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[post_content] => It has become lucrative for businesses to generate revenue through sourcing and purchasing goods elsewhere. However, these businesses must also be aware of the accompanying risks in doing so. If the purchased goods constitute an infringement of intellectual property rights of a third party, the purchaser could be held liable for the damages resulting from this infringement. In a recent case, this issue is addressed by the court of appeal (hereinafter: the Court) in the Hague. This blog post discusses this particular case and more specifically what a purchasing company could do in order to guard itself against liability in case an IP infringement occurs.
Case facts
Van Caem Sports (hereinafter: VCS) is a store specializing in sports goods. In 2013 VCS purchased Converse shoes from EN-S Sports (hereinafter: EN-S) twice. Subsequently, Converse sued VCS for trademark infringement and ordered VCS to pay the damages for the sale of the infringing shoes. The issue in the present case was whether the infringing shoes were supplied by EN-S and whether EN-S is obligated to indemnify VCS for the damages it must pay as a result of the trademark infringement.
In the ruling at first instance, VCS's claims were rejected as VCS was unable to provide sufficient evidence. VCS only submitted unverifiable statements from its Business Controller and CFO, but no verifiable data from its records showing the path taken by the two batches of shoes supplied by EN-S. After that, VCS lodged an appeal.
The Court’s decision
This time around, the Court held that VCS had succeeded in proving that the shoes originated from EN-S. The trademark infringement in the main case was not based on the fact that the shoes were counterfeit, but on the fact that the shoes had not been marketed by Converse in the EEA. As a result, the question of whether the shoes were counterfeit was not of relevance. Since the Court was of the opinion that no exhaustion of trademark rights had taken place, the shoes were not freely marketable in the EEA. Moreover, the Court ruled that EN-S is obliged to indemnify VCS on the basis of the indemnification statement and a closed chain of administration. As EN-S could not further invoke VCS's own fault or estoppel, the Court was of the opinion that the claims of VCS are admissible if EN-S does not succeed in providing evidence to the contrary.
Conclusion
This case clearly shows that it is of utmost importance that a purchasing party is able to provide evidence that the infringing goods seized are the same goods sold and delivered by the contracting party. In the present case, the Court ought the indemnification statement including a lawyer’s letter and a closed chain administration to be sufficient as evidence.
At BG.legal we can help you gather this evidence by, inter alia, drafting an indemnification statement including a lawyer's letter as well as assisting in the establishment of a closed chain of administration.
If you have any questions regarding IP infringements and damages for purchasing parties, please do not hesitate to contact us.
[post_title] => Indemnification and IP infringement: a matter regarding shoes
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[post_content] => When processing personal data, the controller must adhere at all times to the principle of transparency. In practice, this means that data subjects should be adequately informed about the different processing activities that might take place using their personal data. More often than not, this information is provided by means of a privacy policy. In this blog by Stan Elsendoorn, we shall take a closer look at the specific information that needs to be provided, as well as the core values that need to be taken into account when drawing up a privacy policy.
General requirements
Article 12 of the GDPR lists several requirements that should be kept in mind when writing a privacy policy. Each of these requirements shall be further explained below.
I. Concise, transparent, intelligible and in an easily accessible format
The information needs to be presented/communicated efficiently in order to avoid information fatigue, whilst also being intelligible, meaning that the information is comprehensible by the average member of the intended audience.
II. Written in clear and plain language
The information should be provided in as simple a manner as possible, avoiding complex sentences and language structures. Abstract or ambivalent terms which could leave room for different interpretations should be avoided. When targeting children, the controller should also ensure that the vocabulary, tone and style of the language used to communicate the information is appropriate to and resonates with children.[1]
III. Delivered in a timely manner
The information must be provided in a timely manner. The specific time frame depends on the manner in which the personal data are obtained: when the personal data are directly obtained or collected from the data subject, the information should be provided directly after obtaining the personal data. When the personal data are obtained from third parties or other sources, the general rule is that the information should be provided within a reasonable time period and no later than one month after obtaining the personal data. This one-month time limit can be curtailed in the following situations: (i) when the first communication with the data subject takes place prior to the one month time frame, or (ii) when the personal data are disclosed to another recipient. In those situations, the information should (at the very latest) be provided at the time of the disclosure and/or first communication with the data subject.[2]
IV. Provided free of charge
Finally, it is not allowed to restrict access to a privacy policy through the use of a paywall or any other technical/financial means.
