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?

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.

Handlungsbedarf und Handlungsoptionen

IP licensing and insolvency reform: ipso facto clauses

Licensors of intellectual property rights may soon be unable to terminate licenses where the licensee has gone into an insolvency process.

What are ipso facto clauses and why do they matter?

​On November 1, 2019, amendments to the Bankruptcy and Insolvency Act,R.S.C. 1985, c. B-3 (BIA) and the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 (CCAA) came into force. Among other changes described in our previous publication, these amendments expand the protection offered to intellectual property (IP) licensees in the event that the licensor enters insolvency.