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Trademark Licenses Survive Owners’ Bankruptcy, High Court Rules (1)

May 20, 2019, 3:23 PMUpdated: May 20, 2019, 8:43 PM

A company can continue to use a licensed trademark after the mark owner’s rejection of the license in bankruptcy because certain contractual rights remain in place, the Supreme Court decided May 20.

Justice Elena Kagan’s opinion in Mission Product Holdings, Inc. v. Tempnology, LLC settles a question—left unanswered in Congress’ bankruptcy code revision on intellectual property licenses—on whether a licensor can take away its trademark license in bankruptcy.

A bankrupt company that rejects an executory contract—one which neither party has finished performing— is breaching, not terminating, the agreement, the 8-1 ruling said. And a breach doesn’t rescind rights that the ...