  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
resolution process to the bankruptcy court for all other claim objections would fragment the process and create piecemeal litigation. In another case where the non-debtor filed a $28,512,482 proof of claim, the bankruptcy court lifted the stay to allow arbitration of the claim and debtor's objection thereto, finding no reason to disturb the federal courts' preference for arbitration of disputes.
Section 365(n) provides special protection for the non-debtor party where certain intellectual property rights are impacted by rejection of an executory contract. The debtor owned technology which it licensed to a third party and for which license it was entitled to receive royalties. The debtor sold the technology to a buyer, but not the license agreement or right to receive royalties. After its bankruptcy filing, the debtor rejected the license agreement under § 365(a), but the nondebtor licensee elected to retain the right to use the technology and continue to pay royalties under § 365(n). The asset buyer said that upon rejection, the debtor had no right to the technology, and the royalty payments should be paid to the buyer as the owner of the technology. The debtor argued that it was entitled to the royalty payment even though it had rejected the license because the payments were due under the license notwithstanding rejection by the effect of § 365(n). The Third Circuit held that the buyer was not entitled to the royalties, because it had excluded the license agreements from the assets it purchased, and the payments were due under the rejected license agreements.
The non-debtor licensees sought the protection of § 365(n) in using trademarks. However, in
