Question: Carefully read the case and identify the legally relevant issues. Use the applicable law and explain the solution to the dispute between the parties. The
Carefully read the case and identify the legally relevant issues. Use the applicable law and explain the solution to the dispute between the parties.
The famous Portuguese car manufacturer CPM (Companhia Portuguesa de Motores) ceased operations after the death of its founder Joe Rodinhas in 1986. The company named "COMPANHIA PORTUGUESA DE MOTORES, LDA." owned the production facilities and restarted operations later, selling for different car manufacturers. An American company named "BESTAUTO, INC." bought the trademarks "CPM" and "Companhia Portuguesa de Motores". As disputes were raised between "BESTAUTO, INC." and "COMPANHIA PORTUGUESA DE MOTORES, LDA." about the use of this mark by the latter, both companies entered, in 1988, into a contract providing perpetual obligations of payment by "COMPANHIA PORTUGUESA DE MOTORES, LDA." for the use of the company name to identify itself as a manufacturer of the goods it would distribute world-wide. Both parties expressly declared the intention to create perpetual obligations as a direct consequence of the indefinite duration of the trademark. In 1989, the European Directive on Trademarks (89/104/EEC) was adopted, introducing more liberal terms than those agreed with "BESTAUTO, INC." "COMPANHIA PORTUGUESA DE MOTORES, LDA." presented a claim to a court of arbitration asking for the modification of the contract, only for its effects on the European territory, because the liberalization introduced by the European Directive put the company in a situation of hardship. "COMPANHIA PORTUGUESA DE MOTORES, LDA." also invoked its right to terminate the contract on the ground that the contract provided for perpetual obligations.
What should be the decision concerning the Portuguese Company's claims?
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