Eighth Circuit affirms that perpetual royalty - free trademark license was an executory contract

The US Court of Appeals for the Eighth Circuit recently issued an opinion in the first Interstate Bakeries Corp bankruptcy case addressing whether a perpetual royalty-free trademark license constituted an executory contract that could be assumed or rejected in bankruptcy. The Eighth Circuit, in affirming the opinion of the district court, concluded that material obligations remained unperformed by the parties on each side of the license and that as a result, it was an executory contract. If provisions in the licensing agreement explicitly detailing a section, provision, or duty are identified as material, and it remains unperformed, that is enough of a hook for the court to conclude that the license is an executory contract, subject to assumption or rejection and related provisions, in a bankruptcy case even if such case is filed over a decade after the licensing agreement is executed.