ICC International Court of Arbitration issues partial award in
trademark arbitration relating to AgfaPhoto
Mortsel (Belgium) - The International Court of Arbitration of the
International Chamber of Commerce (ICC) issued a decision in the
dispute between Agfa-Gevaert and AgfaPhoto Holding with respect to
the terminated trademark license agreement regarding the AgfaPhoto
trademark. The majority of the court did not uphold, despite the
strong dissent of one of the three arbitrators, Agfa-Gevaert's
decision to terminate the trademark license agreement on October 1,
2005.
On November 2, 2004, Agfa-Gevaert sold its consumer imaging division
to AgfaPhoto Holding GmbH, an entity controlled by German investor
Dr. Hartmut Emans. Following that divestiture, the consumer imaging
business has been operated through a group of companies under the
name of AgfaPhoto, with AgfaPhoto GmbH in Germany as the primary
manufacturing entity. As part of the transaction and for the purpose
of supporting its former consumer imaging business and employees,
Agfa-Gevaert agreed to grant a license for the use of its 'AgfaPhoto'
trademark in connection with the ongoing operation of the consumer
imaging business.
After the insolvency filing of AgfaPhoto GmbH in May 2005 and
subsequent unsuccessful attempts by the insolvency receiver to sell
(parts of) the business, Agfa-Gevaert was of the opinion that the
third-party sublicensing activity conducted by the shell AgfaPhoto
Holding GmbH independent of the former consumer imaging business was
not in line with the spirit or the meaning of the trademark license
agreement. Agfa-Gevaert thus decided to terminate the trademark
license agreement in October 2005.
The sublicensing activity by AgfaPhoto Holding GmbH was only
temporarily suspended, however because the arbitral tribunal decided
during 2006 in an interim order to temporarily allow AgfaPhoto to use
the trademark until the rendering of a final arbitral award. In the
meantime, all royalties collected in connection with such
sublicensing activities by AgfaPhot Holding GmbH were placed into an
escrow account resulting today in a balance of approx. 500.000 Euro.
After extensive arbitration proceedings, including an evidentiary
hearing in December 2006, the majority of the court, despite the
strong dissent of one of the three arbitrators, has now declined to
uphold the termination of the trademark license agreement. Although
the court did not question the good faith basis for Agfa-Gevaert's
termination of the trademark license agreement or the company's
belief that the license was granted and existed for the sole purpose
of supporting its former consumer imaging business and employees, the
majority concluded that the technical terms of the trademark license
agreement did not permit such a termination. Nevertheless, the
tribunal confirmed that any sublicensing activity by AgfaPhoto must
remain limited to the consumer imaging market.
A decision regarding payment claims by AgfaPhoto Holding will be
addressed during the next phase of the arbitration proceedings and
will be decided by the Arbitral Tribunal in a later stage.
Agfa-Gevaert's President and CEO, Jo Cornu, stated: "We obviously
regret this decision and continue to analyze the award. As a first
reaction, I can only confirm that it has always been the intention of
Agfa-Gevaert to give the use of the trademark royalty-free in order
to help our former consumer imaging division and employees. That
business is no longer there. The fact that Mr. Emans can continue to
use the trademark is contrary to the spirit of the agreement and
comes down to an unjust personal enrichment of Mr. Emans."
Contact:
Agfa-Gevaert
Johan Jacobs
Corporate Press Relations Manager
tel. ++32 (0)3/444.8015
e-mail: johan.jacobs@agfa.com
Katia Waegemans
Director Corporate Communication
tel. ++32 (0)3/444.7124
fax. ++32 (0)3/444.7485
e-mail: katia.waegemans@agfa.com