sixty five of the bankruptcy code lets the trustee decide whether the estate will become a party to an executor you contract of the debt or if so the trustee assumes the contract and the estate steps into the debtors shoes rejects the contract the statutes plaintext tells us what that means rejection constitutes a breach of such contract immediately before the date of the filing of the petition fulfill any remaining unperformed obligations under the contract and the counterparty will have a preposition claim against the debtor for any resulting damages but that's all rejection is the decision not to take on the debtors future performance obligations which are therefore breached the overwhelming consensus of courts and scholars is that rejection can't give the estate any greater rights with respect to the rejected contract than the debtor would have outside bankruptcy and as respondent doesn't contest outside bankruptcy a license or could not use its own breach of contract as a basis to terminate the la seize rights under the agreement the you just said and i think it's correct that the government would be rejection means of the dollar has no obligation to perform future duties under the contract but if the debtor in this case as the owner of the trademark in question did not continue to perform quality control activities in relationship to the mark would that not imperil the future the validity of the mark so how can you know how can the debtor not continue to perform duties under that contract so th the quality control obligation is an obligation that's imposed by trademark law not solely by the contract in many cases not at all by the contract it is quite true that if it was the relevant meaning yes i assume that there's both a contractual obligation and a legal obligation under a tree market all but to the extent that there's a rejection of the contract the property owner is electing to say as he as it is entitle to say under the long i reject that obligation vsa b you can't continue to use my mark because i can't assure i'm not capable that's why you reject a contract because it's not beneficial to the company i reject that obligation hence i reject your being able to use it with respect justice sotomayor that is not how it works why when why how why isn't that exactly how it works that the agreement itself imposed an obligation on the license store to monitor the quality of the licensees good if that is so the license or is free the estate can choose not to assume that going forward obligation but rejection only relates to contractual obligation briefs said if you're the license see you don't have the right to produce an item if this license was one in which i gave you the license to sell my goods that they could and i refused to sell you the goods they can't go out and make the goods they can't go out and put the trademark on something else because they don't have the right to that different license agreements work in different ways and i don't disagree but the point is that you've been hurt by rejecting the contract i basically said you can't use my goods you are entitled to sue me breach would not let it take away the laysan sees right to use the mark the license or could say i'm preaching all day long but the licensee could continue to use the mark when you say that missionary what more do you look to to find that defined that principle i mean you say outlook to outside bankruptcy rot or you are against a state law is it a kind of common law or governed by state law by federal law and by federal statute the lanham act and case law that's developed under the lanham act so this is actually a much simpler principle it's simply that there are there is nothing that the license or could do outside bankruptcy it can't be done the other way a question of course three sixty five of course which is three sixty five and is not the default rule with respect to intellectual given the explanation that the congress k that it in the store the trademark owners would get more rights than and provides to other licensed sores in the intellectual property field it mentioned the reason why the courts up to that time who had recognized rejection as terminations that trademark owners were different because they ha quality control problems so i read that in the next thing to myself why would you think of giving trademark owners more rights or less rights than people under and let me let me explain justice sotomayor it is certainly true that congress made inadvertent decision to remove trademarks out of three sixty five but the legislative history makes it very clear that in enacting three sixty five n congress did so because it fought the rule of lubrizol which is that rejection deprives the counterparty of rights already conveyed under the agreement was wrong and that principle can't logically be converted didn't it didn't think it was wrong completely because he did a sort of hybrid giving more and less at the  that the law used in ca can retain its rights under the contract and that's precisely the issue when we were is all it did it did in addition go on to set out a specific federal regime governing subsidiary issues that arise with respect to the relationship between the licensee and the license or following rejection and you're correct that that regime differs in some respects from the state law that would otherwise apply but there is no question whatsoever that congress repudiated the basic rule of we were all staying that it was never intended that in addition to relieving itself of the debtors affirmative performance obligations congress never thought that rejection would enable the estate to take back rights already conveyed to the license disapprove one could say that justice ginsburg i believe the reason that congress didn't include trademarks in three sixty five and it is because it first of all it was dealing with an emergency with respect to patent licenses the situation was described as urgent that was what we always about congress recognized that trademarks do have some differences from patents and it thought that further study was alito started us off with and i guess just to take us back there why is it that that does not make trademarks different under you say we look to state law i