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Bankruptcy Proofing a Prepaid Trademark License

Thursday, May 16, 2013 12:30 PM to 1:30 PM
Boston Bar Association - 16 Beacon Street, Boston, MA


The Bankruptcy Code provides no statutory protection for trademark licensees; if a trademark license is rejected in bankruptcy, at least one U.S. Court of Appeals has held that a trademark licensee loses its right to use its licensed trademarks.

The problem is greatest for prepaid trademark licenses, a transaction structure commonly used in connection with the sale or spinoff of a product line or business unit. Under a prepaid trademark license, a licensor is subject to its obligations but receives no royalties or other economic benefit from the license.  As a result, prepaid licenses are very likely to be rejected in a bankruptcy of the trademark licensor.

Two recent cases, Exide Technologies from the Third Circuit U.S. Court of Appeals and Interstate Bakeries from the Eighth Circuit U.S. Court of Appeals, suggest a method for documenting prepaid trademark licenses to minimize licensor insolvency risk.  This program will summarize the current status of the law and provide practical suggestions for documenting licenses and structuring transactions to protect acquirors of product lines and businesses.

The presenters are authors of an article, “Trademark Licensing in the Shadow of Bankruptcy”, to be published in the May 2013 issue of The Business Lawyer that addresses this and related topics.  


Sponsoring Section/Committee(s):




Jennifer Jones


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