Classen Terminates Partnership with Pergo

Kaisersesch, DE, April 20, 2017—Classen Intellectual Property GmbH, a subsidiary company of the Classen-Group, has terminated, with immediate effect, a partnership agreement with Pergo AB - a subsidiary company of Mohawk.

This means Pergo AB is no longer entitled to grant any sub-licensing rights based on Classen’s patent portfolio.

Classen based its extraordinary termination right on information provided by Pergo AB during a court procedure at the regional court in Düsseldorf, Germany. This proceeding, initiated by Classen, was to clarify the overall effectiveness of its partnership with Pergo AB. Additionally, Classen was of the opinion that no party to this agreement had the right to grant sub-licenses for Fold-Down locking solutions for Luxury Vinyl Tiles (LVT), or any other flooring products based on core boards containing plastic components.

During the course of the proceeding, it emerged that Pergo AB and its associate company Flooring Industries Limited s.a.r.l., also a subsidiary of the Mohawk Group, had entered into sub-license agreements covering LVT products without pre-informing or receiving the required prior consent from Classen.

Immediately after that court proceeding, Classen declared its immediate termination of the respective sub-licensing right. Classen based this decision on material breaches of the partnership agreement as Pergo AB had failed to comply with applicable regulations required to correctly grant sub-licenses, i.e. Pergo AB had failed to request written approvals from Classen on every single sub-license case. As a result of this wrongful behavior, Classen has, potentially, suffered significant economic damages.

As a consequence of the termination, Pergo AB was given order to disclose further potential sub-licensees of Classen patents to ensure the continuation of these license agreements by linking them directly to Classen Intellectual Property GmbH.