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Kenneth N. Klee and Whitman L. Holt on Supreme Court's Holding in Mission Product Holdings, Inc. v. Tempnology, LLC

LexisNexis Emerging Issues Analysis, 2019 Emerging Issues 8743
May 2019

In an 8–1 decision authored by Justice Kagan, the Supreme Court of the United States holds that a debtor-licensor’s rejection of a trademark licensing agreement pursuant to Bankruptcy Code section 365 does not necessarily deprive the trademark licensee of its rights to use the mark.  In reaching this conclusion, the Court articulates a general principle applicable to all executory contracts and unexpired leases: “A rejection breaches a contract but does not rescind it,” which means that “all the rights that would ordinarily survive a contract breach” by the debtor outside of the bankruptcy context will “remain in place.”

This commentary analyzes the holding and implications of the Tempnology opinion.