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Dispute over a name

June 2012 - EU & Competition. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

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Competition

An estate agent was entitled to prohibit a former employee from using his name in the promotion of a ‎new estate agency, for the name was protected as a trademark.‎

An estate agent was entitled to prohibit a former employee from using his name in the promotion of a ‎new estate agency, for the name was protected as a trademark.‎
 
It is tempting for an employee to use his former employer’s name to promote a new business. ‎Particularly, if the former employer is an estate agent known from TV. But this may be contrary to the ‎Danish Marketing Practices Act and the Danish Trademarks Act, as this case shows.‎
 
After 15 years of service, a former employee of a well-known estate agent wanted to set up on his own. ‎In the promotion of his new estate agency, the former employee ran a number of ads in which the name ‎of the well-known estate agent appeared.‎
 
The estate agent felt that this could not be right. The former employee was using his name and ‎reputation to promote his new estate agency, trading on the goodwill and reputation he had built.‎
The former employee disagreed. He did not see it as sponging – mentioning the estate agent’s name ‎should be seen as resume information, which was standard practice in the industry.‎
 
Injunction against using the name
The Copenhagen Maritime and Commercial Court ruled in favour of the estate agent, holding that his ‎name was protected as a trademark. By his unauthorised use of the estate agent’s name, the former ‎employee – who was now a competitor – had acted contrary to the Danish Trademarks Act and the ‎Danish Marketing Practices Act.‎
 
The estate agent was therefore entitled to a discretionary sum of about EUR 13,500 from his former ‎employee in compensation and as a fair price for having used his name. However, the estate agent had ‎claimed about EUR 340,000.‎
 
Norrbom Vinding notes:
  • that the decision illustrates that employers may be entitled to compensation and equitable ‎remuneration if their name is used by former employees setting up in business on their own ‎and if the former employees are not authorised to use the name; but

  • that compensation and equitable remuneration will generally be awarded by the courts as a ‎discretionary amount.
The above does not constitute legal advice and should not be relied upon as such
For more information please visit www.norrbomvinding.com