(Slip Opinion) OCTOBER TERM, 2018 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is 

being done in connection with this case, at the time the opinion is issued. 

The syllabus constitutes no part of the opinion of the Court but has been 

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

MISSION PRODUCT HOLDINGS, INC. v. 

TEMPNOLOGY, LLC, NKA OLD COLD LLC 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE FIRST CIRCUIT 

No. 17–1657. Argued February 20, 2019—Decided May 20, 2019 

Petitioner Mission Product Holdings, Inc., entered into a contract with 

Respondent Tempnology, LLC, which gave Mission a license to use 

Tempnology’s trademarks in connection with the distribution of certain clothing and accessories. Tempnology filed for Chapter 11 bankruptcy and sought to reject its agreement with Mission. Section 365 

of the Bankruptcy Code enables a debtor to “reject any executory contract”—meaning a contract that neither party has finished performing. 11 U. S. C. §365(a). It further provides that rejection “constitutes a breach of such contract.” §365(g). The Bankruptcy Court

approved Tempnology’s rejection and further held that the rejection

terminated Mission’s rights to use Tempnology’s trademarks. The 

Bankruptcy Appellate Panel reversed, relying on Section 365(g)’s 

statement that rejection “constitutes a breach” to hold that rejection

does not terminate rights that would survive a breach of contract 

outside bankruptcy. The First Circuit rejected the Panel’s judgment 

and reinstated the Bankruptcy Court’s decision. 

Held: 

1. This case is not moot. Mission presents a plausible claim for

money damages arising from its inability to use Tempnology’s trademarks, which is sufficient to preserve a live controversy. See Chafin 

v. Chafin, 568 U. S. 165, 172. Tempnology’s various arguments that

Mission is not entitled to damages do not so clearly preclude recovery

as to render this case moot. Pp. 6–7.

2. A debtor’s rejection of an executory contract under Section 365 of 

the Bankruptcy Code has the same effect as a breach of that contract 

outside bankruptcy. Such an act cannot rescind rights that the contract previously granted. Pp. 7–16. 
 

 

 

 

 

2 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Syllabus 

(a) Section 365(g) provides that rejection “constitutes a breach.” 

And “breach” is neither a defined nor a specialized bankruptcy 

term—it means in the Code what it means in contract law outside 

bankruptcy. See Field v. Mans, 516 U. S. 59, 69. Outside bankruptcy, a licensor’s breach cannot revoke continuing rights given to a

counterparty under a contract (assuming no special contract term or 

state law). And because rejection “constitutes a breach,” the same result must follow from rejection in bankruptcy. In preserving a counterparty’s rights, Section 365 reflects the general bankruptcy rule 

that the estate cannot possess anything more than the debtor did 

outside bankruptcy. See Board of Trade of Chicago v. Johnson, 264 

U. S. 1, 15. And conversely, allowing rejection to rescind a counterparty’s rights would circumvent the Code’s stringent limits on 

“avoidance” actions—the exceptional cases in which debtors may unwind pre-bankruptcy transfers that undermine the bankruptcy process. See, e.g., §548(a). Pp. 8–12. 

(b) Tempnology’s principal counterargument rests on a negative 

inference drawn from provisions of Section 365 identifying categories 

of contracts under which a counterparty may retain specified rights 

after rejection. See §§365(h), (i), (n). Tempnology argues that these

provisions indicate that the ordinary consequence of rejection must 

be something different—i.e., the termination of contractual rights 

previously granted. But that argument offers no account of how to 

read Section 365(g) (rejection “constitutes a breach”) to say essentially its opposite. And the provisions Tempnology treats as a reticulated scheme of exceptions each emerged at a different time and responded to a discrete problem—as often as not, correcting a judicial 

ruling of just the kind Tempnology urges.

Tempnology’s remaining argument turns on how the special features of trademark law may affect the fulfillment of the Code’s goals.

Unless rejection terminates a licensee’s right to use a trademark, 

Tempnology argues, a debtor must choose between monitoring the 

goods sold under a license or risking the loss of its trademark, either 

of which would impede a debtor’s ability to reorganize. But the distinctive features of trademarks do not persuade this Court to adopt a 

construction of Section 365 that will govern much more than trademark licenses. And Tempnology’s plea to facilitate reorganizations

cannot overcome what Section 365(a) and (g) direct. In delineating 

the burdens a debtor may and may not escape, Section 365’s edict 

that rejection is breach expresses a more complex set of aims than 

Tempnology acknowledges. Pp. 12–16. 

 879 F. 3d 389, reversed and remanded. 

KAGAN, J., delivered the opinion of the Court, in which ROBERTS, C. J., 
 

Cite as: 587 U. S. ____ (2019) 3 

Syllabus 

and THOMAS, GINSBURG, BREYER, ALITO, SOTOMAYOR, and KAVANAUGH, 

JJ., joined. SOTOMAYOR, J., filed a concurring opinion. GORSUCH, J., 

filed a dissenting opinion. 
 

 

 

_________________ 

_________________ 

Cite as: 587 U. S. ____ (2019) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to 

notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

No. 17–1657 

MISSION PRODUCT HOLDINGS, INC., PETITIONER v. 

