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The Intellectual Property StrategistFeaturesIntellectual PropertyLitigationPatent Licensing and TransactionsPatent Litigation

Protecting a Trademark Licensor's Rights In Its Licensee's Bankruptcy Case

By Alfred S. Lurey
September 01, 2022

A recent bankruptcy case from the District of Delaware underscores the need for a trademark licensor to be alert to filings made in its licensee's bankruptcy case that may require prompt action by the licensor to protect its valuable rights under a license agreement. In re Armstrong Flooring, Inc., Chapter 11 Case No. 22-10426 (MFW) (Bankr. D. Del. July 22, 2022).

In that case, at the request of the debtor licensee, Armstrong Flooring, Inc., the bankruptcy court issued a temporary restraining order and preliminary injunction that directed Armstrong World Industries, Inc. and AWI Licensing LLC, the licensors under a trademark license agreement with the debtor licensee (the License Agreement), to execute written consents to the assignment by the debtor licensee of its rights and obligations under the License Agreement to the successful bidders for the debtor licensee's assets at sales conducted under section 363 of the Bankruptcy Code.

The License Agreement

The License Agreement had its genesis in 2016, when Armstrong World Industries, Inc. (AWI) divested itself of its floor tile products business by spinning off its subsidiary, Armstrong Flooring, Inc. (AF). In connection with that transaction, AWI and its licensing subsidiary, AWI Licensing LLC (AWI Licensing), entered into the License Agreement with AF.

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