As published in the Canada Gazette last week, amendments to the Bankruptcy and Insolvency Act (BIA) and Companies’ Creditors Arrangement Act (CCAA) relating to IP licenses when the IP licensor becomes insolvent, will come into force November 1, 2019. These amendments were included in Budget Implementation Act, 2018, No. 2 (Bill C-86). I discussed these amendments in my recent article for Slaw, Intellectual Property Licenses in Bankruptcy Scenarios.

My article, Intellectual Property Licenses in Bankruptcy Scenarios, discusses these amendments, how they expand on the related 2009 amendments and some of the (limited) case law on these sections.

The legislation (see Bill C-86) as described in the Canada Gazette Part II (link):

The Intellectual Property Strategy aspect of the Plan amended IP laws to clarify acceptable practices and prevent misuse of IP rights. Currently, in BIA and CCAA restructuring, IP licensees in good standing can continue to use the IP if the debtor disclaims the licence. The amendments extend this right to liquidation proceedings (bankruptcies and receiverships) and asset sales. The following specific amendments achieve the objective of protecting IP user rights in cases where the IP licensor becomes insolvent:

• • Section 266 provides that an IP user in good standing can continue to use the IP if that IP is sold in a BIA restructuring;
  • Section 267 provides than an IP user in good standing can continue to use the IP if that IP is disclaimed or sold in a BIA liquidation;
  • Section 268 provides that an IP user in good standing can continue to use the IP if that IP is disclaimed or sold in a receivership; and
  • Section 269 provides that an IP user in good standing can continue to use the IP if that IP is sold in a CCAA restructuring.