Mark owner awarded damages for loss of licensing opportunity

In Eduardo Denkberg v Coto Cicsa (Case 1361), an appellate court in Buenos Aires has ruled that the defendant's unauthorized use of the plaintiff's trademark, even though the plaintiff had not yet used the mark, frustrated the plaintiff's ability to license it in the future. The court ordered the defendant to cease using the trademark and to pay the plaintiff general damages for loss of opportunity.

Denkberg is the owner the registered trademark PRINCE in respect of children's toys. When Coto, a major supermarket chain, began using the mark to market ceiling fans, Denkberg brought legal proceedings for trademark infringement. Denkberg sought not only a permanent injunction preventing any further use of the mark by Coto, but also damages. Although Denkberg had not yet licensed his mark for use by third parties, nor was he even contemplating this at the time of trial, he argued that in future his ability to do so would be affected by Coto's unauthorized use.

The trial court found for Denkberg, ordering Coto to cease using the mark and to pay Denkberg damages. The monetary award was calculated as 0.62% of the sales revenue Coto had enjoyed as a result of using the PRINCE mark.

On appeal, the appellate court affirmed the lower court's ruling. It stated that the injunction against Coto was justified because (i) Coto's use of the PRINCE mark constituted unfair use, and (ii) it was certain that Denkberg's ability to license the mark in future would be detrimentally affected by such unfair use. The court reasoned that the monetary award, although low, was fair because at the time of trial Denkberg had not suffered actual damages.

Jorge Otamendi, G Breuer, Buenos Aires