The federal circuit courts are split over whether a licensee has the right to continue using a licensed trademark after the license is rejected in bankruptcy. In Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, the Seventh Circuit held that rejection does not abrogate the licensee's right to use the licensed trademark, a decision that expressly rejects the Fourth Circuit's contrary holding that rejection ends a licensee's right to use the licensed mark. While this Note argues that the Fourth Circuit interpreted and applied the Bankruptcy Code accurately in Lubrizol Enterprises v. Richmond Metal Finishers, it finds that the effect of the Fourth Circuit's holding is not beneficial for trademark licensees or technological advancement. Accordingly, this Note proposes an amendment to the Code that empowers bankruptcy judges to exercise broad discretion in resolving the effect of rejection to the end that licensees will not lose their bargained-for trademark rights in most cases.
Pugh, Sumner R. IV
"The Great Bankrupt Divide: Amending The Rights of Trademark Licensees Under the Code,"
Georgia Law Review: Vol. 48:
1, Article 7.
Available at: https://digitalcommons.law.uga.edu/glr/vol48/iss1/7