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Case on 'Coolcore' Marks Settles a 34 Year Debate Regarding Bankruptcy and IP Law
On May 20, 2019 the U.S. Supreme Court issued its long-awaited decision in Mission Product Holdings, Inc. v. Tempnology, LLC, No. 17-1657, ruling that a trademark licensee can retain its rights under a trademark license agreement that is rejected by the licensor as an executory contract in bankruptcy.
In a decision that was unanimous on the merits (the decision was 8-1 with the sole dissent based on a non-substantive issue), the Supreme Court settled a decades-long debate regarding the fate of licenses in bankruptcy. Specifically, the Court determined that, under Section 365(a) of the Bankruptcy Code, a debtor's rejection of an executory contract pursuant to bankruptcy has the same effect as a breach outside bankruptcy, such that a debtor-licensor's rejection of a license agreement does not revoke the underlying trademark license.
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