Kontext von Unternehmensinsolvenzen anders zu behandeln als sonstige Formen von Eigentum oder Verträgen. Allgemein unterscheidet das Insolvenzrecht für Unternehmen nicht zwischen IP-Rechten oder IP-Lizenzen und anderen Rechtearten, so dass die Rechtslage im Vorfeld der Insolvenz unverändert bleibt. Entsprechend wird sich das Änderungs-, Übertragungs- oder Kündigungsvermögen einer zahlungsunfähigen Partei auch weiterhin nach einer IP-Lizenz richten. Es ist nicht unüblich, dass eine IP-Lizenz die Kündigung zulässt, wenn eine Partei in Insolvenz geht. Obwohl ein Registrierungssystem speziell für IP-Lizenzen fehlt, so gibt es doch öffentliche Register zur Eintragung von Patenten, Marken und Designs z. B. sind ein eingetragener Inhaber einer Exklusivlizenz auf ein Patent und ein autorisierter Nutzer einer eingetragenen Marke berechtigt, gegen Verletzungen ihrer entsprechenden Rechte gerichtlich vorzugehen. Das Insolvenzrecht für Unternehmen bietet allgemeine Bestimmungen, mit denen im Vorfeld der Insolvenz die Rechtslage in Bezug auf solche Verträge verändert wird, die für IP- Verträge gelten können (z. B. Feststellung der Nichtigkeit von Vereinbarungen, die gesetzliche Vorrangigkeitsregelungen umgehen oder dazu dienen, Aktiva eines Unternehmens bei eintretendem Insolvenzfall herauszulösen). Im Kontext einer Privatinsolvenz (nur der Konkursfall einer Einzelperson) gelten bestimmte Vertragsbestimmungen mit IP-Bezug als nichtig. 17