V'soske Shops Incorporated v V'soske Joyce Ltd

• Jurisdiction: Ireland
• Judge: MR JUSTICE JOHN BLAYNEY
• Judgment Date: 24 May 1990
• Neutral Citation: 1990 WJSC-HC 1398
• Court: High Court
• Date: 24 May 1990

1990 WJSC-HC 1398

THE HIGH COURT

No.8796P/1987

V'SOSKE SHOPS INCORPORATED v. V'SOSKE JOYCE LTD

BETWEEN

V'SOSKE SHOPS INCORPORATED

Plaintiff

AND

V'SOSKE JOYCE LIMITED

Defendant

Synopsis:

CONTRACT

Terms

Breach - Trade mark - Use - Licence - Renewal - Terms - Licensor bound to consider request for renewal - Express term that consent not to be withheld unreasonably - New conditions sought to be imposed - Whether consent withheld unreasonably - (1987/8796 P - Blayney J. - 24/5/90)

|V'Soske Shops Incorporated v. V'Soske Joyce Ltd.|

LICENCE

Renewal

Terms - Licensor - Rights - Restriction - Licence granted for specified period subject to renewal - Consent to renewal not to be withheld unreasonably - (1987/8796 P - Blayney J. - 24/5/90)

|V'Soske Shops Incorporated v. V'Soske Joyce Ltd.|

WORDS AND PHRASES

"Withheld unreasonably"

Consent - Trade mark - Use - Limitation - Use licensed for specified term subject to renewal - Consent to renewal not to be withheld unreasonably - (1987/8796 P - Blayney J. - 24/5/90)

|V'Soske Shops Incorporated v. V'Soske Joyce Ltd.|

TRANSCRIPT OF JUDGMENT

1 DELIVERED BY THE HONOURABLE MR JUSTICE JOHN BLAYNEY ON 24TH MAY 1990

APPEARANCES

For the Plaintiff:

Peter Shanley, SC

Fidelma Macken, BL

Instructed by

Whitney Moore & Keller

For the Defendant:

Richard Law Nesbitt, BL

Instructed by

Matheson Ormsby & Prentice

2 This is an unfortunate commercial dispute between two companies between whom there is an extremely friendly relationship. Basically they have fallen out over the interpretation of the agreement under which the present owners of V'Soske Joyce limited (the Defendant) bought their shares in the Company from V'Soske Shops Incorporated (the Plaintiff). As Counsel in their closing addresses have clearly indicated, what the Court has to do is see what is the correct construction of the agreement under which the present owners of the Defendant bought their shares because the whole issue in the case turns on this agreement. In fact, it seems to me that it turns upon the provisions of clause 5 of the agreement.

3 The essential issue is whether the Plaintiff, who are clearly the owners of the trade mark V'SOSKE were entitled under the terms of the agreement to withhold their consent to renewal of the agreement when it terminated in 1984 after the first five years if the Defendant did not agree with the new terms which the Plaintiff wished to introduce into the agreement, which were basically a term in regard to exports to the USA and a term under which the Defendant would have to pay as a royalty 2 per cent of their total turnover per annum.

4 Counsel have referred in great detail to the terms of clause 5 of the agreement of 3rd December 1979 and there is no need for me to go into it again. I think the introductory paragraph to clause 5 is of considerable importance and is as follows:

"In consideration for the continued use of the name “V'Soske” in its corporate title or in connection with its products…".

5 I will stop there to comment that there is a reference to the continued use of the name without any limitation being put on it. It therefore seems to me that what is referred to is not continued use for a term of five or 10 years but simply continued use.

6 It then says in that introductory paragraph:

"…V'Soske Joyce Ltd. must accept the following conditions:".

7 Again, it seems to me that what that is saying clearly is that on the one hand permission is being given for the continued use of the name in the Defendant's corporate title and on the other hand it is setting out the conditions under which that permission is being given, and those conditions are spelled out in paragraphs a, b, c and d.

8 It seems to me that those conditions apply for as long as the use of the name V'SOSKE continues, that the conditions are not, as Mr Shanley submitted, applicable simply to the first five-year period and I think that that is implicit in the conditions themselves.

9 The first condition is:

"a. Use the V'Soske name only in reference to rugs and carpets produced by V'Soske Joyce Ltd. in Oughterard, Galway, and only on those products of the same quality standards as currently produced."

10 There is no reason why that condition should not continue for as long as the name is used.

11 The second condition is:

"b. Protect in so far as possible the manufacturing processes, especially shearing techniques and equipment for machine-tufted carpet, from becoming known to competitors."

12 Again, while it appears that it is unimportant, it is something which the Plaintiff could have wished to be observed beyond the original five-year term.

13 The third condition is:

"c. Continue to elect a V'Soske Shops Inc. Director as a Director of V'Soske Joyce Ltd. for as long as the V'Soske name is used."

14 It is clear that this condition is to continue for as long as the the V'SOSKE name is used.

15 Then there is:

"d.The continued use of the name “V'Soske” by V'Soske Joyce Ltd. in either their title or in connection, with their products will be subject to an annual payment of Irish £100 on July 1 of each year to V'Soske Shops Inc. for a term of five years, which term is to be renewable at the request of V'Soske Joyce Ltd. with the consent of V'Soske Shops Inc. not to be withheld unreasonably.rdquo;"

16 The first thing to be said in regard to this clause is that it does not actually say that the use of the name is to be limited to five years. It says that the continued use will be subject to an annual payment of Irish £100 on 1st July each year for a term of five years. So it simply says that during a term of five years there is to be a payment of £100 each year and that this term is to be renewable at the request of the Defendant.

17 The question arises as to the meaning to be given to the phrase "to be renewable". It seems to me that it must be construed as meaning that it will be renewable every five years. This offer document was drafted on behalf of the Plaintiff and in so far as there may be any ambiguity in it it is to be construed against the Plaintiff. If the intention of the Plaintiff was that the term could be renewed once only, it seems to me that that should have been clearly spelled out in the agreement. I think that would be inconsistent with the introduction to the clause which refers to "the continued use of the name “V'Soske” without any limitation, and at the beginning of clause d there is again reference to the continued use of the name. So it seems to me that what the clause means is that the term is to be renewable every...