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Tech Bankruptcy
March 31, 2008
  Exclusive patent license deemed non-assignable
In a non-bankruptcy case, Proteotech, Inc. v. Unicity International, Inc., 542 F. Supp. 2d 1216; 87 U.S.P.Q. 2d 1317 (W.D. Wash.), a Federal District Court has held that an exclusive patent license is not freely assignable absent the licensor's consent. In reaching this decision, the Court reached out to the bankruptcy court decisions in In re Hernandez, 285 B.R. 435 (Bankr. D. Ariz. 2002) and In re Aerobox Composite Structures, 373 B.R. 135 (Bankr. D.N.M. 2007).

The plaintiff, Proteotech, had granted an exclusive patent license to Rexall Sundown, Inc. The license did not contain any relevant provisions regarding sublicensing of the patent rights. Rexall then granted a non-exclusive license of the technology to the defendant, Unicity. In 2006, Proteotech sued Unicity alleging patent infringement, among other things. Proteotech claimed that because Rexall had no authority to sublicense the patent rights, Unicity had not received any right to practice the patent and thus was violating the patent.

The Court noted the controlling precedent of In re CFLC, Inc. (Everex) with respect to non-exclusive patent licenses, but still was faced with the question of whether an exclusive patent license was non-assignable. Following Hernandez, the District Court held that exclusive patent licenses are, by default, non-assignable.

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March 10, 2008
  Selling a Domain Name Online
Usually, I post about a new case, or interesting article. But, I haven't seen anything in a while. So, I thought I'd put up a post about a pending sale of a domain name, ECO.ORG, I'm handling for another chapter 7 trustee.

The name originally belonged to The Environmental Careers Organization, Inc., a non-profit which helped place interns in ecology friendly jobs using grant money. When they had some problems involving the use of EPA grants, they closed their doors and filed a chapter 7 petition.

So that's the background. ECO.ORG seemed like a pretty good name - but not top dollar. I did some background research and spoke to one investment banker who deals with million dollar domain names - and found out that the market is mostly driven these days by "domainers" who want to park generic domain names and pick up advertising revenue. The game is to get the website picked up by search engines, and feed visitors advertisements. Apparently, domain names will sell for about 1x expected revenue, and something like ECO.ORG might generate $100,000 or so a year. Not too shabby. But not rich enough for the investment bankers.

So, I had to look elsewhere. The premier place to auction off domain names these days seems to be a website called Sedo.com. You can list a domain name there, and troll for offers. Or, you can put the name up for auction. If the name is a good quality name - generally defined as a generic term or 2 or 3 letter word in the .com Tld - you can submit the name for inclusion in Sedo's GreatDomains auction. The GreatDomains auction runs once a month, auctioning off a large number of names at the same time. Sort of the Christies of the domain name world. I spoke to a fellow at Sedo, with the auspicious title of "chief negotiator" and he seemed willing to let me auction ECO.ORG on GreatDomains. After watching their March auction (eggs.com sold for over $100,000), I decided this was the route to use.

But, GreatDomains' audience is mostly domainers. I wanted to reach non-profits and sellers of consumer goods, or perhaps other strategic purchasers. So, I decided to also prepare and issue a press release. These days, issuing press releases is fairly easy. I used a service called PRweb, which gets the release issued on a number of on-line news feeds as well as the AP feed. Because the debtor's original chapter 7 filing had been newsworthy, the press release worked off the insolvency angle and the fact that the company was selling its domain name to pay creditors. I picked a May auction date, and advertised the date in the press release. I used a long lead time because trade magazines have a fairly long publication cycle.

So, we will see what happens. The court approval process is underway, the press release goes out in a day or two, and maybe we will get some great bids.

So, we will see what happens.

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

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Location: Boston, Massachusetts, United States

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.

Exclusive patent license deemed non-assignable
Selling a Domain Name Online
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