Patent Office-Busan Rehabilitation Court, Supporting the Rebound of Insolvent Companies in Busan-Ulsan-Gyeongnam Region

The Korean Intellectual Property Office (KIPO) and the Busan Rehabilitation Court have joined forces to support the revival of bankrupt companies in the Busan, Ulsan, and Gyeongnam (hereinafter referred to as Bu-Ul-Gyeong) region.

On the 17th, KIPO announced that it signed a Memorandum of Understanding (MOU) with the Busan Rehabilitation Court to promote the utilization of intellectual property rights (IP) by companies undergoing rehabilitation and bankruptcy.

The agreement focuses on supporting companies rooted in the Bu-Ul-Gyeong region to achieve economic recovery and normalization through the use of IP.

Based on the agreement, companies under rehabilitation in the Bu-Ul-Gyeong region will be able, with court approval, to repay certain debts after selling collateralized IP through the “IP Collateral Loan Recovery Support Organization,” which consists of KIPO, the Korea Invention Promotion Association, and Intellectual Discovery Inc.

The IP Collateral Loan Recovery Support Organization plays a role in reducing financial institutions' losses by purchasing collateral IP from banks when small and medium-sized enterprises default on loans secured by IP.

Additionally, companies can have rehabilitation opportunities through KIPO’s “Sale & License Back (SLB) program.”

This program supports companies’ debt repayment by purchasing collateral IP from them while granting a license to use the collateral IP, enabling companies to continue using the IP.

The structure supports both the rehabilitation process and normalization by allowing companies to raise funds through the sale of collateral IP and granting priority rights to repurchase the collateral IP depending on circumstances.

In this process, KIPO mediates the sale of IP from bankrupt companies through specialized personnel, and the court facilitates smooth proceedings by paying brokerage fees.

Through this support, bankrupt companies are expected to liquidate IP more quickly and efficiently.

KIPO and the Busan Rehabilitation Court foresee that this agreement will play a crucial role in enabling companies undergoing rehabilitation and bankruptcy procedures to effectively utilize intellectual property rights to repay debts and rebuild their economic foundations.

Kim Wanki, Commissioner of KIPO, stated, “The agreement is significant in that it expands support for bankrupt companies, which had been limited to the metropolitan area, to the Bu-Ul-Gyeong region. KIPO and the Busan Rehabilitation Court will continue to provide unwavering support so that companies under rehabilitation and bankruptcy can overcome crises by utilizing IP.”

Kwon Sunho, Chief Judge of the Busan Rehabilitation Court, said, “The agreement is meaningful in that it covers both corporate rehabilitation and corporate bankruptcy procedures. Through this agreement, rehabilitating companies will have the opportunity to restart by selling IP and receiving licenses at a low cost, and creditors of bankrupt companies will have increased chances of debt recovery.”

This content was produced with the assistance of AI translation services.