TEMPNOLOGY, LLC, NKA OLD COLD LLC 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE FIRST CIRCUIT 

[May 20, 2019] 

JUSTICE KAGAN delivered the opinion of the Court. 

Section 365 of the Bankruptcy Code enables a debtor to

“reject any executory contract”—meaning a contract that

neither party has finished performing. 11 U. S. C. §365(a).

The section further provides that a debtor’s rejection of a 

contract under that authority “constitutes a breach of such

contract.” §365(g).

Today we consider the meaning of those provisions in

the context of a trademark licensing agreement. The 

question is whether the debtor-licensor’s rejection of that

contract deprives the licensee of its rights to use the

trademark. We hold it does not. A rejection breaches a 

contract but does not rescind it. And that means all the 

rights that would ordinarily survive a contract breach,

including those conveyed here, remain in place. 

I 

This case arises from a licensing agreement gone wrong.

Respondent Tempnology, LLC, manufactured clothing and 

accessories designed to stay cool when used in exercise. It 

marketed those products under the brand name 

“Coolcore,” using trademarks (e.g., logos and labels) to 
 

 

 

 

 

2 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

distinguish the gear from other athletic apparel. In 2012, 

Tempnology entered into a contract with petitioner Mission Product Holdings, Inc. See App. 203–255. The 

agreement gave Mission an exclusive license to distribute 

certain Coolcore products in the United States. And more 

important here, it granted Mission a non-exclusive license 

to use the Coolcore trademarks, both in the United States 

and around the world. The agreement was set to expire in 

July 2016. But in September 2015, Tempnology filed a 

petition for Chapter 11 bankruptcy. And it soon afterward 

asked the Bankruptcy Court to allow it to “reject” the 

licensing agreement. §365(a).

Chapter 11 of the Bankruptcy Code sets out a framework for reorganizing a bankrupt business. See §§1101– 

1174. The filing of a petition creates a bankruptcy estate

consisting of all the debtor’s assets and rights. See §541.

The estate is the pot out of which creditors’ claims are 

paid. It is administered by either a trustee or, as in this 

case, the debtor itself. See §§1101, 1107. 

Section 365(a) of the Code provides that a “trustee [or

debtor], subject to the court’s approval, may assume or 

reject any executory contract.” §365(a). A contract is 

executory if “performance remains due to some extent on

both sides.” NLRB v. Bildisco & Bildisco, 465 U. S. 513, 

522, n. 6 (1984) (internal quotation marks omitted). Such 

an agreement represents both an asset (the debtor’s right 

to the counterparty’s future performance) and a liability

(the debtor’s own obligations to perform). Section 365(a)

enables the debtor (or its trustee), upon entering bankruptcy, to decide whether the contract is a good deal for 

the estate going forward. If so, the debtor will want to 

assume the contract, fulfilling its obligations while benefiting from the counterparty’s performance. But if not, the 

debtor will want to reject the contract, repudiating any 

further performance of its duties. The bankruptcy court

will generally approve that choice, under the deferential 
 

Cite as: 587 U. S. ____ (2019) 3 

Opinion of the Court 

“business judgment” rule. Id., at 523. 

According to Section 365(g), “the rejection of an executory contract[ ] constitutes a breach of such contract.” As 

both parties here agree, the counterparty thus has a claim

against the estate for damages resulting from the debtor’s

nonperformance. See Brief for Petitioner 17, 19; Brief for 

Respondent 30–31. But such a claim is unlikely to ever be

paid in full. That is because the debtor’s breach is deemed 

to occur “immediately before the date of the filing of the 

[bankruptcy] petition,” rather than on the actual postpetition rejection date. §365(g)(1). By thus giving the 

counterparty a pre-petition claim, Section 365(g) places

that party in the same boat as the debtor’s unsecured 

creditors, who in a typical bankruptcy may receive only 

cents on the dollar. See Bildisco, 465 U. S., at 531–532 

(noting the higher priority of post-petition claims). 

In this case, the Bankruptcy Court (per usual) approved

Tempnology’s proposed rejection of its executory licensing 

agreement with Mission. See App. to Pet. for Cert. 83–84.

That meant, as laid out above, two things on which the 

parties agree. First, Tempnology could stop performing

under the contract. And second, Mission could assert (for 

whatever it might be worth) a pre-petition claim in the 

bankruptcy proceeding for damages resulting from Tempnology’s nonperformance.

But Tempnology thought still another consequence

ensued, and it returned to the Bankruptcy Court for a 

declaratory judgment confirming its view. According to

Tempnology, its rejection of the contract also terminated

the rights it had granted Mission to use the Coolcore 

trademarks. Tempnology based its argument on a negative inference. See Motion in No. 15–11400 (Bkrtcy. Ct. 

NH), pp. 9–14. Several provisions in Section 365 state

that a counterparty to specific kinds of agreements may 

keep exercising contractual rights after a debtor’s rejection. For example, Section 365(h) provides that if a bank-
 

 

4 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

rupt landlord rejects a lease, the tenant need not move

out; instead, she may stay and pay rent (just as she did 

before) until the lease term expires. And still closer to 

home, Section 365(n) sets out a similar rule for some types

of intellectual property licenses: If the debtor-licensor 

rejects the agreement, the licensee can continue to use the

property (typically, a patent), so long as it makes whatever 

payments the contract demands. But Tempnology pointed

out that neither Section 365(n) nor any similar provision

covers trademark licenses. So, it reasoned, in that sort of 

contract a different rule must apply: The debtor’s rejection 

must extinguish the rights that the agreement had conferred on the trademark licensee. The Bankruptcy Court 

agreed. See In re Tempnology, LLC, 541 B. R. 1 (Bkrtcy. 

