Sharp Sues to Use Name in U.S. -- WSJ
June 13 2017 - 3:02AM
Dow Jones News
By Takashi Mochizuki
TOKYO -- Sharp Corp. has sued China's Hisense Electric Co.,
which licensed the Sharp brand for televisions sold in the U.S.,
accusing Hisense of putting the Sharp name on poor-quality TVs and
deceptively advertising them.
The court action is the latest effort by Osaka-based Sharp to
retrieve the right to use its own name when selling TVs in one of
the world's largest markets. Sharp is trying to recover its
position as a global maker of consumer electronics.
Hisense rejected the allegations and said it was selling
high-quality televisions under the Sharp name.
The dispute illustrates the risks when the owner of a well-known
brand name gives up control over products sold under that name.
In 2015, Sharp signed a deal with Hisense giving the Chinese
company the right to use the Sharp name on TVs sold in the U.S.
through 2020. At the time, Sharp was in financial distress and
selling assets to raise cash. In 2016, Taiwan's Foxconn Technology
Group, formally known as Hon Hai Precision Industry Co., took a
controlling stake in Sharp for Yen388.8 billion ($3.52 billion),
and Foxconn has sought to put the Japanese company back on a growth
track.
In a complaint filed to a California state court in San
Francisco, Sharp lawyers said the Japanese company's brand and
trademark "are at risk of being destroyed" by the time the
five-year term of the Hisense agreement expires.
It said that under Hisense's management, the televisions are
"shoddily manufactured" and "in many cases, perceived by consumers
as cheap." It said it wanted Hisense to stop using the Sharp
name.
Sharp said its testing found the Sharp-brand televisions made by
Hisense violated U.S. Federal Communications Commission standards.
It said Hisense gave consumers deceptive information about the size
and brightness of the TVs, violating other federal standards.
Hisense said it did nothing wrong.
"Hisense categorically denies Sharp's claims in the litigation
and looks forward to presenting its case in the appropriate forum,"
a company representative told The Wall Street Journal. "Hisense is
in full compliance with the trademark license agreement and Sharp's
attempt to terminate the agreement is of no effect. Hisense will
continue to manufacture and sell quality televisions under the
Sharp licensed brands."
Waseda Business School professor Atsushi Osanai, who used to
work at Sony Corp.'s TV unit, said the case was important to
Sharp's efforts to restore itself as a global brand.
"If it wants to revive as a global consumer-electronics maker,
Sharp should make every possible effort to retrieve the U.S. TV
license because the product, which still occupies the center of the
living room, remains an important marketing tool," Mr. Osanai
said.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
(END) Dow Jones Newswires
June 13, 2017 02:47 ET (06:47 GMT)
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