Clifford Chance

Supreme Court Resolves Trademark Treatment Following Rejection in Bankruptcy

23 May 2019

Earlier this week, the U.S. Supreme Court issued its decision in Mission Product Holdings, Inc. v. Tempnology, LLC, finally answering the long-awaited question as to whether a debtor-licensor's rejection of a trademark contract deprived the licensee of its right to use the trademark. The Court concluded that rejection of a trademark licensing agreement operates only as a breach, allowing the trademark user to continue to use the trademark post-rejection to the extent permitted under applicable state law. The ruling resolved a split among the First Circuit Court of Appeals and the Seventh Circuit Court of Appeals on what the International Trademark Association identified as "the most significant unresolved issue in trademark licensing."

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