Bankruptcy – Breach of Contract

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United States Supreme Court

Case Name: Mission Product Holdings, Inc. v. Tempnology, LLC,

Case No.: 17-1657

Focus: Bankruptcy – Breach of Contract

Section 365 of the Bankruptcy Code enables a debtor to “reject any executory contract”—meaning a contract that neither party has finished performing. 11 U. S. C. §365(a). The section further provides that a debtor’s rejection of a contract under that authority “constitutes a breach of such contract.” §365(g). Today we consider the meaning of those provisions in the context of a trademark licensing agreement. The question is whether the debtor-licensor’s rejection of that contract deprives the licensee of its rights to use the trademark. We hold it does not. A rejection breaches a contract but does not rescind it. And that means all the rights that would ordinarily survive a contract breach, including those conveyed here, remain in place.

Reversed and remanded

Dissenting: SOTOMAYOR, J., filed a concurring opinion. GORSUCH, J., filed a dissenting opinion.

Concurring:

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.