In In re Catapult Entertainment, Inc., what prevented Catapult from assuming the licenses without the licensor's consent?

In In re Catapult Entertainment, Inc., what prevented Catapult from assuming the licenses without the licensor's consent?

• A. The debtor-in-possession may assume without consent.
• B. The licenses were terminated.
• C. The licensor's consent is not required for nonexclusive licenses.
• D. Federal patent law requires licensor's consent for nonexclusive licenses.

Answer: (B)

The key idea is that in bankruptcy, you can only assume an IP license if the license is still active and considered an executory contract that can be cured or honored. If the licensor has terminated the license, there’s nothing left to assume. In Catapult, the licenses were terminated by the licensor (often due to insolvency or breach provisions), so there was no license to take on behalf of the debtor. The debtor-in-possession can’t assume something that no longer exists, and termination removes that option. Why the other thoughts don’t fit: a debtor-in-possession cannot assume licenses without the licensor’s consent and the required cure; licenses aren’t automatically eligible for assumption just because they’re nonexclusive, and patent law doesn’t create a blanket rule forcing licensor consent for nonexclusive licenses. The actual obstacle here was that the licenses had been terminated.

The key idea is that in bankruptcy, you can only assume an IP license if the license is still active and considered an executory contract that can be cured or honored. If the licensor has terminated the license, there’s nothing left to assume. In Catapult, the licenses were terminated by the licensor (often due to insolvency or breach provisions), so there was no license to take on behalf of the debtor. The debtor-in-possession can’t assume something that no longer exists, and termination removes that option.

Why the other thoughts don’t fit: a debtor-in-possession cannot assume licenses without the licensor’s consent and the required cure; licenses aren’t automatically eligible for assumption just because they’re nonexclusive, and patent law doesn’t create a blanket rule forcing licensor consent for nonexclusive licenses. The actual obstacle here was that the licenses had been terminated.