Franchisor Wins IP Dispute

In bankruptcy, the debtor is entitled to reject (not perform) burdensome contracts. For franchise agreements that contain trademark licenses, the effects of rejection are decided on a case-by-case basis. Sometimes the licensees of the trademarks can continue to use the trademarks over the objection of the franchisor and sometimes not. This issue arose in the Crumbs Bake Shop case in connection with the sale of its assets.

6 minute read February 28, 2015 at 11:00 PM
By
Craig R. Tractenberg
Franchisor Wins IP Dispute

In bankruptcy, the debtor is entitled to reject (not perform) burdensome contracts. For franchise agreements that contain trademark licenses, the effects of rejection are decided on a case-by-case basis. Sometimes the licensees of the trademarks can continue to use the trademarks over the objection of the franchisor and sometimes not.

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