Necessary information
In addition to the aforementioned requirements, the following information – depending on the manner in which the personal data were obtained – should also be included when drawing up a privacy policy
Necessary information when the personal data is directly provided by the data subject (article 13 GDPR)
I. The identity and contact details of the controller;
II. (Where applicable) the contact details of the data protection officer;
III. The purpose and legal basis for the processing;
IV. (Where applicable) if the legal basis for the processing is a legitimate interest of the Controller, a description of said interests;
V. (Where applicable) the (categories of the) recipients of the personal data;
VI. (Where applicable) if the controller intends to transfer the personal data to a recipient in a third country for which the EU has not (yet) adopted an adequacy decision, the appropriate and/or suitable safeguards taken;
VII. The (criteria to determine the) period for which the personal data will be stored;
VIII. Information on the existence of data subject’s rights, including the right to request access, rectification or erasure of the personal data, the right to restrict or object to the processing of personal data as well ass the right to data portability;
IX. (Where applicable) if the legal basis for the processing activities is the consent of the data subject, the existence of the right to withdraw said consent at any given time;
X. The right to lodge a complaint with the supervisory authority;
XI. Whether the provision of personal data is part of a statutory or contractual requirement or obligation and the possible consequences of failing to provide the personal data;
XII. (Where applicable) Information on the existence of an automated decision-making system, including profiling, including meaningful information about the logic involved, the significance as well as the consequences that the system’s automated decision-making might entail for (the rights of) the data subject.
Obtained from third parties or other sources (article 14 GDPR)
When the personal data are obtained from third parties or different sources, the privacy notice must contain the same information as mentioned above, with the exception of:
XI. Whether the provision of personal data is part of a statutory or contractual requirement or obligation and the possible consequences of failing to provide the personal data
Which must be replaced by:
XI. The source from which the personal data originate.
Conclusion
There are a lot of things to keep in mind when drawing up a privacy policy. One should not only take into account the aforementioned prerequisites, but also the way in which this information is conveyed to the data subject.
In need of a privacy policy or other GDPR-documentation? BG.Legal offers a GDPR-starterkit that is specifically tailored to entrepreneurs. For more information, please check the following link.
[1] WP29, Guidelines on transparency under Regulation 2016/679 (WP260 rev.01), 11th of April 2018, rec. 12 to 16.
[2] Article 13.1 jo. 14.3 (a) to (c)
WP29, Guidelines on transparency under Regulation 2016/679 (WP260 rev.01), 11th of April 2018, rec. 26 to 28.
[caption id="attachment_29432" align="alignleft" width="240"]
Stan Elsendoorn,[/caption]
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[post_content] => Case facts
Globus has registered both the word and figurative mark MAXUS in 1996 at the German Patent and Trademark Office for the classes 1 through 9 and 11 through 34. Maxxus Group GmbH has sought action for a declaration revoking Globus’ marks on the ground of non-use in 2019. Maxxus supported its claim stating that Globus hasn’t used the marks over the past five years. In addition, Maxxus stated that it has browsed Globus’ webshop in which two results emerged. The results referred to a beverage store in Germany operated by a connected company to Globus. According to investigation, using a detective agency, it appeared that the store didn’t sell beverages containing the MAXUS trade mark. Globus disputed the contentions and stated that it used both marks at issue in such a way to preserve its rights over them. By not procuring more facts, Maxxus had fallen short of its burden of proof under German law, according to Globus.
German procedural law imposes next to the burden of setting out the facts for the plaintiff, a reciprocal obligation on the defendant. Each party is obligated to carry out investigations in their own sphere of activity. The referring court took the view that the Judgement of the Ferrari-case[1] doesn’t preclude the applicant from bearing a burden of setting out the facts. Therefore the following questions are referred to the CJEU.
