Treatment of intellectual property in the bankruptcy legal framework of the GCC states

Abstract

The Gulf Cooperation Council (GCC) states have made a number of efforts to reform bankruptcy laws in recent years. The modernization of bankruptcy law in GCC countries presents the question of how IP assets and bankruptcy proceedings relate and intertwine. Problems for insolvency proceedings centre on valuation. An even more complicated but extremely common scenario is when the IP is licensed. Licensing effectively creates a new ‘sub-bundle’ of rights from the original property rights. Another issue is the classification of a licence and whether it is a property right or a contractual right, or some type of hybrid creature. Complications are exacerbated by the fact that many IP licence agreements will contain an ipso facto clause. The purpose of this article is to address these issues by examining the laws of the UAE, Kuwait and Saudi Arabia, and how IP assets are treated in bankruptcy proceedings.