Case 24-11649-CTG Doc 752 Filed 10/10/24 Page 1 of 8
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`IN THE UNITED STATES BANKRUPTCY COURT
`FOR THE DISTRICT OF DELAWARE
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`In re:
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`SUNPOWER CORPORATION, et al.1
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`Chapter 11
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`Case No. 24-11649 (CTG)
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`(Jointly Administered)
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`Related Docket No. 493
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`OBJECTION OF INTERNATIONAL DECISION SYSTEMS, INC D/B/A SOLIFI TO
`ASSUMPTION AND ASSIGNMENT OF LICENSE AGREEMENT
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`International Decision Systems, Inc d/b/a Solifi (“Solifi”), by and through its undersigned
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`counsel, objects to the assumption and assignment of a License and Support Agreement. In support
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`of this Objection, Solifi respectfully states as follows:
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`BACKGROUND
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`1.
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`On August 5, 2024, debtor SunPower Corporation (“SunPower”) and certain of its
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`affiliates (collectively, the “Debtors”) each filed a petition for relief pursuant to Chapter 11 of the
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`Bankruptcy Code.
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`2.
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`Solifi is a global, multi-asset, finance technology company that supplies platforms
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`for automotive finance, equipment finance, wholesale/floorplan finance, and working capital
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`solutions to enterprises across the globe. Declaration of Lukas Forseth (“Forseth Declaration”),
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`which is filed herewith, at ¶ 3.
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`1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax
`identification number, are: SunPower Corporation (8969); SunPower Corporation Systems (8962);
`SunPower Capital, LLC (8450); SunPower Capital Services, LLC (9910); SunPower HoldCo, LLC (0454);
`SunPower North America, LLC (0194); Blue Raven Solar, LLC (3692); Blue Raven Solar Holdings, LLC
`(4577); BRS Field Ops, LLC (2370); and Falcon Acquisition HoldCo, Inc. (3335).
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`Case 24-11649-CTG Doc 752 Filed 10/10/24 Page 2 of 8
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`A.
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`The Parties’ License Agreement
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`3.
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`Solifi and SunPower are parties to a License and Support Agreement (as amended
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`and supplemented, the “License Agreement”). A copy of the License Agreement is attached as
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`Exhibit A to the Forseth Declaration. Pursuant to the License Agreement, Solifi granted a
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`nonexclusive license of, among other things, software programs in object code format (the
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`“Product”) to SunPower. Forseth Decl., at ¶ 4.
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`4.
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`Under Section 2.2 of the License Agreement, Solifi granted to SunPower:
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`a limited, personal, non-exclusive, non-transferable, non-sublicensable license
`during the Use Period to: (a) download and install, on permitted servers owned or
`controlled by [SunPower] or authorized by [Solifi] under Section 3.3 of this
`Agreement, up to the number of copies of the Product, and any Updates thereto,
`provided by [Solifi] to [SunPower] specified on the Order Form; (b) permit
`Authorized Users and Outsourced IT Providers to use the Product and Updates
`provided by [Solifi] to [SunPower] in accordance with the Use Description and
`Documentation; in all cases, solely for the purposes of [SunPower’s] internal
`computing operations.
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`Forseth Decl., Ex. A at Sec. 2.2.
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`5.
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`The Product contains copyrighted material. Forseth Decl. at ¶ 5. According to 17
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`U.S.C. § 102, “Copyright protection subsists, in accordance with this title, in original works of
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`authorship fixed in any tangible medium of expression, now known or later developed, from which
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`they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of
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`a machine or device.” “Works of authorship” includes “literary works. Id. at § 102(a). “Computer
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`programs are entitled to copyright protection as ‘literary works.’” Dun & Bradstreet Software
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`Servs., Inc. v. Grace Consulting, Inc., 307 F.3d 197, 206 (3d Cir. 2002).
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`6.
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`Moreover, the Product includes copyright notices embedded in its code. Forseth
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`Decl. at ¶ 5.
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`7.
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`Under the License Agreement, Solifi also agreed to grant a limited, non-exclusive,
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`non-transferable license to SunPower in certain circumstances: (i) to reproduce and use the
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`Case 24-11649-CTG Doc 752 Filed 10/10/24 Page 3 of 8
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`Documentation, (ii) to use the APIs, (iii) for the “Production License” version of the Product; (iv)
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`to install copies of the Non-Production Product; and (v) to install copies of the Disaster Recovery
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`Product (as those capitalized terms are defined in the License Agreement). Id. at Secs. 2.4-2.8.
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`8.
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`The License Agreement also makes clear that Solifi “owns all right, title and
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`interest in and to the Supplier Technology, including all intellectual property rights therein,
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`SunPower’s data notwithstanding.”2 Id., Ex. A at Sec. 2.14.
