Thanks to our March guest bloggers, Louis Andrew ‘66 and 3L Nicholas Harken. Our April bloggers will be Barack Obama, Sarah Palin, and Keith Richards. Okay, that was indeed a lame April’s Fools joke. But we can no doubt expect an interesting month from Eric Pearson ’07 and 1L Joseph Schuster. Richards will not actually be blogging here until next month, when he is in town to pick up his honorary degree at the Law School’s graduation ceremony.
Congratulations to 3L Laura Steele, the winner of this year’s Frank DeGuire Award for the best student comment in the Marquette Intellectual Property Law Review. Laura’s terrific comment, entitled “Actual or Hypothetical: Determining the Proper Test for Trademark Licensee Rights in Bankruptcy,” is available on SSRN. Here is the abstract:
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.
No one wants a replay of the financial meltdown of the past couple years, but can new regulations really provide a long-term solution? Periods of heightened regulatory oversight seem inevitably followed by periods of deregulation, while the prospect of government bailouts may create a moral hazard that promotes excessive risk-taking. Thus, in an interesting new article on SSRN, Shelley Smith suggests an alternative response that does not involve government regulatory agencies. Her proposal instead focuses on the courts and reform of the law of adhesion contracts — those take-it-or-leave-it agreements that consumers routinely sign without reading or understanding.
Shelley argues that contracts of adhesion played an important role in creating the subprime mortgage mess, as consumers took on ruinous financial obligations without fully understanding the terms of the deals. She suggests that courts should create stronger incentives for the drafters of contracts of adhesion to make the key terms comprehensible to ordinary consumers. Thus, she would relax the normal presumption that the terms of the written contract will be strictly enforced where there is reason to doubt whether a reasonable person would have read and understood those terms. If the “reasonable person” test is not satisfied, and extrinsic evidence fails to establish that the consumer actually received notice of the disputed term, then the court would not enforce the term as written, but would instead treat the case as a “missing term” case.
The article, entitled “Reforming the Law of Adhesion Contracts: A Judicial Response to the Subprime Mortgage Crisis,” is forthcoming in the Lewis and Clark Law Review. The abstract appears after the jump.