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“Protection for Trademark Licensees in Licensor Bankruptcies Remains Uncertain: In re Tempnology, LLC”

Business Bankruptcy Committee Newsletter By Kevin Grzebielski

Below is an excerpt:

The licensing of intellectual property ("IP") – such as patents, copyrights, and trademarks – can mean big business for licensors (the IP's owner) and licensees (the users of the IP). IP may be among the most valuable assets of a licensor, generating significant royalties. A licensee, in turn, may build its entire business around the utilization of licensed IP, including the use of the licensor's trademarks.

However, when an IP licensor files a bankruptcy case, the interests of the debtor-licensor and the licensee can clash. The debtor-licensor often seeks to sell the valuable IP unencumbered. Conversely, the licensee may have incurred significant expenses in order to utilize the licensed IP and will want to retain those rights.

Originally published in Business Bankruptcy Committee Newsletter, January 2016