Section 365(n) of the Bankruptcy Code provides offers substantial protection for licensees when a licensor files for bankruptcy. In a bankruptcy proceeding, a licensor/executor has the option of either accepting and continuing an intellectual property license agreement, or rejecting the license. If an intellectual property license is rejected, a licensee is afforded beneficial options under the Code. The Bankruptcy Code defines “intellectual property” in Section 101 (35A) as a-

In Lodge v. Kondaur Capital Corp., Case No. 13-10919 (decided May 8, 2014), the United States Court of Appeals for the Eleventh Circuit decided an issue that it never previously addressed: whether a party could recover damages under 11 U.S.C. § 362(k) for emotional distress resulting from another party’s violation of the automatic stay in bankruptcy. In Lodge, the Court held that such damages were recoverable but could not be recovered in the particular circumstances of that case.

In Durango-Georgia Paper Co. v. H. G. Estate, LLC, Case No. 11-15079 (decided January 7, 2014), the Eleventh Circuit addressed what it defined as a question of first impression: “whether under ERISA the trustee of a corporation that is a contributing sponsor and is in bankruptcy can maintain an action for the benefit of the bankruptcy estate and the estate’s unsecured creditors against the corporation’s former owner … for liabilities arising from the termination of a pension plan.” Opinion, p. 5. The Court held that the answer is “no.”

A bankruptcy court in Texarkana, Texas held that breaches by two debtor-franchisees of a non-competition covenant in their franchise agreement with a print shop franchisor qualified for discharge through bankruptcy.  As the court noted, in addition to equitable remedies such as injunctive relief, Michigan law (under which the franchise agreement was governed) allowed for the award of monetary damages as compensation for violation of a non-competition agreement.  Because monetary damages were an available remedy, the court reasoned, the breach of the covenant qualified as a dischar