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`9.
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`The License Agreement prohibits SunPower from assigning the Agreement without
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`Solifi’s consent. Specifically, Section 11.3 of the License Agreement states:
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`[SunPower] may not assign, sublicense, publish, sell, transfer, or otherwise exploit
`this Agreement or any rights or obligations under this Agreement whether by
`operation of law or otherwise, without the prior written consent [of Solifi]. For
`purposes of this Agreement, an “assignment” includes use of the Products for the
`benefit of any third party to a merger, acquisition and/or other consolidation by,
`with or of [SunPower], including any new or surviving entity that results from such
`merger, acquisition and/or other consolidation. Any attempt at such assignment will
`be void without the prior written consent of [Solifi].”
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`Id., Ex. A at Sec. 11.3.
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`10.
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`Solifi does not consent to the assignment of the License Agreement. Forseth
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`Decl. at ¶ 6.
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`B.
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`The Assignment Notice
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`11.
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`The Debtors filed a Notice of Potential Assumption or Assumption and Assignment
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`of Certain Contracts or Leases [Docket No. 304] and a Notice of Potential Assumption or
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`Assumption and Assignment of Certain Contracts or Leases [Docket No. 305] on September 4,
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`2024. The License Agreement was not identified on either of these Notices.
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`2 “Supplier Technology” is defined as “collectively, the Products, APIs, and related Documentation, and
`all derivative works of the Products, APIs, and related Documentation.” Ex. A at 1.35.
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`12.
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`The Debtors filed the Supplemental Notice of Potential Assumption or Assumption
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`and Assignment of Certain Contracts or Leases [Docket No. 493] (the “Assignment Notice”) on
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`September 18, 2024.
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`13.
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`The Assignment Notice stated that “pursuant to the Bidding Procedures and the
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`terms of any Winning Bid, the Debtors may assume and assign to the Winning Bidder the contract
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`or agreement listed on Schedule 1 . . . to which you are a counterparty, upon approval of the Sale
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`Transactions, which may be as early as September 23, 2024.” Docket No. 493 at 2 (emphasis in
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`original).
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`14.
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`The Assignment Notice further stated that “pursuant to the Bidding Procedures
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`Order, if you . . . object to a proposed assignment to the Winning Bidder of any Assigned
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`Contract,” the objecting party must file a written objection that is “filed with the Court and served
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`and actually received no later than October 10, 2024 at 5:00 p.m. (Eastern Daylight Time”.
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`Id. (emphasis in original).
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`15.
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`Schedule 1 of the Assignment Notice identified the License Agreement and all
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`active amendments and supplements as an executory contract that the Debtors may assume and
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`assign to the Winning Bidder. Docket No. 493-1 at 3 (identified as S-58).
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`16.
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`On September 24, 2024, the Court entered the Order (I) Authorizing and Approving
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`the Sale of Sunstrong Equity Interests and Related Assets to Ha Sunstrong Capital LLC and GF
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`Sunstrong Capital, LLC Free and Clear of All Liens, Claims, Encumbrances, and Other Interests
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`and (II) Granting Related Relief [Docket No. 611] (the “Sale Order”).
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`17.
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`The Sale Order purports to authorize the Debtors to “assume each of the Assigned
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`Contracts and assign the Assigned Contracts, set forth in Exhibit 3 . . . attached hereto…” Docket
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`No. 611 at 15. The License Agreement is listed as an Assigned Contract on Exhibit 3 to the Sale
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`Order. The Sale Order was entered 16 days prior to the October 10 objection deadline identified
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`in the Assignment Notice.
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`18.
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`Prior to the filing of the Assignment Notice, Solifi was contacted by SunPower for
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`the purposes of making an introduction to HASI, which Solifi understands is the Winning Bidder
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`or an affiliate thereof, regarding migrating the Product to HASI. Forseth Decl., at ¶ 7. Solifi and
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`HASI then engaged in meetings and correspondence about the work necessary to migrate the
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`Product, as well as costs to do so, both for licensing the Product and professional services work to
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`setup the Product on HASI’s hardware. Id.
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`19.
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`HASI has taken the position that the License Agreement is identified on Exhibit 3
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`to the Sale Order and that Solifi’s time to object to the assumption and assignment of the License
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`Agreement ended on September 20, 2024, one day after the Assignment Notice (the only Notice
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`that identified the License Agreement) was filed. Id. at ¶ 8.
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`OBJECTION
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`A.
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`Solifi’s Objection is Timely.
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`20.
