The issue in this case is whether or not a trademark licensee can retain any rights under a licensing agreement following the debtor-licensor’s “rejection” of the agreement under Section 365 of the Bankruptcy Code?

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The example of a business dispute involving intellectual property that I have chosen involves Mission Product Holdings Inc., versus Tempnology, LLC. The issue in this case is whether or not a trademark licensee can retain any rights under a licensing agreement following the debtor-licensor’s “rejection” of the agreement under Section 365 of the Bankruptcy Code? The case currently resides with the Supreme Court of the United States.

When a company enters into bankruptcy, all of the company’s assets become a part of the bankruptcy estate. However it becomes trickier when intellectual property licensed to licensees is involved. At this juncture, the trustee may assume or reject any executory contract or unexpired lease of the debtor under U.S.C. 365 (a). As a matter of general practice, exclusive intellectual property licenses have generally been regarded as executory contracts, while non-exclusive licenses are not so easily categorized. This is because the licensor can grant rights to others by definition, allowing for the rejection of ongoing debtor/licensor obligations under the license, but not impacting previously granted intellectual property rights under the license.

After reviewing the law, researching the lawsuit, and reading commentary on the case, it’s unclear with which was the final ruling will fall. However, it appears that whatever the final outcome this particular case ruling will definitely leave a lasting mark.

https://abovethelaw.com/2019/03/leaving-a-mark-what-mission-products-holdings-inc-v-tempnology-llc-may-or-may-not-mean-for-trademark-licenses-in-bankruptcy/

Based on oral arguments, how SCOTUS will rule on this issue is anyone’s guess.https://abovethelaw.com/2019/03/leaving-a-mark-what-mission-products-holdings-inc-v-temp 

Respond

On December 28, 2018, the limited liability company representing famed Seattle-area grunge rock band Nirvana sued clothing designer Marc Jacobs and fashion retailers Neiman Marcus and Saks Fifth Avenue in the U.S. Federal District Court for the Central District of California.”Quinn, 2019

Nirvana believes that Marc Jacobs use of their signature smiley face will have consumers thinking that Nirvana support or affiliated with Marc Jacobs and their Grunge line of clothing. There is argument for both sides of this case. Marc Jacobs is stating that it is similar but would not cause confusion of the trademark smiley. Nirvana states that the smiley it self is confusing for consumers. In this situation I would think that the trademark should hold the smiley is close to the Nirvana smiley. I showed the image to my husband his a big Nirvana fan and he thought it was a Nirvana smiley. So this would cause confusion for the consumer upon purchase.

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