mean it's are you saying that there is a uniform state law that says that the quality control obligation sort of makes no difference with respect to this issue that the entire contract is not unwound if there is i don't believe anyone would say that the entire contract can be unwound by the unilateral act of the lace and sore that's just because it on top but i mean the question is whether the quality control obligation makes trademarks different not from normal contract law not the question and the answer is no there is no support for that at all what happens what happens when the licenses or abdicates its quality control obligations which again stem from trademark law not from the contract is that the license or risks abandonment of the marks of the license or many use the may lose its rights in the mark  if that happens then the market is up for grabs the licensee can continue to use it so can third parties whoever can establish rights in it through use will be the new owner but it absolutely does not change basic contract law principles including that the breaching party cannot terminate the contract because it breaches the opposite is true but we're not and i'm sorry just wonder what would happen in th situations of the debtor is the lesson of residential property it rejects the lease and you would say that however the lessee could continue to a residential property and the lessor would be relieved of any further obligations under the contract correct but not statutory obligations yet correct so if there was a statute that s s that any sort of residential property has to provide heat they would continue to would have to continue to precisely and the reason that so is that the estate is the owner of the underlying property so if it's an apartment building the estate now owns the apartment building the estate is not given any kind of exemption from generally a plausible law relating to property ownership simply because it's in bankruptcy or because a contract relating to that asset has been rejected this is the kind of thing the trustee deals with every day the trustee is obligated with respect to all of the estates assets to comply with generally applicable law and it's also required to decide whether a particular asset is valuable enough to be worth investing a state funds and so with regard to the quality control obligation the trustee will have to make a decision this mark valuable to the estate and if so is it valuable enough to warrant making a really pretty minimal investment that's necessary to continue monitoring quality i mean i  think i'm sorry no please just as you know just thinking about that example you gave the analogy of the less sore of real property there is in many cities background that says once the landlord stops maintaining the property the city insists that the tenant leave because the property isn't safe anymore and i guess one question is whether there might be or is a similar background rule with respect to what happens to a trademark where the obligation for quality control it's not being maintained is that a silly analogy it's not a silly analogy at all but there is not analogous law if you know the again the license of frequently takes upon itself the great burden of quality control i mean quality control is obviously in the licensees interest as much as the license source because the licensee wants to maintain that the validity of the market just as much exclusive distribution rights off the table of the corporal o said there forfeited assume for the moment that i'm going to i'm not going to enforce it so we just have that the license arrangement and as i understand it your client wasn't under any orders not to use the license or the trademark and so what what theory are you injured and what damages might you have mission was injured because it was wrongly prevented from using the bankruptcy technology attempted to terminate the contract mission placed a purchase order technology said we're not going to fill that order so it's true that immediately before the bankruptcy mission hadn't been placing purchase orders because technology was refusing to fill them and then once the rejection order was really pretty you season your own goods using their true work or were you just knowing from the oh i'm sorry no at that point we were purchasing goods from technology which was a requirement under the contract so they no longer had to supply you with goods so what are we here meaning they don't have and i mean they have they have they have an obligation and you're open to damages but without it without you producing the goods i thought that brief from the media kerry said that you're relieved from supplying goods to lesser is really from supplying but just a sort of my or we had a right under the  to trip excuse me mr chief justice may please the court if i could just pick up on a couple of the questions about whether trademarks are different and then say a few words about our rule why respondents are wrong as the case is not moot this is at bottom a claim for money damages and it's still up in the air whether petitioner is going to get a judgment in its favor or responder has raised a number of arguments why on remand petition or would lose even if you rule in their  prohibiting petitioner from using the trademark at any point than where the damages this part of response arguments are i'm not sure i understand because it seems to prove way too much work because if it's right that you can't get the damages even when there's a bankruptcy court order it basically a declaratory judgment and it will be unlawful for you to use the mark then you would be able to get damages even under their theory of the case that you can take away the license in bankruptcy by rejecting it and terminate it you  would leave it at the counter party with nothing unless they went back into court and asked for an injunction against the thing the court just told it was already illegal is a very strange arguments are not to revolve that are trying to follow you so one of us is just confused and it may  me but if if the bankruptcy court is simply saying you've rejected it and the rejection only means you don't have to perform and that you breached does that prohibit oh the judge that that wouldn't