IP Licenses in Bankruptcy: Navigating the Circuit Split After Tempnology

Description

When Congress codified the Bankruptcy Code §365(n), its chosen definition of intellectual property in §101(35) included patents, trade secrets and copyrights, but failed to include trademarks, leaving interpretive challenges to the courts.

Seventh Circuit rulings permit trademark licensees to continue using licensed trademarks in bankruptcy. However, the First Circuit’s recent decision in Mission Product Holdings Inc. v. Tempnology (1st Cir. 2018) does not follow the Seventh Circuit’s approach.

The First Circuit held that the Bankruptcy Code does not “contain any catchall or residual clause from which one might infer the inclusion of properties beyond those expressly listed,” and the Code definition of IP does not include trademarks.

Practitioners must navigate this circuit split as they assist companies that receive a license from debtor-licensors in determining the extent of such licensee’s rights and obligations.

Separately, additional questions have emerged in recent years as to the ability of a debtor-licensee to assume or assign an IP license, and whether or not an IP license is executory and can be rejected by a debtor-licensor.

Listen as our authoritative panel examines the impact of the Bankruptcy Code on IP license agreements, reviews the First Circuit’s opinion in the Tempnology case and discusses the circuit split it created. The panel will also provide insights for dealing with IP licenses in bankruptcy proceedings.