The US Supreme Court has reversed the First Circuit’s ruling in Mission Products (Mission Prod. Holdings v. Tempnology, LLC (In re Tempnology, LLC), 879 F.3d 389 (1st Cir. 2018)), thereby allowing the trademark licensee in that case to continue using the licensed trademark despite the debtor trademark licensor’s rejection of the underlying trademark agreement in its bankruptcy case.

United States District Court, C.D. California, May 21, 2019

Previously published in Bankruptcy Law News, Vol. XXIV, No.28.

Courts possess inherent authority to regulate conduct in their courtrooms and to enforce their orders. All litigants who are unsuccessful in civil litigation are disappointed. Fortunately, after they have exhausted their remedies, virtually all of them recognize the binding nature of the adverse ruling and move on. But not everyone is so sanguine and accepting. Certain litigants refuse to accept the court’s ruling, and indeed, will objectively and affirmatively refuse to abide by such decrees.

On Monday, the U.S. Supreme Court finally resolved a trademark law issue that had remained unsettled for years: whether a bankrupt trademark owner may revoke a trademark licensee’s rights to a licensed trademark by “rejecting” the license agreement under a specific provision of the Bankruptcy Code. The Court, in an 8-1 decision, held that the Code provided a bankrupt trademark owner with no such right, and thus a trademark licensee maintains its right to continue using the trademark per the terms of the license.

The Supreme Court issued its much-anticipated ruling yesterday in the First Circuit case of Mission Product Holdings, Inc. v. Tempnology, LLC, resolving a circuit split that had developed on “whether [a] debtor‑licensor’s rejection of an [executory trademark licensing agreement] deprives the licensee of its rights to use the trademark.” And it answered that question in the negative; i.e., in favor of licensees.

Yesterday, in an 8-1 decision, the US Supreme Court held in Mission Product Holdings, Inc. v.

On May 20, 2019, the U.S. Supreme Court issued an 8-1 ruling in the case of Mission Product Holdings, Inc. v. Tempnology, LLC. The decision resolves a circuit split, holding that a licensee may retain its right to use licensed trademarks, notwithstanding the debtor-licensor’s rejection of the contract in bankruptcy. The Supreme Court’s decision has potentially far-reaching implications.

The U.S. Supreme Court decided yesterday to uphold a licensee’s right to continue using trademarks despite the bankrupt licensor’s rejection of the underlying license agreement. As a result, bankrupt brand owners cannot use bankruptcy law to unilaterally revoke a trademark license. In Mission Product Holdings, Inc. v.

A Big Answer To A Big Question. After dividing the courts for a number of years, we finally have the answer to the big question of whether rejection of a trademark license by a debtor-licensor deprives the licensee of the right to use the trademark. Here’s the question on which the Supreme Court granted certiorari in the Mission Product Holdings, Inc. v Tempnology, LLC case:

On May 20, 2019, the U.S. Supreme ruled a trademark licensee can continue to use the trademark after a bankrupt licensor rejects the license agreement. The case is Mission Product Holdings, Inc. v. Tempnology, LLC. Some lower courts had ruled that rejection of trademark license agreement terminated the licensee’s rights to use the trademark.