have prohibited it with the bankruptcy court tells them you can't so you don't have an exclusive license that spew we therefore if it so what remains of this case well they're saying under their theory they can't move forward they have a non exclusive from somewhere else and no court has resolved these remaining claims and so this is still a very much alive case and really urging the court just to answer the trademark question here and to send it back down the first circuit has a damaging precedent on the books that we think really just undermines the stability and value of trademark licenses across the board i mean you imagine a situation where you're a franchisee who's invested millions of dollars in reliance on the ability you know to to put up in a mcdonald's in that in the golden arches and all of that with under respondants rule what they're saying is as soon as that the trademark owner goes into bankruptcy for any reason they can pull the rug out from under every single one of its franchisees and basically put them to an extortion a choice between paying a higher royalty payment or shutting down their business and house there to assets here one is the house which you least and the other is a promise by me to replace the windows or so if you can analogize to that you win well the more i think about it i'm not sure why ok there are a lot of special provisions in the trademark law and in bankruptcy law about houses and leases be it's really a special kind of house it's like a house that will collapse unless you keep it up maybe like an igloo that you promised to air condition you know you break your promise to air condition no more now if you seem to think of it like that you think you know there aren't too right you know this upkeep business is an essential part of one right which is going to give you the house to live in so thought i had i would like you or miss minnelli or you know so that some point to tell me which is the strong why is it you know you know what it's not really like that and i think a key portion of this key piece of it is if the trademark owner stops performing the quality control and in maintaining their distinct in this of the mark to consumers that does not instantly destroy the mark right that is a process of gradual it's over time and then another thing that makes it different from your igloo example is that at the end of the day the license still use the mark because the only thing that happens if you stop performing the quality control is eventually at the end of the day after some period of time it will be abandoned and returned to the public domain and i what i really think is actually it's a lot more like the situation in our brief which we talk about of leasing somebody a photocopier where you agree to maintain it over time it may well be that if you stop the maintenance on the photocopier that eventually the photocopier is going to going to eventually break down but that doesn't mean that you can repossess the copier by breaching your obligation to perform the maintenance right that's why i think really the heart of this case it just to say a couple words about why respondents are wrong that they're pressing an argument in their in their briefs that you should draw negative inference from and that the exact opposite rule should apply for trademarks i just want to emphasize how bizarre it would be to read and that way the whole point of n was to overrule lubrizol specific result that congress established for patents that that is i admit somewhat different than what would apply under the general background rule like under and three and four this is pretty far down in the weeds but and it is reproduced in our brief and fourteen and fifteen a it imposes basically an obligation on the license or to actually continue performing some of the obligations under the contract notwithstanding the rejection and for it require it imposes a duty to continue performing even during the period where the trustee still trying to figure out whether to assume or reject it and so i think really the right lesson to take away from an is the one justice ginsburg was saying which is that it doesn't put a thumb on the scale one way or the other they just didn't answer the trademark question sometimes  mission is just an omission judge easterbrook put it but if so then what you have to do is just resolve this by looking at the background rule under a and g and on that i think we have just by by far the better of the reading because she tells you what happens when you reject a contract and the answer is that the rejection constitutes a breach and i guess just one last point about g which i think is very helpful to our position and this is reproduced in the tex a i mean really respondents are effectively reading an to be an exception to the general rule in g they're saying that the general rule in g is that you can claw back some of these rights take back past performance but if you look at the text g it just doesn't say that it doesn't mention n it doesn't say that it's an exception and it identifies these two other provisions h two and i two as exceptions to the general rule and they have nothing to do with what we're talking about here those are about situations where you  offset round sorry i don't actually understand that argument it seems as all of these are exceptions by their nature and that goes contrary to the general rule that if it's an exception to the rule is different than the exception no i think what they really are are of the background rule to clarify difficult situations that's what it is and think but you know that the greatest problem here is that rejection is not a contract we don't when we stalk about contracts we talk about repudiating them terminating their avoiding them for a bunch of different language but backer of c is using a very specialized rejection and your adversary is right that it's not generally that we reject a piece of a contract we reject generally reject the entire contract and so it's not the rejection of one claim under the contract so there is some force of their one is the history of this language which we discuss in our brief but it's grounded in the common law of trusts in receivership so the idea that the trustee is not technically