Anti-Assignment Provisions, Copyright Licenses, and Intra-Group Mergers : The Effect of Cincom v. Novelis

At first blush, the decision in Cincom Systems, Inc. v. Novelis Corp. inspires an almost knee-jerk negative reaction. It strikes one as unfair and arbitrary that an anti-assignment provision in an intellectual property license would be triggered by a series of mergers within a single operating company (intra-group mergers) when no substantive change results. However, upon closer examination of the relevant law and competing interests, it becomes clear that the court came to a decision that is correct, if perhaps otherwise open to criticism.This Note argues that the formalist approach that should be applied for intellectual property licenses transferred by operation of law due to traditional corporate acquisitions should also be applied to transfers resulting from intra-group mergers. Part II of this Note provides a legal analysis of the circuit court decision in Cincom, concentrating on the conclusions of the respective courts in regard to corporate, contract, and intellectual property law. Part III explores the implications of the Cincom decision to both merger decision-making and contract negotiation. Part IV argues for the application of a formalist approach to non-acquisitive mergers. Part IV also explores and dismisses alternative approaches