Our client is a trademark management company that includes a number of subsidiary holders of trademarks in the fashion and home sectors. Their business model is basically the licensing of trademarks to retailers and leading manufactures in a particular country’s market.
Through the recommendation of the contracts manager at our client’s subsidiary, with whom we had already acted in the registration of the master franchises for their trademark in Brazil, the client contacted our firm for consultations on strategies to restructure various trademarks in Brazil, previously exclusively licensed to another company. In January 2015, our client terminated the license agreement because it had not been receiving the minimum contractual royalties since 2013.
After sending a notice of termination of the license agreement concerning the relevant trademark in Brazil due to non-payment of royalties, the former licensee filed a court action requesting that our client refrain from disclosing such termination to the market (especially the chain of sublicensees) as well as pay compensation for alleged damages.
In reply, our client filed a court action requesting that the former licensee cease the use of the trademark and pay the due royalties. Daniel Law managed to obtain an injunction order to immediately compel the former licensee to cease the use of the relevant trademarks (including through sublicensees), which gave security to the client to reassume the operation of such trademark in Brazil. The injunction order forced the former licensee to accept our client’s terms and, as a result, the parties reached an agreement to resolve this issue.