This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
The case concerns whether a bankruptcy trustee may reject a trademark license under Section 365 of the Bankruptcy Code, and how that rejection affects the debtor’s obligations and any resulting damages.
Background and question before the Court
Justices asked whether rejection of a trademark license under Section 365 discharges the debtor’s future obligations and how pre‑petition versus post‑petition damages are treated.
What each side argues
Petitioner
According to Petitioner, section 365 of the Bankruptcy Code lets the trustee decide whether the estate will become a party to an executory contract; rejection constitutes a breach of the contract immediately before the filing of the petition, relieving the debtor of future performance obligations.
According to MS. SPINELLI, the license is analogous to a lease; prior to bankruptcy the debtor conveyed an interest in its intellectual property, creating a lease‑like interest that survives the bankruptcy filing.
Respondent
According to Respondents, the case is moot because the exclusive distribution rights are off the table, leaving only a non‑exclusive trademark license that has already expired.
According to Respondents, existing Supreme Court precedent would not allow a claim based on the rejected trademark license.
What happened at oral argument
Justice Alito asked whether rejection means the debtor has no obligation to perform future duties under the contract.
According to Justice Sotomayor, justice Sotomayor questioned the relevance of the trademark obligations after rejection.
Justice Gorsuch asked why the alleged injury was insufficient for Article III standing and whether damages might be available.
According to Justice Breyer, justice Breyer inquired whether a trademark lease would dissolve once the lessee holds the “stick” in the bundle of sticks.
What the Court decided
Why it matters
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- ec93f068597fdf68f912-r1-a5e28d8175ceb6e8.pdforal argument transcript
Guide generated September 26, 2026. Automated validation accepted this version.