Questions for a preliminary ruling:
‘Is EU law, in particular with regard to [Directive 2008/05]], in particular in article 12, and Directive [2015/2436], in particular in Articles 16, 17 and 19, to be interpreted as meaning that the effect utile of those provisions prohibits an interpretation of national procedural law which;
- Imposes on the applicant in civil proceedings for cancellation of a national registered trade mark on the ground of revocation for non-use a burden of setting out the facts, as distinguished from the burden of proof, and
- Requires the applicant, in the context of that burden of setting out the facts,
- To make, in such proceedings, substantiated submissions regarding the defendant’s non-use of the trade mark, to the extent that it is possible for the applicant to do so; and
- to carry out, for that purpose, its own research into the market, in a manner which is appropriate to the request for cancellation and to the specific nature of the trade mark concerned?’
Ruling by the CJEU
The
CJEU rejected that Article 16 and 17 are relevant to answering the preliminary question and therefore answers the question solely in the light of Article 19. And according to Article 19(1), the question of the burden of proof in respect of genuine use does not constitute a procedural provision falling within the competence of the Member State.
The CJEU stated as following:
”It is the proprietor of the mark at the best place to adduce evidence in support of the assertion that its mark has been put to genuine use”. This doesn’t mean that there are not standards for the application for a revocation of a trademark. According to the CEJU: “
that the applicant, in a given procedure, does not have to bear the burden of proof does not necessarily release that party from the obligation to provide a full statement of the facts upon which it bases its claims”.
The CJEU concludes with: “
however, it is clear from Article 19 of Directive 2015/2436 that an application for revocation of a trade mark on the basis of that provision is founded on the claim that the mark has not been put to genuine use by its proprietor. Such a claim, by its nature, does not lend itself to a more detailed statement”.
Thus the applicant is still not released of the burden of setting out facts as a basis to the revocation claim of a trade mark. However, the CJEU does conclude that the best place to procure evidence for genuine use is the proprietor.
Conclusion
Article 19 opposes a procedural rule of a Member State in revocation proceedings for non-use of a trade mark. Therefore, according to the court, this situation requires at least a substantiated, fact-based argument from the requesting party. This means that the requesting party should conduct a certain appropriate investigation before initiating the revocation proceedings.
Thus, before initiating an application for revocation on the ground of non-use of a trade mark, be aware that you must conduct an appropriate investigation to prove the non-use of that trade mark.
Case: ECLI:EU:C:2022:174
[1] C-720/18 and C-721/18, EU:C:2020:854
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[post_content] =>
What is data?
The value of many companies lies more and more in the large amount of
data generated by the company, also known as 'data' or 'big data'. The value of the data is so great because it provides, for example, more insight into the behaviour of their customers, the production process, the service or the product itself. Products or the production process are adjusted and profit margins are increased. The demand for data and the number of companies meeting that demand are also growing very rapidly. These companies are mainly engaged in collecting and offering data.
On the other hand, there is the realisation that by processing data, companies and governments gain more insight not only into their own production processes and customers, but also into people's lives. These insights may lead to a breach of
personal privacy. The use of data, however, is unavoidable in today's society and this role will only increase in the coming years. The relatively new phenomenon of 'data', and especially the great value attached to it, creates new legal challenges. This already starts with the realisation that the concept of 'data' is very limited in our legislation. Important issues include the following:
- Ownership of data;
- Protecting data;
- Data sharing;
- Data and ethics;
- Privacy;
- Software as a Service (SaaS);
- Data as a Service (DaaS)
Knowledge from practice
BG.legal is one of the few law firms that combines substantive knowledge on data and AI from practice with legal knowledge. Robin Verhoef is a bachelor student of Data Science with a great interest in the legal aspects of data. Our lawyers in turn have taken various courses in the field of data and AI. Because of our strong combination, we understand our clients' product and can provide them with the best tailor-made solutions.
BG.legal follows the developments of data closely and is happy to advise you. The following companies have already been helped:
BG.legal is a member of the
NL AI Coalition and NVAIR (Dutch Association for AI and Robotics Law)
[post_title] => Data
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[post_content] => The European Commission has published a draft
AI (Artificial Intelligence)
Regulation. The current laws and regulations are inadequate for AI applications. The approach of this draft is to opt for human-centred AI. Developers of AI applications must assess for themselves in which of the four risk groups their applications fall. The higher the risk, the higher the requirements for that AI application. It will certainly take years before the AI Regulation will enter into force. In addition, there is a good chance that the draft will be adjusted in the coming period.
