Notice of URAWA's Resolution of Lawsuits and Settlement with KUPA Regarding Upower UP200 Series and Design (Purple Color) Trademark Rights

LOS ANGELES, July 10, 2024 /PRNewswire/ -- URAWA Corporation (Headquarters: Kuki-Shi, Saitama-Ken, Japan; President: Tatsuya Koyama; hereinafter referred to as "URAWA") filed a lawsuit on August 5, 2022 against KUPA Inc. (Headquarters: 2353 W. La Palma Ave. 92801 U.S.A., CEO: Richard Hurter (hereinafter referred to as "KUPA") in the Central District Court of California, regarding trademark (design/color) rights for the Upower UP200 series nail machines, including to establish its senior rights to the mark, The Purple Machine. 

The UP200 nail filing machine, known as the "Purple Machine," was marketed in the United States by KUPA as URAWA's Exclusive Distributor. The UP200 was developed, manufactured, and marketed worldwide by URAWA. It quickly became famous in the industry due to its superior performance and design, with consumers referring to the UP200 by its unique purple color. KUPA was only a distributor for URAWA and did not own or claim to own any rights to the "Purple Machine" name. Nevertheless, KUPA registered, presumably as URAWA's Exclusive Distributor, the trademark color design rights related to the UP200 without URAWA's knowledge.

In addition to obtaining a transfer of the color mark registration, Urawa sought damages against KUPA for false advertising and unfair competition, including bad faith dealing as URAWA's U.S. distributor. In addition, on August 10, 2023, URAWA filed a lawsuit in the Tokyo District Court against KUPA seeking damages for breach of the annual minimum purchase obligation and default under the distribution agreement between the two companies.

URAWA announces that the lawsuits have successfully concluded via a settlement agreement whereby the Central District of California has retained jurisdiction for a period of time to help ensure KUPA's performance of the agreement.

• KUPA shall pay URAWA US$1,000,000 (approximately ¥158 million)
• KUPA has provided and URAWA has recorded a security interest in KUPA's assets, including Intellectual Property, to ensure full payment
• KUPA has acknowledged URAWA's senior trademark rights and assigned to URAWA and URAWA has recorded design rights to the COLOR PURPLE used in connection with nail filing machines
• KUPA shall dispose of its stock of nail filing machines in the COLOR PURPLE and discontinue their sale
• KUPA has dismissed its counterclaim against URAWA with prejudice

URAWA terminated its Exclusive Distribution Agreement with KUPA (which covered North America) in 2021 and appointed CT Beauty Supply, Inc. and Angelina Nail Supply, Inc. as new distributors of UP200 aka the "Purple Machine."

To forestall competition, KUPA sent a letter to URAWA and its new distributors claiming the sale of the UP200 in the U.S. was an infringement of the "Color Purple" trademark and damages.

In investigating KUPA's trademark claim, other concerns surfaced. Although KUPA was URAWA's exclusive distributor in North America during the COVID-19 pandemic, allegations arose that KUPA was misleading nail product distributors and consumers by providing false or misleading information regarding the UP200's availability and production status to suppress UP200 sales in the U.S. There were reasons to believe KUPA was acting in bad faith in violation of the Lanham Act and the implied covenant of good faith and fair dealing by suppressing UP200 sales and giving priority to sales of nail machines manufactured by other companies.

On August 5, 2022, URAWA filed a lawsuit against KUPA in the Central District Court of California concerning the registration of its trademark and design rights and against KUPA's bad faith and unfair trade practices. The trademark and design right lawsuit sought a declaratory judgment confirming URAWA's ownership of the "Color Purple" trademark and design rights related to the UP200. Furthermore, on August 10, 2023, URAWA filed a lawsuit against KUPA in the Tokyo District Court seeking damages for breach of their distribution agreement. 

In the United States, KUPA filed counterclaims under the Color Purple registration seeking damages against URAWA and its new distributors.

The settlement that was reached and agreed upon is a resolution of all the above lawsuits and the settlement terms include transfer of the Color Purple registration and secured payments by KUPA to URAWA. Future plans for URAWA will continue to strictly manage its own intellectual property rights and contribute to the development of the nail industry by providing nail machines and services, including the UP200.

For press inquiries, please contact
Mitsuo Sakaguchi, Sales Department
Phone: +81-480-24-1751
Email: [email protected]
(https://www.urawa.co.jp)

SOURCE URAWA Corp.