TIMODELLA CLUB marks erroneously registered by franchisee


In Tanning Center SRL v Lami SA (Case 7094/98, March 14 2006), the Federal Court of Appeals has ordered the assignment of Lami SA's national registrations for TIMODELLA CLUB to Italian company Tanning Center SRL. Although Lami was a franchisee of Tanning Center, the court noted that it had no right to register the marks in its own name.

Tanning Center uses the mark TIMODELLA CLUB to identify services involving the use of special fitness equipment used to help weight loss. It was operating more than 100 service centres across the world at the time the parties signed a franchise agreement in 1992 to allow Lami to open the first TIMODELLA CLUB centre in Argentina. The agreement set forth that Tanning Center would apply for registration of the relevant trademarks in Argentina and license them to Lami. However, Lami applied for registration of the marks in its own name to "avoid delays", according to a letter sent to Tanning Center.

The agreement also established that Tanning Center had to assign the trademarks to Lami free of charge provided that the latter had opened no less than 10 centres in Argentina by March 1995. Lami had not met this condition. Lami admitted the existence of the agreement but rejected Tanning Center's allegations and justified registration "to avoid losing the marks to a local competitor".

The court noted that it was clear from the terms of the agreement - which included the license of Tanning Center's foreign trademarks - that Lami knew the marks belonged to Tanning Center when it applied for registration of TIMODELLA CLUB. Those applications were filed without Tanning Center's authorization. The Trademarks Act provides that marks so obtained are null and void. The court further stated that if it were a case of trademark piracy, it would have opted for the cancellation of the trademarks. However, Lami was not a pirate; instead, its act had been to misinterpret the agreement between the parties.

In reaching its decision, the court decided that it was more efficient for Tanning Center to obtain its trademarks by having them assigned by Lami instead of applying for new registrations after declaring the marks null and void. Therefore, it held that the best solution was to restore the marks TIMODELLA CLUB to Tanning Center - the legitimate owner - based on the provisions of the Trademarks Act and the Paris Convention for the Protection of Industrial Property.

Agustina Martínez Estrada, G Breuer, Buenos Aires

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