On Monday, May 20, 2019, the United States Supreme Court issued an 8-1 decision holding that a bankrupt company’s decision to reject an existing license of its trademarks does not terminate a licensee’s right to continue using the licensed trademarks. 

This decision settles a longstanding split among circuit courts, which has been one of the most significant unresolved issues in trademark licensing.  Bankruptcy permits debtors to reject most contracts to eliminate their obligations.  Until today, circuit courts were split over the issue of whether this right of rejection allowed bankrupt trademark owners to use rejection to revoke a trademark license. 

The case is Mission Products Holdings lnc. v. Tempnology LLC, case number 17-1657, at the Supreme Court of the United States.  A more detailed analysis of the implications of this decision for trademark owners will follow.