Strategic Industries Limited v Sana Industries Company Limited [2017] KEHC 86 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

COMMERCIAL & TAX DIVISION

CIVIL SUIT NO. 681 OF 2010

STRATEGIC INDUSTRIES LIMITED...............PLAINTIFF

VERSUS

SANA INDUSTRIES COMPANY LIMITED....DEFENDANT

JUDGMENT

1. This Dispute is about whether or not Sana Industries Company Limited (Sana) has infringed on the Trade Mark No. 40653 known as “PONY TAIL.”

2. Strategic Industries Limited (Strategic) is the registered proprietor of the said Trade Mark registered under class 26 of the Nice Classifications. Strategic’s claim is presented in the Plaint dated 30th September 2010 and supported by the testimony of Ghazal Kefel (PWI) given on 8th March, 2017.

3. The Trade mark is in respect of hair additions, hair pieces and braids, weaves and wigs. It was averred by Strategic that it manufactures and sells such products under the said Trade Mark. In his evidence DWI stated that the Plaintiff has invested heavily in the design and outlay of its product “Pony Tail” so as to be responsive to Market Demands.

4. That on August 2010, the Plaintiff realized that the sales turnover to its “Pony Tail” product was either steady or declining. A Sales analysis of the product from January 2010 to December 2010 and from January 2011 to December 2011 (P exhibit pages 15 & 16) were produced to demonstrate this trend in sales of the product.

5. Upon doing a Market Research, Strategic found out that Sana was manufacturing, packaging, distributing and selling hair weaves and wigs under the same name “Pony~Tail” and with similar or resembling colour configuration, layout and general get-up as Strategic’s products. Produced in Court were the colour packaging of both Strategic and Sana labels (P Exhibit pages 13 and 14). This use, PWI, testified was without authority of Strategic and would obviously cause confusion. The point was made that the two set of products were in the same market.

6. PWI testified that Sana had infringed and continued to infringe on his Company’s Trade Mark “Pony Tail” and that Sana’s action created the wrong impression that Sana is the manufacturer and proprietor of the Trade Mark “Pony Tail” or that Sana’s products were infact the products of Strategic while they are not.

7. Strategic’s cause of action is for infringement of its Trade mark and of passing off. The particulars of passing off being:-

(a) Manufacturing and selling into the same market goods in the same class as those of the Plaintiff and bearing the same trade mark as those of the Plaintiff

(b) Copying and using the get-up, colour configuration and labels resembling those of the Plaintiff with identical wording and deceptive lay-out.

8. In the end the Plaintiff prays for judgment against the Defendant for:-

(a) A declaration that the Defendant has infringed the Plaintiff’s trade mark “PONY TAIL” registered as Number 40653.

(b) A permanent injunction restraining the Defendant whether by itself, directors, employees, agents and/or servants or any body or entity deriving authority under it from manufacturing,packaging and selling any products bearing the Plaintiff’s trade mark ‘PONY TAIL’ or any other name bearing those resemblance thereof or using the colour configuration, get-up or packaging resembling or closely resembling those of the Plaintiff’s ‘PONY TAIL’.

(c) An order that the Defendant do deliver up to the Plaintiff all hair pieces, weaves and wigs, hair additions and braids bearing the infringing mark together with all their packets for destruction.

(d) Damages

(e) Costs of this suit.

9. Answering questions in cross-examination, PW1 explained that a ‘Pony’ is a horse of small statute and a ‘tail’ is a tail as ordinarily known. On the other hand the word ‘Ponytail’(one word)describes a hair style which originated in the 18th century. He conceded that the word ‘Ponytail’(one word) is descriptive of a common hairstyle. It is a generic word. He was later to explain that Strategic’s Trademark ‘Pony Tail’ were two words.

10. PWI also told Court that there are now many products originating from China whose names are ‘ponytail’ (one word) or ‘pony tail’ (two words).

11. On the issue of sales, the evidence of PWI was that when his company sells products, it raises invoices. The invoices would therefore be the primary evidence of sales. He nevertheless readily admitted that Strategic had not produced those invoices.

