The consortium of Indonesian and foreign entrepreneurs that established the iconic Bali beach club concept and ended up suing in Singapore have won on appeal. At issue is how an informal business group did not control and manage their brand as their business grew. This allowed to one of them to give a license for the brand, leading to a rival multi million dollar KU DE TA club atop the Marina Bay Sands casino in Singapore.
A group of businessmen came up with the concept for and established the original KU DE TA beach club in Bali in 2000. It became the leading venue on this island. They had only a basic contract and various of them began registering trademarks with little consistency abroad. Some marks ended up in a company called Nine Squares run by several of the partners. Later on other businessmen secured a spurious license from Nine Squares and opened the club at the Marina Bay Sands.
Litigation started in 2010. One case involved whether the Singapore KU DE TA marks were held by their owner Nine Squares on trust for the original partners. If not it was argued they were invalid. There were also disputes elsewhere. The final appeal dealt with the strength and validity of the license to the club operator in Singapore.
Meanwhile the Singapore business and other KU DE TA trademarks had been acquired by LV Capital Asia the investment arm of LVMH, who announced extravagant global expansion plans for the brand. Rather curious of a leading brand owner, given the suspicious brand background.
The final appeal decision in late May ruled the license illegal and an earlier decision had ruled that the partners were the true owners of the trademarks. So the court found the Singapore club had infringed the partners trademarks and other rights. That will leads to a large damages claim and a large payment of their costs.
The Singapore club will be rebranded CE LA VI, a play on the French C'est La Vie. The Hong Kong club due to open next month will also adopt the new name. No doubt the investors carefully planned a fall back position were they to lose.
The KU DE TA owners should recover a lot of money, although their legal fees will have been extraordinary. Hopefully now the partners can rebuild this brand into the global business it perhaps deserves.