The accidental incidental use of a brand by the former franchisee

The judgment of the District Court of Gelderland of 9 March 2016, ECLI:NL:RBGEL:2016:1691 (ERA Nederland/Houvast Makelaardij) concerns a situation in which a franchisee had terminated the franchise agreement with the franchisor. The franchisor confirmed the termination. The
franchisee was advised to remove all references to ERA from its business operations. The former franchisee has argued that he has actively removed the brands from ERA and that he has made further efforts to do so. Nevertheless, unintentional incidental brands of ERA have remained in use, caused by busyness and carelessness, according to the former franchisee. In some places, for example, ERA expressions have remained unintentionally visible on photos on the website of the former franchisee and on that of Funda and on for sale signs and posters of properties that the former franchisee manages.

According to the preliminary relief judge, the aforementioned use constitutes trademark infringement pursuant to Article 2.20 paragraph 1 sub a BCIP. The lack of malicious intent or intent on the part of the former franchisee does not detract from this infringement. Intent is not required for presuming an infringement. The fact that the unauthorized use of the trademark did not take place on a large scale does not detract from the infringement either. Pursuant to Article 2.21 paragraph 2 sub b BCIP, the damage is determined as a fixed amount on the basis of the license fee that would have been due under the terminated franchise agreement if the former franchisee had requested and received permission to use the ERA brands. 

It follows from this judgment that it is important to realize that, in principle, the inadvertent and incidental continued use of trademark rights of the former franchisor can also be sanctioned.

mr. AW Dolphijn – Franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice.

Do you want to respond? Go to dolphijn@ludwigvandam.nl