Trademarked for Death? A Licensee’s Trademark Rights After an Executory Contract is Rejected in Bankruptcy
Upon declaring bankruptcy, a licensor of a trademark is given the option to “reject” its license agreements with trademark licensees. Due to the absence of trademarks from the definition of “intellectual property” in the Intellectual Property Licenses in Bankruptcy Act, courts have split over whether rejection allows trademark licensees continued use of the trademark. This Note suggests that the Supreme Court follow the Seventh Circuit’s holding in Sunbeam and allow trademark licensees to retain use of the trademark on the theory that rejection of a trademark license in bankruptcy is not rescission but rather a breach of contract. To minimize any negative impact on the public, this Note further suggests that trademark licensees be required to continue to maintain the quality-control standards in place prior to the licensor’s bankruptcy. This approach best protects the rights of trademark licensees without jeopardizing trademark integrity.
B.A. Duke University. J.D. Candidate, Vanderbilt University Law School. This note is dedicated to my editors on the Vanderbilt Law Review, Kimberly Ingram, Courtney Mitchell, Scott Singer, Terrence McKelvey, Andrea Bilbija, and all who helped out and provided suggestions for improvement. Special thanks to Professor Bill Norton for his guidance and input, and a hat tip to my good friend Patrick Tricker for the initial topic idea.