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. (Ed. ElvisNews: remebember the Elvis Flip-Flop slippers?)
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.