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Hastings Law Journal

Abstract

One consequence of the technology explosion in the last decade was the dominance of a wide variety of commercial technology collaborations and alliances. As parties to those alliances are discovering in the current recession, the bankruptcy of one party to those transactions can create serious problems for other parties, especially with respect to the relevant intellectual property rights. Trustees in bankruptcy and bankruptcy lawyers are learning how to exploit vulnerabilities in the structure of collaborations to the growing distress of the intellectual property and technology community. This Note addresses some of the legal and practical issues that arise in these bankruptcy cases, as well as the viability of defensive strategies that the technology companies and intellectual property owners are using as they adapt their forms and practices to prevent adverse past experiences from occurring in future bankruptcy cases.

It is clear that the law in this area currently fails to ensure that parties to intellectual property and other agreements retain the important rights they bargained for in the face of a bankruptcy proceeding. This Note suggests that, for the time being, parties must have the foresight to strategically account for these potential pitfalls in bankruptcy when structuring and drafting agreements, at least until Congress responds with a more effective legislative scheme that balances competing bankruptcy and intellectual property policy goals.

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