Federal Court Allows Sale of Secured IP Assets in Nuheara Administration

Category: , Intellectual Property, Technology & Data
Date: 01 April 2025
Author: Tyrone Walker - Genuine People
The recent Federal Court decision in' Jones (in their capacity as Administrators of Nuheara Ltd) v Realtek Semiconductor Corp (No 1)' [2025] FCA 267 highlights the critical role of intellectual property (IP) in corporate restructuring '€” and the Court's readiness to approve the sale of IP assets, even when subject to a secured creditor's interest.

Background

Nuheara Ltd, a listed ASX company focused on smart-hearing technology, entered administration in August 2024. Its most valuable assets were its IP '€” including patents, brand rights, and associated know-how. The administrators sought to sell these assets as part of a Deed of Company Arrangement (DoCA) proposal to a syndicate of investors. A major creditor, Realtek Semiconductor Corp, held a registered security interest over Nuheara's IP but refused to consent to the sale, arguing it was entitled to enforce its rights as a secured creditor.

IP at the Centre of the Dispute

The administrators applied under section 442C(2)(c) of the' Corporations Act 2001 (Cth)' for leave to dispose of the property '€” including the IP '€” despite Realtek's objection. The Court granted the application, emphasising:
  • The IP assets were central to the value of the business and necessary to preserve continuity and goodwill.
  • Without the IP sale, Nuheara's business could not be viably restructured, and the IP would be significantly devalued in a liquidation scenario.
  • The administrators had secured an offer that provided a commercial return for Realtek and maximised recoveries for other creditors.
  • Realtek had multiple opportunities to negotiate alternative terms or enforce its rights earlier, but declined to do so.

Key IP Takeaways

  • IP is often a company's most valuable asset '€” particularly in the tech and innovation space. Its treatment during administration is pivotal to the outcome for creditors and stakeholders.
  • Secured creditors should be proactive in dealing with IP enforcement and engagement with administrators. Delay or lack of cooperation can result in outcomes contrary to their expectations.
  • The decision reaffirms that Courts may permit the sale of IP subject to security interests where doing so aligns with the broader goals of Part 5.3A '€” notably, business rescue and creditor return.
If you need help securing or enforcing your intellectual property '€” your company's most valuable asset '€” please get in touch with Hunt & Hunt Lawyers.