12. On another aspect of Strategic’s case, PW1’s testimony was that the get up of Sana’s product was similar to that of Strategic. These similarities include; the colour of purple, red and yellow. On both get-ups, the word ‘pony tail’ is two words although he accepted that on the Sana’s product, there was a tilde between the words pony and tail.

13. However, there were differences. On Strategic’s get-up was one photo of a girl while on Sana’s was a photo of a girl’s face then two photos, one of her back and the other of her side. The logo ‘Angels’ was part of the get-up of Sana and logo ‘Darling’ of Strategic. Those were some of the differences.

14. Sana’s defence comprised its Statement of Defence dated 10th December, 2010 and filed in Court on 16th December, 2010 and the evidence of Gerald Gakuru Muchugia (DWI). The Defence denies each and every averment in the Plaint and further avers as follows:-

i. That Sana is the registered proprietor of the Trade mark known as Angels duly registered as number 38523.

ii. That Sana is the registered proprietor of a Trademark with a monogram of the letter ‘A’ depicting the head and hair of a woman and which is registered as number 58299.

iii.Both the Trade mark Angels and letter ‘A’ are always prominently emblazoned in the packaging of its products.

15. According to DWI, Sana was incorporated on 6th November 1989 as Sana Trading Company Limited but later changed to its current name, Sana Industries Limited on 20th January, 1992. Its core business was to manufacture, distribute and sale synthetic hair additions. In the knowledge of the witness, Sana was the first company to venture into the said business in the country and has expanded its business to Ethiopia, Zimbabwe, Tanzania, Zambia and Malawi. It markets its products under the trade name ‘Angels’ unlike Strategic which markets its products under the trade name ‘Darling’.

16. The evidence of DWI is that by definition a ‘PonyTail’ is internationally recognized as a hairstyle in which most or all of the hair on the head is pulled away from the face and secured at the back of the head with a clip, hair tie or similar device. It is used by both men and women but mainly by women and girls as it is easy to maintain. He further explained that in the hair industry, one does not need to have hair additions to have a ‘PonyTail’. Natural hair can be held in a ponytail.

17. Because the norm is that whenever a customer intends to buy a generic product, the customer will specify the said product with the underlying trade name, a customer will either purchase ‘pony tail’ by “Angels” or ‘pony tail’ by “Darling”. The witness makes the point that a customer cannot be misled or lured to purchase a product with the wrong type of trade name because one can easily distinguish the hair additions in contention with the respective trade names.

18. Under cross examination, the witness told Court that out of ignorance, the Registrar (presumably, The Registrar of Trademark) registered ‘Pony Tail’ as a trade mark. It was his evidence that had Sana seen the monthly journal in which the intention to register the Trade mark was published, then it would have opposed it.

19. There was further evidence that an attempt in 1997 by Sana to register the name Angels ‘PonyTail’ was rejected because Darling had already registered a similar name. Sana had made this attempt because Strategic had registered the name. It had not been necessary before as the name was that of a hairstyle and that it had started rolling out this product pony tail in 1990. The witness said that he had evidence of user before 1994 but he did not have it in Court.

20. DWI told Court that although the registration of Strategic’s Trademark came to their attention in 2010, Sana neither took out expungement proceedings nor has it set up a Counter claim for expungement.

21. On the get up of the products of the two rivals, DWI was of the view that they were not similar. Some differences in his view, were;

(i) Sana- the face of model is very clear and hair does not touch the face but covers the head.

Strategic – there is a hair strip coming down touching the model’s forehead.

(ii) Sana – Capital ‘A’ on upper right

Strategic – complete name written ‘Darling’

(iii) Words ‘Flame Retardant’ fiber appears on Sana only

(iv) Words ‘Tangle free collections’ appears on Strategic only

(v) Word ‘original’ appears on Sana only

22. While admitting that colours are almost similar he stated that there was a yellow background to the get up of Sana. The witness also made the point that the symbol ® which signifies (Registered Trade mark) is not appended to the word ‘Pony Tail’ in Strategic’s get-up.

