6th Circuit decision on IP license transfers through intra-corporate mergers

The Sixth Circuit today held that a copyright (or patent) license that expressly provides that it is non-assignable or non-transferrable is breached when (1) the licensee merges with its corporate sibling entity, (2) the licensee is not the surviving entity, and (3) state law provides that the surviving entity owns all the assets of the constituent entities.

The court noted that even if the license hadn’t expressly addressed assignability or transferability, federal common law would have led to the same result because its default rule prohibits transfer of a patent or copyright license without authorization.

The case is Cincom Systems, Inc. v. Novelis Corp., No. 07-4142 (6th Cir. Sept. 25, 2009).