In the ruling of the District Court of The Hague dated April 19, 2022, we are again dealing with a dispute between two former trading partners.
Spyra is engaged in the design and marketing of innovative water toys. Spyra designed and developed a water gun that allows 20 individual water shots to be fired, after which the gun is automatically refilled. Spyra is the holder of the international trademark registration for the word mark SPYRA, for goods and services in class 28 (toys), which registration is valid in the European Union, among other countries. Spyra has also protected the appearance of the water gun as a design in the EU.
DesignNest is a wholesale distributor of electronic and telecommunications equipment and related parts. DesignNest is also engaged in product design. DesignNest purchased 542 SPYRA ONE water guns from Spyra in August 2020, which copies were delivered to DesignNest by Spyra in mid-September 2020. By letter and email dated May 10, 2021, Spyra terminated its agreement with DesignNest.
DesignNest subsequently posted images of a competing look alike water gun on its website and said of Spyra’s product:
“With great regret we are announcing that we are not able to fulfill orders and backorders of Spyra. They are encountering quality issues as well as delivery problems. This means that we will start a refund for all backorders and that the Spyra product will not be back in stock. We are working on finding an alternative product to replace the empty spot Spyra has left in our portfolio (2021-08-02).” And:
“Can Spyra still deliver the products? While our back order list is growing each day, Spyra is no longer responding to our requests for getting new stock in our warehouse. This is resulting in long waiting times for our loyal customers. We are not sure what is happening internally with Spyra and sure hope that the company will succeed and strive We still believe in Spyra even though one of the co-founders has stepped away from the company earlier last year.
We are aware that our customers are getting impatient and are even thinking about a refund or worse; seeking for other competitive brands. We can ensure you that we are doing our utmost best to get you the products. To be continued…”
DesignNest also continues to market original Spyra water guns. This is allowed according to the court, because its trademark rights have been exhausted.
Regarding the claims related to the notices on DesignNest’s website, the court found them admissable because DesignNest knew very well, or at least should have known, why Spyra was no longer supplying DesignNest with original SPYRA ONE water guns. After all, Spyra had terminated the Agreement and ceased supplying its products as of that date. Therefore, the text passages cited above on DesignNest’s website provided factually incorrect information to visitors to the website, unfairly placing Spyra in a bad light. DesignNest is ordered to cease and desist from the unfair trade practices consisting of making false and misleading statements on its website.