23. At the conclusion of taking of evidence, counsel for each side filed written submissions. This Court has considered these submissions in the context of the pleadings and the evidence herein and frames the following issues for resolution;-

(a) Is the Defendant entitled to the Defence of ‘prior use’ to defeat the Plaintiff’s claim for Trade mark infringement?

(b) If so, has the Defendant proved prior use?

(d) Is there passing-off of the Plaintiff’s goods by the Defendant?

(e) Is the Plaintiff entitled to the orders sought?

24. There is undisputed evidence that the Trademark ‘PONY TAIL’ was registered in part A of the register in the name of Stripes Industries Limited under No. 40653 on 21st October, 1994 (P Exhibit page 9). The mark was in respect of Hair additions, Hair pieces and Wigs. The Trade Mark was renewed for a further period of 14 years from 16th July 2000(P Exhibit age 10). Vide a Certificate of Registration of Assignment, Trade Mark No. 40653 was on 17th October 2005, assigned by Stripes Industries Limited to Strategic Industries Limited (P Exhibit 11). Admittedly, Strategic was the owner of the Trade mark as at the date of the filing of the Plaint on 12th October, 2010.

25. Generally, Registration of a Trade Mark confers the right of exclusive use of the Mark. Section 7 of the Trade Mark Act sets out the rights given by registration in Part A and infringement thereof:-

“(1) Subject to the provisions of this section, and of sections 10 and 11, the registration (whether before or after 1st January, 1957) of a person in Part A of the register as the proprietor of a trade mark if valid gives to that person the exclusive right to the use of the trade mark in relation to those goods or in connection with the provision of any services and without prejudice to the generality of the foregoing that right is infringed by any person who, not being the proprietor of the trade mark or a registered user thereof using by way of permitted use, uses a mark identical with or so nearly resembling it as to be likely to deceive or cause confusion in the course of trade or in connection with the provision of any services in respect of which it is registered, and in such manner as to render the use of the mark likely to—

(a) be taken either as being used as a trade mark;

(b) be taken in a case in which the use is upon the goods or in physical relation thereto or in an advertising circular or other advertisement issued to the public, as importing a reference to some person having the right either as proprietor or as licensee to use the trade mark or goods with which such a person is connected in the course of trade;

(c) be taken in a case where the use is use at or near the place where the services are available for acceptance or performed or in an advertising circular or other advertisement issued to the public or any part thereof, as importing a reference to some person having the right either as proprietor or as licensee to use the trade mark or to services with the provision of which such a person as aforesaid is connected in the course of business;

(d) cause injury or prejudice to the proprietor or licensee of the trade mark.

(2) The right to the use of a trade mark given by registration shall be subject to any conditions or limitations entered on the register, and shall not be deemed to be infringed by the use of any such mark in any mode, in relation to goods to be sold or otherwise traded in any place, in relation to goods to be exported to any market or services for use or available for acceptance in any place or country, or in any other circumstances, to which, having regard to any such limitations, the registration does not extend.

(3) The right to the use of a trade mark given by registration shall not be deemed to be infringed by the use of any such mark by any person—

(a) in relation to goods connected in the course of trade with the proprietor or a licensee of the trade mark if, as to those goods or a bulk of which they form part, the proprietor or the licensee conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of the trade mark; or

(b) in relation to goods adapted to form part of, or to be accessory to, other goods in relation to which the trade mark has been used without infringement of the right given as aforesaid or might for the time being be so used, if the use of the mark is reasonably necessary in order to indicate that the goods are so adapted and neither the purpose nor the effect of the use of the mark is to indicate otherwise than in accordance with the fact a connexion in the course of trade between any person and the goods;

(c) in relation to services to which the proprietor of the trade mark or a licensee conforming to the permitted use has applied the trade mark, where the purpose and effect of the use of the trade mark is to indicate, in accordance with the fact, that those services have been performed by the proprietor or a licensee of the trade mark; or

