The plaintiff’s know-how rights regarding cereal products replacing meat have been infringed. In an almost 10-years-long, complex law suit, the court first established this in 2014. However, the case only concluded with the Curia’s review decision at the end of 2019.
The plaintiff company was established essentially in order to use the know-how created by one of its members (on the production of meatlike material made from cereals and having a high protein content and the manufacture of such products).
The plaintiff and private persons connected with defendant No. 1 jointly established defendant No. 2. The plaintiff allowed defendant No. 2 to use the know-how in the framework of a use agreement concluded in 2006.
The parties were marketing more than 10 product variants based on the know-how for years under the plaintiff’s „Búzahús” (in English: „Wheatmeat”) trademark.
Defendant No. 1 became the toll manufacturer of the products in question as defendant No. 2’s subcontractor. The plaintiff selected the machines necessary for the manufacturing. Further, one of the plaintiff’s members trained defendant No. 1’s workers how to apply the production technology and he also contributed to the elaboration of the necessary documentation because noone at defendant No. 1 had any relevant knowledge or experience.
Defendant No. 1 acquired direct control and 96,6% of shares in defendant No. 2 in December 2006, while the plaintiff was squeezed out of defendant No. 2.
At the end of 2008, defendant No. 2 terminated its contract concluded with the plaintiff claiming that it’s own liquidation proceeding has started. Following this, defendant No. 2 started claiming that it has not concluded a contract with the plaintiff and that it has not received any recipes, documentation on technology, etc. At the same time, defendant No. 2 refused to provide the plaintiff with the manufacturing formulae.
In parallel with the above, defendant No. 1 continued to manufacture the products based on the know-how from 2009 without any change. Defendant No. 1 did not request the plaintiff for a license and did not pay any fees for using the know-how. Defendant No. 1 started marketing the products under the „Gabonahús” (in English: “Cerealmeat”) brand but with unaltered presentation, formats and flavours.
The essence of the resolutions: the court ordered that defendant No. 1 cease the infringement (and to refrain from further infringement), to destroy the infringing products and to pay damages to the plaintiff.
Although defendant No. 1 claimed that it started manufacturing products independently from the know-how in question as from 2011, it did not even attempt to substantiate this claim. The question, therefore, remains: will defendant No. 1 change the formula of its products after the conclusion of the case?
Krisztian Tivadar LL.M.
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