a party to the contract and has a choice of whether to assume or reject it and the rule back then under the common law is the same one we're advocating now the learned and decision we cite in our brief drives this home that the truck that the bankrupt landlord the trustee can stop paying for your heating hot water but he cannot of make sure you keep your rights and store asking the court to reverse the dreamer mr chief justice and may it please the court i'd like to start with the issue of the lutenist and if we take the exclusive distribution rights off the table which was the source of the four million dollars of claims that petition referred to in their reply at the petition stage that kept the case from being moot we're left only with a non exclusive trademark license that is already expired and the dispute about the rights under that is moot as i said it's already expired so we don't have a forward looking issue would only be a past issue and as the questions have indicated there were was no use of the trademark during the post rejection period the non exclusive he is correct that's right although the bankruptcy court did was at our request declare the parties rights what was the meaning of rejection and the only argument that the petitioner has that they would that they have some basis of claim against my client for the post rejection period is that we sought that ruling from the court why isn't it enough to have at least have in a court of injury for article three purposes the uncertainty created by declaratory judgment that effectively you can't use it may not prohibit you from using it but it sure may cause you to think twice about doing so and there might be damages available your honor i think that would be directly contrary to the first amendment nor pennington doctrine we have a right to go to court to ask you to declare the parties rights and that can't be the tortious act that creates damages on part of the other side they have no claim against us because we took no action against them to stop them from using the trademark their own words in the first circuit reflect this because by their own words and this is at j a five seventy two they say but for the bankruptcy court this cision mission would have continued using cool corps trademarks so it was only that decision and our only act is asking the court to make a ruling and i don't believe that this court's precedent would allow a claim to be based on that that's our mootness argument and with that i'm happy to proceed to the merits on the assumption that the court might reach the  concerned that a ruling in your favor would affect any number of other contracts the copier example the car example any of the other or the mcdonald's franchise i'd be happy to your honor because i think the photocopier example is actually parodic matic and there is we mentioned that there is another section of the code section five forty two a that that provides for a party who's in possession of property of the estate to return that property to the estate upon the filing of the petition and if the copier is held under a lease then the copier is property of the estate and that provision would require that the party to return the copy or two to the letter to the bankrupt c estate unless they affirm assume the contract which they're going to do because that's a source of income so as a practical matter they always assume that the copier in position under the contract is worth more than giving back a used copy or which is not worth very much but that's what the rule provides if on the other hand the copier has already been sold then it's no longer property of the state and the other party does not have to return it and that's exactly what the rule that we advocate for so under section three has a mcdonald's franchise the mcdonald's franchise is an interesting exception because they highlight the million dollars perhaps or more that's been invested by the free china z that does not distinguish the franchisee from in the of the other creditors of the bankruptcy estate a person might have been invested millions of dollars as a bond holder in the state it might have been a trade creditor with millions of dollars of claims all of those claims are reduced to often pennies on the dollars because they're preposition claims and that's the same the congress provided for counter parties all the creditors of the bankruptcy estate have to bring these claims as pre partition claims and that's the critical language of three sixty five g one it says that it constitutes a breach but doesn't stop there it says that it constitutes a breach as of the day before the petition it's a pre petition claim for breach and it's the temporal element that's critical and that temporal element continues through the other provisions five o two g one says that you must bring your claims on the basis of rejection and the claim is as if the breach had happened before the petition and when you get to eleven fourteen which is the discharge provision it says that those claims that are rose before the plan is confirmed are discharged and then specifically cross references five zero two what do you say about the the example of the last war in the last see where your honor ever since the one nine hundred thirty four act congress has included exceptions that specifically deal with real estate and so i would say we'd have to go to the terms of the explicit specific exception in three sixty five h one now what's notable is that that exception two things one it provides less rights not more but less rights than under petitioners general rule so instead of being an exception that that protects a favored class which is what congress thought it was doing it's instead a statement that that puts them in a worse position the other thing that's interesting about it is that three sixty five one only applies to lessees where the lease has commenced so in other words the party whose lease has commenced which is the party that would have a particular claim on congress's interest has lesser rights than a lessee whose lease has not yet rejection and terminate the rights of the opposing party that's right your honor the outs the nine bankruptcy rule is that the counter party has the choice they can either