Bankruptcy Treatment of Intellectual Property Assets: An Economic Analysis
Peter S. Menell
University of California, Berkeley - School of Law
March 1, 2007
Berkeley Technology Law Journal, Vol. 22, p. 733, 2007
With the rise of intellectual property in the modern economy, bankruptcy treatment of intellectual property assets has taken on ever greater importance. The law in this area must balance different approaches to asset management. Viewing the world from an ex ante perspective, intellectual property laws seek to foster investment in research and development. Freedom of contract plays a central role in maximizing the potential value of intellectual property by encouraging a robust licensing market to exploit the value of intellectual creativity. By contrast, the bankruptcy system generally views asset management from an ex post standpoint, focusing narrowly on how to maximize the value of a failing or failed enterprise. Thus, bankruptcy law affords trustees and debtors substantial leeway to rescind contracts and reorder the affairs of the failed entity. This article examines the rather complex rules governing the treatment of intellectual property assets in bankruptcy and suggests various reforms that could better promote economic efficiency.
Number of Pages in PDF File: 91
Keywords: bankruptcy, intellectual property, patents, copyrights, trademarks, trade secrets, opportunism, economic analysis
JEL Classification: K30, O34
Date posted: March 13, 2007 ; Last revised: January 16, 2012
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