US court rules trademark license agreement can survive bankruptcy

US court rules trademark license agreement can survive bankruptcy

The US Supreme Court has ruled that a trademark license can survive the bankruptcy of the licensor, according to a report published by The National Law Journal.

The case, Mission Products Holdings v. Tempnology, reverses a previous decision in Lubrizol Enterprises v. Richmond Metal Finishers. The judges overwhelmingly agreed in the Mission case that a licensee should be able to continue to use the trademarks it has negotiated and invested in, rather than see it swept into the bankruptcy estate.  

“The debtor can stop performing its remaining obligations under the agreement,” wrote Justice Elena Kagan. “But the debtor cannot rescind the license already conveyed. So the licensee can continue to do whatever the license authorizes.”

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