treat the contract as having been a total breach anticipatory rejection counterparty me treated as a total breach or it may seek to enforce the contract what congress did in three sixty five and you don't think that there is outside bankruptcy any special rule for trademarks you agree outside bankruptcy what would be the rule in this context in the trademark context well your honor i think our view is that you would have a breach of contract claim but you would not have an ongoing use  of the trademark because precisely because the nature of the trademark the nature of the trademark is that it is the trademark owner's reputation or it's a day before bankruptcy nobody knows bankruptcy is going to take place i am the holder of a trademark i have leased it to you and you can use it for ten years and i assume certain obligations and i write you a letter i'm not going to do it which is a material breach of the contract now you bring a lawsuit the day before and you say judge you know i want to keep the least good which could be anything jewels for a costume company you know that i don't know about igloos but but but nonetheless you say it could be anything ok what's the law can i keep it or not keep it well in our view you can't be no when you say in  your view i already stop you because it's amazing to me that there is no authority that's more on point in this real estate stuff which as you say is absolutely filled with writings in the statute  that property law for five hundred years and people have breached for five hundred years but not great march ok but in their common law you couldn't even license trademark because it was the person  owner's you can't think of any analogy or anything you would tell us when you walk in the day before nobody knows about bankruptcy and you say right or is a breach the contract  but i want to keep the property there's no good case that would help me well if we're talking about something other than other than trademark anything i do think is there are then you're right that the the non bankruptcy law is that the counter party gets to choose whether to treat that ok whether you have any authority for the proposition that trademark is different but that there's any authority that says if you're outside bankruptcy and the licensed or breeches is there any authority for the idea that the license see then has to stop using the mark i don't have a case to know and then to see then then the argument really turns down too which is where it sort of felt after reading the briefs well is this continuous obligation to keep the trademark going which is on me the breach or is that enough and at that point i become uncertain and one of the things cutting against you is that the licensee can keep up the trademark himself the but i don't know if that's enough so if you found anything that would really help the licensee cannot keep up the trademark that's the problem at the licensee or under the lanham act the licensee may license the trademark as a quote related party and it's not meaning you know subsidiary it means that it is acting under the control of the trademark owner without that control the trademark no longer serves as the source of identifying for the consumers that is the genuine article that's why trademarks are recognized as property of presidents or i since the licensee can't take any steps when a third party is infringing the trademark regardless of what the license or thinks but it's the licensees income right if the trademark no longer has value that certainly undermines the value that the license only saw in the original country it may be your are but again this is why mccarthy specifically warns against analogies of trademark to other forms of property even those that look very similar like patents because trademarks require a unity of ownership all goodwill  to the trademark owner that may be but there are thousands of big ahmed's i guess firms that have leased the word mcdonald and if one of the if somehow super mcdonald went bankrupt say the people in this neighborhood trust me to have real mcdonald's and what i'll do is i will look at every hamburger and i will make certain that that these numbers are exactly the same as they were when macdonald was still alive or whatever he doesn't have a right to do that i got to impress or once once the trademark owner ceases to control the market  can he can ok if he can and here we're dealing with non exclusive licenses why isn't that his problem well your honor again the the rule the general rule under the three sixty five g is that all claims for breach of contract have to be brought creep petition and that's because a preposition claim is pennies on the dollar a post petition claim is dollars for dollar if you allow the counter party to choose do i want preposition pennies or do i want efficient dollars they're always going to choose dollars and that would frustrate congress's purpose of ensuring that all claims are brought resolved and discharged as part of the bankruptcy and that's why congress knew that it had to provide all of the exceptions to the rule ok but i was here that's your bigger argument which is not a trademark argument here that's an argument about everything right which is that we should not read g to say that you know what she says honestly g says constitutes a breach that suggests that he just look to the effects of a breach under non bankruptcy law why doesn't she say that what  of bankruptcy and in the you certainly in the usual context it can be a but but the bankruptcy rule gives that choice to the counter party in congress flip that in three sixty five it's only in exceptions that the counterpart who has a choice what language are you pointing to in three six three sixty five g that says anything other than we look to see what happens when you breach b it's the the principle language is that it's a creep petition breach and then you have to trace it through and i realize the bags to code is very convoluted but you have to i recently cannot drive that g one i'm sure you can but i just to explain why it's going to take me some steps five o two g one says that a claim that arises from rejection must be brought it ministered and is just charged under the general rule as if it had a reason