On May 20, 2019, the US Supreme Court clarified that when a trademark licensor rejects a trademark license agreement in a Chapter 11 bankruptcy proceeding, the rejection does not rescind the use rights of the licensee under the license agreement. The decision resolved a circuit split on this issue between the First and Seventh Circuits. The Court held that the licensor’s rejection of the license agreement in bankruptcy has the same effect on the licensee’s rights as a licensor’s breach of the license agreement outside of bankruptcy.

For the past several years, low interest rates and higher commodity prices have resulted in generally favorable financial conditions in the energy sector, keeping energy bankruptcy activity to a minimum. With the recent sharp decline of prices in numerous commodities and forecasts of higher interest rates in the near future, there is a likelihood that the financial condition of some companies in the energy and commodities sectors could deteriorate significantly.