(d) in relation to services the provision of which is connected in the course of business with the proprietor or a licensee of the trade mark, where the proprietor or licensee has at any time expressly or impliedly consented to the use of the trade mark; or

(e) in relation to services available for use with other services in relation to which the trade mark has been used without infringement of the right given by registration or might for the time being be so used; if—

(i) the use of the trade mark is reasonably necessary in order to indicate that the services are available for such use; or

(ii) neither the purpose nor the effect of the use of the trade mark is to indicate otherwise than in accordance with the fact that there is a connection in the course of business between any person and the provision of those services.

(4) The use of a registered trade mark, being one of two or more registered trade marks that are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration as aforesaid, shall not be deemed to be an infringement of the right so given to the use of any other of those trade marks.(my emphasis)

26. The Provisions of Section 7 reveals the general conditions for an action for infringement of a Trademark. This include:-

a) The use of a sign or mark

b) The use of (a) without the consent or authority of the proprietor

c) The use of (a) in public

d) The use of (a) in advertising

e) The use of (a) in a manner likely to cause injury and prejudice to the proprietor

(See Havelock J. in Pasticio Lucio Garofalo S.PA Vs. Debenham & Fear Limited [2013] eKLR). Another element is the impugned mark is identical with or so nearly resembling the Trademark as to be likely to deceive or cause confusion in Trade or provisions of services in respect of which the Trademark is registered.

27. Fundamentally the Court must evaluate the likelihood of deception or confusion and in making that assessment may consider the following:-

Proximity of the goods and services.

Similarity or resemblance of the markings.

Evidence of actual confusion where this has occurred.

The market place where the goods are traded or services provided.

This Court bears these elements and factors in mind as it undertakes its next task.

28. There is evidence that the Sana has used the Mark ‘Pony~Tail (notice the tilde sign between the two words) on its products. Does the Mark by Sana look identical with or so nearly resemble that of Strategic as to be likely to deceive or cause confusion in the course of Trade?

29. It is the case of Strategic that the words ‘PONY TAIL’ are two words being Pony and Tail and is different from the one word ‘PonyTail’ which describes a hairstyle. The latter being a generic name. The case by Strategic is that although Sana has placed a tilde sign between the two words it does not change the pronunciation of the word and the Marks of the Strategic and Sana are identical.

30. It seems to this Court that by affixing the ‘tilde’ between the two words there is an attempt by Sana to differentiate the marks. Does this tweak make the Marks dissimilar? The only difference in the two Marks is the tilde on the Mark of Sana. Though not identical, the two Marks resemble. It may not therefore be surprising that the Registrar of Trademarks rejected Sana’s application made in 1997 to register the Mark ‘Angels Pony Tail’.

31. Given the commonality of the market and the products sold, this Court has to find that the Mark of Sana which resembles the Trademark of Strategic is likely to cause confusion in the course of trade. However before making any findings as to whether Sana has infringed, the Defences it has set up must be examined.

32. In its statement of Defence, Sana had set up a defence that it is the registered proprietor of two Trade Marks. One known as Angels duly registered as number 38523 and a monogram of letter ‘A’ registered as number 58299. At the hearing, neither of these certificates were produced in Court and it would seem that this line of defence was abandoned. At least it was not followed through.

33. In the course of hearing, the witness for Sana appears to have introduced another line of Defence. DWI testified;-

“We started rolling out that product “Pony Tail” in 1990. We did not register the name then because it was a hairstyle”

The Defendant was setting up the Defence of “prior use”. In other words, the Defendant was attempting to avail itself of the provisions of section 10 of the Trade mark Act which reads:-

“Nothing in this Act shall entitle the proprietor or a licensee of a registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date anterior—

(a) to the use of the first-mentioned trade mark in relation to those goods by the proprietor or a predecessor in title of his; or

(b) to the registration of the first-mentioned trade mark in respect of those goods in the name of the proprietor or a predecessor in title of his,

whichever is the earlier, or to object (on such use being proved) to that person being put on the register for that identical or nearly resembling mark in respect of those goods under subsection (2) of section 15.