pre bankruptcy and then the discharge statute eleven fourteen also refers to five o two g it says that all claims that a rose pretty confirmation are discharged and then it specifically references the claim specified in five o two g y because what if i were to geve does is make clear that all claims based on the breach that is the the rejection or deemed pre partition breach if congress thought that some of those claims would be brought to pennies but other claims could be brought for full dol there's congress would have told us where that line was and it didn't what instead congress does it provided the general rule that the instead of the counter party getting the choice treated as a total breach terminated or pseudo enforce the debtor the trustee gets that choice i'm going to treat it as a total breach terminated and then what the exceptions do in each of them is it gives the counterparty a choice so now it's the exception now as in non bankruptcy law the counter party gets the choice to treat is terminated that's the general rule when congress enacted and they said that's the general rule would apply apart from the exception accept these rights but the rights that are accepted are a subset of rights that would exist under non bankruptcy law and i'll point you to and in particular because and makes clear that the following rights that patente and that the licensee would not would have under non bankruptcy law are not available to it ok the right to specific performance the right to updates in the  software or the patent the right to set off that would be available under non bankruptcy law the right to an administrative claim all of those rights that a party would have under non bankruptcy law that the counterparty does not have if they elect the rights that congress has provided them under and so the idea that congress adopted this very detailed exception that goes on for pages to provide for patent ts licenses rather patent licensees because they were a favored party and that in the end those are fewer and lesser than the rights of trademark owners or that patent licensees would have had and right well your honor it's not a uniform view we've pointed to articles that agree with us peter manno article agrees that upon the rejection of trademark license the licensee's right to use  is terminated and said they have a claim for prepaid pre bankruptcy pennies on the dollar and of course the wilton article says the same mr weldon is my co counsel so i understand you may discount that but the but but but it is absolutely not true that the views are unanimous in one in one respect among a mickey that the other side have are that into and other organizations that have gone to congress many times to ask congress to adopt an exception similar to and for trademark licensee is and congress has refused to do so so now they're asking this court to do what they have failed to obtain from congress but note when they went to congress to ask them to adopt an exception they understood that it had to be nuanced it had to balance the party's respective rights it had to for example provide that you had to continue to conform to trademark standards and for example that you have to continue to pay your share of advertising fees all of these are things that are different because of trademark because of the duty of control because of the need to maintain consistency and congress could do that in a statute that's what was proposed congress has declined to do so it is going to be sure i'm not missing something forget bankruptcy think of contract law over the course of the centuries right now as i started out a breach is a provision the ordinary rule is be can keep the property that he's got if you want is not the ordinary rule but then there are laws there should be lots of not ordinary cases there should be lots of cases what happens does it does it does does does see what happens well your honor i previously said that i was not aware of a case that specifically held that breach by a license or ns the licensees right to use the mark my colleagues have have been reminded me of the seven circuit's decision gorenstein enterprises b quality care usa seventy four of second for thirty one which holds that it does and the licensees right to use the market again i think that's because of the nature of the trademark that it represents the owners reputation the unitary theory of ownership which is unique to trademark and the fact that without that control there is no related party to to use the market and therefore it ceases to be affected so this is what special rules were outside of bankruptcy this is a special rule for trademarks it's different from the rule that would apply outside bankruptcy for let's say least property and it's be the reason why this is a different rule is because of the duty of the license were to maintain the quality bankruptcy so i don't i don't understand why there would be a special rule for trademark outside bankruptcy that would be it would be predicated on the license or his failure to exercise the quality control and so because of because the license war doesn't want to do that the license or and in breach of the contract gets a more favorable result it doesn't seem to make any sense well you're honor it again i think it's because of the unique nature of the trademark as being only you can only have a valid license of the trademark if there is that control that specified by the lanham act and so if you bankruptcy gives you more rights well what what we're saying is that there we think that with trademarks especially you can't continue to exercise the trademark license after rejection and that because of the unique character of trademarks but under our view it's true generally as well because if you have a lease of a photocopier the the general rule of three sixty five g is that if you if you reject a lease of a photocopier that at least now is effectively terminated it's been reduced to a claim for prepared to sion damages and five forty two a would tell us that the possessor of the of the photocopier has to return it to the estate unless the lease is assumed which it normally is because it's more beneficial so the general rule is that these types of ongoing relationships are terminated