No
matter how un-logical EPE�s vision on Elvis
merchandise may be, the company has and will
always have the last word on Elvis related
products. The Belgian wholesale company Sogilo
discovered that the hard way. Sogilo had applied
for the licensing of a series of Elvis products,
including bathroom carpets. The first contacts
via email were very promising for the Belgian
company, although every email stated that EPE
will have the final approval, before the
products are commercially released. Sogilo also
got permission to develop a few demonstration
models. It was then, when EPE put their foot
down and said �no� to the bathroom-carpet with
Elvis�s picture and name. According to their
lawyer, the company will never allow products
with Elvis�s likeness that can be stepped on.
The Belgian judge noted in his decision that EPE
has a �difficult to understand� logic regarding
Elvis related merchandise, but accepted the fact
that the �heirs of Elvis� have the right to
reject merchandise that doesn�t meet the guide
lines of the company. Therefore, the bathroom
carpet cannot be produced.
The Belgian company is not planning to put the
case to rest. It believes that EPE has broken an
pre-contractual agreement and appeals the
decision. To be continued.
Below is Patricia
Cappuyns's version of the judgement. Cappuyns
represented Elvis Presley Enterprises.
In a judgment handed down on 26 March
2007, the Commercial Court of Dendermonde in
Belgium clarified the intellectual property
owner's prerogative to decide how his lP is to
he used.
Belgian rug manufacturer and licensee candidate,
Sogilo, entered into license negotiations with
Elvis Presley Enterprises (EPE) through EPE's
Benelux agent. The negotiations centred on the
production of household goods bearing the
likeness of Elvis and Elvis-related trade marks.
The agent made it clear from the beginning of
the negotiations that everything discussed was
subject to the approval of EPE. It was also made
clear to Sogilo that the first step of the
license negotiations consisted of completing a
Business Proposal which would subsequently be
submitted for EPE's approval.
Only after approval hy EPE of the Business
Proposal could a formal agreement be entered
into.
Under EPE's conditions, licensed products can
only be brought to market once a formal
agreement is signed and the various product
approval procedures provided in it are complied
with. Any product that does not follow the
various stages of the approval procedure is
immediately removed from the market.
Pending the license negotiations, EPE approved
some products for the sole purpose of showing
them at a trade fair in January 2002. Approval
for a number of other products, such as bath
mats and rugs, was withheld because EPE ohjected
to any use that would entail stepping on the
face of Elvis. However, unknown to EPE, Sogilo
had already entered into agreements with its
customers for products that had either not been
approved, or that had only been approved for use
at the trade fair.
When, finally, no license agreement was
concluded and Sogilo had no Elvis products to
deliver to its customers, Sogilo allegedly
suffered lost profits and damage to its
commercial reputation. The company then filed a
claim for over �400,OOO (approximately
US$537,000) in damages against EPE and its
Benelux agent on the basis of contractual and
pre-contractual liability. The basis of Sogilo's
argument was that EPE did not communicate their
disapproval of the use of Elvis' likeness on the
rugs until the end of December 2001, by which
time Sogilo had already started production of
samples and was marketing them to its customers.
In the 26 March 2007 judgment, the Commercial
Court of Dendermonde held that no contractual or
pre-contractual fault had been committed by EPE
or its agent, and dismissed Sogilo's claims.
The Court confirmed that it is the right
holder's prerogative to exercise control over
how his protected property is to be used by a
(potential) licensee, especially if it was made
clear to the (potential) licensee from the
beginning of the negotiations that the right
holder intended to exercise such control.
It had been made clear to Sogilo that any
negotiations with the agent were subject to
EPE's approval and every detail of the use of
the images of Elvis Presley was subject to
formal approval hy EPE. Although no licensing
agreement was ever concluded between Sogilo and
EPE it was made clear from the beginning that
any products that were not formally approved by
EPE in the pre-production stage would be removed
from the market.
The Court concluded that Sogilo should have
known that it was taking a considerable risk in
giving instructions to third parties without
having fust obtained formal approval on every
detail from EPE. Sogilo's claim for damages was
therefore dismissed. The judgment is still
subject to appeal.
Posted: 2nd. September 2007