What does that mean for the AI applications that are currently being developed or used? Are there no rules for that?
For various AI applications, there are already laws and/or regulations that must be complied with.
For example:
- Medical Devices Regulation: for AI applications in medical devices
- Constitution + Human Rights Treaties: for protection of fundamental rights such as speech, privacy, self-determination.
- General Data Protection Regulation: when processing personal data
- Product safety regulations: when an AI application causes injury
- Consumer protection: when information obligations arise from these regulations
- Codes of conduct: when a sector lays down rules (code of conduct) for AI applications
- Contracts: when parties have agreed on rules for AI applications in an agreement
In short, even without an AI regulation, there are already laws and regulations that an AI application must comply with. For AI developers, this means that they must make an inventory of which laws and regulations the AI application must comply with, and whether they comply with them. If they do not, a customer/client may later claim that the AI application did not meet the legal requirements. This may lead to damage claims. As a user/client for the development of an AI application, you will have to ask a similar question. The same applies to supervisors of parties using an AI application.
AI compliance assessment
Therefore, it is wise for both
developers and
users of AI applications to determine in an AI compliance assessment which laws and regulations apply to the AI application and whether it complies with them. If they are not complied with, timely action can be taken to become compliant.
For more questions about this, or for guidance in performing an AI compliance assessment, please contact Jos van der Wijst.
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[post_content] => The government is starting to pay more and more attention to the supervision of
AI and its use. On our knowledge platform about legal aspects of Artificial Intelligence
legalair.nl we wrote two articles about it:
Regulator for algorithms? The coalition agreement states the intention to set up a new regulator that will focus on algorithms. Although there are already several regulators who deal with algorithms, there is no general regulator yet.
Starter Kit Fair Algorithms for Municipalities. In the Fair Algorithms project, a dashboard has been developed to help municipalities (and other organisations) develop and use algorithms. The dashboard contains a questionnaire that asks more questions based on previous answers and also explains points of interest.
What can we do for you?
BG.legal has a team of lawyers, paralegals and a data scientist who advise on legal aspects of AI.
Firstly, we help you to draft and review contracts for the use or development of AI applications so that you know where you stand and what you can expect from the application.
We can also help you with a check of existing applications by means of an AI Impact Assessment. In this process, we check whether an AI application complies with existing laws and regulations and with sector-specific codes of conduct. Besides the existing regulations, we also look at the EU proposal for a regulation for AI applications.
For questions, please contact Jos van der Wijst and Robin Verhoef.
[post_title] => AI: Supervision and Toolbox
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[post_content] => We are inclined to think that using the same trade name is not possible.
Is organisation A using a trade name? Then organisation B cannot use exactly the same name. If organisation B does it, this will quickly result in an infringement of the trade name right.
But it doesn't always have to be that way. I will explain how that can be.
WOW
I will take the recent
WOW judgment (in Dutch) as an example. The claimant in this case is Stichting WOW. Stichting WOW has registered a word and figurative mark with the Benelux Office for Intellectual Property (hereafter “
BOIP”).
In this case, Stichting WOW is suing the defendant WOW Lijnbaan B.V.. WOW Lijnbaan uses its trade name in various ways. What is clear is that it always uses the word 'WOW':
The question is whether WOW Lijnbaan is thereby infringing on the trademark and trade name rights of Stichting WOW.
Since the defendant's name is (at least partly) the same as the plaintiff's, we are inclined to think that there is infringement. But the court does not think so. Why is that?
Trade name
The basic principle is that an organisation may not use a trade name that is already in use at that time. There are exceptions to this principle, but I will not go into them now.
The court finds in this case that there is no confusion for the relevant public. The parties both serve a different geographical area. Stichting WOW is located in Rotterdam. WOW Lijnbaan is located in Amsterdam. The fact that WOW Lijnbaan also has plans to open a branch in Rotterdam does not matter, according to the court.
Trademark infringement
So is there an infringement of the WOW
trademark? No. The court ruled that the use of WOW has little distinctive character. It is not very creative. And so the scope of protection is small.
