Legal analysis of the PITT- CHAR Case

Facts

• The plaintiff “PPG Industries Ohio USA” is the registrant owner of the PITT-CHAR trademark, under Class (2) for paints and coatings products.

• The defendant, a Saudi based company, markets products bearing the plaintiff’s PITT-CHAR trademark without the registered owner’s consent.
• Accordingly, the plaintiff filed an infringement action with the Commercial Court in Dammam based on Article 17/2 of the GCC Trademark Law which provides as follows: “the owner of a registered trademark shall have an exclusive right to use said mark and prevent others from using the same or any identical or similar marks – including geographical indicators – without his consent, etc.”.

Defendant’s Response to the Lawsuit

•  At the first hearing, the defendant’s representative motioned the court for an extension of time to submit a response to the case. In their response, the defendant claimed that they have signed a partnership agreement with the plaintiff back in 1982 and that the said agreement authorized them to use the trademark in question without the plaintiff’s consent.
• Further, the defendant claims that Clause (14) of the 1982 agreement provides that: any dispute, difference, or question arising between the parties or their successors… shall be referred to arbitration. Accordingly, the defendant requested the court to refer the case to arbitration.
•  Furthermore, the defendant claimed that the parties have signed an agreement back in 2013, the “Manufacturing Agreement” such agreement authorized them to use the trademark in question.

Response to the Defendant

• The plaintiff responded that the 1982 agreement was amended by the 2009 agreement, and neither agreement authorized the defendant to use the PITT-CHAR trademark. Since the defendant did not obtain a license from the plaintiff to use the PITT-CHAR, the use of the mark by the defendant shall be considered infringing.
• The plaintiff also responded that the 2009 Agreement modified the 1982 Agreement, and that the 2009 Agreement does not include an arbitration clause, and therefore the plaintiff’s claim is invalid.
• In response to the defendant’s claim regarding the 2013 Agreement   the “Manufacturing Agreement”, the plaintiff responded that the said agreement does not authorize the defendant to use the PITT-CHAR trademark, but rather applies to other trademarks. Furthermore, the said agreement exempted the Kingdom of Saudi Arabia from its provisions.

Decision

In its decision, the court referred to Article 11 of the Saudi Law of Arbitration, which provides as follows: “a court before which a dispute, subject matter of an arbitration agreement, is filed shall dismiss the case if the defendant raises such defense before any other claim or defense” Given the defendant did not raise the arbitration cause at the first hearing, the court concluded that the failure by the defendant to raise the defense in the first hearing shall be considered as waiver of the right to arbitrate. Thus, in terms of subsistence, halt the defendant’s use of the PITT-CHAR trademark, and prohibit it from selling or exporting any PITT-CHAR products. The court also ordered the defendant to withdraw the products bearing the trademark in question.