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Sharp claims Hisense reverse-ferreted its US telly licence deal

Alleges Chinese company paid for Sharp's name, then made it a discount brand

Sharp wants its name back from Hisense, which is allowed to use Sharp's name in the US but stands accused of making brand-power-erasing knock-off tellies.

Sharp granted Hisense a five-year licence over its US TV business amid financial woes that only ended when Foxconn came to the Japanese company's rescue with a US$3.8 billion takeover completed in 2016.

But in a complaint (PDF) filed with the San Francisco Superior Court in May and published last week, Sharp now says it wants its brand back because Hisense has been selling inferior products under its brand.

Under Hisense's management, Sharp says, “those televisions are shoddily manufactured, deceptively advertised, raise safety concerns and are now, in many cases, perceived by consumers as cheap”.

Sharp has told the court it reckons the damage to its brand in the USA amounts to at least $100 million.

The complaint also alleges unfair trade practices: with the licensing deal in hand, Hisense had access to Sharp's channel in America. The complaint says Hisense exploited this to pitch its own-branded products at a premium, with Sharp TVs offered as the budget brand.

In every screen size offered under both brands, “the Hisense-branded television is offered at a higher price and as a higher-quality product than the comparable-sized Sharp-branded television”.

Other specifics of the complaint include breaching Federal Communications Commission electromagnetic interference standards; breaking Federal Trade Commission rules about labelling picture size; falsely advertising brightness and 4K resolution; and breaking safety standards.

Intellectual property blog IAM notes that Sharp had started negotiations to get its brand back last September and takes the lawsuit as meaning those negotiations failed.

Hisense has told the Wall Street Journal (paywalled) it denies the allegations. ®

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