But that is not the only thing that is relevant in this case. The court also considered that the parties' use of the WOW signs was not identical. There are differences in their use. For example, because Lijnbaan WOW is almost always used in combination with the words "burgers & fries".
The court also finds it implausible that the public will think that the signs of WOW lijnbaan originate from Stichting WOW. So that parties in this case are mixed up. The court has ruled that the origin of the WOW signs cannot be mistaken. And so there is no trademark infringement.
Conclusion
The more original the trade name, the better. Creative trade names have a greater scope of protection. Non-creative names can also be protected. However, if a different geographical area and a different type of use of the name are involved, this protection can still be circumvented.
[post_title] => The same trade name does not constitute an infringement. How can that be?
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[post_content] => After the judgment of the Supreme Court of February 2021 in the DOC Dairy Partners vs. Dairy Partners dispute, the possibility of protecting a descriptive trade name seemed to have become (even) more limited. Nothing appears to be further from the truth. The judge in preliminary relief proceedings of the District Court of The Hague ruled at the end of September 2021 that the use of the name 'Low Budget Verhuisservice' constitutes trade name infringement of the trade name 'Budget Verhuisservice'.
What happened?
The moving company Klustoppers has used the
trade name 'Budget Verhuisservice' since April 2015. Klustoppers also uses this name for its website 'www.budgetverhuisservice.nl'.
In 2020, a competitor entered the market, profiling itself under the trade name 'Low Budget Moving Service'. This company used the website
www.lowbudgetverhuisservice.nl.
Klustoppers was not happy about this, which led to the suing of this competitor. Klustoppers claimed a ban on the use of the name 'Low Budget Moving Service' before the court.
When is a trade name possible?
When assessing the question of whether a trade name has been infringed, it must be determined whether a trade name right exists.
A trade name
does not come into being the moment you have thought of it, registered it with the Chamber of Commerce or registered it as a domain name. You will have to actually use the trade name (first) to get an exclusive right to the name. This use means using the name for your company. Names for your products are not protected under trade name law. Protection of products is possible within the trademark law, a registration is required.
Use of trade name
The use of a trade name can be; the use of the name on letterhead, use of the name on the website (so not only in the domain name), use in the info e-mail address, a name board above a physical shop, use of the name on social media channels and so on.
Recently, the
Court of Appeal of The Hague (in Dutch) ruled, for example, that the use of a trade name in the intro of a film (it concerned the trade name of a producer) can be seen as valid use of a trade name and therefore provides protection.
When is there infringement of a trade name?
Article 5 of the Trade Names Act states that it is forbidden to use a trade name (or a similar trade name) that has already been used by another party if that use creates a likelihood of confusion among the normally attentive public. Likelihood of confusion means that there is a chance of the confusion that parties are seen in some way related to each other, while this is not the case. Is there such a likelihood of confusion? Then there has been trade name infringement. If not, there is no trade name infringement. Whether there is a likelihood of confusion depends on the circumstances of the case.
Descriptive Trade Names
It follows from the judgment in the DOC Dairy Partners vs. Dairy Partners dispute of the Dutch Supreme Court that a likelihood of confusion is and can be less likely for the same descriptive trade names than for the same non-descriptive trade names. According to the Supreme Court, the following circumstances may lead to a likelihood of confusion in the use of identical or similar descriptive trade names:
- A need for preservation of descriptive trade names must be taken into account. The more descriptive a trade name, the greater the need for reservation, the smaller the likelihood of confusion;
- The likelihood of confusion requires that the trade name be distinctive (through absorption (i.e. name recognition) or the addition of a non-descriptive element);
- The Internet has made people more accustomed to descriptive names - partly because findability improves with the use of descriptive terms - and because the public knows this, confusion is less likely to occur.
Conclusion, the protection of a descriptive trade name is very limited as the likelihood of confusion in the case of descriptive trade names is low.
So why is the trade name Budget Rental Service infringing on the trade name anyway?
As stated above, the question of whether a trade name infringement has occurred is based on the question of confusion. The answer to this question
depends on the circumstances of the case.
