Neco Millers Limited v Wamai t/a Sherehe Maize Meal [2023] KEHC 25143 (KLR)

Neco Millers Limited v Wamai t/a Sherehe Maize Meal (Commercial Suit E005 of 2018) [2023] KEHC 25143 (KLR) (Commercial and Tax) (10 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25143 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Suit E005 of 2018

FG Mugambi, J

November 10, 2023

Between

Neco Millers Limited

Plaintiff

and

James Wamai t/a Sherehe Maize Meal

Defendant

Judgment

1. Through a plaint dated August 10, 2018 the plaintiff sought orders against the defendant for infringement of trademark and passing off. Despite proof of service, the defendant did not file any defence leading the plaintiff to file a request for a judgment dated 10th July 2018. Judgment was entered by this court and a formal proof hearing was held on July 20, 2023.

2. The hearing took place in the presence of counsel for the plaintiff but there was no appearance for the defendant. During the hearing, the plaintiff’s director,David Mwangi Njagi,adopted his witness statement and produced a bundle of documents both dated April 10, 2018 which he relied on as the plaintiff’s evidence. The plaintiff also filed submissions dated August 11, 2023 which the court has also considered.

3. From these, 3 substantive issues arise, which the plaintiff must prove and that is:i.Whether the plaintiff is the proprietor of the mark;ii.Whether there was infringement by the defendant;iii.Whether the plaintiff is entitled to the remedies prayed for.

Analysis 4. The registration of trade marks is regulated by the Trade Marks Act cap 506 Laws of Kenya. By dint of section 5 of the said Act, a person cannot institute proceedings to prevent or to recover damages for the infringement of an unregistered trade mark.

5. It is also important to note that under section 7(1) of the Act, a valid registration based on the use of the mark or an intention to use the trade mark in Kenya guarantees a proprietor the exclusive right to the use of the trade mark in relation to goods or provision of services.

6. The plaintiff claims proprietorship over the trademark Sherehe Maize Meal. Evidence led through the plaintiff’s Director, Mr David Mwangi Njagishows that the plaintiff applied for and registered the trademark Sherehe Maize Meal under part A of the Act. I have seen the certificate of registration of trademark No 72xxx in the name of the plaintiff. I do however note that the trademark was for a validity period of ten (10) years effective October 13, 2011.

7. The trademark was therefore scheduled to expire on October 13, 2021. This suit was filed in August 2018 when the trade mark was still registered in the plaintiff’s name.

8. The plaintiff provided an extract of the publication of a similar mark by the defendant, in the Kenya Industrial Property Institute (KIPI) Journal No. 2018/02, dated February 28, 2018. The details of the application by the defendant for the mark are scanty although the plaintiff produced a notice of opposition to registration dated March 6, 2018, filed by the plaintiff against the registration by the defendant. It is not clear whether the plaintiff pursued this issue with the registrar of trade marks to conclusion or the outcome.

9. The plaintiff’s further claim is based on the tort of passing off. The Black’s Law Dictionary 8th Edition defines passing-off as:“the act or an instance of falsely representing one’s own product as that of another in an attempt to deceive potential buyers. It is actionable under the law of unfair competition. It may also be actionable as a trade mark infringement.”

10. The plaintiff takes issue with the defendant for passing off its product as that of the plaintiff’s. The elements required to prove an action for passing off were set out in the case of Reckitt & Colman Products LtdvBoden Inc &others, 1990 RPC 34 where it was held as follows:“The law of passing off can be summarized in one short general proposition, no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number.First, he must establish a goodwill or reputation or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get up”(whether it consists simply of a brand name or a trade description, or the individual features of labelling or packing) under which his particular goods or services are offered to the public, such that the get up is recognized by the public as distinctive specifically of the Plaintiff’s goods or services.Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff.Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the Plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the band name.Thirdly, he must demonstrate that he suffers or, in a quia timet action that he is likely to suffer, damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s good or services is the same as the source of those offered by the Plaintiff.”

11. Regarding the first element of goodwill, it is not in dispute that the plaintiff’s product was first registered in 2011. The defendant sought to register their mark in 2018. This proves that the plaintiff’s mark was registered before the defendant’s mark.

