Trademark Owners Cannot Use Bankruptcy Law to Revoke Trademark Licenses

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On May 20, 2019, the U.S. Supreme Court ruled in an 8-1 decision that a bankrupt debtor and trademark licensor cannot rescind the licensee’s rights to use its trademark by rejecting thelicense agreement in bankruptcy. See Mission Product Holdings Inc. v. Tempnology, LLC, 587 U.S. ______ (2019). In reaching its decision, the Supreme Court resolved a split between the Court of Appeals for the First and Seventh Circuits as to “whether the debtor-licensor’s rejection of that contract deprives the licensee of its rights to use the trademark.” The Court held that it does not and explained that “rejection [of an executory contract in bankruptcy] 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 [such as continued use of a licensed trademark], remain in place.”

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