The U.S. Court of Appeals for the Third Circuit recently affirmed its expansive definition of what constitutes an intellectual property license in In re Spansion, 2012 U.S. App. LEXIS 26131 (3d. Cir. Dec. 21, 2012). The Third Circuit clarified that a license need not be expressly labeled as such or formally grant intellectual property rights, but instead is a mere waiver by the holder of intellectual property of its right to sue. From a bankruptcy perspective, the characterization of an agreement that contains a covenant not to sue for intellectual property infringement as a license is significant, because the Bankruptcy Code allows an intellectual property licensee to retain its rights under a license notwithstanding rejection of the license by the debtor-licensor.
Background