Ct. NH 2015). It held, relying on the same “negative 

inference,” that Tempnology’s rejection of the licensing

agreement revoked Mission’s right to use the Coolcore

marks. Id., at 7. 

The Bankruptcy Appellate Panel reversed, relying

heavily on a decision of the Court of Appeals for the Seventh Circuit about the effects of rejection on trademark 

licensing agreements. See In re Tempnology, LLC, 559 

B. R. 809, 820–823 (Bkrtcy. App. Panel CA1 2016); Sunbeam Products, Inc. v. Chicago Am. Mfg., LLC, 686 F. 3d 

372, 376–377 (CA7 2012). Rather than reason backward 

from Section 365(n) or similar provisions, the Panel focused on Section 365(g)’s statement that rejection of a 

contract “constitutes a breach.” Outside bankruptcy, the 

court explained, the breach of an agreement does not 

eliminate rights the contract had already conferred on the 

non-breaching party. See 559 B. R., at 820. So neither 

could a rejection of an agreement in bankruptcy have that

effect. A rejection “convert[s]” a “debtor’s unfulfilled obligations” to a pre-petition damages claim. Id., at 822 (quoting Sunbeam, 686 F. 3d, at 377). But it does not “terminate the contract” or “vaporize[ ]” the counterparty’s 
 

Cite as: 587 U. S. ____ (2019) 5 

Opinion of the Court 

rights. 559 B. R., at 820, 822 (quoting Sunbeam, 686 

F. 3d, at 377). Mission could thus continue to use the 

Coolcore trademarks. 

But the Court of Appeals for the First Circuit rejected

the Panel’s and Seventh Circuit’s view, and reinstated the 

Bankruptcy Court decision terminating Mission’s license. 

See In re Tempnology, LLC, 879 F. 3d 389 (2018). The 

majority first endorsed that court’s inference from Section 

365(n) and similar provisions. It next reasoned that special features of trademark law counsel against allowing a 

licensee to retain rights to a mark after the licensing

agreement’s rejection. Under that body of law, the majority stated, the trademark owner’s “[f]ailure to monitor and 

exercise [quality] control” over goods associated with a 

trademark “jeopardiz[es] the continued validity of [its]

own trademark rights.” Id., at 402. So if (the majority 

continued) a licensee can keep using a mark after an

agreement’s rejection, the licensor will need to carry on its

monitoring activities. And according to the majority, that

would frustrate “Congress’s principal aim in providing for 

rejection”: to “release the debtor’s estate from burdensome 

obligations.” Ibid. (internal quotation marks omitted).

Judge Torruella dissented, mainly for the Seventh Circuit’s reasons. See id., at 405–407. 

We granted certiorari to resolve the division between 

the First and Seventh Circuits. 586 U. S. ___ (2018). We 

now affirm the Seventh’s reasoning and reverse the decision below.1 

—————— 

1 In its briefing before this Court, Mission contends that its exclusive 

distribution rights survived the licensing agreement’s rejection for the 

same reason as its trademark rights did. See Brief for Petitioner 40– 

44; supra, at 2. But the First Circuit held that Mission had waived that 

argument, see 879 F. 3d, at 401, and we have no reason to doubt that 

conclusion. Our decision thus affects only Mission’s trademark rights. 
 

 

 

6 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

II 

Before reaching the merits, we pause to consider Tempnology’s claim that this case is moot. Under settled law, 

we may dismiss the case for that reason only if “it is impossible for a court to grant any effectual relief whatever” 

to Mission assuming it prevails. Chafin v. Chafin, 568 

U. S. 165, 172 (2013) (internal quotation marks omitted). 

That demanding standard is not met here.

Mission has presented a claim for money damages—

essentially lost profits—arising from its inability to use 

the Coolcore trademarks between the time Tempnology 

rejected the licensing agreement and its scheduled expiration date. See Reply Brief 22, and n. 8. Such claims, if at 

all plausible, ensure a live controversy. See Memphis 

Light, Gas & Water Div. v. Craft, 436 U. S. 1, 8–9 (1978).

For better or worse, nothing so shows a continuing stake

in a dispute’s outcome as a demand for dollars and cents.

See 13C C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure §3533.3, p. 2 (3d ed. 2008) (Wright & 

Miller) (“[A] case is not moot so long as a claim for monetary relief survives”). Ultimate recovery on that demand

may be uncertain or even unlikely for any number of

reasons, in this case as in others. But that is of no moment. If there is any chance of money changing hands,

Mission’s suit remains live. See Chafin, 568 U. S., at 172. 

