Following the Supreme Court's decision in November 2023 that ByWe had lost the right to claim dis-missal due to agreed arbitration, the main hearing in IdHair Company A/S's lawsuit against ByWe took place in January 2024. Søndre Østfold District Court has, in its judgment of January 25, 2024, ruled in favor of IdHair, and ByWe is ordered to pay compensation and legal costs totaling 12 million Norwegian kroner.
Background of the case
The law firm Hjort has assisted IdHair Company A/S, a Danish company that develops hair products for the professional beauty industry, in a dispute with its former distributor in Norway, ByWe AS, for several years.
Due to poor sales results, the distribution agreement between the parties was terminated by IdHair in January 2017. Concurrently with the termination, ByWe launched products competing with IdHair's hair wax products. In March 2017, IdHair requested evidence preservation outside of court against ByWe due to suspected violations of the Marketing Act both during and after the term of the distribution agreement.
It was not until August 2021 that the evidence preservation case was concluded by the delivery of relevant evidence, and IdHair initiated legal proceedings against ByWe in August 2022.
Judgment of Søndre Østfold District Court on January 25, 2024
The main hearing in the case was held in Søndre Østfold District Court in early January 2024. In the judgment delivered on January 25, 2024, the court found that the products launched by IdHair's former distributor bore striking similarities to IdHair's products and that the opposing party had not done enough to exploit the available variation possibilities. The court considered this to be a violation of the prohibition against product imitations in section 30 of the Marketing Act.
As the product imitations occurred in the wake of a previous distribution agreement, and since the imitation appeared deliberate and systematic, the court found that it also constituted an independent breach of the requirement of good business practice in section 25 of the Marketing Act.
Furthermore, the court considered the marketing communication in connection with the launches of the copy products to be a violation of the prohibition against misleading business practices in section 26 of the Marketing Act.
The court found it likely that IdHair had suffered an economic loss as a result of ByWe's violations of sections 25, 26, and 30 of the Marketing Act. After a discretionary assessment, the court awarded IdHair an economic loss of NOK 6,000,000. IdHair was further awarded NOK 4,100,000 in compensation for the costs incurred in the evidence preservation case, as well as full reimbursement of legal costs for the proceedings in the district court.
Hjort attorneys Nils Christian Langtvedt and Ole Iversen Johnstad Kalvø represented IdHair Company A/S throughout the evidence preservation case. During the proceedings of the lawsuit in the district court, IdHair Company A/S was assisted by Hjort attorney Ole Iversen Johnstad Kalvø and associate Maria Brandtzæg. The judgment is currently not final.
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