3 (a). Does a license agreement remain valid during an insolvency proceeding
Generally yes, subject to contractual provisions (such as those stipulating insolvency as an event of termination) and subject to the license agreement being disclaimed by the judicial manager or liquidator, or discharged by the court.
3 (b). Is the trustee or receiver obliged to perform the obligations under a license agreement?
Generally yes, subject to contractual provisions (such as those stipulating insolvency as an event of termination and anti-assignment provisions) and subject to the license agreement being disclaimed by the judicial manager or liquidator, or discharged by the court, until the underlying IPR is disposed of during the liquidation process.
3 (c). What can a licensee do, if anything, to protect its right to use the licensed IPR?
In the case of trademarks, a licensee should record the license in the trademark register, so that the world at large is deemed to have notice of the license. The license to use the registered trademark will then be binding on every successor in title to the grantor's interest, unless the license provides otherwise.
A licensee with sufficient bargaining power can request to contract with IP holding companies with little or no trading or business activities, so that liabilities are ring-fenced and there is consequently a lower risk of insolvency.
Otherwise, the licensee may seek to acquire the underlying IPR during the liquidation process.3 (d). Can a licensor prevent a trustee or receiver from selling or transferring the insolvent licensee's rights under a license agreement?
Practically, the licensor can build in contractual safeguards to pre-empt such a situation, such as providing for the licensee's insolvency as a termination event.