{"id":3251,"date":"2019-06-14T18:48:09","date_gmt":"2019-06-14T18:48:09","guid":{"rendered":"https:\/\/bpslaw.com\/staging-site\/?p=3251"},"modified":"2019-06-14T18:48:36","modified_gmt":"2019-06-14T18:48:36","slug":"supreme-court-strengthens-rights-of-trademark-licensees","status":"publish","type":"post","link":"https:\/\/bpslaw.com\/staging-site\/supreme-court-strengthens-rights-of-trademark-licensees\/","title":{"rendered":"Supreme Court Strengthens Rights of Trademark Licensees: Holds that bankruptcy debtors cannot terminate trademark license agreements under section 365 of the U.S. Bankruptcy Code"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-large wp-image-3253\" src=\"https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/06\/BLEAKLEY-Supreme-Court-img-1024x536.jpg\" alt=\"\" width=\"940\" height=\"492\" srcset=\"https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/06\/BLEAKLEY-Supreme-Court-img-1024x536.jpg 1024w, https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/06\/BLEAKLEY-Supreme-Court-img-300x157.jpg 300w, https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/06\/BLEAKLEY-Supreme-Court-img-768x402.jpg 768w, https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/06\/BLEAKLEY-Supreme-Court-img.jpg 1199w\" sizes=\"auto, (max-width: 940px) 100vw, 940px\" \/>In the United States, the Bankruptcy Code allows individuals and entities (\u201cdebtor\u201d) who cannot repay their debts to seek relief from some or all of those debts.<\/p>\n<p>One of the peculiar aspects of the Bankruptcy Code is that <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/11\/365\">11 U.S.C. \u00a7 365(a)<\/a> enables a debtor to reject \u201cexecutory contracts,\u201d which are contracts that neither party has finished performing. Examples of executory contracts are a real estate lease and an intellectual property licensing agreement.<\/p>\n<p>The question before the Supreme Court in <a href=\"https:\/\/www.supremecourt.gov\/opinions\/18pdf\/17-1657_4f15.pdf\"><em>Mission Product Holdings, Inc. v. Tempnology, LLC.<\/em><\/a>, was whether the \u201crejection\u201d of a trademark licensing agreement under \u00a7 365(a) also terminated the rights of the licensee to use the trademark.<\/p>\n<p>The Court agreed to hear the case to resolve a split among the circuit courts. The Court of Appeals for the First Circuit held in <a href=\"https:\/\/www.leagle.com\/decision\/infco20180112121\"><em>In re Tempnology, LLC<\/em>, 879 F. 3d 389 (2018)<\/a> that a debtor\u2019s rejection of trademark licensing agreement terminated the licensing agreement. The Seventh Circuit, however, had ruled the other way in <a href=\"https:\/\/caselaw.findlaw.com\/us-7th-circuit\/1605632.html\"><em>Sunbeam Products, Inc. v. Chicago Am. Mfg.<\/em>, LLC, 686 F. 3d 372 (7th Cir. 2012)<\/a>.<\/p>\n<p>The Supreme Court agreed with the Seventh Circuit, holding that a debtor\u2019s rejection of trademark license under Section 365 of the Bankruptcy Code has the same effect as a breach of that license agreement outside bankruptcy. Rejection does not rescind rights that the contract previously granted.<\/p>\n<p>\u201cA rejection breaches a contract but does not rescind it. And that means all the rights that would ordinarily survive a contract breach, including those conveyed here, remain in place.\u201d The debtor \u201ccan stop performing its remaining obligations under the agreement. But the debtor cannot rescind the license already conveyed. So the licensee can continue to do whatever the license authorizes.\u201d<\/p>\n<p>The Court\u2019s holding is a victory for trademark licensees. It strengthens the rights of licensees by making clear that rejection of a trademark license during bankruptcy does not rescind the license. It will also give trademark licensees greater power and leverage during the bankruptcy reorganization process.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-3186 size-medium\" src=\"https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/01\/Rodriguez-Adam-212x300.jpg\" alt=\"\" width=\"212\" height=\"300\" srcset=\"https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/01\/Rodriguez-Adam-212x300.jpg 212w, https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/01\/Rodriguez-Adam-768x1088.jpg 768w, https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/01\/Rodriguez-Adam-723x1024.jpg 723w, https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/01\/Rodriguez-Adam.jpg 1200w\" sizes=\"auto, (max-width: 212px) 100vw, 212px\" \/>At Bleakley Platt, Mr. Rodriguez focuses his practice in the areas of litigation, intellectual property and real estate. Previously, he was the Director of Real Estate for Westchester County, where he negotiated commercial real estate transactions valued at over $100 million. Prior to his appointment as Director of Real Estate, Mr. Rodriguez defended the County of Westchester in one of the highest-profile HUD enforcement actions in United States history. He has also served as a law clerk to two federal judges and worked as an intellectual property litigator at a large law firm in New York City.<\/p>\n<p>Visit Mr. Rodriguez\u2019s Facebook page \u201c<a href=\"https:\/\/www.facebook.com\/TrademarkTales\/?modal=admin_todo_tour\">Trademark Tales<\/a>,\u201d <a href=\"https:\/\/twitter.com\/ARodEsq11\">Twitter feed<\/a>, <a href=\"https:\/\/www.instagram.com\/arodesq11\/\">Instagram feed<\/a> and <a href=\"https:\/\/www.linkedin.com\/in\/adam-rodriguez-a73669153\/\">LinkedIn<\/a> for more thoughts on the law.<\/p>\n<p>To read Mr. Rodriguez\u2019s complete biography, click <a href=\"https:\/\/bpslaw.com\/staging-site\/team\/adam-rodriguez\/\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the United States, the Bankruptcy Code allows individuals and entities (\u201cdebtor\u201d) who cannot repay their debts to seek relief from some or all of those debts. One of the peculiar aspects of the Bankruptcy Code is that 11 U.S.C. \u00a7 365(a) enables a debtor to reject \u201cexecutory contracts,\u201d which are contracts that neither party [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3251","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Supreme Court Strengthens Rights of Trademark Licensees: Holds that bankruptcy debtors cannot terminate trademark license agreements under section 365 of the U.S. Bankruptcy Code | Bleakley Platt<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Supreme Court Strengthens Rights of Trademark Licensees: Holds that bankruptcy debtors cannot terminate trademark license agreements under section 365 of the U.S. Bankruptcy Code | Bleakley Platt\" \/>\n<meta property=\"og:description\" content=\"In the United States, the Bankruptcy Code allows individuals and entities (\u201cdebtor\u201d) who cannot repay their debts to seek relief from some or all of those debts. One of the peculiar aspects of the Bankruptcy Code is that 11 U.S.C. \u00a7 365(a) enables a debtor to reject \u201cexecutory contracts,\u201d which are contracts that neither party [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/bpslaw.com\/staging-site\/supreme-court-strengthens-rights-of-trademark-licensees\/\" \/>\n<meta property=\"og:site_name\" content=\"Bleakley Platt\" \/>\n<meta property=\"article:published_time\" content=\"2019-06-14T18:48:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-06-14T18:48:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/bpslaw.com\/staging-site\/wp-content\/uploads\/2019\/06\/BLEAKLEY-Supreme-Court-img-1024x536.jpg\" \/>\n<meta name=\"author\" content=\"Niki Jones\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Niki Jones\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. 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