The economic fallout from the COVID-19 pandemic has hit all industries in Germany. To mitigate the negative impacts of the pandemic, the government has implemented loan programs and introduced various emergency measures via the COVID-19 Insolvency Suspension Act (COVInsAG), such as temporarily suspending the obligation to file for insolvency and limiting the personal liabilities of the managing directors. As a result, the number of insolvency proceedings in Germany is decreasing significantly.
After the Corporate Insolvency and Governance Bill (CIGB) was published on 20 May 2020, it raced through the House of Commons and House of Lords and, on 26 June 2020 (in under 6 weeks) came into force as the Corporate Insolvency and Governance Act 2020 (CIGA), with certain of the temporary measures taking effect from 1 March 2020.
How was the CIGB received?
Consequences and contractual options
Licensors of intellectual property rights may soon be unable to terminate licences where the licensee has gone into an insolvency process.
What are ipso facto clauses and why do they matter?
As the impact of COVID-19 is felt throughout the economy, even those companies able to weather the storm are likely to feel the effects of corporate insolvency as collaborators, customers and suppliers find themselves in financial difficulty. This article focuses on the impact of insolvency on IP licences from the perspective of both licensors and licensees. It also contains our top tips for mitigating the risks.
How do you safeguard your interests if you find yourself dealing with a company that enters an insolvency process or is at risk of insolvency, whether as a contract counterparty or in a dispute? Conversely, if you find prospective contract counterparties raising concerns about your company's solvency, what protections might you be able to offer your counterparty in order to continue the relationship?
As a rule, Belgian insolvency law does not tackle the issue of IP rights or licensing agreements in the event of insolvency proceedings. Their fate will therefore be subject to the general provisions of Belgian insolvency law, which vary depending of the type of insolvency proceedings concerned.