The purpose of Section 10 of the Trade Marks Act is to protect prior use (constituting continuous and bonafide use) of an unregistered Trademark prior to the use or registration of a Trade mark in contention.

34. But there would be two difficulties that Sana faces. One, it seems to this Court that the Defence of prior use must be specifically pleaded as a requirement of order 2 Rule 4(1) of The Civil Procedure Rules. Rule 4(1) of order 2 reads:-

“(1) A party shall in any pleading subsequent to a plaint plead specifically any matter, for example performance, release, payment, fraud, inevitable accident, act of God, any relevant Statute of limitation or any fact showing illegality —

(a) which he alleges makes any claim or defence of the opposite party not maintainable;

(b) which, if not specifically pleaded, might take the opposite party by surprise; or

Unfortunately for Sana, it does not plead prior use.

35. Even if the Court were to be in error that ‘prior use’ is a matter which needs to be pleaded, Sana did not lead sufficient evidence to prove this defence. When challenged to furnish evidence of prior use before 1994, DWI stated;-

“I have evidence of use before 1994 but not in Court.”

So that evidence was not produced.

36. Another Defence taken up by Sana, again, outside its Pleadings was that the name ‘Pony Tail’ was not registerable under the provisions of the Act. Before making submission on this aspect, the witness for Sana had told Court that the word ‘Pony Tail’ refers to a hairstyle where some or all the hair of the head are pulled from the face and tied to the back of the head. It was therefore a generic name incapable to registration. The witness asserted that it must have been registered in ignorance.

37. Sana sought to rely on the provisions of Section 12 of The Act to demonstrate that the word ‘Pony Tail’ failed the test of distinctiveness and was not eligible for registration. The law there is that:-

(1) In order for a trade mark (other than a certification trade mark) to be registrable in Part A of the register, it must contain or consist of at least one of the following essential particulars—

(a) the name of a company, individual or firm, represented in a special or particular manner;

(b) the signature of the applicant for registration or some predecessor in his business;

(d) a word or words having no direct reference to the character or quality of the goods, and not being according to its ordinary signification a geographical name or a surname;

(e) any other distinctive mark, but a name, signature or word or words, other than such as fall within the descriptions in paragraphs (a), (b), (c), and (d), shall not be registrable under this paragraph except upon evidence of its distinctiveness.

(2) For the purposes of this section, “distinctive” means adapted, in relation to the goods in respect of which a trade mark is registered or proposed to be registered, to distinguish goods with which the proprietor of the trade mark is or may be connected in the course of trade from goods in the case of which no such connexion subsists, either generally or, where the trade mark is registered or proposed to be registered subject to limitations, in relation to use within the extent of the registration and in relation to services means to distinguish services with the provision of which the proprietor is or may be connected in the course of business, from services the provision of which he is not so connected.

(3) In determining whether a trade mark is adapted to distinguish, the court or the Registrar may have regard to the extent to which—

(a) the trade mark is inherently adapted to distinguish; and

(b) by reason of the use of the trade mark or of any other circumstances, the trade mark is in fact adapted to distinguish. (my emphasis)

38. It was submitted that, Strategic having conceded that there is stiff competition between them and Sana, Strategic was obscuring the Registration of the Trade Mark as a Restrictive Trade Practice under the Competition Act.

39. The answer by Strategic is that Sana did not take any objection to the registration of the Trade Mark as provided for under Section 21 of The Act nor has it initiated expungement proceedings under Section 35 of The Act.

40. The provisions of Section 21 of the Act are on opposition to Registration. This is the opportunity for any person opposed to the registration of a Trade Mark to register the opposition before the Trademark is registered. Sana conceded that it did not avail itself of these provisions because it was not aware of Strategic’s application for Registration.