12. The idea of goodwill has been defined in various ways. In Commissioners of Inland Revenue v Muller & Company’s Margaring, 1901 AC as the benefit and advantage of the good name, reputation and connection of a business, as well as the attractive force attached to the name, get-up or logo which brings in custom.

13. In HP Bulmer Ltd v Bollinger SA, [1978] RPC 79 the court described it as a valuable reputation the integrity of which the owner is entitled to protect. The period that a product is deemed to have acquired a reputation and goodwill is depends on a case to case basis.

14. In the absence of any evidence to the contrary by the defendant, and noting that what is required to be proved is that the public identifies a particular distinctive mark with the product that is marketed by the plaintiff, in my view the plaintiff has been able to prove on a balance of probabilities that from 2011 the maizemeal flour packaged under the name Sherehe Maize Mealwas available for sale and thus acquired a reputation capable of being protected as goodwill.

15. Secondly, the court is also required to answer the question as to whether the two products are indistinguishable due to the similarity in trademarks, such that an average customer would not be able to tell the difference between the two. In determining this question, I rely on the holding of the court in LA Group (Pty) Ltd v Lifestyle Equities C.V, 029/18/OAPI/CSR, where the court provided the parameters for consideration. It was held that the assessment of the signs in issue should be done at the visual, audio and conceptual levels.

16. This was also enunciated by the European Court inSabel BV and Puma AG, Rudolf Dassler Sport case C 251/95 to the extent that:“Global appreciation of the visual, aural or conceptual similarity of the marks in question, must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components.” (emphasis added).

17. I have considered both marks and I note that there are striking visual similarities between them. The dominant element in both is the prominent word Sherehe against an orange backdrop, and a family at a table. The predominant colours are orange and green. To my mind, the average consumer may, if they even see any difference in the details, only recognize them after a sufficient interval of time.

18. The risk of confusion also must be appreciated considering that both products relate to the same category of products being maizemeal flour. I therefore find no difficulty in holding that there is a misrepresentation by the defendant to the public (whether or not intentional) that is likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff.

19. Finally, having so established, the remedy that is available to the plaintiff would be nominal damages or an enquiry as to damages or account of profits associated with the loss of profits. This would be in addition to injunctive relief so as to restrain the continuance of the infringement and passing off. The plaintiff seeks general damages as compensation for his loss and in the alternative, an account of the profits made by the defendant.

20. The court has the discretion to award either remedy depending on the circumstances at hand. (See Halsbury’s Laws of England Vol. 48 [2007] para 442).

21. Such prayer is not unusual. In British United Provident Association Limited v Bupa Kenya Limited, [2020] eKLR (F. Tuiyott, J as he then was) found a plaintiff to be deserving of these orders. In doing so the Learned Judge held that:“A plaintiff bringing an action for infringement of intellectual property may choose to prove damages contemporaneously with liability. But it may, like here, first seek to establish infringement and once infringement has been determined to move to the next step of proving damages… As to the taking of account of profits of an infringer, the philosophy behind the remedy is that a party who has profited unlawfully from using or riding on another’s intellectual property should not be allowed to keep the profits made from such venture. To permit that would be to allow for unjust enrichment.”

Determination 22. Guided by this reasoning which I find sound, I hereby enter judgment for the plaintiff against the defendant and grant the following orders:

i.A permanent injunction restraining the defendant whether by himself, his agents and/or servants from manufacturing, producing, reproducing or authorizing the reproduction, selling or otherwise dealing with its maize meal product known as “Sherehe Maize Meal” or any substantial part thereof in any form whatsoever without the license of the plaintiff;ii.An enquiry as to damages or at the plaintiff’s option an account of profits and payment of all sums found due upon taking such enquiry or account.iii.Delivery to the plaintiff within 60 days from the date of this judgment, of all packaging and copies of the Sherehe Maize Mealand design works of the said product for destruction which are in the defendant’s possession.iv.Costs of the suit.

DATED, SIGNED AND DELIVERED IN NAIROBITHIS 10TH DAY OF NOVEMBER 2023. F. MUGAMBIJUDGE