Tackling Rights Of Trademark Licensees In Bankruptcy

Law360, New York (September 20, 2012, 1:48 PM EDT) -- Acquirers of branded businesses often acquire prepaid, perpetual, exclusive trademark licenses to use the business’s trademarks. On Aug. 30, 2012, the U.S. Court of Appeals for the Eighth Circuit ruled that a bankrupt licensor that had granted this type of license may reject the license and cut off the acquirer’s right to use the marks.

The case, In re Interstate Bakeries Corporation, involved a common fact pattern in merger and acquisition transactions where the buyer acquires a business under an asset purchase agreement and licenses related...
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