No change in sight for Wendy’s luck

Wendy’s against Wendy’s is beginning to look a bit like Jarndyce against Jarndyce, the interminable court case described by Charles Dickens in his 900 page novel, Bleak House: “Jarndyce and Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means.”

While the Wendys have not quite reached this point, there is still confusion in the media about this long-running trademark conflict, also reflected in the latest judgment of the Court of Amsterdam in late January.

Apparently, “luck had run out” for Wendy’s, the small snack bar in Goes, Zeeland, which had won a widely-reported victory against the American hamburger giant Wendy’s. But does this mean that all is now lost and they have missed out on a € 6.5 million payout? Well, not quite…..

Execution

The Court of Amsterdam’s judgment concerns what is known as an execution dispute. This is a dispute concerning the interpretation and execution of an earlier judgment; in this case, a judgment dating from the year 2000. In that judgment, the American company Wendy’s had been forbidden to continue using the trade name and trademark Wendy’s in the Netherlands and the rest of the Benelux.

Despite the 2000 judgment, Wendy’s International did not give up on the European market, and the two Wendys continued to keep a close eye on each other. The Americans went on to establish Wendy’s Netherlands B.V. in 2009 and Wendy’s Netherlands Holding B.V. in 2014. Wendy’s of Zeeland felt that these trade names were in breach of the prohibition established by the judgment of 2000 and invoked its penalty clause. They argued that, by deliberately acting in violation of the judgment, Wendy’s International had incurred penalties amounting to €6,516,283.90 (now, that’s a lot of hamburgers).

But…

Although the court found that the trade names could be imputed to the parent company Wendy’s International, it also ruled that there was no violation of the infringement ban issued in the 2000 judgment.

According to the court, the registered companies Wendy’s Netherlands and Wendy’s Netherlands Holding were conducting ‘different business activities’ (internal financing and holding activities) to the Wendy’s in Goes (services of a neighbourhood snack bar) and addressed “a different audience”. In other words, the court considers it unlikely that the clientele of a snack bar will consult the Commercial Register ‘in order to investigate the snack bar’s identity and group link’ and it found that there was no question of the risk of confusion necessary to establish a violation.

The judgment from 2000 was therefore upheld and its infringement ban remains unaltered. The only thing that the Court of Amsterdam did establish was that, in using the trade name Wendy’s for internal financing and holding activities, Wendy’s International was not in violation of the judgment’s infringement ban. The court even added that this would certainly change if the subsidiaries attempted to develop any activities related to fast food and catering services.

Clientele

No credit entry for € 6,516,283.90 then, just a debit entry of € 13,681.00 for legal costs. Having said that, Wendy’s of Goes is the only company that can fry hamburgers under the name Wendy’s in the Netherlands; that was and remains the case.

So were these proceedings pointless? No. Given the scale and duration of the conflict, it is not at all surprising that Wendy’s of Zeeland objected to the trade names of its foreign competitor. In fact, it had to in order to protect its trademark.

And who knows, a subsequent court case may have a different outcome. Just imagine, if everyone in Goes waiting for their call from the snack bar decided to go online and look up the trade register to check out the snack bar's identity and group link… It might just happen.