2006 Code of Virginia § 59.1-505.10 - Financing arrangements; remedies or enforcement

59.1-505.10. Financing arrangements; remedies or enforcement.

(a) Except as otherwise provided in subsection (b), on material breach of afinancial accommodation contract by the accommodated licensee, the followingrules apply:

(1) The financier may cancel the financial accommodation contract.

(2) Subject to paragraphs (3) and (4), the financier may pursue its remediesagainst the accommodated licensee under the financial accommodation contract.

(3) If the financier became a licensee and made a transfer or sublicense thatwas effective under 59.1-505.8, it may exercise the remedies of a licensorfor breach, including the rights of an aggrieved party under 59.1-508.15,subject to the limitations of 59.1-508.16.

(4) If the financier did not become a licensee or did not make a transferthat was effective under 59.1-505.8, it may enforce a contractual rightcontained in the financial accommodation contract to preclude the licensee'sfurther use of the information. However, the following rules apply:

(A) The financier has no right to take possession of copies, use theinformation or informational rights, or transfer any contractual interest inthe license.

(B) If the accommodated licensee agreed to transfer possession of copies tothe financier in the event of material breach of the financial accommodationcontract, the financier may enforce that contractual right only if permittedto do so under subsection (b) (1) and 59.1-505.3.

(b) The following additional limitations apply to a financier's remediesunder subsection (a):

(1) A financier described in subsection (a) (3) which is entitled under thefinancial accommodation contract to take possession or prevent use ofinformation, copies, or related materials may do so only if the licensorconsents or if doing so would not result in a material adverse change of theduty of the licensor, materially increase the burden or risk imposed on thelicensor, disclose or threaten to disclose trade secrets or confidentialmaterial of the licensor, or materially impair the licensor's likelihood orexpectation of obtaining return performance.

(2) The financier may not otherwise exercise control over, have access to, orsell, transfer, or otherwise use the information or copies without theconsent of the licensor unless the financier or transferee is subject to theterms of the license and:

(A) the licensee owns the licensed copy, the license does not precludetransfer of the licensee's contractual rights, and the transfer complies withfederal copyright law for the owner of a copy to make the transfer; or

(B) the license is transferable by its express terms and the financierfulfills any conditions to, or complies with any restrictions on, transfer.

(3) The financier's remedies under the financial accommodation contract aresubject to the licensor's rights and the terms of the license.

(2000, cc. 101, 996.)