41. That may be so but there was no reason given by Sana why it has not taken advantage of the Provisions of Section 35 of The Act to move the Registrar or Court for expungement of the Trademark. Section 35 reads:-

(1) Any person aggrieved by the non-insertion in or omission from the register of an entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, may apply in the prescribed manner to the court or, at the option of the applicant and subject to the provisions of section 53, to the Registrar, and the court or the Registrar may make such order for making, expunging or varying the entry as the court or the Registrar may think fit.

(2) The court or the Registrar may in any proceeding under this section decide any question that it may be necessary or expedient to decide in connexion with the rectification of the register.

(3) In case of fraud in the registration, assignment or transmission of a registered trade mark, the Registrar may himself apply to the court under this section.

(4) Any order of the court rectifying the register shall direct that notice of the rectification shall be served in the prescribed manner on the Registrar, and the Registrar shall on receipt of the notice rectify the register accordingly.

(5) The power to rectify the register conferred by this section shall include power to remove a registration in Part A of the register to Part B.

42. The Registration of Trade Mark No.46653 having not been expunged, this Court cannot uphold the argument by Sana that it was not eligible for registration and was therefore wrongfully registered.

43. There is yet again another Defence, again not pleaded, that from the pictorial evidence of Strategic, the mark ® which stands for (Registered Trademark) is affixed above the word ‘DARLING’ and not ‘PONY TAIL’ and so what is capable of protection is ‘DARLING’ and not ‘PONY TAIL’. The observation made by the Defence in respect to the picture produced by Strategic is, no doubt, accurate. I understood the Defence to be that third parties could not, by looking at the get-up, be aware that the Mark ‘PonyTail’ was registered. That a third party such as Sana could therefore not be guilty of infringing. But Strategic has produced evidence that it is indeed the registered proprietor of the Trademark “PONY TAIL” registered as Mark No.40653 and if there was any doubt then that would have been removed by the Demand Letter of 22nd July 2010 from the Plaintiff’s lawyer to Sana asking them to cease from infringing of the Mark.

44. It is common ground that Sana and Strategic both sell beauty products which include sale of hair additions, hair pieces and hair wigs. Sana infact acknowledge that they are stiff competitors. An acknowledgement that they share a market place. Sana has failed in its Defences and the only conclusion to be drawn is that it has infringed on the Plaintiff’s Trademark number 40653 known as ‘PONY TAIL’. It matters not that Sana may not have had an intention to infringe because Infringement of a Trademark is a tort of strict liability.

45. A passing off claim is a right of a Trade to bring a legal action for Protection of goodwill. It may be brought under the law of unfair competition and sometimes as a Trademark infringement. There would be three elements to be proved in an action of passing off. Lord Oliver Aylmerton sets them out in Reckitt & Colman products Ltd Vs. Borden Inc & others [1990] R.p.c 34:-

“The law of passing off can be summarized in one short general proposition, no man may pass off is 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 success. These are there in number. First, he must establish a goodwill 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 a labelling or packaging) 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. Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not international) 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 within a particular source which is in fact the Plaintiff. For example, if the public is accustomed to rely on 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 brand name. Third, 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 goods or services is the same as the source of those offered by the Plaintiff”.

46. For starters, did Strategic establish a goodwill or reputation attached to the goods in the mind of the purchasing public by association with its get up such that the get-up is recognized by the Public as distinctive of its products?

47. The only witness called by Strategic was its Director and General Manager. In his written statement he states,

“Over the years, the Plaintiff has invested heavily in the design and outlay of its product “PONY TAIL’ so as to be responsive to market demands and to assure its consumers of continued professionalism and quality”

48. Other than this scanty evidence, there was no other evidence led on the issue of goodwill or reputation. Strategic thought this to be sufficient and submitted,

“Obviously your Lordship, the Plaintiff had created immense goodwill in the market hence the competition by other market players to eat into that market niche by selling products of similar name. The Plaintiff could not have registered and renewed the trade mark for long periods for nothing. The Plaintiff has shown sales analysis showing decline of sales and as was held by his Lordship Havelock in the Pastificio case, goodwill is established by long user of the trade mark. Indeed, it was Mr. Kefel’s evidence that the Plaintiff’s products under trademark “PONY TAIL” are well-known both in the local and international beauty products market, especially in the East Africa region where the Plaintiff has a large market presence”. This statement was not challenged. In fact, even according to the Defence witness, the Plaintiff is a leading competitor in the market and inference of solid goodwill for its products is given”.

