Article „Owner of trademark may be liable for the obligations of trademark user“ by Aleksandr Tsemin
According to the article published in business newspaper Ärileht by attorney Aleksandr Tsemin of the LEADELL Pilv Law Office, by renting out its trademark, the owner of the trademark may become liable for fulfilling also the obligations of the trademark user, as appears from a recent resolution of the Estonian Supreme Court.
The Supreme Court in its decision No. 3-2-1-136-16 has provided guidelines in order to resolve the long-term unclear situation related to the liability of a trademark owner and a trademark user regarding the damages caused to the service customer. Although the problem has been defined in difficult wording, it is basically the case of taxi drivers.
The court proceeding in Estonia involved a well-known taxi company, being also the owner of a trademark providing taxi services, whose economic activity includes the sale of its trademark for use to third persons providing taxi services independently. The passenger who initiated the court dispute had ordered taxi services from the trademark user and allegedly received damage from the taxi driver through incompetent service. The passenger filed a claim for compensation to court against the trademark owner, not the driver who provided the taxi service. The question raised during the proceeding if the claim was submitted against the correct respondent.
In its resolution the Supreme Court explained that in case the passenger had not been specifically notified who was the provider of services (trademark owner or user), it was first of all necessary to detect if the taxi driver (trademark user) could be handled as a representative of the trademark owner or independent entrepreneur. According to the Supreme Court, in the given dispute the trademark user had not separated itself from the trademark owner (on the doors and inside the car there were only signs of the trademark Taxify, not the name of the entrepreneur providing services). Additionally the driver had not clarified that it was providing services individually. The court also stated that the owner of the trademark had to be aware that the trademark users were its representatives it in the market. The passenger had an impression that the taxi driver was an authorised representative of the trademark owner and therefore the liability for the concluded contracts can be attributed to the trademark owner.
Although court admitted that general conclusions cannot be drawn from this decision, all the companies practicing similar economic activities are recommended to revise the contracts concluded with trademark users and take measures to decrease potential risks. In view of the current explanations of the Supreme Court it is evident that such liability can never be fully precluded and the trademark owners need to consult with legal experts in each specific case.