Yesterday, in Mission Product Holdings v. Tempnology LLC, the Supreme Court held that a trademark licensee may continue using a licensed trademark after its licensor files for bankruptcy and rejects the relevant license agreement. While a debtor-licensor may "reject" a trademark license agreement under Section 365 of the Bankruptcy Code, such rejection is only a breach of the agreement and does not allow the licensor to revoke the licensee's rights.

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.

In 8-1 decision resolving circuit court split, U.S. Supreme Court holds that bankrupt company’s rejection of executory contract containing trademark license constitutes breach of contract, not its rescission or termination, and licensee retains its rights under the license.

The US Supreme Court decided what the International Trademark Association (INTA) called "the most significant unresolved legal issue in trademark licensing" when it ruled on May 20, 2019, that bankrupt companies cannot use bankruptcy law to revoke a trademark license.

In its 8-1 decision, the court resolved a circuit split by holding that a debtor's rejection of a trademark license under Section 365 of the Bankruptcy Code, which enables a debtor to "reject any executory contract" (a contract that neither party has finished performing), amounts only to a breach of the license.