86 Analyses of this case by attorneys

  1. Connecticut Bankruptcy Court Adds Fuel to the Fire in Debate Over Effect of Rejection of Trademark License

    Jones DayMark DouglasAugust 14, 2018

    According to the court, rejection of the agreement, of which the trademark license was an integral component, resulted in a nonmaterial breach, rather than termination, and the section 365(n) election "indisputably" preserved the licensee's exclusive right to use the intellectual property during the remaining term of the license agreement. In so ruling, the bankruptcy court embraced the approach articulated by the U.S. Court of Appeals for the Seventh Circuit in Sunbeam Prods., Inc. v. Chicago Am. Manuf., LLC, 686 F.3d 372 (7th Cir. 2012), cert. denied, 133 S. Ct. 790 (2012), and rejected the contrary view endorsed by the Fourth and First Circuits—the only other circuit courts of appeals that have directly addressed the issue—in Lubrizol Enters., Inc. v. Richmond Metal Finishers, Inc. (In re Richmond Metal Finishers, Inc.), 756 F.2d 1043 (4th Cir. 1985), and Mission Product Holdings, Inc. v. Tempnology, LLC (In re Tempnology, LLC), 879 F.3d 389 (1st Cir. 2018).

  2. US Supreme Court | Rejection Of A Trademark License In Bankruptcy Is A Breach Of Contract That Does Not Terminate The Licensee’s Right To Use The Mark

    McDermott Will & EmeryMay 24, 2019

    The Bankruptcy Code’s definition of “intellectual property” includes trade secrets, patents and copyrights, but does not mention trademarks.Prior to theMission Productdecision, courts were split on whether a trademark licensee retains the ability to use a debtor-licensor’s marks after the corresponding license is rejected in bankruptcy. The Court of Appeals for the Seventh Circuit had held that a trademark license agreement was not rescinded or terminated upon rejection of a trademark license agreement.Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, 686 F.3d 372 (7th Cir. 2012), whereas the Court of Appeals for the First Circuit had held that rejection constitutes complete termination of the licensee’s rights, including the right to use the mark.In re Tempnology, LLC, 879 F.3d 389 (1st Cir. 2018).The Supreme Court affirmed the Seventh Circuit’s reasoning inSunbeamand reversed the First Circuit.

  3. Trademark Licenses . . . Again (Update No. 1)

    Patterson Belknap Webb & Tyler LLPDavid DykhouseMay 24, 2018

    [1] 879 F.3d 389 (1st Cir. Jan. 12, 2018). [2] SeeSunbeam Products, Inc. v. Chicago American Manufacturing, LLC, 686 F.3d 372 (7th Cir.), cert. den.

  4. First Circuit Rejects Sunbeam Approach to Effect of Rejection of Trademark License in Bankruptcy

    Jones DayMark DouglasApril 21, 2018

    In Mission Product Holdings, Inc. v. Tempnology, LLC (In re Tempnology, LLC), 879 F.3d 389 (1st Cir. 2018), the U.S. Court of Appeals for the First Circuit ruled that the rejection of a trademark license in bankruptcy means that the licensee loses the ability to use the licensed intellectual property because trademarks are not among the categories of "intellectual property" afforded special protection under the Bankruptcy Code. In so ruling, the First Circuit effectively embraced the approach articulated by the Fourth Circuit in Lubrizol Enters., Inc. v. Richmond Metal Finishers, Inc. (In re Richmond Metal Finishers Inc.), 756 F.2d 1043 (4th Cir. 1985), and rejected the contrary approach endorsed by the Seventh Circuit—the only other court of appeals that has directly addressed the issue—in Sunbeam Prods., Inc. v. Chicago Am. Manuf., LLC, 686 F.3d 372 (7th Cir. 2012), cert. denied, 133 S. Ct. 790 (2012).

  5. New Jersey Bankruptcy Court Decision Protects Rights of Trademark Licensees - "Free and Clear" Sale of a Trademark or Intellectual Property License Under Section 363 Does Not Trump Rights of Third Party Licensees under Section 365

    Holland & Knight, LLPAlvin Fletcher Benton Jr.November 18, 2014

    The Crumbs court rejected the continuing applicability of Lubrizol to trademark license rejections, ruling that the legislative history of Section 365 indicated congressional intent that bankruptcy courts exercise their equitable powers to decide whether trademark licensees may retain their licensed rights as though protected under Section 365(n). The court held that it would be inequitable to strip the licensees of their rights upon rejection.Election Does Not Imply Lack of Protection The Crumbs court cited a Seventh Circuit decision in Sunbeam Products, Inc. v. Chicago Am. Mfg. LLC, 686 F.3d 372 (7th Cir. 2012). In Sunbeam, the Seventh Circuit focused on the text of Section 365(g) and addressed the statutory protections granted to licensees of trademarks as similar to real estate lessees whose leases are rejected by debtor/lessors.