Tempnology makes a flurry of arguments about why 

Mission is not entitled to damages, but none so clearly

precludes recovery as to make this case moot. First, 

Tempnology contends that Mission suffered no injury 

because it “never used the trademark[s] during [the postrejection] period.” Brief for Respondent 24; see Tr. of Oral

Arg. 33. But that gets things backward. Mission’s nonuse of the marks during that time is precisely what gives 

rise to its damages claim; had it employed the marks, it

would not have lost any profits. So next, Tempnology

argues that Mission’s non-use was its own “choice,” for 
Cite as: 587 U. S. ____ (2019) 7 

Opinion of the Court 

which damages cannot lie. See id., at 26. But recall that 

the Bankruptcy Court held that Mission could not use the 

marks after rejection (and its decision remained in effect 

through the agreement’s expiration). See supra, at 4. And 

although (as Tempnology counters) the court issued “no 

injunction,” Brief for Respondent 26, that difference does 

not matter: Mission need not have flouted a crystal-clear 

ruling and courted yet more legal trouble to preserve its 

claim. Cf. 13B Wright & Miller §3533.2.2, at 852 

(“[C]ompliance [with a judicial decision] does not moot [a

case] if it remains possible to undo the effects of compliance,” as through compensation). So last, Tempnology

claims that it bears no blame (and thus should not have to 

pay) for Mission’s injury because all it did was “ask[ ] the 

court to make a ruling.” Tr. of Oral Arg. 34–35. But 

whether Tempnology did anything to Mission amounting 

to a legal wrong is a prototypical merits question, which 

no court has addressed and which has no obvious answer. 

That means it is no reason to find this case moot. 

And so too for Tempnology’s further argument that

Mission will be unable to convert any judgment in its favor 

to hard cash. Here, Tempnology notes that the bankruptcy 

estate has recently distributed all of its assets, leaving 

nothing to satisfy Mission’s judgment. See Brief for Respondent 27. But courts often adjudicate disputes whose

“practical impact” is unsure at best, as when “a defendant

is insolvent.” Chafin, 568 U. S., at 175. And Mission 

notes that if it prevails, it can seek the unwinding of prior 

distributions to get its fair share of the estate. See Reply

Brief 23. So although this suit “may not make [Mission] 

rich,” or even better off, it remains a live controversy—

allowing us to proceed. Chafin, 568 U. S., at 176. 

III 

What is the effect of a debtor’s (or trustee’s) rejection of 

a contract under Section 365 of the Bankruptcy Code? 
 

 

8 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

The parties and courts of appeals have offered us two

starkly different answers. According to one view, a rejection has the same consequence as a contract breach outside bankruptcy: It gives the counterparty a claim for 

damages, while leaving intact the rights the counterparty

has received under the contract. According to the other 

view, a rejection (except in a few spheres) has more the

effect of a contract rescission in the non-bankruptcy world:

Though also allowing a damages claim, the rejection terminates the whole agreement along with all rights it

conferred. Today, we hold that both Section 365’s text and 

fundamental principles of bankruptcy law command the 

first, rejection-as-breach approach. We reject the competing claim that by specifically enabling the counterparties 

in some contracts to retain rights after rejection, Congress

showed that it wanted the counterparties in all other 

contracts to lose their rights. And we reject an argument

for the rescission approach turning on the distinctive 

features of trademark licenses. Rejection of a contract—

any contract—in bankruptcy operates not as a rescission

but as a breach. 

A 

We start with the text of the Code’s principal provisions

on rejection—and find that it does much of the work. As 

noted earlier, Section 365(a) gives a debtor the option,

subject to court approval, to “assume or reject any executory contract.” See supra, at 2. And Section 365(g) describes what rejection means. Rejection “constitutes a

breach of [an executory] contract,” deemed to occur “immediately before the date of the filing of the petition.” See 

supra, at 3. Or said more pithily for current purposes, a

rejection is a breach. And “breach” is neither a defined 

nor a specialized bankruptcy term. It means in the Code 

what it means in contract law outside bankruptcy. See 

Field v. Mans, 516 U. S. 59, 69 (1995) (Congress generally 
Cite as: 587 U. S. ____ (2019) 9 

Opinion of the Court 

meant for the Bankruptcy Code to “incorporate the established meaning” of “terms that have accumulated settled

meaning” (internal quotation marks omitted)). So the first 

place to go in divining the effects of rejection is to nonbankruptcy contract law, which can tell us the effects of 

breach. 

Consider a made-up executory contract to see how the 

law of breach works outside bankruptcy. A dealer leases a 

photocopier to a law firm, while agreeing to service it 

every month; in exchange, the firm commits to pay a 

monthly fee. During the lease term, the dealer decides to

stop servicing the machine, thus breaching the agreement 

in a material way. The law firm now has a choice (assuming no special contract term or state law). The firm can 

keep up its side of the bargain, continuing to pay for use of 

the copier, while suing the dealer for damages from the 

service breach. Or the firm can call the whole deal off, 

halting its own payments and returning the copier, while

suing for any damages incurred. See 13 R. Lord, Williston 

on Contracts §39:32, pp. 701–702 (4th ed. 2013) (“[W]hen a

contract is breached in the course of performance, the

injured party may elect to continue the contract or refuse 

to perform further”). But to repeat: The choice to terminate the agreement and send back the copier is for the law 

firm. By contrast, the dealer has no ability, based on its 

own breach, to terminate the agreement. Or otherwise 

said, the dealer cannot get back the copier just by refusing 

to show up for a service appointment. The contract gave 

the law firm continuing rights in the copier, which the 

dealer cannot unilaterally revoke.

