The transfer of a trademark does not automatically entail the transfer of existing contracts relating to that trademark

Cass. Com, 18 February 2026, 23.23.681

In this ruling, the French Supreme Court (“Cour de cassation”) reiterated an important point of law concerning the transfer of a trademark and the transfer of existing contracts relating to the transferred trademark.

A licensee, the beneficiary of a trademark license agreement and a selective distribution agreement, had brought a claim for contractual liability against the company that had succeeded in the rights of its licensor, arguing that this assignee had deliberately refused to supply it, which constituted a wrongful breach of contract, giving rise to a right to compensation.

In support of its claim, the selective distributor and licensee argued that the trademark license agreement and the selective distribution agreement, which were in force at the time of the transfer of the licensor’s assets, had been transferred to the assignee.

The licensee argued that the assignment of the trademarks, which was equivalent to a sale, necessarily entailed the transfer of the trademark license agreement, which was ancillary to it and comparable to a lease. The assignee, as the new owner, was therefore required to guarantee the undisturbed use of the licensed trademark. 

The Court of Appeal of Bordeaux dismissed the licensee’s claims and ruled that the trademark license and selective distribution agreements have not been transferred to the company acquiring the trademark and were therefore not enforceable against it.

The licensee lodged an appeal.

The French Supreme Court dismissed the appeal and ruled that the transfer of a business, which includes the transfer of ownership of trademark rights, does not, unless otherwise stipulated in the deed of transfer, entail the transfer of the selective distribution agreement for products bearing those trademarks, nor that of the license agreement for said trademarks where that agreement is inseparable from the selective distribution agreement.

Thus, in the absence of a stipulation to the contrary, the selective distribution agreement is not automatically transferred as an accessory to the intangible assets of the business.

In this regard, the Court of Appeal had noted, upon examination of the documents, that i) the contracts in question were not included among the intangible assets described in the information document provided to the transferee of the business, and that, ii) the deed of transfer of the business, which provided for the transfer of, inter alia, the intangible assets of the business, including all patents and trademarks, contained no reference to the continuation of the trade mark license and selective distribution contracts.

Regarding the trademark license agreement, the French Supreme Court noted that the parties had intended to make the selective distribution agreement and the license agreement an ‘indivisible whole’, the latter having been concluded exclusively on the basis of the approval received by the licensee. Consequently, as the assignee of the business had not consented to the transfer of the selective distribution agreement, the license, being indivisible from that agreement, could not be regarded as included in the transfer of the business.

As the new assignee was not bound by the selective distribution agreement, it could not be held liable for a breach of its obligation to ensure the selective distributor was regularly supplied in accordance with the latter’s orders, nor for a wrongful termination of that agreement.

It should be noted that, in this case, the issue of the transfer of contracts attached to the assigned trademarks arose following several successive insolvency and liquidation proceedings involving the company owning those trademarks and subsequently its successors.

However, this circumstance is deemed to have no bearing on the resolution of the dispute, since the contracts had not been terminated in the context of those collective proceedings, neither at the request of the administrators nor at the request of the licensee.