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Seventh Circuit Holds That Trademark Licensee Does Not Lose Right to Use Licensed Trademarks When Debtor-Licensor Rejects License

August 16, 2012 Read the memo

The United States Court of Appeals for the Seventh Circuit recently held that a trademark licensee does not necessarily lose the right to use licensed marks upon rejection of the license agreement by a debtor-licensor. (Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, Docket No. 11-3920 (7th Cir. July 9, 2012.))  The decision is grounded on the court's understanding of the consequence of rejection under the Bankruptcy Code rather than the nature of the particular contract at issue and, thus, may also have implications for other types of contracts.

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