Understanding the risk that a judgment for willful IP infringement may be discharged in bankruptcy

When a patent, copyright, or trademark holder wins a judgment for infringement of that IP, and the court awards extra damages because the infringement is willful, the judgment could be at risk if the infringer enters into bankruptcy.  A recent article by my colleagues Mike Reed and Tony Lovensheimer explains that when determining whether to discharge a willful infringement judgment in bankruptcy, the court examines not only whether the infringement was willful, but also whether the infringement was malicious.  These standards are not necessarily the same as the standard that applies to willfulness under intellectual property laws.  As the article explains:

if the infringer/debtor seeks bankruptcy protection, the IP owner could find its hard-earned judgment for willful infringement significantly devalued, maybe even rendered valueless.

The article provides several tips that IP owners should consider when asserting a claim for willful infringement of a patent, trademark or copyright.  As Mike and Tony explain:

IP owners have a much better chance at protecting their judgments from being discharged in bankruptcy if they begin their infringement actions with a plan to ensure that they obtain the factual and legal findings necessary to satisfy the standard for a debt to not be discharged in bankruptcy.

To read the full article, click here.

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