Ritchey

Failure to exercise control of a licensee leads to loss of trade mark rights

Ritchey Limited (Ritchey) was established in the early 1970s under the name Ritchey Tagg Limited. The business specialises in the design, manufacturing and sale of animal identification tags, and acts as a distributor of a wide range of animal husbandry products and agricultural and farm equipment. Ritchey sold the patented animal identification tags of Ritchey Manufacturing Company (RMC).

Case Study

Case Type

Trade mark opposition

Action

Proving a licence no longer valid

Outcome

Successful opposition

Issue:

We’ve worked with Ritchey (now Allflex Group UK Limited) for more than 20 years — advising on the protection of it brands, product designs and technical innovations.

More than forty years later, a dispute arose between Ritchey and RMC. When RMC tried to register the name RITCHEY in the European Union, Ritchey opposed the application. Ritchey has traded under the RITCHEY name in the UK, Republic of Ireland and several EU member states for over 40 years. In 2012, RMC complained that the online activities of Ritchey were causing confusion with its RITCHEY brand. RMC then applied to register RITCHEY as a trade mark in the European Union.

Ritchey opposed this application as it was concerned that if RMC was to obtain an EU-wide trade mark registration for its name, this would undermine the value of its business and could interfere with its work in European Union member states. We argued that Ritchey had acquired unregistered trade mark rights in the name RITCHEY as a result of its longstanding use for identical products. In response, RMC argued that it owned unregistered trade mark rights in the name RITCHEY by virtue of two trade mark licences from 1972 and 1980. These had no date of termination and RMC argued that they ran in perpetuity. The EUIPO found in favour of RMC at first instance. Ritchey appealed the decision.

Action:

A fundamental principle of licensing a trade mark is that the licensor must exercise control over its use, so that the trade mark maintains its function of indicating the origin of the goods to which the mark is applied.

From our discussions with Ritchey, it was clear that RMC had not exercised any control over the use of the RITCHEY trade mark for many years. We therefore had to establish to the satisfaction of the Board of Appeal that the trade mark licence was no longer valid. The Board of Appeal put significant weight on the evidence collected and presented by us from longstanding employees of Ritchey, some of whom had worked for the business for over 20 years, who declared that they had not ever had any dealings with RMC; and third party evidence which stated that the RITCHEY trade mark was associated only with Ritchey. In the evidence of the former managing director of Ritchey, which had been filed by RMC, it was stated that the licence had gone into default.

We were able to persuade the Board of Appeal that RMC had not exercised control over the use of the trade mark RITCHEY by Ritchey for many years, during which time there had been a number of changes of ownership in the business. As a consequence, the Board of Appeal concluded that the trade mark licence between RMC and Ritchey had lapsed at some point in time and thereafter the goodwill created from the use of the RITCHEY trade mark inured to the benefit of Ritchey. Ritchey was therefore able to succeed in its opposition to the application of RMC.

Outcome:

We were able to successfully oppose the registration of RITCHEY by RMC on appeal and, therefore, protect the value that exists in the RITCHEY trade mark which is owned by Ritchey. This case demonstrates the importance of clearly drafting the terms of a licence and actively managing the licensor-licensee relationship. It’s advisable to include limitations on the term of a licence with clear provisions governing term renewal, termination and post-termination use of the licensed trade mark. By failing to control the use of the RITCHEY trade mark by Ritchey, RMC lost its claim to rights in this trade mark.

Find out more about the case, here.

For more information please contact Gareth Price gip@udl.co.uk.

0113 245 2388

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