The Chennai commercial court recently granted relief to tractor manufacturing giant Tractors and Farm Equipment Ltd. (TAFE) by allowing it to continue its tractor business under the trademark name of Massey Ferguson (MF) against the termination of a trademark agreement with US-based tractor manufacturer Massey Ferguson Corporation.
TAFE contested the termination of the trademark agreement by Massey Ferguson Corporation and sought court intervention to restrain agents, partners, subsidiaries, or assigns in business, as well as their dealers, stockists, and distributors from interfering with TAFE's right to use the brand "Massey Ferguson" in India.
The commercial court in Chennai, in its order on 28 April, upheld TAFE's request, allowing them to maintain the status quo prior to the termination while issuing a notice regarding the termination.
The US-based tractor manufacturer Massey Ferguson Corporation, a subsidiary of agricultural machinery manufacturer AGCO Corporation, terminated a trademark usage agreement dating back to 1994 with TAFE.
TAFE, a joint venture between Massey Ferguson Ltd., a part of the AGCO Group, and Amalgamations Pvt. Ltd., was formed in 1960.
The first trademark agreement was signed in 1974, wherein Massey Ferguson Ltd., Canada, and TAFE initially granted TAFE the right to use the MF brand for only limited tractors manufactured by Massey Ferguson Ltd and their associated components and spare parts in India.
However, the subsequent trademark agreement signed in 1994 between the two companies allowed TAFE the exclusive right to use the Massey Ferguson (MF) brand name for its tractor operations in India. Under the terms of this agreement, TAFE could utilize the MF brand solely for the tractors it manufactured or had manufactured for it in India, thereby establishing its distinct identity in India's agricultural machinery market.
According to the petition seen by Mint, TAFE alleged that the AGCO Group abruptly took a decision to terminate the trademark agreement without any prior information. The termination, executed on 26 April 2024, just after a board meeting held on 25 April by the AGCO group, where there was no mention of termination.
It alleged that the termination was done with malicious intent and ended six decades of partnership between the two companies.
TAFE argued that such termination would prompt a cascade of consequential effects due to the intricate interplay of commercial transactions among the parties, resulting in cascading repercussions on the worldwide relationship between the parties.
The plea also mentions that the draft notes indicate AGCO Group is prepared to issue a global public statement accessible to all dealers and stakeholders of the company. According to TAFE, the company's products, including MF brand tractors, are widely used by Indian farmers.
Any such public statement would not only concern distributors and stakeholders but also cause industry-wide panic, including among Indian farmers. Therefore, the Indian tractor company also has the right to claim damages from the AGCO Group.
TAFE stated in the plea that as an exclusive partner for AGCO Group in India, the tractor giant TAFE has invested significantly in marketing and developing the MF brand over six decades, establishing its intellectual property.
The company has used the MF brand extensively with endorsement from AGCO Group. Therefore, the termination notice issued by AGCO Group, which holds a 20.70% share in the company, is seen as an act of bad faith that could hinder both companies' commercial activities.
In February 2024, TAFE's sales of domestic tractors totaled 8,455 units, marking a decline of 24.73%, compared to the same month in the preceding year, during which they sold 11,233 tractors in February 2023. Furthermore, TAFE experienced a decrease in market share by 1.77%.
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