The First and Eleventh Circuits denied petitions for rehearing en banc in two controversial cases. One of the cases, involving trademarks, may end up in the Supreme Court next term.
The Boston-based appeals court will not reconsider Mission Product Holdings Inc. v. Old Cold LLC (In re Old Cold LLC), 879 F.3d 376 (1st Cir. Jan. 12, 2018), which reversed the Bankruptcy Appellate Panel by holding that the rejection of a trademark license bars the licensee from continuing to use the mark.
In a 2/1 opinion, the First Circuit deepened an existing a split of circuits by disagreeing with Sunbeam Products Inc. v. Chicago American Manufacturing LLC, 686 F.3d 372 (7th Cir. 2012), where Circuit Judge Frank Easterbrook held that nothing in non-bankruptcy law precludes a licensee from continuing to use a trademark simply because the licensor has breached the license agreement.
Instead, the majority on the First Circuit panel followed a long-controversial decision from the Fourth Circuit, Lubrizol Enterprises Inc. v. Richmond Metal Finishers Inc., 756 F.2d 1043 (4th Cir. 1985).
Evidently, some judges on the First Circuit were in favor of rehearing en banc, because the order on Feb. 14 denying the petition said that “a majority” did not vote for rehearing.
Also on Feb. 14, the Eleventh Circuit denied rehearing en banc in Title Max v. Wilber (In re Wilber), 876 F.3d 1302 (11th Cir. Dec. 11, 2017).
In Wilber, the majority held, over a strident dissent, that a creditor need not object to confirmation of a chapter 13 plan. Instead, the majority held that the confirmed plan did not bind the creditor because the lender had previously filed a motion to declare that a car was no longer estate property. The majority also held that state law can operate automatically to take property out of the bankrupt estate after filing.
In the order denying rehearing, the Eleventh Circuit said that no judge even requested polling the circuit judges.
Will the Supreme Court Hear Either Case?
Old Cold, involving the consequences of rejecting a trademark license, deepens an existing circuit split on an important issue nationwide. Therefore, Old Cold presents an attractive case for the Supreme Court to grant certiorari. Counsel for the appellant told ABI that a decision has not been made on seeking Supreme Court review.
On the other hand, Wilber is not so likely to attract attention at the Supreme Court. Although other courts, in this writer’s opinion, are unlikely to agree with Wilber, the Supreme Court is not a court of error. The majority in Wilber said that the result turned on the peculiar facts of the case. Consequently, the Supreme Court may not be interested in a case arguably lacking nationwide consequences.
To read ABI’s discussion of Old Cold and Wilber, click here and here.