Product liability: Saeco and Philips too?

A company's core business can always change. A good example of this, is the company Philips. Known for its lamps, televisions and audio equipment in the past, Philips nowadays produces medical equipment. When a company decides to change the main focus of their business, the older brands are often licensed to third parties, so that they can continue producing the old products. This raises the question: who is liable if something is wrong with these product?

 

A faulty coffee machine caused a house to go up in flames in Finland. Saeco made the machine, but the packaging and product also bore the Philips’ trademark. Is Philips liable?

Positive, the European Court ruled. Not only is the manufacturer liable, so is the licensee. By placing their trademarks on a product, companies create the impression of being involved in the production. The consumer can therefore sue either company. It is up to the companies involved to arrange who should pay the damages among themselves.

When licensing a trademark, make clear arrangements on how to guarantee the quality of a product and if the quality is not uphold by either one of the two parties, determine beforehand who is liable.

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IP quiz Trademarks

Puma is one of the bigger sports and lifestyle brands in the world. The core-business is the design, development and sale of (sports) shoes, (sports) clothing and accessories. In 1960, Puma registered an international trademark for a device designed in 1958: the formstrip. Since then, Puma has registered approximately 90 formstrip trademarks with validity in the Benelux or the European Union. Puma claims that this is a serial mark. Monshoe is a wholesaler of women's shoes and related products. The company designs and develops Monshoe shoes which it largely markets itself. Monshoe sells its women's shoes under the brands Shoecolate and Pearlz. The shoe Shoecolate is offered in various colour combinations. Puma claims that Monshoe infringes its well-known formstrip trademark. Monshoe contradicts this and states that the average consumer will not perceive the device of Monshoe on the sneakers as a trademark. And if the public will recognize a trademark in the decoration, it will not make the connection to Puma. According to Monshoe, the formstrip logo is not a well-known trademark within the meaning of the BVIE and the UMVo. There is no likelihood of confusion because the sign does not or hardly evoke any association with Puma among the public. In light of the above, who is right? Does this constitute decorative use or linking to a well-known trademark?