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Trademark Licenses . . . Again (Update No. 4)

Our May 23, June 28, July 13 and August 3 posts discussed the First Circuit’s January 12 decision in Mission Product Holdings, Inc. v. Tempnology, LLC.[1] and, most recently, the pending petition for certiorari.[2]  Since our last post, the respondent filed its response to the petition in opposition to granting cert.,[3] giving several reasons why cert. should be denied.

It is common knowledge that it is more likely that the Supreme Court will grant cert. where decisions of the Courts of Appeals of different circuits are in conflict in order to resolve the conflict.  The Opposition Brief discounts the circuit split touted by petitioner.  It describes the split as consisting solely of the Seventh Circuit’s 2012 Sunbeam decision and the First Circuit’s 2018 Tempnology decision and characterizes this split as “neither deep nor long-standing.”[4]  That characterization depends on the exclusion of Lubrizol from the equation, which respondent does with two points: Lubrizol was a patent case, not a trademark case, and thus raised different issues because of underlying differences in patent and trademark law, and in any event Congress fully resolved the issues raised by Lubrizol for patents and all other forms of intellectual property except trademarks nearly 30 years ago when it enacted Section 365(n) of the Bankruptcy Code.[5]

Respondent also cites particular characteristics of this case that make it less than an ideal vehicle to resolve a supposed split with Sunbeam.  The underlying licenses in the two cases were quite different, the underlying license in this case had already expired in accordance with its terms before its purported rejection, and the record below is bereft of any evidence on the costs and benefits of varying possible effects of rejection.[6]

In addition, the Opposition Brief discusses at length the comprehensive treatment of the rejection of intellectual property licenses in Section 365(n) and the exclusion of trademarks therefrom.[7]  Therefore, it contends, the circuit split, such as it is, is limited to trademarks and not to intellectual property generally.  The Opposition Brief asserts that Congress’ omission of trademarks was entirely “purposeful,” thus rebutting Sunbeam’s famous (or infamous) “an omission is just an omission.”

We continue to monitor developments in what could become one of the most consequential Supreme Court cases on bankruptcy in decades.

[1]  879 F.3d 389 (1st Cir. 2018), petition for cert. filed, No. 17-1657 (June 11, 2018). 

[2]  Some cases are cited and terms used as cited or defined in our prior posts.

[3]  Brief in Opposition to Petition for a Writ of Certiorari of Tempnology, LLC n/k/a Old Cold LLC, No. 17-1657 (September 7, 2018) (“Opposition Brief”). 

[4]  Id. at 4. 

[5]  Id. at 4-6.

[6]  Id. at 14-17.

[7]  Id. at 7-14.