Court considers whether transfer of company included trademarks

In Poul Stig Briller A/S v Poul Stig Holding A/S (Case V-82-11, January 14 2013), the Danish Maritime and Commercial Court in Copenhagen has considered whether the transfer of a company included the transfer of its trademarks.

For many years, Mr Poul Stig had been designing spectacle frames and selling glasses and contact lenses from a store named Poul Stig Briller. The store was owned by Poul Stig Briller A/S (PSB), a subsidiary of Poul Stig Holding A/S (the seller).

Pursuant to a contract dated September 14 2005, the entire share capital of PSB was transferred from the seller to MC Axel Holding A/S.

After the sale of the company, Poul Stig registered the domain name 'www.poulstig.com'. He also registered a figurative mark including the word element 'Poul Stig'. 'Stig' was written with two dots over the 'I'. When, in 2010, PSB sought to register the trademark POUL STIG, it became aware of Poul Stig's registrations. It objected to the trademark registration and requested that the domain name be transferred to it.

The court first held that, at the time of the transfer, the trademarks POUL STIG BRILLER and POUL STIG had been acquired and held by PSB by commencement of use (in Denmark, unregistered trademarks can be acquired by use).

According to Section 38 of the Danish Trademarks Act, "if anybody transfers his enterprise, the right to the trademarks of the enterprise shall pass to the transferee, unless otherwise agreed or deemed to be agreed". Section 38 corresponds to Section 17 of the Community Trademark Regulation (207/2009).

In the transfer contract, the parties had agreed as follows:

"The transfer comprises the company's name (Poul Stig Briller) and the logo. However, it is agreed that the seller has the right to maintain its name, just like the company Gitte og Poul Stig Design, and any possible future consolidated company has the right to use the name Poul Stig."

However, since Poul Stig had made the trademark registration on behalf of the seller, which was already in existence at the time the contract was signed, the above-mentioned section of the agreement was irrelevant. Consequently, the court held that Section 38 of the act was applicable.

The trademark registered by Poul Stig was found to have a very high degree of similarity with PSB's acquired trademarks POUL STIG BRILLER and POUL STIG. The only element that distinguished the mark registered by Poul Stig from PSB's trademarks was that there were two dots over the 'I', instead of only one. Thus, Poul Stig's trademark had to be revoked in relation to glasses and contact lenses.

Another issue in this case was the domain name 'www.poulstig.com', which had been registered by Poul Stig after the transfer of PSB. The court found that the address 'www.poulstig.com' targeted the Danish market and, therefore, the registration infringed PSB's rights. Accordingly, Poul Stig had to transfer the domain name to PSB.

The case confirms that, when a whole company is transferred and there is no agreement to the contrary, the trademarks and domain names of the company are also transferred, even if the rights relate to the seller's name. In this situation, it is strongly recommended to make specific arrangements regarding the parties' future use of a personal name, as the buyer can have an interest in expanding the use of its name later on.

Mette-Marie Henrichsen, Plesner, Copenhagen