And now to return to bankruptcy: If the rejection of the 

photocopier contract “constitutes a breach,” as the Code 

says, then the same results should follow (save for one

twist as to timing). Assume here that the dealer files a 

Chapter 11 petition and decides to reject its agreement 

with the law firm. That means, as above, that the dealer 
 

10 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

will stop servicing the copier. It means, too, that the law 

firm has an option about how to respond—continue the

contract or walk away, while suing for whatever damages

go with its choice. (Here is where the twist comes in:

Because the rejection is deemed to occur “immediately 

before” bankruptcy, the firm’s damages suit is treated as a 

pre-petition claim on the estate, which will likely receive

only cents on the dollar. See supra, at 3.) And most important, it means that assuming the law firm wants to 

keep using the copier, the dealer cannot take it back. A 

rejection does not terminate the contract. When it occurs, 

the debtor and counterparty do not go back to their precontract positions. Instead, the counterparty retains the 

rights it has received under the agreement. As after a 

breach, so too after a rejection, those rights survive. 

All of this, it will hardly surprise you to learn, is not just

about photocopier leases. Sections 365(a) and (g) speak 

broadly, to “any executory contract[s].” Many licensing 

agreements involving trademarks or other property are of

that kind (including, all agree, the Tempnology-Mission

contract). The licensor not only grants a license, but 

provides associated goods or services during its term; the 

licensee pays continuing royalties or fees. If the licensor 

breaches the agreement outside bankruptcy (again, barring any special contract term or state law), everything 

said above goes. In particular, the breach does not revoke

the license or stop the licensee from doing what it allows.

See, e.g., Sunbeam, 686 F. 3d, at 376 (“Outside of bankruptcy, a licensor’s breach does not terminate a licensee’s 

right to use [the licensed] intellectual property”). And 

because rejection “constitutes a breach,” §365(g), the same

consequences follow in bankruptcy. The debtor can stop

performing its remaining obligations under the agreement. But the debtor cannot rescind the license already

conveyed. So the licensee can continue to do whatever the 

license authorizes. 
Cite as: 587 U. S. ____ (2019) 11 

Opinion of the Court 

In preserving those rights, Section 365 reflects a general

bankruptcy rule: The estate cannot possess anything more

than the debtor itself did outside bankruptcy. See Board 

of Trade of Chicago v. Johnson, 264 U. S. 1, 15 (1924) 

(establishing that principle); §541(a)(1) (defining the 

estate to include the “interests of the debtor in property”

(emphasis added)). As one bankruptcy scholar has put the

point: Whatever “limitation[s] on the debtor’s property

[apply] outside of bankruptcy[ ] appl[y] inside of bankruptcy

as well. A debtor’s property does not shrink by happenstance of bankruptcy, but it does not expand, either.” D. 

Baird, Elements of Bankruptcy 97 (6th ed. 2014). So if the 

not-yet debtor was subject to a counterparty’s contractual 

right (say, to retain a copier or use a trademark), so too 

is the trustee or debtor once the bankruptcy petition

has been filed. The rejection-as-breach rule (but not the 

rejection-as-rescission rule) ensures that result. By insisting 

that the same counterparty rights survive rejection as

survive breach, the rule prevents a debtor in bankruptcy

from recapturing interests it had given up.

And conversely, the rejection-as-rescission approach

would circumvent the Code’s stringent limits on “avoidance” actions—the exceptional cases in which trustees (or 

debtors) may indeed unwind pre-bankruptcy transfers

that undermine the bankruptcy process. The most notable example is for fraudulent conveyances—usually,

something-for-nothing transfers that deplete the estate (and 

so cheat creditors) on the eve of bankruptcy. See §548(a). A 

trustee’s avoidance powers are laid out in a discrete set of

sections in the Code, see §§544–553, far away from Section 

365. And they can be invoked in only narrow circumstances—unlike the power of rejection, which may be

exercised for any plausible economic reason. See, e.g.,

§548(a) (describing the requirements for avoiding fraudulent transfers); supra, at 2–3. If trustees (or debtors) could 

use rejection to rescind previously granted interests, then 
 

12 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

rejection would become functionally equivalent to avoidance. Both, that is, would roll back a prior transfer. And 

that result would subvert everything the Code does to

keep avoidances cabined—so they do not threaten the rule

that the estate can take only what the debtor possessed 

before filing. Again, then, core tenets of bankruptcy law

push in the same direction as Section 365’s text: Rejection

is breach, and has only its consequences. 

B 

Tempnology’s main argument to the contrary, here as in 

the courts below, rests on a negative inference. See Brief 

for Respondent 33–41; supra, at 3–4. Several provisions of

Section 365, Tempnology notes, “identif[y] categories of 

contracts under which a counterparty” may retain specified contract rights “notwithstanding rejection.” Brief for 

Respondent 34. Sections 365(h) and (i) make clear that 

certain purchasers and lessees of real property and

timeshare interests can continue to exercise rights after a 

debtor has rejected the lease or sales contract. See 

§365(h)(1) (real-property leases); §365(i) (real-property 

sales contracts); §§365(h)(2), (i) (timeshare interests). And 

Section 365(n) similarly provides that licensees of some 

intellectual property—but not trademarks—retain contractual rights after rejection. See §365(n); §101(35A); 

supra, at 4. Tempnology argues from those provisions

that the ordinary consequence of rejection must be something different—i.e., the termination, rather than survival, 

of contractual rights previously granted. Otherwise, 

Tempnology concludes, the statute’s “general rule” would

“swallow the exceptions.” Brief for Respondent 19.

