3 (a). Does a license agreement remain valid during an insolvency proceeding
Yes, a license agreement remains valid and enforceable if the trustee chooses to either fulfill a contract of the bankrupt party themselves or demand performance from the contractual partner. If the trustee chooses to refuse performance, the license agreement does not lapse but claims under the agreement are not enforceable for the duration of the insolvency proceedings. In this case, the solvent party has claims for damages that can be enforced only according to the German rules on insolvency proceedings. From an economic perspective, the right of the insolvency administrator to choose the non-fulfillment of the license equals a termination right.
3 (b). Is the trustee or receiver obliged to perform the obligations under a license agreement?
No, the trustee has the right to choose whether the contractual relationship should continue to be fulfilled by both parties or to refuse performance.
3 (c). What can a licensee do, if anything, to protect its right to use the licensed IPR?
At the moment, neither legislation nor case law provides a watertight solution for the licensee to protect its rights to use the licensed IPR against an insolvency of the licensor. However, different options are being discussed, such as the grant of a usufruct to the licensee. In any case, the potential insolvency of the licensor should be addressed in the license agreement.
3 (d). Can a licensor prevent a trustee or receiver from selling or transferring the insolvent licensee's rights under a license agreement?
If the trustee decides to continue the agreement, the contractual provisions of the license agreement govern the transfer of rights under the agreement. Thus, if the agreement prohibits the selling or transfer of rights under the agreement, the trustee cannot deviate from this. If the agreement allows the transfer, the trustee can do so.
In addition, if the trustee refuses performance, they are bound by the contractual provisions. However, even if the license agreement allows the transfer of the licensee's rights, since in this constellation claims under the agreement are not enforceable for the duration of the insolvency proceedings, a transfer is not possible.