November 5, 2018
On October 29, 2018, the Supreme Court agreed to hear an appeal of a dispute concerning the rights of licensees of trademarks whose licensors are bankrupt. The case should resolve the uncertainty going back more than 30 years as to whether a debtor may terminate the trademark rights of its licensee by rejecting the license agreement pursuant to the Bankruptcy Code.
The case, Mission Product Holdings, Inc. v. Tempnology, highlights the long-standing dispute between different appeals courts on the issue. Claimant Mission Products argued that Congress did not intend for licensees’ rights to be cut-off by the rejection by a debtor of the license agreement. The First Circuit Court of Appeals in Boston concluded to the contrary, ruling that Congress intended to allow debtors the right to terminate such licenses.
Moses & Singer attorneys offer advice and risk avoidance strategies for those licensing trademarks to protect against rejection and termination of such rights by potentially insolvent licensors, and to industry groups and others on the interpretation and application of this bankruptcy law. We will alert you of any significant developments and the result of the case.