AgfaPhoto wins trade mark dispute with Agfa-Gevaert

According to an Agfaphoto press release, the ruling is final and no appeal is possible. In October 2005, Agfa-Gevaert attempted to terminate the license agreement concluded with AgfaPhoto Holding. Among other things, this license agreement includes the rights to the AgfaPhoto trademark and runs for an indefinite term.

"We welcome the decision by the ICC, which fully confirms our point of view," said Dr. Frank Nellissen, Managing Director of AgfaPhoto Holding GmbH. "This ruling marks an important positive signal to us and our present and future partners with whom we enter sublicense agreements. Now we can finally get started." AgfaPhoto Holding is planning to systematically expand its brand activities across the entire consumer imaging market on a worldwide scale.

Based on an order for interim measures issued last year by the Court of Arbitration, Agfa-Gevaert was obliged to approve some sublicense agreements negotiated by AgfaPhoto Holding. Under the license agreement, Agfa-Gevaert is required to approve the conclusion of sublicense agreements between AgfaPhoto Holding and its partners. In view of Agfa-Gevaert’s negative attitude and the legal uncertainty, it had so far been impossible to expand the sublicensing business as planned, AgfaPhoto pointed out. Following the recent arbitration award, Agfa-Gevaert may no longer refuse its approval based on the argument that AgfaPhoto GmbH, the operating subsidiary of AgfaPhoto Holding, was declared insolvent in May 2005.

"In the second phase of the proceedings which is now pending, the main issue is AgfaPhoto Holding’s claim for damages and determining the quantum of the damages caused and payable by Agfa-Gevaert as a result of its illegal conduct," added Dr. Nellissen. At the beginning of the proceedings, AgfaPhoto Holding had already estimated impending damages of no less than EUR 200 million.

In the opinion of AgfaPhoto Holding, the insolvency of AgfaPhoto GmbH was the result of negligence and misconduct on behalf of Agfa-Gevaert. To clarify the actual circumstances of the insolvency, AgfaPhoto Holding initiated separate arbitration proceedings before the ICC about a year ago. As yet, Agfa-Gevaert has not commented on the substance of the serious allegations made, which have meanwhile also been raised by the bankruptcy administrator of AgfaPhoto GmbH.

In a press release commenting on the decision, the Agfa-Gevaert Group pointed out that 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, but 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, Agfa-Gevaert said.

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 (editor’s note: AgfaPhoto Holding GmbH’s majority shareholder) 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."