Will the Supreme Court Adopt the Seventh Circuit’s View That Trademark Licensees Receive The Protections Granted to Other Intellectual Property Licensees in Bankruptcy Cases or the First Circuit’s View that Trademark Licensees are Excluded from Such Protections?
Doing the Splits:
A Column Devoted to Circuit Splits Under the Bankruptcy Code
Annette W. Jarvis, Dorsey & Whitney LLP
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On October 26, 2018, the Supreme Court granted certiorari to the First Circuit’s decision in Mission Prod. Holdings, Inc. v. Tempnology, LLC (In re Tempnology, LLC)1. In granting certiorari, the Supreme Court will resolve a circuit split created by this decision in variance with the Seventh Circuit’s 2012 decision in Sunbeam Prods. v. Chi. Am. Mfg., LLC.2 While the Seventh Circuit in Sunbeam held that a non-debtor, trademark licensee could retain its rights under the trademark license after rejection, the First Circuit in Tempnology held that trademarks are excepted from protections granted to other intellectual property in bankruptcy such that the rejection of a trademark license terminates the licensee’s right to use the trademark.
The dispute centers on whether the exclusion of trademarks in the definition of intellectual property in the Bankruptcy Code removes trademark licensees from the protections granted other intellectual property licensees under §365(n). Section §365(n) was enacted to protect intellectual property licensees from the harsh result in Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc.,3 which terminated
1879 F.3d 389 (1st Cir. 2018)
2686 F.3d 372 (7th Cir. 2012)
3756 F.2d 1043 (4th Cir. 1985)