Can Bankruptcy Terminate Intellectual Property Licenses?
On October 26, the Supreme Court granted Mission Products Holdings, Inc.’s petition for certiorari to address the circuit split on the issue of whether a licensee of intellectual property rights should be able to retain its rights to the intellectual property even if the licensor rejects the contract. Mission Prod. Holdings, Inc. v. Tempnology, LLC, No. 17-1657, 2018 WL 2939184 (U.S. Oct. 26, 2018). Specifically, the Supreme Court certified the following question for review: “[w]hether, under § 365 of the Bankruptcy Code, a debtor-licensor’s ‘rejection’ of a license agreement—which ‘constitutes a breach of such contract,’ 11 U.S.C. § 365(g)—terminates rights of the licensee that would survive the licensor’s breach under applicable non-bankruptcy law.” Id.
After filing for Chapter 11 bankruptcy, a company may request court approval to “reject” any outstanding executory contracts. 11 U.S.C. §§ 365(a), 1107(a). If the bankruptcy court approves the rejection, the other party to the contract may pursue a claim for damages because of the “breach” of the contract but cannot compel future performance. 11 U.S.C. § 365(g). The Supreme Court previously held “the authority to reject an executory contract is vital to the basic purpose to a Chapter 11 reorganization, because rejection can release the debtor’s estate from burdensome obligations that can impede a successful reorganization.” N.L.R.B. v. Bildisco & Bildisco, 465 U.S. 513, 528 (1984). In many situations, monetary damages provide adequate compensation for the rejection. However, in situations involving contracts for specialized services or goods, monetary compensation—and likely reduced monetary compensation due to the insolvency of the rejecting party—may leave the other party in an undesirable position.
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Baker Botts Private Reception at J.P.Morgan Healthcare Conference
Baker Botts will be hosting a private reception during the J.P.Morgan Healthcare Conference to be held at the JW Marriott located in San Francisco Union Square overlooking downtown San Francisco on Tuesday January 8, 2019.
The JW Marriott San Francisco Union Square is conveniently located one block away from The Westin St. Francis where the J.P.Morgan Healthcare Conference is held.
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The New Reality Of Patent Trials Post-Halo
Jeremy Taylor, Sarah Guske, Wayne Stacy
Jury verdicts following the U.S. Supreme Court’s 2016 Halo decision suggest that previous patent litigation strategies are no longer working for trial-bound cases, and new strategies must be adopted to effectively try cases after Halo. Defendants that do not properly prepare defenses to willful infringement early in a case are much more likely to be found liable for both infringement and willfulness at trial, and plaintiffs that do not capitalize on post-Halo strategies are missing a huge opportunity to win their case. In this post-Halo world, both plaintiffs and defendants need to rethink strategies for handling trial-bound patent infringement lawsuits — strategies that, in most situations, begin as soon as a case is filed.
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*This article first appeared in Law360 on November 13, 2018.
The classic Converse All-Star Chuck Taylor sneakers may be the most iconic sneakers—nay, footwear—ever designed. That design is now the subject of a trademark dispute in the International Trade Commission (ITC), recently heard on appeal by the Federal Circuit. Last month, the Federal Circuit vacated and remanded a 2016 decision by the ITC that had found invalid a Converse trademark registration for the classic midsoles. Converse v. Int’l Trade Comm’n, No. 16-2497, 2018 WL 5536405 (Fed. Cir. Oct. 30, 2018). The court thereby breathed new life into Converse’s effort to halt the respondents’ importation into the United States of footwear that allegedly infringes Converse’s trademark.
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*This article first appeared in New York Law Journal on November 27, 2018.
# # #About Baker Botts L.L.P.
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