In this dispute, Klustoppers claimed that it had made considerable investments in the name 'Budget Verhuisservice' and that customers could demonstrably find it under that name. The competitor 'Low Budget Removal Service' did not contradict this. Therefore, the court assumes that 'Budget Verhuisservice' has some name recognition and therefore some distinguishing capacity. Because the only difference between the two trade names is a descriptive word, namely 'Low', the chance of a likelihood of confusion is not removed, according to the Court.
The fact that the competitor copied the general terms and conditions of Klustoppers one by one is also a circumstance that is taken into account in the question of confusion. The court ruled that this also increases the likelihood of confusion.
A final indication that there is a likelihood of confusion is that the confusion has actually arisen.
Despite the fact that the name 'Budget Verhuisservice' is a descriptive trade name, this name is - under these circumstances - protected and the use of the name 'Low Budget Verhuisservice' is prohibited. Klustoppers is therefore right.
Remarkable
It is noteworthy that the District Court of The Hague ruled in 2016 that Klustoppers itself had crossed the line by using the trade name 'Studenten Verhuisservice'. This just goes to show that the line between infringement and being 'copied' can be very thin.
Questions?
Do you want to set up a company and/or market a product, but do not know yet whether you can use the name you have thought up? We will be happy to advise you! Even if someone else copies your company name or product name, we will be happy to help.
[post_title] => Infringement of descriptive trade name possible after all
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[post_content] => The design of furniture can be protected in various ways. The best way is through design rights.
Design rights on furniture
The design right arises only after it has been registered. This means that you must register the design of the piece of furniture with the competent office. You can register the design within the Benelux, Europe or even internationally.
The model (or: the design) of a piece of furniture must therefore be recorded. This can be done by means of a photo, drawing or sketch. By registering a photo of a new piece of furniture, for example, the characteristics of the design are established and protected. Thus, characteristics such as:
- Lines
- Circumference
- Dimension
- Shape
- Texture
- Embellishments
- Material choice
- Style
These features are then protected by design rights. In order to register a design, the design must be new and have an individual character.
Is the registration successful? Then the design of the piece of furniture is protected for a number of years. Within the Benelux and Europe, protection lasts for five years and can be extended by five years to a maximum of 25 years. For
contracting parties of the Hague agreement the protection last for five years and can be extended by five years to at least 15 years, depending on the national law of the contracting party.
Usefulness of design rights
Design rights help to protect the design of a piece of furniture. Because the holder of the design right has the exclusive right to sell, stock or produce the piece of furniture.
Other parties are not allowed to place pieces of furniture that are too similar to the protected piece of furniture on the market. Such as counterfeit products. This also applies to products which are similar to the protected piece of furniture, but which are not complete copies. In short: design law gives you the opportunity to take action against infringing parties. And to keep copies and other imitation products off the market.
This is how it works.
Action against infringements
First, a summons letter must be sent to the infringing party. Infringing parties can be wholesalers, sellers of the furniture or the manufacturer.
You often summon the other party:
- To cease and desist the infringement;
- Cease and desist the sale of the furniture;
- To cease production of the furniture;
- Destroy stock;
- Withdraw the furniture from the market (a recall);
- Signing of a cease and desist declaration;
- Payment of damages, loss of profits and/or legal costs.
In some cases, the summons is complied with. Or the parties discuss the dispute. Unfortunately, this is not always the case. If the infringing party does not want to cooperate, legal proceedings can be initiated. This can be an urgent procedure or an 'ordinary' procedure.
Functioning of a procedure
During proceedings, the judge will compare the design with the infringing furniture. The judge looks at whether the furniture creates the same overall impression. Can buyers see the difference between the pieces of furniture? Are the differences so great that they influence the purchasing decision?
To answer these questions, the judge looks at different aspects. Such as the size, materials used and colours of the furniture. A good example is the judgment of the District Court of The Hague of 14 August 2015. You can view it
here (in Dutch).
Does the infringing product create the same impression as the design? Then it is an infringement. The owner of the design is therefore vindicated. The infringing piece of furniture will have to be taken off the market.
Frequently used defence
Often the opposing party will put forward the defence that the
design right is invalid. The other party does this by arguing that the design is not new and does not have an individual character. The design of the model would not be creative enough and would fit in with the design of furniture that already exists on the market.
