Why Iceland (the country) is suing Iceland (the grocery store)
The supermarket used to be owned by an Icelandic retail conglomerate. Now, the country's government is challenging the trademark with the EU's intellectual property office.
A lifeguard dressed against the chill wind watches over bathers at Iceland's Blue Lagoon hot springs in 2010.
Chris Helgren / Reuters
The country of Iceland is taking the company of Iceland to court.
Iceland Foods, Ltd., a British frozen-foods supermarket chain, is being accused by the country鈥檚 government of 鈥渁ggressively pursuing鈥� cases against Icelandic companies that use the country鈥檚 name in their trademark or advertising. And it鈥檚 challenging the company鈥檚 privileges over use of the name with the European Union Intellectual Property Office.
"The government of Iceland is concerned that our country's businesses are unable to promote themselves across Europe in association with their place of origin - a place of which we are rightly proud聽and enjoys a very positive national branding,鈥� it said in a statement, .听
The dispute, with its roots in the financial crisis of 2008,聽may shine a light on how Iceland has managed to recover from its swift and overwhelming collapse to become what many analysts describe as a model for economic recovery.
Iceland Foods, founded in England in 1970, was actually Icelandic-owned for a period聽鈥斅爎etail conglomerate Baugur had a majority stake in the chain. In 2009, Baugur collapsed, and the supermarkets then passed into the hands of two different Icelandic banks before its founder Malcolm Walker took it over in 2014.听
The new ownership may have brought the current legal challenge upon themselves: Last year, they went after an entity named Islandsstofa for its use of the trademark 鈥淚nspired by Iceland鈥� in its branding of products like meat, eggs, and coffee. That entity, the supermarket chain discovered later, was actually the government of Iceland.
鈥淗ad we known that the Icelandic government was behind it, we could have had a conversation - a conversation which we鈥檇 still be delighted to have,鈥� a company spokesman . And the grocery chain contradicts the government鈥檚 assertion that it had tried to resolve the dispute outside of court, saying it had聽鈥渞eceived no recent approaches to achieve an amicable resolution of this issue, which would be our preferred approach.鈥澛�
This lawsuit, in a sense, is indicative of how far Iceland has come in recent years in restoring its "brand."
Iceland鈥檚 financial crash, from 2008-2011, amid a global financial meltdown, was epic. 鈥淣o country has ever crashed as quickly and as badly in peacetime,鈥澛燣ondon School of Economics professor Jon Danielsson 鈥� was followed by a dismantling of the country's hugely expanded financial sector, which became notorious for its misconduct.
Having lured in a surfeit of cash from foreign sources with high interest rates, ,聽"Iceland's bankers went on a historically ill-advised buying spree. They bought foreign companies, they bought foreign real estate, they even bought foreign soccer teams...Iceland's banks were not only paying high prices聽for questionable assets, but also promising to pay their depositors high interest rates.听This was about as unsustainable as business models get, and it wasn't that hard to tell."聽
The government responded with prosecutions聽鈥斅爋ver two dozen bankers and financiers have been convicted since 2010, , in stark contrast to the US and Europe, where bank executives escaped legal consequences. It also guaranteed its citizens鈥� deposits, while refusing to cover losses by foreign depositors, and let its currency devalue by some 60 percent in a year.听By 2013, its economy was growing again, mostly off the back of tourism.
That鈥檚 not to say Iceland has escaped the anti-establishment wave that has upended politics in Europe and the US. The Pirate Party, a hacktivist group that grew into a political party led by poet and transparency activist Birgitta Jonsdottir, managed to get a new, crowdsourced constitution approved by 67 percent of voters before the Icelandic parliament failed to ratify it. The party also captured 10 of the 63 seats in parliament in October elections.
"Whatever happens,鈥� , "we have created a wave of change in the Icelandic society."