Debtors Cannot Assume or Assign Trademark License Without Licensor's Consent

Trademarks serve as symbols of good will and are a valuable asset of the business associated with the mark. Not surprisingly, trademark licenses typically require the licensor's consent for assignments, because licensors want the right to pass on the abilities of new potential licensees. In the event of bankruptcy filing by the licensee, the contractual restriction on assignment is ordinarily unenforceable. <i>See</i> 11 U.S.C. ' 365(f)(1). Bankruptcy Code ' 365(c)(1), however, provides an exception to this general rule: a debtor may not 'assume or assign' any executory contract without consent of the non-debtor if 'applicable law' provides that the non-debtor can refuse to accept performance from a third party.

32 minute read March 29, 2006 at 08:45 AM
By
Michael L. Cook and David M. Hillman
Debtors Cannot Assume or Assign Trademark License Without Licensor's Consent

Trademarks serve as symbols of good will and are a valuable asset of the business associated with the mark. Not surprisingly, trademark licenses typically require the licensor's consent for assignments, because licensors want the right to pass on the abilities of new potential licensees.

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