The court must assess this defence. The court does this by looking at the so-called 'design heritage'. The design heritage is the design of all existing pieces of furniture. So the judge will look at whether the impression of the design differs from the general impression of the existing furniture. The judge will answer the following questions, as it were:
How does the model differ from other pieces of furniture already on the market?
To what extent is something new designed?
If the court finds that the design is new and has an individual character, the piece of furniture is protected by design rights.
No new model has been designed? Then the piece of furniture can still be protected by
copyright.
Conclusion
Design law provides a solid basis for keeping counterfeit products or copies off the market. Do you have any questions about design rights on furniture? Then please contact us without obligation.
[post_title] => Design right on furniture: infringement or not?
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What is distribution?
Distribution means that an independent entrepreneur (distributor) sells his client's products or services under his own name to customers. The distributor differs from an agent, who merely mediates in the conclusion of an agreement between the principal and the customer. The distribution agreement has no legal provisions of its own and therefore offers parties a great deal of freedom (more than, for example, the agency agreement). This freedom offers opportunities but also risks and both client and distributor would be wise to properly describe the boundaries of the assignment. This prevents disappointments that may lead to disputes. In any case, the following
should be considered:
- The duration of the agreement;
- The scope of the work as well as the working area;
- The amount of the commission and the conditions under which the fee is payable;
- The possibilities of termination;
- The consequences of termination, including for the residual stock.
In consultation with the client and/or distributor, we advise on the structure of the agreement and draw it up for you. In this way, the client or distributor knows that his/her interests are properly safeguarded in the agreement. In the unlikely event of a dispute between the parties, we are ready to bring the situation to a favourable conclusion.
[post_title] => Distribution agreement
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[post_content] => It has become lucrative for businesses to generate revenue through sourcing and purchasing goods elsewhere. However, these businesses must also be aware of the accompanying risks in doing so. If the purchased goods constitute an infringement of intellectual property rights of a third party, the purchaser could be held liable for the damages resulting from this infringement. In a recent case, this issue is addressed by the court of appeal (hereinafter: the Court) in the Hague. This blog post discusses this particular case and more specifically what a purchasing company could do in order to guard itself against liability in case an
IP infringement occurs.
Case facts
Van Caem Sports (hereinafter: VCS) is a store specializing in sports goods. In 2013 VCS purchased Converse shoes from EN-S Sports (hereinafter: EN-S) twice. Subsequently, Converse sued VCS for trademark infringement and ordered VCS to pay the damages for the sale of the infringing shoes. The issue in the present case was whether the infringing shoes were supplied by EN-S and whether EN-S is obligated to indemnify VCS for the damages it must pay as a result of
the trademark infringement.
In the ruling at first instance, VCS's claims were rejected as VCS was unable to provide sufficient evidence. VCS only submitted unverifiable statements from its Business Controller and CFO, but no verifiable data from its records showing the path taken by the two batches of shoes supplied by EN-S. After that, VCS lodged an appeal.
The Court’s decision
This time around, the Court held that VCS had succeeded in proving that the shoes originated from EN-S. The trademark infringement in the main case was not based on the fact that the shoes were counterfeit, but on the fact that the shoes had not been marketed by Converse in the EEA. As a result, the question of whether the shoes were counterfeit was not of relevance. Since the Court was of the opinion that no exhaustion of trademark rights had taken place, the shoes were not freely marketable in the EEA. Moreover, the Court ruled that EN-S is obliged to indemnify VCS on the basis of the indemnification statement and a closed chain of administration. As EN-S could not further invoke VCS's own fault or estoppel, the Court was of the opinion that the claims of VCS are admissible if EN-S does not succeed in
providing evidence to the contrary.
Conclusion
This case clearly shows that it is of utmost importance that a purchasing party is able to provide evidence that the infringing goods seized are the same goods sold and delivered by the contracting party. In the present case, the Court ought the indemnification statement including a lawyer’s letter and a closed chain administration to be sufficient as evidence.
At BG.legal we can help you gather this evidence by, inter alia, drafting an indemnification statement including a lawyer's letter as well as assisting in the establishment of a closed chain of administration.
If you have any questions regarding
IP infringements and damages for purchasing parties, please do not hesitate to
contact us.
[post_title] => Indemnification and IP infringement: a matter regarding shoes
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