Pergo Disputes Classen's Claims Regarding Patent Dispute

Wielsbeke, BE, April 27, 2017—On March 23, 2017, the first instance court in Dusseldorf, Germany, handed down two decisions in a legal dispute involving Pergo and Classen, relating to both parties’ patent cooperation on Fold-Down technology.

In the first case brought by Pergo, it was decided that Classen breached certain fundamental clauses of the Pergo-Classen agreement, and that as a result, Classen is liable to compensate Pergo for damages. The court ordered Classen to provide information to Pergo, so that Pergo could quantify its past damages.

Classen counterclaimed and argued that Pergo did not have the right to sub-license the Classen Fold-Down patents for LVT products. Classen believed this was a breach of the agreement with Pergo. On that basis, Classen sent a termination notice to Pergo during the proceedings and asked the court to confirm that the termination was valid. On these points, the court found in favor of Pergo and confirmed that Pergo did have the right to sub-license the Classen Fold-Down patents for LVT products, and further declared Classen’s termination invalid.

After this decision, Classen informed Pergo that it would appeal, and has now again tried to terminate the Classen-Pergo agreement. Classen this time has based its termination attempt on grounds different to the first termination attempt. Pergo has informed Classen that it does not accept this new termination and will challenge it in court as well if necessary. The contract between Pergo and Classen does not give any party the right to terminate the agreement without good reason. Pergo does not believe that Classen has any good reason to terminate the cooperation.

In the second case, Classen filed suit for infringement of one of its Fold-Down patents against a distributor of LVT products with Fold-Down technology. The LVT products were covered by a sub-license on the Classen Fold-Down patents granted by Pergo to a third party manufacturer. Classen argued that the sub-license was invalid as Pergo did not have the right to sub-license the Classen Fold Down patents under the Classen-Pergo agreement. Based on the finding that Pergo did have the right to sub-license the Classen Fold-Down patents for LVT products, the products were found to be licensed and the suit was dismissed. Classen was ordered to pay costs.

Pergo respects the right of Classen to appeal the first instance decisions but is surprised that Classen has sent out press statements suggesting that Classen won the German court proceedings and that there is a question mark over licenses already granted. Pergo believes these are misleading as Pergo’s right to license out the Classen rights for LVT has been confirmed and the termination of Classen was found to be invalid. In addition, any existing sub-licenses would in any event not be affected by any potential subsequent termination of the Classen-Pergo agreement.