Textra Automotive (Textra) is a medium-sized European company focusing mainly on high-tech sensors for cars. The company decided to partnered with one of the manufacturing groups (Siam) in Thailand to manufacture vehicle sensors with a plan for further expansion if the venture turns out to be profitable.
The venture was profitable with three successive quarters, Textra decides to expand its sale in Indonesia, Malaysia, Vietnam, and the Philippines. The success resulted in the next stage of registering the trademark in Thailand and also in four other countries. Nonetheless, the trademark was discovered from Textra that it is registered by Mais Manufacturing Ltd.
Further investigation revealed that Mais manufactured inferior sensors and was sold at a reduced price under Textra’s trademark. The major blow to the company was by the Siam group selling the faulty Textra sensors despite the contract specified that all faulty sensors have to be destroyed.
This resulted in an infringement case from Mais group to Textra regarding the letter of demand for trademark infringement. On a legal encounter by the local lawyer, Textra was advised that the “Textra” trade is legitimately registered in Thailand by Mais and cannot be claimed from the Mais. Due to the threat of infringement by Mais, Textra has to negotiate with Mais to purchase the “Textra” trademark at a substantial price.
The three important lessons learned by the EU are-
- Due diligence should be conducted by the EU SMEs on their local partners before collaborating on any projects.
- The trademarks should be registered by the EU SMEs in the South-East Asian countries for interest before or as soon as they arrived in the respective countries.
- Monitor the market strongly by EU SMEs for infringement products and allocate a budget for actions against the infringers. Medical devices with sub-standard qualities are sold to counterfeit any risk for the health of the consumer or damage the company’s reputation.
In my opinion, the situation should be considered in a global context and it should be applied to every and any company before getting into any kind of monetary exchange or expansion of their products. It is not just for the safety of the company’s image or reputation but also for the employees who have been working hard behind such devices or products.
The overall scenario shows that it was a huge investment even though the company earned profits in three successive quarters, but got wasted out into unnecessary litigations and a bad experience.