49. This Court has considered the judgement of Havelock J. in Pasticio(supra),where he held,

“Goodwill may be established therefore, by the long usage of the trade mark, and thus the accruing right and interest therein. This principle was established in CDL Hotels International Ltd vs. Pontiac Marina Pty Ltd [2000] 1 LRC 243 referred to by the Plaintiff, where it was held inter alia:

“…in a long line of authorities, it had been stablished that pre-trading activities were capable of generating goodwill. Commercial realities demand so, given the considerable expenditure involved in marketing, advertising and promotion to familiarize the public with the service or product”.

A similar position was adopted by the Court of Appeal of Alberta, Canada in Triple five Corporation v. Walt Disney Productions (1994) ABCA 120 in which the learned Judge postulated that indeed goodwill may be established in a claim for passing off by the exigencies and effort expended in the marketing, advertising and promotion of the goods or services of the proprietor. In this case, it is not in doubt that the Plaintiff was first registered in Kenya in 1993 and that it had been in business in other countries prior to its establishment in Kenya. After its registration in Kenya, it is presumed that it went into business and has over that period of time, expended resources in marketing, promotion and advertising its products under its trademark. The Defendant disputed this notion by refuting that the Plaintiff had not shown any evidence that it was in business over the period prior to 28th September, 2009 when the Plaintiff had not shown any application for alteration of the trade mark “Santa Lucia”. In my view, it would be preposterous for the Defendant, and indeed this Court, to presuppose that the Plaintiff registered the trade mark without having any intention to engage in and establish a business. The reasonable deduction that can be inferred was that the Plaintiff has been engaging in business since the date of the original registration of its trademark and that it has in the span of over twenty (20) years established goodwill, within the purview of the determination in Triple five Corporation v. Walt Disney Productions and CDL Hotels International Ltd v Pontiac Marina Pty Ltd(both Supra).

50. I am however unable to read the view of the learned Judge as being a proposition that goodwill is proved simply and only because the Plaintiff has been established for many years and has been the owner of the Trademark for a long period of time. This, granted, can be an important indicator of goodwill but I doubt that it is enough to prove goodwill without more. Indeed looking further at the decision the Judge had held,

“PW1 in his testimony stated that the Plaintiff Company had been established over one hundred (100) years ago and its products had been distributed in the market in many countries. These were similar to the averments made by PW2 and PW3”.

It needs to be noted that in that matter, PW3 was the General Manager of the Plaintiff’s duly appointed Agent and Distributor who the Judge noted, had testified that the Plaintiff had cultivated goodwill and reputation over a period of 20 years.

51. How a Plaintiff establishes reputation or goodwill, must necessarily turn on the circumstances and facts of each case. What is important is that the Plaintiff demonstrates:-

a) It has established reputation in a Mark by using it in business.

b) The use is associated with the Claimant personally or its goods/services.

c) The Mark distinguishes the Claimant’s goods/services from other goods/services.

d) The infringement is within the geographical limits of its reputation and goodwill.

52. The Plaintiff’s evidence was that its Products under the Trademark are well known both in the Local and International Beauty Products Market (in particular in the East African Region) and that it has a large market presence. This mere assertion by the Plaintiff was not backed by further evidence, like, Market survey or Statistics.

53. While goodwill may be demonstrated by the exigencies and effort put in marketing, advertising and promotion (see Pastificio(supra), there must be evidence of that exigency and effort. It will not be sufficient merely to state as the PW1 has done here that:-

“…the Plaintiff has invested heavily in the design and outlay”.

