The most famous Czech watch brand, Prim, has been the subject of complex legal disputes for 20 years. Two companies are competing for it: MPM-Quality from Frýdek-Místek and Elton hodinářská from Nové Město nad Metují.
Both watch manufacturers use the Prim brand and want to become its sole seller on the Czech market. On Monday, a landmark ruling was handed down by the Supreme Administrative Court, which could significantly tip the scales in favour of MPM-Quality.
The court ruled that the word and figurative trademark Prim, which the North Moravian company purchased in 2001, is valid. The company may therefore use the Prim logo on its watches. Its owner, Petr Hanko, believes the ruling will also help him in the dozens of other legal disputes he is pursuing against his East Bohemian rival Elton hodinářská.
The majority owner of Elton is billionaire Michal Strnad; a stake in it is also held by well-known media entrepreneur Michal Voráček, who owns Parlamentní listy.
Elton hodinářská is the legal successor of the original manufacturers who began producing Prim watches in Nové Město nad Metují in 1942. Representatives of Elton state that, unlike their North Moravian rival, their company still manufactures the original Prim movement. Regardless of Monday’s ruling, they intend to continue using the Prim brand.
Elton hodinářská had previously complained to the Industrial Property Office (ÚPV) that MPM-Quality was using the Prim brand on its watches without authorisation. It argued that the Prim inscription had been designed back in the socialist era by a former employee of its predecessor — the state enterprise Elton. It therefore asked the office to declare invalid the Prim trademark that MPM-Quality had purchased from the company Eutech in 2001.
Eutech is the post-privatisation successor of the state enterprise Chronotechna, which had registered the trademarks for the Prim brand with the patent office during the socialist era.
An unexpected twist in a complex case
Six years ago, the Industrial Property Office granted Elton hodinářská’s application to invalidate the trademark. The Supreme Administrative Court now states that this was a mistake.
“There was no reason to invalidate the trademark, at least not for the reasons found by the office, and it still belongs to MPM-Quality,” says Supreme Administrative Court judge Karel Šimka.
The court did not directly rule on which company may use the Prim brand. Even so, its verdict may mark a turning point in a legal case that has lasted two decades.
Elton hodinářská had previously argued that the sale of the brand to its rival was unclear due to a botched privatisation.
From Šimka’s perspective, the ÚPV erred in evaluating the registration of the trademark from the socialist era through a contemporary lens. The state enterprises of that time were, in his view, components of a centrally managed economy. “What happened back then must be accepted as fact,” says the presiding judge.
During the socialist era, Prim watches were produced in Nové Město nad Metují at a branch plant of the state enterprise Chronotechna. In 1969, the watchmakers separated from it and the state enterprise Elton was established.
The predecessor of Elton hodinářská used the Prim brand under a licence agreement concluded with Chronotechna. However, the post-privatisation successor of the state enterprise Chronotechna — the company Eutech — sold the Prim trademarks to MPM-Quality owner Petr Hanko.
Hanko has been in the watchmaking business since 1992. He also launched his own production in Frýdek-Místek. However, his watches do not contain Czech movements — he assembles most of them from Swiss or Japanese components. Shortly after purchasing the Prim brand, legal disputes with Elton hodinářská began.
The merry-go-round of disputes continues
Hanko is convinced that thanks to Monday’s ruling he holds a powerful tool with which he can turn the disputes over brand ownership in his favour. “We will fight to ensure that Elton hodinářská immediately stops advertising and selling all products under the Prim brand in the Czech Republic,” declares the determined entrepreneur, who is waiting for the office to re-register the word and figurative trademark. He wants to launch further lawsuits and injunctions against his competitor. “There will be no more Prim in Nové Město nad Metují,” Hanko believes. He says he will also litigate for financial compensation. He wants the word Prim to disappear from the East Bohemian watches.
He points to the fact that both companies, because of the legal disputes, have created logos for their wristwatches that look graphically different from the original historical one.
Prim watches used to bear only a square PRIM inscription. The four letters stand horizontally, the line on the “P” and “R” slightly falls short. It is precisely this original logo for which Hanko now holds a valid trademark. In the past, due to the disputes, he almost stopped using it. Instead, he put an arched version of the Prim logo on his watches, which was originally created for mechanical clocks and alarm clocks. He also holds a trademark for this version.
Both companies are also engaged in disputes abroad. Elton hodinářská registered its own trademark Manufacture PRIM 1949 with the EU Intellectual Property Office in Alicante, Spain. According to Milan Kozel, General Director of Elton hodinářská, nothing will change in this regard.
“MPM-Quality has already attempted several times to have the European trademark Manufacture PRIM 1949 for watches cancelled at the European EUIPO office and at the EU General Court, but always without success. Elton hodinářská therefore has repeatedly confirmed that it has the right to use the Manufacture PRIM 1949 logo, and the Supreme Administrative Court ruling cannot change this fact,” says Kozel. This case continues in Luxembourg.
According to him, Elton hodinářská does not intend to stop labelling watches with the word Prim. He has not yet studied the latest ruling, which could be pivotal. “We will wait with our reaction for a legal analysis. However, what is crucial is that the decision on a possible re-registration of the trademark for MPM-Quality does not in any way affect our rights to mark our wristwatches with the designation PRIM,” Kozel is convinced.
MPM-Quality chief Hanko disagrees, however: “We want to stop the distribution of Prim watches from Nové Město nad Metují. I won’t take away the fact that they have some production there, but they’re not called Prim. They’re called Elton.”
The dispute over the Prim brand
◼ Elton hodinářská, the watch manufacturer from Nové Město nad Metují in East Bohemia, uses the Prim logo as the legal successor. It is the heir of the state enterprise Elton, entrusted with watch production, which became independent from the state enterprise Chronotechna in 1969.
◼ The Frýdek-Místek company MPM-Quality purchased the Prim brand in 2001, when watch production in East Bohemia was collapsing. It was sold to them by the company Eutech — the successor of the state enterprise Chronotechna, which managed the watch production plant in Nové Město nad Metují between 1949 and 1969.
◼ The Supreme Administrative Court has now confirmed that the word and figurative trademark Prim, which the Industrial Property Office declared invalid six years ago, is valid. The trademark is owned by the company MPM-Quality.
◼ The essence of a trademark is that only its owner may use the protected designation on products. Other companies are required to refrain from using it. This may represent a key turning point in the entire case.
Author: Markéta Řeháková
Source: Hospodářské noviny, 27 November 2020
