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Bankruptcy Litigation Trademarks United States Supreme Court

Supreme Court Rules Rejection of Trademark License Does Not Rescind Rights of Licensee

Mission Product Holdings, Inc. v. Tempnology, LLC

The question is whether a debtor’s rejection of its agreement granting a license “terminates rights of the licensee that would survive the licensor’s breach under applicable nonbankruptcy law.”

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In Mission Product Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652 (2019), the Supreme Court undertakes to resolve a circuit split between the First and Seventh Circuits over the effect of rejection in bankruptcy of a trademark license under section 365 of the Bankruptcy Code. The question is whether a debtor’s rejection of its agreement granting a license “terminates rights of the licensee that would survive the licensor’s breach under applicable nonbankruptcy law.” (Pet. for Cert. i.) Those rights include the right to continue to use the trademarks for the term of the rejected agreement.

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