Berlin

Germany's long-standing failure to legislate on the treatment of licences in insolvency is not merely a technical legal problem. It is a competitive disadvantage felt most acutely in the pharma and biotech sectors, where licence agreements sit at the heart of how patented compounds, platform technologies, and clinical-stage assets are commercialised. Uncertainty around a licensed IP position feeds directly into investment decisions, deal valuations, and the willingness of counterparties to engage with German entities at all. The adoption of Directive (EU) 2026/799 of the European Parliament and of the Council of 30 March 2026 on the harmonisation of certain aspects of insolvency law (the "Directive" or "Insolvency Directive") has changed the landscape – at least in part. The Directive entered into force on 21 April 2026, and Member States have until 22 January 2029 to transpose it into national law. For Germany, that transposition window is the first realistic legislative opening since 2012 to address the structural deficiencies of the Insolvenzordnung (InsO) as they apply to intellectual property licences.Both licensors and licensees who hold material IP positions governed by German law should take an active interest in the Directive as it resolves some of the risk, however, only partially. In the meantime, the existing legal framework continues to generate risks that are manageable through careful contractual and structural planning.

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