Perlman

Appellant Stephen Perlman (“Perlman”) licensed certain patents to appellee Catapult Entertainment, Inc. (“Catapult”). He now seeks to bar Catapult, which has since become a Chapter 11 debtor in possession, from assuming the patent licenses as part of its reorganization plan. Notwithstanding Perl-man’s objections, the bankruptcy court approved the assumption of the licenses and confirmed the reorganization plan. The district court affirmed the bankruptcy court on intermediate appeal. Perlman appeals that decision. We are called upon to determine whether, in light of § 365(e)(1) of the Bankruptcy Code, a Chapter 11 debtor in possession may assume certain nonexclusive patent licenses over a licensor’s objection. We conclude that the bankruptcy court erred in permitting the debtor in possession to assume the patent licenses in question.

I.

Catapult, a California corporation, was formed in 1994 to create an online gaming network for 16-bit console videogames. That same year, Catapult entered into two license agreements with Perlman, wherein Perlman granted to Catapult the right to exploit certain relevant technologies, including patents and patent applications.

•In October 1996,…