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Tech Bankruptcy
November 26, 2007
  Patent Act KOs Title 11
A few years ago I posted a blog about an interesting District Court decision, Morrow v. Microsoft Corporation, 2004 WL 1781010 (Aug. 10, 2004), which held that a chapter 11 plan could divide the ownership of a patent from the right to sue for infringement of that patent. In the underlying bankruptcy, the debtor's chapter 11 plan had established three liquidating trusts. One received the patent and another the right to bring infringement claims. When one trust sued Microsoft for patent infringment, Microsoft claimed the trustee (Morrow) lacked standing. The District Court for the Northern District of California disagreed. The court held the trustee had standing under the terms of the confirmed plan and general trust principles.

In September, the Federal Circuit reversed the decision at 499 F.3d 1332 (Fed. Cir. 2007). The Federal Circuit held that a plaintiff must have an interest in a patent in order to bring an infringement claim. To simplify (a lot, because I have other work to do), the requirement is constitutional in origin - a bankruptcy Court apparently can not circumvent the requirement through the provisions of Title 11 and confirmation of a Chapter 11 plan.

Because the creditor's trust holding the cause of action did not have an interest in the patent, the Trustee lacked standing to assert a claim against Microsoft for patent infringement. The Patent Act won.

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November 13, 2007
  Second Life Credit Card
I came across an interesting article recently about a credit card that is usable in the Second Life on-line world. Apparently, it links to your real life credit card, so purchases made in Second Life would be passed through as charges against your real world credit card. Obviously, there must be merchants who would have to accept these Second Life credit cards.
All this is interesting in and of itself, but, more importantly, it is pretty much a truism that where credit exists insolvency structures will soon follow. Will Second Life come up with its own ways of dealing with insolvencies?


A blog discussing the impact of technology on bankruptcy law and practice.

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Warren E. Agin is a partner in Swiggart & Agin, LLC, a boutique law firm in Boston, Massachusetts focusing on the needs of technology companies. Mr. Agin heads its bankruptcy department. The author of the book Bankruptcy and Secured Lending in Cyberspace (3rd Ed. West 2005), Mr. Agin also chaired the ABA's E-commerce and Insolvency Subcommittee from 1999 to 2005, co-chaired the Boston Bar Association's Internet and Computer Law Committee (2003-2005), and served on the American Bar Association's Standing Committee on Technology and Information Services (2008-2011). Mr. Agin currently co-chairs the Editorial Board of Business Law Today. A contributing editor to Norton Bankruptcy Law and Practice, 3d, and co-author of its chapter on intellectual property for the past fifteen years, he is author of numerous legal articles and addresses on topics of technology, internet and bankruptcy law.

Patent Act KOs Title 11
Second Life Credit Card
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