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New Damaging Claims Emerge Re Hisense Made TV’s

The bitter fight between Japanese TV, brand Sharp and Chinese brand Hisense in the USA market, has taken a new twist with Sharp claiming that the Hisense made, Sharp branded, TV’s leak radiation are smaller in screen size, brightness and resolution than indicated on packaging and web pages.

Since the claims were made in a US Court, Hisense has moved to modify information on their US web site. The same size modifications to sizes have not been made on Hisense Australia web sites.

Unlike Australia, where Hisense TV’s are shipped from a TV plant in China, Hisense was forced to cut a licencing deal with Sharp in an effort to get traction in the USA market where under their own brand name US consumers had shunned the Chinese Companies TV products.

Today Hisense is pushing Hisense branded TV’s into the US premium market and Sharp branded TV’s into mid to bottom end of the market.

Prior to Hisense taking over the brand the Sharp TV’s were seen as a premium brand and the Hisense TV’s as a discount brand in the USA. Recently Hisense Australia was accused of buying market share in Australia.

See sperate story here.

Last week Sharp told the court it reckons the damage to its brand by Hisense in the USA amounts to at least $100 million.

Australian 65″Hisense TV, similar specs to US Sharp TV above

Taiwanese owned Foxconn who now owns Sharp, has told ChannelNews that the Sharp TV’s sold in the USA are similar to the TV’ being sold in Australia.

“The technology is the same in Australia and the USA. The products are coming from different plants but they are basically the same models that are modified for different markets”.

The Sharp complaint alleges that Hisense exploited the Sharp brand name 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.

Back in 2015, when Sharp was struggling to grow their TV business due to their inability to raise capital and because of mounting debts, Hisense moved to acquire Sharp America’s TV business for the North and South American markets in a deal worth $23.7 million.

The Sharp branded Hisense TV’s were never launched in Australia.

Hisense Group at the time said that they had cut a deal that resulted in them acquiring “all equity and assets of Sharp’s TV factory in Mexico for $23.7 million with rights to use the ‘Sharp’ brand name and all its channel resources in both North and South American regions.”

Now two years into the deal Sharp wants the deal to be killed off and their rights to the Sharp name returned to the Japanese Company.

Sharp claims that their brand name which has a reputation for quality is being trashed by Hisense they claim that the Hisense made TV’s leak radiation and are slighter in screen size, brightness and resolution than indicated on packaging and web pages.
A court document released on Monday, claims that the screen sizes of seven different Sharp models were misrepresented on packaging.

11 out of 28 TVs purchased at retail evidenced electromagnetic interference (EMI) in excess of US FCC emission standards;

At least one model was listed on Hisense’s website as 35 percent brighter than the actual specification; and that TVs marketed as 4K only qualified for the lower-res UHD spec.

Sharp’s lawyers argue, the alleged sub-par production is intentional by Hisense, which used Sharp’s U.S. retail distribution network and diminished product quality to advantage its own TVs, while selling the Sharp-branded products at below tier-1 prices.

Those factors have caused “irreparable harm to Sharp’s reputation and goodwill” to the tune of $100 million, the company said, and effectively abrogated the terms of the trademark licensing agreement, which Sharp unilaterally terminated on April 17.

The legal action, was filed in a California Superior Court and a U.S. District Court in New York, According to Hisense, Sharp’s suits are without merit, and came only after the company lost a May 9 arbitration decision that upheld the licensing deal.

Hisense claim that Sharp signed away its TV rights at a time when it was in financial distress.

Now, flush with cash following its nearly $4 billion acquisition by Foxconn last August, it is seeking to win back its TV business by “disparaging and harassing” Hisense.

Hisense USA said it “categorically denies Sharp’s claims in the litigation and looks forward to presenting its case in the appropriate forum.” It further stated that it is in full compliance with the licensing agreement, and “will continue to manufacture and sell quality televisions under the Sharp licensed brands.”

For its part, Sharp is seeking damages, an injunction preventing Hisense from using its trademarks, and acknowledgement of the alleged standards violations that could support its efforts to terminate the licensing deal.