The U.S. Supreme Court refused on Monday to resolve the question of what happens to the license to use a trademark when the owner of that trademark goes through bankruptcy, Reuters reported yesterday. In an order without comment, the high court rejected a request from Jarden Consumer Solutions to help settle a conflict between federal courts of appeal over whether trademark licenses survive bankruptcy. The case involves Lakewood Engineering & Manufacturing Co., a consumer products company that outsourced the manufacturing of box fans bearing its trademark to Chicago American Manufacturing. Lakewood's creditors in 2009 filed an involuntary bankruptcy petition against the company. The bankruptcy trustee rejected Lakewood's supply contract with Chicago American and sold the bulk of Lakewood's assets to the highest bidder, Jarden. Chicago American continued to produce fans with the Lakewood trademark, prompting a lawsuit by the trustee and later Jarden for trademark infringement. But the bankruptcy court found that even though the trustee had rejected the contract, Chicago American could continue to use the Lakewood trademark. In 1988, Congress changed the Bankruptcy Code to allow holders of intellectual property licenses from a debtor to retain their rights even if a trustee rejects the licensing agreement in a bankruptcy. However, in its definition of "intellectual property," Congress included patents and copyrights but not trademarks. "We think this is going to interfere with the bankruptcy process and lead to the dilution of trademark rights by creating uncertainty regarding the parties' trademark rights and obligations post-rejection in bankruptcy," said Leonard Feldman, Jarden's appellate lawyer at Stoel Rives. The case is Sunbeam Products Inc v. Chicago American Manufacturing, No. 12-431.
