The Supreme Court of Israel recently clarified the distinction between fixed and floating charges under Israeli law. While the decision of the Supreme Court did not specifically address charges on intellectual property, the tests set forth by the Supreme Court will likely affect the characterization of charges on such intangible assets under Israeli law. This decision takes on additional importance in the current economic climate, which may see more IP-rich companies in insolvency situations or looking to use their intellectual property assets to secure financing.

Israel recently enacted a new Insolvency Law, which came into effect in September 2019. The statute substantially revises procedures and substantive rights in connection with corporate insolvency and bankruptcy. The law may allow debtor licensors more flexibility to terminate intellectual property license agreements.

Background and Analysis