54. Strategic’s averment in the Plaint that its ‘Mark’ was well known and that the Product associated with the Mark had a large Marker presence had been denied by Sana (see statement of Defence). It is not therefore true as suggested by Counsel for Strategic that the assertion of reputation or goodwill was not challenged. Right from the outset, Strategic bore the onus of establishing this important element of the Tort. This, unfortunately, they did not do.

55. The conclusion of this Court is that the Plaintiff has established that there has been infringement of its Trademark but fails in its claim under passing off.

56. What are the remedies available for Trademark infringement? These may include:-

a) An injunction to stop the Defendant from using the impugned Mark.

b) An order requiring the destruction or forfeiture of the infringed goods.

c) A money of damages sustained by the Plaintiff which may include the Defendant’s profits.

d) Punitive damages.

57. In the Plaint, Strategic seeks the following prayers:-

a) A declaration that the Defendant has infringed the Plaintiff’s trade mark ‘PONY TAIL’ registered as Number 40653.

b) A permanent injunction restraining the Defendant whether by itself, directors, employees, agents and/or servants or anybody or entity deriving authority under it from manufacturing, packaging and selling any products bearing the Plaintiff’s trade mark “PONY TAIL” or any other name bearing those resembling or closely resembling those of the Plaintiff’s “PONY TAIL”.

c) An order that the Defendant do deliver up to the Plaintiff all hair pieces, weaves and wigs, hair conditions an braids bearing the infringing mark together with all their packets for destruction.

d) Damages.

e) Costs of this suit.

58. There would be no difficulty in granting prayer (a)(b) and (c) but not so the prayer for damages. PW1 testified that it carried out a Sales Analysis of the item ‘PONY TAIL’ for the periods 2010 to December 2010 and from January 2011 to December 2011. That the Data showed that the sales had tempered off. The witness readily admitted that the analysis was not prepared by himself but a member of Staff working in the Sales Department. Further that the primary evidence of Sales (invoices) was not shared with the Court.

59. Sana thought the evidence to be weak while the Strategic’s Counsel resignedly submitted,

“And although the Plaintiff’s loss could have been elaborated better, it cannot be lost that the actual damage resulted for which the Plaintiff is entitled to compensation at the Court’s discretion”.

Strategic then asked the Court to follow the decision in Haria Industries vs. P.J Products Limited [1976] EA 367 where Sir Charles Newbold remarked,

“…Having said that, and bearing in mind, as I said earlier, that in my view, and I think clearly in the trial Judge’s view, the action of the Defendant was deliberate and he sought to make a profit out of his wrong and that therefore this one of the few cases in which an amount of damages additional to the purely compensatory can be given, I have come to the conclusion that the proper figure which should be awarded to the Plaintiff for the action of the Defendant in £ 750…”

60. Strategic as I now understand it, is asking for punitive damages in addition to general damages. Infact it seeks punitive Damages of Khs.5,000,000/-. But as would be clear from its pleadings the facts to be relied on for punitive Damages were not pleaded as indeed the Prayer itself and the same cannot be awarded. As to General damages, the Plaintiff has left this Court with little to work on and it will have itself to blame for the outcome.

61. In the absence of any evidence to assist the Court make an objective assessment of the General Damages deserved, this Court makes an order of a token sum of Kshs.10,000/= under this heading.

62. In closing I observe that the Court would have reached the same outcome in respect to remedies even had the tort of passing off been proved.

63. Ultimately, judgment is entered for the Plaintiff against the Defendant in terms of prayers (a) (b) and (c) of the Plaint. While I can make an order that the delivery up shall be within 14 days of this order, I shall be asking the Parties to address me as to the place for delivery up and destruction. In addition there shall be General damages of Kshs.10,000/=. The Plaintiff shall also have costs of the suit.

Dated, Signed and Delivered in Court at Nairobi this 3rd day of November, 2017.

F. TUIYOTT

JUDGE

PRESENT;

Nyaribo h/b Githinji for Defendant

Onsongo h/b Nyawara for Plaintiff

Alex - Court Clerk