Fashion industry licensees invest substantial sums in reliance on their license rights. Bankrupt licensors have been able to convince courts they can “reject” licenses and, when so doing, thereby cause licensees’ trademark rights to vaporize. Here we discuss why and what a licensee can do.
The Effect of Rejection on Trademark License Rights
The United States District Court for the Central District of Illinois has arguably driven the last nail into the coffin of In re Crane, the much criticized decision of the United States Bankruptcy Court for the Central District of Illinois. The coffin was already set in place after the Illinois legislature passed S.B.0016 late last year, which was signed into law by Gov.
The Bankruptcy Court for the District of Delaware recently issued an opinion confirming a chapter 11 plan (i) based on a lock-up agreement between the debtor and its major creditors and (ii) containing third party releases that bound creditors unless they affirmatively "opted out" in a ballot actually returned to the balloting agent.
As Ohio enjoys its latest boom in oil and gas exploration, it is important to understand how oil and gas leases are treated in bankruptcy. Unsettled Ohio law regarding whether a debtor owns unextracted oil and gas as part of the debtor’s real property can make this a difficult issue.
The recent case ofGreb v. Diamond International Corp. highlights the need for dissolved corporations and their insurers to consider the survival statute of their state of incorporation when defending against actions brought in California.
On December 13, 2012, Judge Vincent L. Briccetti from the United States District Court of the Southern District of New York denied the appellant Notes Trustee’s request to compel payment of an administrative expense claim.
In Greb v. Diamond Int’l Corp., 2013 WL 628328 (Cal. Feb. 21, 2013), the California Supreme Court unequivocally and unanimously laid to rest the assertion that dissolved foreign corporations may be sued in California after the time of the statute of limitations provided by the laws under which the foreign corporations were incorporated.
The U. S. Court of Appeals for the Third Circuit, equating a covenant not to sue under a patent with a license, has concluded that a trustee in bankruptcy cannot unilaterally reject the covenant as an executory contract. In re Spansion, Case Nos. 11-3323, -3324 (3rd Cir., Dec. 21, 2012) (Scirica, J.).
Spansion and Apple settled a patent dispute at the U.S. International Trade Commission (ITC) regarding flash memory products, with Spansion agreeing to dismiss its case and to refrain from filing related actions. In pertinent part, the agreement stated:
The U.S. Court of Appeals for the Seventh Circuit, on Feb. 14, 2013, held that an insider of a Chapter 11 partnership debtor cannot avoid the “competition rule” in a new-value reorganization plan. The debtor’s equity owner arranged for his wife, also an “insider,” to contribute new value to obtain the equity of the reorganized debtor. In re Castleton Plaza, LP, — F.3d –––, 2013 WL 537269 at *1 (7th Cir., Feb. 14, 2013).
A recent ruling in the American Airlines bankruptcy case enforcing an automatic acceleration upon bankruptcy provision serves as a reminder that the enforceability of so-called ipso facto provisions in debt instruments remains an unsettled, forum-dependent question.