they're reduced to a claim for pre bankruptcy damages breach of contract damages that are paid pennies on the dollar and then it's not up to the counter party to decide they don't want pennies on the dollar they would rather have dollars for dollar because if that were the case then no counter party would bring a claim for pre bankruptcy breach they would all wait and try to enforce the specific any argument that would limit paroling in your favor just to trademark law because it seems to me that you're asking us to do exactly what the other side wants us to do to announce a general interpretation of this or that basically says these types of contracts actually do survive well let's see these have the right to terminate in part and keep other rights alive well you're not are you i thought when i read your briefs that you had an argument as to why we should limit our ruling to trademark law but there's no way to do that even under your interpretation no no your honor i think that there is first of all all we're asking the court to do is it here to its ruling in bill disco which said that the effect of rejection is that the contract is no longer an enforceable contract that's that's our rule this court decided in bill disco it was in the n l r b context but the first part of the opinion is all about how  collective bargaining agreements are subject to three sixty five a and g just like any other contract and so when the court steps a somewhat different because that rick buyers actual affirmative obligations by the employers well you're not arguing the employer has to be a trademark owner has to continue his rights what one of the rights that was was deemed one that had to be brought as a prepared to sion claim in bill disco was a claim based upon the loss of seniority rights seniority rights  if it was reduced to a claim for prepared to sion damages and that's the rule that we're articulating but it even if three sixty five didn't work the way we say even if the general rule three sixty five g that non bankruptcy law provides such that the exceptions become superfluous and actually give the favored parties fewer rights than the general rule would provide which is of course contrary to everything this court has ever said about exceptions which they're called exceptions in three sixty five g b we would still have an argument so could i understand if it's sort of nature of the argument i mean you have your general argument and the way that goes is misbah now lisa says the effect of rejection is breach and you say the effect of rejection is rescission and that's the basic argument where you know honestly miss minnelli has this language that says it constitutes a breach of addition breach so but then you say  ellie is right on that and we just look to what it means to breach outside non outside bankruptcy law then you say we have a special rule for trademarks because trademarks are different outside bankruptcy law and you point us to a single seven circuit case is that correct and the nature of the trademark and mccarthy he explains the rule of unitary ownership that it's a different type of property that the property is really just the property interest in the owners reputation and the fact that the whole notion of licensing which was a new advent in trademark was because the licensee is treated as a related party because it is operating under the control so it is in the nature of the it is in the nature of trademark that it is subject to that control and without that control it ceases to exist but i want to point the court to the specific language of trademark license which i think really brings home the point this trademark license in this is a j tooth says thirty seven says that it can grants the mission and non exclusive nontransferable limited license for the duration of the term to use its mark for the limited purposes of performing its obligations exercising its rights of the agreement subject to written trademark guidelines of the  and the right of court to review and approve in other words all it was was a contract right it's not a property right in the license there can't be because of the rule of unitary ownership all it was was a contract right to use the trademark subject to cool corps control and if that control goes away because you can't enforce that that's one of the one of the if you know prospective performance obligations of a kook or in thank you i have three points that i'll try to make quickly first the gorenstein case that counsel referred to does not hold that a trademark license or can unilaterally term a license by ceasing to exercise quality control that was a case in which the lessons see defaulted on the agreement for other reasons and then tried to continue using the trademark afterwards obviously that can't be done so there is no authority for the proposition that general contract princip don't apply to trademark licenses second this is not about whether the debtor can abandon the trademark and get rid of its monitoring obligations it's about whether the state  take back the rights in the license and resell them to somebody else and distribute the proceeds among creditors and it can't rejection is not avoidance there are separate avoidance procedures and the code  rejection doesn't let the estate claw back interest and the debtors assets that the debtor conveyed before bankruptcy due to those are just one question if you continue using the m case mission has an administrative claim stemming from the wrongful deprivation of its right to use the trademark post rejection of the state it's a claim against the a state that a prior to bankruptcy the debtor conveyed the licensee an interest in its intellectual property we don't have to call that a property right it doesn't matter what we call it but it's a stick in the bundle of sticks just the bankruptcy the debtor doesn't have the right to transfer the license to a buyer or to its creditors that is also true in bankruptcy one of the most fundamental principles of bankruptcy is that the estate have any greater rights to property than the debtor itself had at the time of filing the lace the debtors ip comes into the bankruptcy estate subject to the license so the value of the license is not available to creditors belongs to