  6. Sunbeam: Seventh Circuit Says That Rejection in Bankruptcy Does Not Vaporize a Trademark Licensee's Rights

    Crowell & Moring LLPTerence P. RossJuly 13, 2012

    2012In characteristically clear prose by Chief Judge Frank Easterbrook, the U.S. Court of Appeals for the Seventh Circuit held on July 9 that a debtor-licensor's rejection in bankruptcy of an intellectual property license does not abrogate the non-debtor licensee's right to use the licensed trademarks. Sunbeam Products, Inc. v. Chicago Am. Mfg., LLC, No. 11-3920 (7th Cir. July 9, 2012). The decision is noteworthy because the case involves the effect of rejection on a licensee's rights to the use of both patents and trademarks, and the result as to trademarks creates a split among federal judicial circuits.In 2008, Lakewood contracted with Chicago American Manufacturing ("CAM") to manufacture Lakewood's box fans.

  7. The U.S. Supreme Court Rules That Rejection of a Trademark License Agreement in Bankruptcy Does Not Strip the Licensee of Its Right to Use the Trademark

    Jones DayAugust 20, 2019

    In particular, trademarks, trade names, and service marks are not included in the definition of "intellectual property" under section 101(35A) of the Bankruptcy Code. Because of this omission, courts continued to struggle when determining the proper treatment of trademark licenses in bankruptcy.Sunbeam Gives Trademark Licensees a Glimmer of HopeIn Sunbeam Products, Inc. v. Chicago Am. Manuf., LLC, 686 F.3d 372 (7th Cir. 2012), the Seventh Circuit expressly rejected the Lubrizol court’s approach to trademark licenses. Focusing on the impact of section 365(g) of the Bankruptcy Code (which provides that the rejection of an unassumed executory contract or unexpired lease constitutes a prepetition breach of the contract or lease), the Seventh Circuit explained that, outside bankruptcy, a licensor’s breach does not terminate a licensee’s right to use IP.

  8. Supreme Court Addresses Effects of Trademark License Rejection in Bankruptcy

    McDermott Will & EmeryMargaret DuncanJuly 10, 2019

    The Seventh Circuit had held that a trademark license agreement was not rescinded or terminated upon rejection of a trademark license agreement. Sunbeam Products v. Chicago American Manufacturing (2012). The First Circuit, on the other hand, had held that rejection constitutes complete termination of the licensee’s rights, including the right to use the mark.

  9. Supreme Court: Licensees Retain Trademark Rights After Rejection Under Section 365 of the Bankruptcy Code

    Schnader Harrison Segal & Lewis LLPJune 22, 2019

    Other courts, most notably the Seventh Circuit, came to the opposite conclusion. In a well-reasoned decision by Judge Easterbrook in Sunbeam Products, Inc. v. Chicago Am. Mfg., LLC, 686 F.3d 372, 376-77 (7th Cir. 2012), the Seventh Circuit held that rejection does not terminate a licensee’s trademark rights because under Section 365(g), rejection constitutes a breach and under non-bankruptcy law a breach does not ordinarily terminate the licensee’s trademark rights. The U.S. Supreme Court granted cert in Mission Product Holdings in order “to resolve the division between the First and Seventh Circuits.”

  10. Supreme Court Holds That Trademark Licensor’s Rejection Does Not Rescind or Terminate License

    Kramer Levin Naftalis & Frankel LLPJune 19, 2019

    Future decisions will consider whether the holding has rendered Sections 365(h), (i) and (n) superfluous, or whether non-trademark intellectual property licensees, lessees and real estate vendees retain some different or additional rights upon rejection. Similarly, as the concurrence suggests, courts will no doubt consider how individual contract provisions change the impact of contract rejection.See Sunbeam Prods., Inc. v. Chicago Am. Mfg., LLC, 686 F.3d 372 (7th Cir. 2012).[View source.]