But that argument pays too little heed to the main 

provisions governing rejection and too much to subsidiary 

ones. On the one hand, it offers no account of how to read 

Section 365(g) (recall, rejection “constitutes a breach”) to

say essentially its opposite (i.e., that rejection and breach 
 

 

Cite as: 587 U. S. ____ (2019) 13 

Opinion of the Court 

have divergent consequences). On the other hand, it 

treats as a neat, reticulated scheme of “narrowly tailored 

exception[s],” id., at 36 (emphasis deleted), what history 

reveals to be anything but. Each of the provisions Tempnology highlights emerged at a different time, over a span

of half a century. See, e.g., 52 Stat. 881 (1938) (realproperty leases); §1(b), 102 Stat. 2538 (1988) (intellectual 

property). And each responded to a discrete problem—as 

often as not, correcting a judicial ruling of just the kind

Tempnology urges. See Andrew, Executory Contracts in 

Bankruptcy, 59 U. Colo. L. Rev. 845, 911–912, 916–919

(1988) (identifying judicial decisions that the provisions

overturned); compare, e.g., In re Sombrero Reef Club, Inc., 

18 B. R. 612, 618–619 (Bkrtcy. Ct. SD Fla. 1982), with, 

e.g., §§365(h)(2), (i). Read as generously as possible to 

Tempnology, this mash-up of legislative interventions says 

nothing much of anything about the content of Section

365(g)’s general rule. Read less generously, it affirmatively refutes Tempnology’s rendition. As one bankruptcy

scholar noted after an exhaustive review of the history:

“What the legislative record [reflects] is that whenever

Congress has been confronted with the consequences of

the [view that rejection terminates all contractual rights],

it has expressed its disapproval.” Andrew, 59 U. Colo. L. 

Rev., at 928. On that account, Congress enacted the provisions, as and when needed, to reinforce or clarify the 

general rule that contractual rights survive rejection.2 

—————— 

2 At the same time, Congress took the opportunity when drafting 

those provisions to fill in certain details, generally left to state law, 

about the post-rejection relationship between the debtor and counterparty. See, e.g., Andrew, Executory Contracts in Bankruptcy, 59 U. 

Colo. L. Rev. 845, 903, n. 200 (1988) (describing Congress’s addition of 

subsidiary rules for real property leases in Section 365(h)); Brief for

United States as Amicus Curiae 29 (noting that Congress similarly set 

out detailed rules for patent licenses in Section 365(n)). The provisions 

are therefore not redundant of Section 365(g): Each sets out a remedial 

scheme embellishing on or tweaking the general rejection-as-breach 
 

 

 

14 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

Consider more closely, for example, Congress’s enactment of Section 365(n), which addresses certain intellectual property licensing agreements. No one disputes how

that provision came about. In Lubrizol Enterprises v. 

Richmond Metal Finishers, the Fourth Circuit held that a 

debtor’s rejection of an executory contract worked to revoke its grant of a patent license. See 756 F. 2d 1043, 

1045–1048 (1985). In other words, Lubrizol adopted the 

same rule for patent licenses that the First Circuit announced for trademark licenses here. Congress sprang 

into action, drafting Section 365(n) to reverse Lubrizol and 

ensure the continuation of patent (and some other intellectual property) licensees’ rights. See 102 Stat. 2538 (1988);

S. Rep. No. 100–505, pp. 2–4 (1988) (explaining that Section 365(n) “corrects [Lubrizol’s] perception” that “Section

365 was ever intended to be a mechanism for stripping

innocent licensee[s] of rights”). As Tempnology highlights,

that provision does not cover trademark licensing agreements, which continue to fall, along with most other contracts, within Section 365(g)’s general rule. See Brief for 

Respondent 38. But what of that? Even put aside the

claim that Section 365(n) is part of a pattern—that Congress whacked Tempnology’s view of rejection wherever it 

raised its head. See supra, at 13. Still, Congress’s repudiation of Lubrizol for patent contracts does not show any 

intent to ratify that decision’s approach for almost all 

others. Which is to say that no negative inference arises.

Congress did nothing in adding Section 365(n) to alter the 

natural reading of Section 365(g)—that rejection and 

breach have the same results. 

Tempnology’s remaining argument turns on the way

special features of trademark law may affect the fulfillment of the Code’s goals. Like the First Circuit below, 

Tempnology here focuses on a trademark licensor’s duty to 

—————— 

rule. 
 

