Settling a circuit split, the U.S. Supreme Court, in an 8-1 decision, has concluded that a trademark licensee’s rights are not automatically terminated when a debtor in bankruptcy rejects the license agreement.
The case, Mission Product Holdings, Inc. v. Tempnology, LLC (Mission Product), arose from a pre-bankruptcy trademark license agreement between Tempnology, LLC, the bankrupt debtor, and Mission Product Holdings, Inc. (Mission), which was granted a non-exclusive license to use Tempnology’s “Coolcore” trademarks. During the bankruptcy, Tempnology “rejected” the trademark license in accordance with the Bankruptcy Code. The Court held that, because rejection under the Bankruptcy Code operates only as a breach and not a rescission, the rejection did not deprive Mission of its right to use the trademarks under the license. Continue Reading