A faulty coffee machine caused a house to go up in flames in Finland. Saeco made the machine, but the packaging and product also bore the Philips’ trademark. Is Philips liable?
Positive, the European Court ruled. Not only is the manufacturer liable, so is the licensee. By placing their trademarks on a product, companies create the impression of being involved in the production. The consumer can therefore sue either company. It is up to the companies involved to arrange who should pay the damages among themselves.
When licensing a trademark, make clear arrangements on how to guarantee the quality of a product and if the quality is not uphold by either one of the two parties, determine beforehand who is liable.