Cite as: 587 U. S. ____ (2019) 15 

Opinion of the Court 

monitor and “exercise quality control over the goods and

services sold” under a license. Brief for Respondent 20; 

see supra, at 5. Absent those efforts to keep up quality,

the mark will naturally decline in value and may eventually become altogether invalid. See 3 J. McCarthy, 

Trademarks and Unfair Competition §18:48, pp. 18–129, 

18–133 (5th ed. 2018). So (Tempnology argues) unless

rejection of a trademark licensing agreement terminates

the licensee’s rights to use the mark, the debtor will have 

to choose between expending scarce resources on quality

control and risking the loss of a valuable asset. See Brief 

for Respondent 59. “Either choice,” Tempnology concludes, “would impede a [debtor’s] ability to reorganize,”

thus “undermining a fundamental purpose of the Code.” 

Id., at 59–60. 

To begin with, that argument is a mismatch with

Tempnology’s reading of Section 365. The argument is

trademark-specific. But Tempnology’s reading of Section 

365 is not. Remember, Tempnology construes that section 

to mean that a debtor’s rejection of a contract terminates

the counterparty’s rights “unless the contract falls within

an express statutory exception.” Id., at 27–28; see supra, 

at 12. That construction treats trademark agreements

identically to most other contracts; the only agreements

getting different treatment are those falling within the

discrete provisions just discussed. And indeed, Tempnology could not have discovered, however hard it looked, any 

trademark-specific rule in Section 365. That section’s 

special provisions, as all agree, do not mention trademarks; and the general provisions speak, well, generally. 

So Tempnology is essentially arguing that distinctive

features of trademarks should persuade us to adopt a 

construction of Section 365 that will govern not just

trademark agreements, but pretty nearly every executory 

contract. However serious Tempnology’s trademarkrelated concerns, that would allow the tail to wag the 
 

16 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

Opinion of the Court 

Doberman. 

And even putting aside that incongruity, Tempnology’s

plea to facilitate trademark licensors’ reorganizations

cannot overcome what Sections 365(a) and (g) direct. The 

Code of course aims to make reorganizations possible. But 

it does not permit anything and everything that might 

advance that goal. See, e.g., Florida Dept. of Revenue v. 

Piccadilly Cafeterias, Inc., 554 U. S. 33, 51 (2008) (observing that in enacting Chapter 11, Congress did not have “a

single purpose,” but “str[uck] a balance” among multiple 

competing interests (internal quotation marks omitted)).

Here, Section 365 provides a debtor like Tempnology with

a powerful tool: Through rejection, the debtor can escape

all of its future contract obligations, without having to pay

much of anything in return. See supra, at 3. But in allowing rejection of those contractual duties, Section 365 does 

not grant the debtor an exemption from all the burdens

that generally applicable law—whether involving contracts or trademarks—imposes on property owners. See 

28 U. S. C. §959(b) (requiring a trustee to manage the 

estate in accordance with applicable law). Nor does Section 365 relieve the debtor of the need, against the backdrop of that law, to make economic decisions about preserving the estate’s value—such as whether to invest the 

resources needed to maintain a trademark. In thus delineating the burdens that a debtor may and may not escape,

Congress also weighed (among other things) the legitimate 

interests and expectations of the debtor’s counterparties. 

The resulting balance may indeed impede some reorganizations, of trademark licensors and others. But that is 

only to say that Section 365’s edict that rejection is breach 

expresses a more complex set of aims than Tempnology

acknowledges. 

IV 

For the reasons stated above, we hold that under Sec-
Cite as: 587 U. S. ____ (2019) 17 

Opinion of the Court 

tion 365, a debtor’s rejection of an executory contract in

bankruptcy has the same effect as a breach outside bankruptcy. Such an act cannot rescind rights that the contract previously granted. Here, that construction of Section 365 means that the debtor-licensor’s rejection cannot 

revoke the trademark license. 

We accordingly reverse the judgment of the Court of 

Appeals and remand the case for further proceedings 

consistent with this opinion. 

It is so ordered. 
 

_________________ 

_________________ 

Cite as: 587 U. S. ____ (2019) 1 

SOTOMAYOR, J., concurring 

SUPREME COURT OF THE UNITED STATES 

No. 17–1657 

MISSION PRODUCT HOLDINGS, INC., PETITIONER v. 

TEMPNOLOGY, LLC, NKA OLD COLD LLC 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE FIRST CIRCUIT 

[May 20, 2019] 

JUSTICE SOTOMAYOR, concurring. 

I agree with the Court that a debtor’s choice to reject an

executory contact under 11 U. S. C. §365(a) functions as a 

breach of the contract rather than unwinding the rejected 

contract as if it never existed. Ante, at 8–10. This result 

follows from traditional bankruptcy principles and from 

the general rule set out in §365(g) of the Bankruptcy Code.

I also agree that no specific aspects of trademark law 

compel a contrary rule that equates rejection with rescission. I therefore join the Court’s opinion in full. I write 

separately to highlight two potentially significant features

of today’s holding.

First, the Court does not decide that every trademark

licensee has the unfettered right to continue using licensed marks postrejection. The Court granted certiorari

to decide whether rejection “terminates rights of the licensee that would survive the licensor’s breach under applicable nonbankruptcy law.” Pet. for Cert. i. The answer is 

no, for the reasons the Court explains. But the baseline 

inquiry remains whether the licensee’s rights would survive a breach under applicable nonbankruptcy law. Special terms in a licensing contract or state law could bear 

on that question in individual cases. See ante, at 9–10; 

Brief for American Intellectual Property Law Association 

as Amicus Curiae 20–25 (discussing examples of contract 
 

 

2 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

SOTOMAYOR, J., concurring 

terms that could potentially lead a bankruptcy court to 

limit licensee rights postrejection).