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`The only notice that the Debtors filed to seek authority to assume and assign the
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`License Agreement is the Assignment Notice. The Assignment Notice conspicuously states that
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`the deadline to “object to a proposed assignment to the Winning Bidder of any Assigned Contract”
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`is October 10, 2024 at 5:00 p.m. (Eastern Daylight Time). Docket No. 493 at 2.
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`21.
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`Because the Assignment Objection Deadline had not passed when the Sale Order
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`was entered – which was only six days after the Assignment Notice was filed – the Sale Order
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`cannot authorize the Debtor to assume and assign the License Agreement without permitting Solifi
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`to file a timely objection.
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`22.
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`This Objection, which is filed prior to the Assignment Objection Deadline stated in
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`the Assignment Notice, is timely.
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`B.
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`The Debtors May Not Assume or Assign the License Agreement.
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`23.
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`The Debtors may not assume and assign the License Agreement without Solifi’s
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`consent, and Solifi has not given consent to the Debtors to assign the License Agreement.
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`24.
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`Section 365(a) of the Bankruptcy Code states, “Except as provided in . . .
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`subsections (b), (c), and (d) of this section, the trustee, subject to the court’s approval, may assume
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`or reject any executory contract or unexpired lease of the debtor.”
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`25.
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`Section 365(c) limits a debtor’s ability to assume or assign executory contracts.
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`Specifically, Section 365(c) states:
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`The trustee may not assume or assign any executory contract . . . of the debtor,
`whether or not such contract . . . prohibits or restricts assignment of rights or
`delegation of duties if—
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`(1)(A) applicable law excuses a party, other than the debtor, to such contract . . .
`from accepting performance from or rendering performance to an entity other than
`the debtor or the debtor in possession, whether or not such contract . . . prohibits or
`restricts assignment of rights or delegation of duties; and
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`(B) such party does not consent to such assumption or assignment . . .
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`26.
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`Applicable law prohibits the Debtors from assigning the License Agreement
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`without Solifi’s consent.
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`27.
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`As established above, the License Agreement grants a non-exclusive copyright
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`license to, among other things, the Product.
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`28.
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`Intellectual property licenses, such as the non-exclusive copyright license granted
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`by Solifi to SunPower pursuant to the License Agreement, cannot be assigned without the
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`licensor’s consent under Section 365(c) of the Bankruptcy Code. See In re Valley Media, Inc., 279
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`B.R. 105, 135-36 (Bankr. Del. 2002) (“A non-exclusive license of rights by a copyright owner to
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`another party is not assignable by that party without the permission of the copyright holder under
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`federal copyright law since the license represents only a personal and not a property interest in
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`the copyright”); In re Golden Books Family Entm't, 269 B.R. 300, 308-09 (Bankr. Del. 2001)
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`(“prevailing case law holds that nonexclusive intellectual property licensees do not give rise to
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`ownership rights and cannot, as a matter of law, be assigned without the consent of the licensor”);
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`In re Patient Education Media, Inc., 210 B.R. 237, 243 (Bankr. S.D.N.Y. 1997) (same).
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`29.
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`Here, because Solifi does not consent to the assignment of the License Agreement,
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`Section 365(c) prohibits the Debtor from assuming and assigning it.
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`CONCLUSION
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`30.
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`In accordance with Section 365(c), the Debtors cannot assume and assign the non-
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`exclusive License Agreement without Solifi’s consent. Solifi does not consent. Thus, the Debtors
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`may not assume and assign the License Agreement.
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`WHEREFORE, for the reasons stated herein, Solifi respectfully requests entry of an Order:
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`A. Denying the Debtors request in the Assignment Notice that they be authorized to
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`assume and assign the License Agreement; and
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`B. Granting to Solifi such other and further relief as the Court deems just and appropriate.
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`Date: October 10, 2024
`Wilmington, Delaware
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`SULLIVAN • HAZELTINE • ALLINSON LLC
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` /s/ William D. Sullivan
`William D. Sullivan (No. 2820)
`William A. Hazeltine (No. 3294)
`919 North Market Street, Suite 420
`Wilmington, DE 19801
`Telephone: (302) 428-8191
`Facsimile: (302) 428-8195
`Email: bsullivan@sha-llc.com
`whazeltine@sha-llc.com
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`and
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`Case 24-11649-CTG Doc 752 Filed 10/10/24 Page 8 of 8
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`Gregory S. Otsuka (Pro Hac Vice pending)
`Larkin Hoffman Daly & Lindgren Ltd.
`8300 Norman Center Drive, Suite 1000
`Minneapolis, MN 55437-1060
`gotsuka@larkinhoffman.com
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`Counsel to International Decision Systems, Inc
`d/b/a Solifi
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