The Brooks Brothers Madison Ave. flagship., photographed on April 19, 2018 in New York.

The Brooks Brothers’ bankruptcy is stepping toward an auction and sale hearing this week. 

The auction, postponed by a day to Tuesday, will proceed with the $305 million stalking horse bid by Sparc Group — a joint venture of Authentic Brands Group and Simon Property Group — as the one that any other competitors will have to beat.

A sale hearing before the Delaware bankruptcy court overseeing the proceedings is scheduled for Friday, according to court documents. 

In the meantime, a few brands have flagged concerns about how their licensing and other intellectual property issues would fare in the course of a sale process. 

Over the weekend, Ralph Lauren Corp. argued in a court filing that a roughly 40-year-old licensing agreement between its predecessor and that of Brooks Brothers should not be transferred as part of a sale process. The brand said that although it doesn’t object to the sale more broadly, the license agreement at issue cannot be transferred without Ralph Lauren’s permission. 

The agreement in question, between a predecessor to Brooks Brothers Group, Inc. and a Ralph Lauren predecessor, essentially gave Brooks Brothers a “perpetual, exclusive license to use the trademark POLO in connection with shirts having button-down collars,” according to Ralph Lauren’s filing. Ralph Lauren said in its filing that it “does not intend” to agree to transfer the licensing agreement in a sale. 

“Accordingly, the debtors cannot be permitted to unilaterally transfer the license to the stalking horse bidder or any other third party,” Ralph Lauren wrote in the filing. 

“Any such transfer absent Ralph Lauren’s consent runs contrary to fundamental principles of trademark law, could result in significant harm to Ralph Lauren’s business, and would subject Ralph Lauren to commercial and reputational risk that the parties to the license agreement never contemplated,” the company wrote.  

Representatives for Brooks Brothers declined comment. 

Separately, Brooks Sports Inc., a company which sells athletic apparel and footwear, and which in recent years has sparred with Brooks Brothers over the retailer’s sports-related products, also asked the court to clarify how the sale would affect Brooks Sports’ own intellectual property rights. 

Specifically, Brooks Sports argued that it should be able to continue to assert its intellectual property rights to its Brooks name, and challenge any purchaser of Brooks Brothers if it believes down the road that they may be violating its purported trademarks. 

“Brooks requests that any order approving the Sale Motion (a ‘Sale Order’): clarify that the sale of the debtors’ assets, including their intellectual property, is subject to Brooks’ rights to seek to enjoin any purchaser from infringing upon Brooks’ rights, including …. to sue any purchaser for trademark infringement and other intellectual property violations, and to maintain and file oppositions and cancellation proceedings against any purchaser’s trademark applications and registrations in the U.S. and elsewhere,” Brooks Sports wrote in its motion.  

 

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