Supreme Court Holds Trademark Licensees Retain Rights Post-Rejection in Bankruptcy

On May 20, 2019, the U.S. Supreme Court held that a trademark licensee will retain its rights to use licensed trademarks following a debtor-licensor’s rejection of a trademark license in its bankruptcy proceeding, subject to the terms of such agreement and applicable state law.

This decision, consistent (in result though not necessarily in reasoning) with court decisions in the Third and Seventh Circuits and in direct conflict with previously-established case law from the First and Fourth Circuits, settled an ongoing circuit split that had been at the forefront of the trademark licensing landscape for decades.