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Bankruptcy — trademarks

By: WISCONSIN LAW JOURNAL STAFF//July 9, 2012//

Bankruptcy — trademarks

By: WISCONSIN LAW JOURNAL STAFF//July 9, 2012//

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United States Court of Appeals For the Seventh Circuit

Civil

Bankruptcy — trademarks

11 U.S.C. 365(a) does not apply to trademarks.

“Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc., 756 F.2d 1043 (4th Cir. 1985), holds that, when an intellectual-property license is rejected in bankruptcy, the licensee loses the ability to use any licensed copyrights, trademarks, and patents. Three years after Lubrizol, Congress added §365(n) to the Bankruptcy Code. It allows licensees to continue using the intellectual property after rejection, provided they meet certain conditions. The bankruptcy judge held that §365(n) allowed CAM to practice Lakewood’s patents when making box fans for the 2009 season. That ruling is no longer contested. But ‘intellectual property’ is a defined term in the Bankruptcy Code: 11 U.S.C. §101(35A) provides that ‘intellectual property’ includes patents, copyrights, and trade secrets. It does not mention trademarks. Some bankruptcy judges have inferred from the omission that Congress codified Lubrizol with respect to trademarks, but an omission is just an omission. The limited definition in §101(35A) means that §365(n) does not affect trademarks one way or the other. According to the Senate committee report on the bill that included §365(n), the omission was designed to allow more time for study, not to approve Lubrizol. See S. Rep. No. 100–505, 100th Cong., 2d Sess. 5 (1988). See also In re Exide Technologies, 607 F.3d 957, 966–67 (3d Cir. 2010) (Ambro, J., concurring) (concluding that §365(n) neither codifies nor disapproves Lubrizol as applied to trademarks). The subject seems to have fallen off the legislative agenda, but this does not change the effect of what Congress did in 1988.”

Affirmed.

11-3920 Sunbeam Products, Inc., v. Chicago American Manufacturing, LLC

Appeal from the United States Bankruptcy Court for the Northern District of Illinois, Hollis, J., Easterbrook, J.

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