1 (a). What are the general principles of the treatment of IP license agreements in insolvency proceedings? Is there a difference depending on the type of proceeding (e.g., a court-appointed receivership, a bankruptcy, a restructuring, etc.)?
Under Article 18 of the PRC Insolvency Law, the administrator in bankruptcy has the right to decide whether to terminate or continue to perform any outstanding contracts in insolvency proceedings. For IP license agreements that have not been fully performed before the commencement of the insolvency proceedings, its continuous performance or termination will be subject to the administrator's decision pursuant to the procedural steps outlined under Article 18.
All insolvency proceedings need to be approved and supervised by the courts in China and the application of Article 18 is irrespective of the type of insolvency proceedings.1 (b). What are the laws governing the treatment of IP license agreements in insolvency proceedings?
The treatment of IP licenses is mainly governed by the PRC Insolvency Law (Article 18) as outlined above. Depending on the specific IP rights of concern, the Trademark Law, Copyright Law, Patent Law and relevant judicial interpretations issued by PRC Supreme People's Court will also need to be considered.