Two years ago, Sharp sold the right to use its brand in North and South American markets to Chinese TV maker Hisense for $27.8 million. At the time, company president Kozo Takahashi stated "we have to consider all options, including a spinoff of the LCD business. The LCD market is changing very rapidly." Now, the Wall Street Journal reports that the company is not happy with the quality of the TVs that Hisense is selling under its logo and has filed a lawsuit in an effort to reclaim those rights.
The agreement gave Hisense a five-year license to put the Sharp name of TVs built in a Mexican factory acquired by Hisense. According to an article by Engadget, court documents filed by Sharp state that there is a risk of the company's brand and trademark being "destroyed" by "shoddily manufactured" TVs. In particular, the company claims the sets violate FCC rules for EMI interference, and that Hisense uses deceptive advertising in promoting the capabilities of the TVs.
In response, Hisense told the Wall Street Journal that it "Categorically denies Sharp's claims in the litigation and looks forward to presenting its case in the appropriate forum." while adding that is in full compliance with the existing agreement. The company noted that it "will continue to manufacture and sell quality televisions under the Sharp brand."
Sharp is now owned by Foxconn and in the two years since the license agreement was executed, it has returned to profitability. However, without the rights to its own brand, re-entering the U.S. market could prove next to impossible. What happens next is anybody's guess, but clearly Sharp is not pleased with the way things are today.
The agreement gave Hisense a five-year license to put the Sharp name of TVs built in a Mexican factory acquired by Hisense. According to an article by Engadget, court documents filed by Sharp state that there is a risk of the company's brand and trademark being "destroyed" by "shoddily manufactured" TVs. In particular, the company claims the sets violate FCC rules for EMI interference, and that Hisense uses deceptive advertising in promoting the capabilities of the TVs.
In response, Hisense told the Wall Street Journal that it "Categorically denies Sharp's claims in the litigation and looks forward to presenting its case in the appropriate forum." while adding that is in full compliance with the existing agreement. The company noted that it "will continue to manufacture and sell quality televisions under the Sharp brand."
Sharp is now owned by Foxconn and in the two years since the license agreement was executed, it has returned to profitability. However, without the rights to its own brand, re-entering the U.S. market could prove next to impossible. What happens next is anybody's guess, but clearly Sharp is not pleased with the way things are today.