The Sale of Trademarked Inventory in Bankruptcy: Pitfalls for Trademark Owners
- Topics:
- Bankruptcies
- Source:
- Reed Elsevier
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Overview: In the information age and in the destabilization of the dot-com market, intellectual property assets represent an increasingly important aspect of loan transactions and insolvency proceedings. Frequently, a lender will hold a security interest in its borrower's inventory, some or all of which may have been produced pursuant to license. The borrower's inventory may, for example, be branded with the trademark of a trademark licensor. When a lender seeks to foreclose on its security interest in such property, the lender, the borrower, the bankruptcy court, and the trademark owner all face a high degree of uncertainty as to what may be done with the trademarked inventory. This article explores those uncertainties with particular attention to the plight of the trademark owner. When a lender obtains a security interest in trademarked inventory and later attempts to realize the value of that security interest through a foreclosure sale, the trademark owner faces risks and challenges that it is unlikely to have faced in any other context.
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Format: HTML | Date: Jan 2003 | Pages: 1