Second, the Court’s holding confirms that trademark 

licensees’ postrejection rights and remedies are more 

expansive in some respects than those possessed by licensees of other types of intellectual property. Those variances stem from §365(n), one of several subject-specific 

provisions in the Bankruptcy Code that “embellis[h] on or 

twea[k]” the general rejection rule. Ante, at 13, n. 2. 

Section 365(n)—which applies to patents, copyrights, and 

four other types of intellectual property, but not to trademarks, §101(35A)—alters the general rejection rule in 

several respects. For example, a covered licensee that

chooses to retain its rights postrejection must make all of 

its royalty payments; the licensee has no right to deduct

damages from its payments even if it otherwise could have 

done so under nonbankruptcy law. §365(n)(2)(C)(i). This 

provision and others in §365(n) mean that the covered

intellectual property types are governed by different rules 

than trademark licenses. 

Although these differences may prove significant for 

individual licensors and licensees, they do not alter the 

outcome here. The Court rightly rejects Tempnology’s 

argument that the presence of §365(n) changes what 

§365(g) says. As the Senate Report accompanying §365(n)

explained, the bill did not “address or intend any inference 

to be drawn concerning the treatment of executory contracts” under §365’s general rule. S. Rep. No. 100–505, 

p. 5 (1988); see ante, at 14. To the extent trademark 

licensees are treated differently from licensees of other 

forms of intellectual property, that outcome leaves Congress with the option to tailor a provision for trademark

licenses, as it has repeatedly in other contexts. See ante, 

at 13–14. 

With these observations, I join the Court’s opinion. 
_________________ 

_________________ 

Cite as: 587 U. S. ____ (2019) 1 

GORSUCH, J., dissenting 

SUPREME COURT OF THE UNITED STATES 

No. 17–1657 

MISSION PRODUCT HOLDINGS, INC., PETITIONER v. 

TEMPNOLOGY, LLC, NKA OLD COLD LLC 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE FIRST CIRCUIT 

[May 20, 2019] 

JUSTICE GORSUCH, dissenting. 

This Court is not in the business of deciding abstract

questions, no matter how interesting. Under the Constitution, our power extends only to deciding “Cases” and

“Controversies” where the outcome matters to real parties 

in the real world. Art. III, §2. Because it’s unclear whether 

we have anything like that here, I would dismiss the 

petition as improvidently granted. 

This case began when Mission licensed the right to use

certain of Tempnology’s trademarks. After Tempnology

entered bankruptcy, it sought and won from a bankruptcy

court an order declaring that Mission could no longer use 

those trademarks. On appeal and now in this Court,

Mission seeks a ruling that the bankruptcy court’s declaration was wrong. But whoever is right about that, it isn’t 

clear how it would make a difference: After the bankruptcy court ruled, the license agreement expired by its own 

terms, so nothing we might say here could restore Mission’s ability to use Tempnology’s trademarks. 

Recognizing that its original case seems to have become 

moot, Mission attempts an alternative theory in briefing

before us. Now Mission says that if it prevails here it will, 

on remand, seek money damages from Tempnology’s 

estate for the profits it lost when, out of respect for the 

bankruptcy court’s order, it refrained from using the 
 

2 MISSION PRODUCT HOLDINGS, INC. v. TEMPNOLOGY, LLC 

GORSUCH, J., dissenting 

trademarks while its license still existed. 

But it’s far from clear whether even this theory can keep 

the case alive. A damages claim “suffices to avoid mootness only if viable,” which means damages must at least 

be “legally available for [the alleged] wrong.” 13C C. 

Wright, A. Miller, & E. Cooper, Federal Practice and 

Procedure §3533.3, p. 22 (3d ed. 2008). Yet, as far as 

Mission has told us, Tempnology did nothing that could 

lawfully give rise to a damages claim. After all, when 

Tempnology asked the bankruptcy court to issue a declaratory ruling on a question of law, it was exercising its

protected “First Amendment right to petition the Government for redress of grievances.” Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U. S. 731, 741 (1983). And petitioning a court normally isn’t an actionable wrong that can 

give rise to a claim for damages. Absent a claim of malice 

(which Mission hasn’t suggested would have any basis

here), the ordinary rule is that “‘no action lies against a

party for resort to civil courts’” or for “the assertion of a 

legal argument.” Lucsik v. Board of Ed. of Brunswick City 

School Dist., 621 F. 2d 841, 842 (CA6 1980) (per curiam); 

see, e.g., W. R. Grace & Co. v. Rubber Workers, 461 U. S. 

757, 770, n. 14 (1983); Russell v. Farley, 105 U. S. 433, 

437–438 (1882).

Maybe Mission’s able lawyers will conjure something 

better on remand. But, so far at least, the company hasn’t

come close to articulating a viable legal theory on which a

claim for damages could succeed. And where our jurisdiction is so much in doubt, I would decline to proceed to the

merits. If the legal questions here are of sufficient importance, a live case presenting them will come along soon 

enough; there is no need to press the bounds of our constitutional authority to reach them today.