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In a 2-1 decision, the U.S. Court of Appeals for the First Circuit reversed its Bankruptcy Appellate Panel’s adoption of the Sunbeam rule, and held that a trademark licensee of a debtor-licensor is not entitled to continuing performance, after the debtor-licensor rejected the underlying contract. In its decision, which deepens the circuit split on the issue, the First Circuit favored the Fourth Circuit’s view in Lubrizol and refused to apply the Seventh Circuit’s analysis in Sunbeam. In re Tempnology, No. 16-9016, 2018 WL 387621 (1st Cir. 2018).

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