A two
million dollar damages claim against Fonterra for alleged trade mark breach over
use of the brand FarmSource was struck out by the High Court.
Fonterra was sued by Te
Awamutu-based dairy consultants Intelact Ltd, reviving a 2014 trade mark
dispute over use of the word “source” as branding in the dairy industry. Intelact owns NZ trade mark registration for
Source World and SourceNZ and has the domain name SourceNZ.com. It took legal action in November 2014 when RD1,
Fonterra’s retail arm, started using the brand FarmSource.
The High Court was told
the dispute was settled with a mediation conference. Interlact agreed to stop using “source” in
its branding after June 2016 in return for a cash payment from Fonterra. The amount paid was supressed. Fonterra and Intelact agreed to use their
best endeavours to reach agreement on a tolling arrangement allowing Intelact a
reduced rate for processing. When no
agreement was reached on reduced rates, Intelact argued the mediation agreement
was at an end. Intelact was threatening
ongoing use of “source” in its branding and the gloves were back on over their
trade mark dispute.
Justice Venning ruled
wording of the mediation agreement settled the dispute over branding. The earlier dispute was replaced by new
obligations: a cash payment and negotiations over a tolling arrangement. The payment was made. And Fonterra was not in breach of any
obligations over a tolling arrangement, he ruled. Fonterra and Intelact agreed to use best
endeavours to reach agreement. This was
no more than an agreement to negotiate, creating no fixed legal obligations.
Intelact
Ltd v. Fonterra – High Court (6.06.17)
17.063