PhD thesis defence by Guillem Gabriel Pizarro
Innovation and insolvency literature has so far predominantly examined access to capital, scrutinising whether national insolvency frameworks favour debtors or creditors and how this dynamic influences innovative activity. While debtor-friendly regimes are often praised for providing a ‘fresh start’ for insolvent entrepreneurs (thereby lowering the costs of financial failure and encouraging high-risk, high-reward ventures), much of the research has concentrated on debtor protections and the general body of creditors’ recovery, neglecting the importance of individual non-insolvent third parties, such as licensees, for innovation. In this regard, national insolvency frameworks rarely address intellectual property (‘IP’) licenses and typically default to general executory contract rules per inertia, with only a few jurisdictions adopting specific legislation on their treatment.
The present work seeks to address this gap, arguing that, in today’s knowledge-based economy, maintaining ongoing access to knowledge (licensed IP rights) can be as crucial as securing the initial capital for innovation. Many actors depend on the continued availability of licensed rights as a fundamental component of their business models; yet, their interests are frequently neglected in favour of financial restructuring and fresh-start policies. Moreover, the global proliferation of IP licensing, combined with complex interdependencies, exacerbates the regulatory gap, potentially stifling innovation and prompting questions as to whether special insolvency legislation is necessary. Employing a comparative law and economics perspective grounded in new institutional economics, this study examines how different national restructuring regimes influence economic outcomes, shape parties’ strategic behaviours, and might impact innovation ecosystems. It identifies the strategic hold-ups and moral hazards’ issues arising ex-ante and ex-post, emphasising the limitations inherent in private ordering unless substantial and often impractical investment safeguards are made. The research concludes that regulatory inertia poses significant risks to innovation and acknowledges the lack of an optimal national legislative model. In parallel, the findings suggest that those jurisdictions with special provisions governing termination are better equipped to mitigate the most critical risks. On the basis of these conclusions, and given the renewed interest in the insolvency harmonisation project, the thesis proposes EU-targeted policy recommendations along those lines.
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