Laura D. Steele


As trademark rights become an increasingly valuable asset in Chapter 11 reorganizations, it is critical for Congress and the courts to clarify how trademarks will be treated in bankruptcy, particularly where the debtor is a trademark licensee. Without clarity, Chapter 11 reorganization may not be a viable option. This Comment urges that trademark licensees should not be stripped of a license simply because the licensee enters bankruptcy. Rather, where a licensee intends only to continue using an existing license under the terms of the existing agreement with the licensor, the licensee's use of that license should be uninterrupted during reorganization. This recommendation, contrary to the position of trademark licensors, will not invade the province of trademark owners to control their marks. To support this recommendation, this Comment examines the statutory frameworks of both trademark and bankruptcy law, legislative history of the Bankruptcy Code, and cases that illuminate the current circuit split over the rights of a trademark licensee in bankruptcy. Building on these elements, this Comment outlines an analytical approach that strikes a balance between the need for business reorganization and the duty of a trademark licensor to exercise control over its mark.