Accuraphoto USA (AUSA) owns the \"Accuraphoto\" trademark in the United States.
ID: 450902 • Letter: A
Question
Accuraphoto USA (AUSA) owns the "Accuraphoto" trademark in the United States. AUSA produces the "SureShot" camera, which is known to consumers as a moderately priced quality product. AUSA entered into a contract with Honshu Photographic, Inc. (HPI), a Japanese corporation. Pursuant to the terms of the contract, HPI was permitted to manufacture and market "SureShot" cameras utilizing the "Accuraphoto" trademark in return for payment of royalties based upon a percentage of HPI's sales. After producing "SureShot" cameras for a short time at its Japanese facility, HPI moved production to its facility in the Philippines in order to reduce labor costs. The cameras produced at the Philippine facility utilized the "Accuraphoto" trademark but were marketed under the name "SharpShot." Additionally, these cameras contained improved electronic features incorporated into the product by HPI engineers. Despite the inclusion of these improvements, "SharpShot" cameras proved to be of inferior quality. Furthermore, "SharpShot" cameras have begun to show up on the shelves of U.S. discount retailers such as K-Mart and Wal-Mart. Additionally, several "SharpShot" cameras have been sent by American consumers to AUSA's American facilities for repair. Finally, HPI has refused to share access with AUSA to the electronic improvements incorporated into the "SharpShot" on the basis that they are confidential proprietary information.
1. What legal recourse may AUSA seek against HPI as a result of HPI's conduct?
2.What do these remedies provide for?
Explanation / Answer
1. From the problem statement above it is clear that there seems to be no space for mediation or arbitration between two parties as this looks clear case of fraud by HPI to AUSA. They have used their trademark and produce a product which is not as per AUSA standard and leads to trademark violation. The best legal recourse that AUSA can seek is filing lawsuit in a civil court with charges amounting to criminality of violating their trust and producing inferior quality product. Bases on the contract it is clear that HPI need to share royalties with AUSA which means any product they are manufacturing under "Accuraphoto" trademark should be traded with their consent and AUSA should be aware of components.
2. Remedies that will be imposed on HPI is lawsuit amounting to criminal charges which can imprisoned the HPI authorities for violating AUSA trust and will imposed financial penalty depend on quantum of punishment