Unga Limited v Capwell Industries Limited [2019] KEHC 5915 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI COMMERCIAL & TAX DIVISION

CIVIL SUIT NO. E425 OF 2018

UNGA LIMITED...................................................PLAINTIFF/APPLICANT

VERSUS

CAPWELL INDUSTRIES LIMITED ........DEFENDANT/RESPONDENT

RULING

1. The ruling relates to a notice of motion application dated 10th December 2018, brought under the provisions of Section 1A, 1B, 3A of the Civil Procedure Act, Section 7 of the Trade Marks Act, Sections 35 and 37 of the Copyrights Act, Order 40 Rule 2 of the Civil Procedure Rules 2010 and all other enabling provisions of the Law.

2. The Applicant is seeking for orders that, pending the hearing and determination of the application and the suit herein, the Defendant/Respondent whether by itself, its directors, officers, servants or agents or employees or any of them or otherwise howsoever be and is hereby restrained from:-

(i) infringing in any way on the Plaintiff’s Trade Mark “DO AMAIZEING WITH HOSTESS” and in particular using the word AMAIZE alone or in combination with other words or label or any other name, mark or designation bearing a close resemblance thereto in connection with maize flour or goods and services in class 30 or in any other manner howsoever;

(ii) manufacturing, importing, exporting, selling, offering for sale, distributing, marketing, advertising, and promoting maize flour and all other products or services bearing the Trade Mark AMAIZE alone or in combination with other words or label or any other name, mark or designation bearing a close resemblance thereto;

(iii) infringing in any way the Plaintiff’s registered copyright work in the artistic work entitled “DO AMAIZEING WITH HOSTESS” and numbered AT-00417 or any part thereof and in particular using the word AMAIZE in connection with printed material for packaging of maize flour or in any other way howsoever;

(iv) passing off any of its goods as the goods of the Plaintiff by using a deceptively similar shape, colour, configuration, overall design and general appearance or by using a deceptively similar name to the Plaintiff’s Trade Marks “DO AMAIZEING WITH HOSTESS” or otherwise causing such goods to be passed-off as the Plaintiff’s goods or services, particularly but not limited to maize flour manufactured and/or marketed under the name AMAIZE;

(v) reproducing or adapting or publishing or broadcasting or selling or distributing or possessing or importing copies of the Plaintiff’s registered copyright work in the artistic work entitled “DO AMAIZEING WITH HOSTESS”;

(vi) parting with the possession, power, custody other than to the Plaintiff and its agents of or in any way altering, defacing, or destroying the following articles or any of them:-

a) products which infringe the Trade Mark “DO AMAIZEING WITH HOSTESS’;

b) goods being passed-off as the goods of the Plaintiff and particularly but not limited to maize flour manufactured and/or marketed by the Defendant under the infringing AMAIZE;

c) All documents, files, packaging materials, cartons, printing blocks, bromides, prints, invoices, receipts, articles or equipment relating to the importation of, purchase manufacture, sale or supply of AMAIZE maize flour falling within the description of  (i)to (vi) above;

(vii) The costs of the application be provided.

3. The application is premised on the grounds on the face of it and an affidavit dated 10th December 2018, sworn by Garama Chome, the National Sales Manager of the Plaintiff’s Company.  He described the Plaintiff is a limited liability company involved in the manufacture and marketing of a broad range of human and animal nutrition and health products. That the Plaintiff is the legitimate owner of the Trademark “Do Amaizeing with Hostess” for which it has applied for registration vide application No. TMA 102901 in class 30. Further, it is the registered owner of Copyright Works in artistic work “Do Amaizeing with Hostess” No. AT-00417 registered with effect from 10th April 2017.

4. The plaintiff avers that the Defendant is manufacturing, selling, offering for sale, distributing, marketing, advertising, importing or exporting maize flour using the Trade mark “Amaize” and on all its stationery, official documents, packaging materials, invoices, equipments, receipts, thus infringing on the Plaintiff’s trademark and Copyrights Works, committing the tort of Passing off and causing confusion in the market. As such the Defendant ought to be restrained from the continued infringement.

5. However, the Defendant filed grounds of opposition in response to the Application and stated briefly that; pursuant to Section 7 of Trademarks Act, the court has no jurisdiction, as the subject Trademark is not registered. That the same matter is pending before Registrar of trademarks and therefore these proceedings should be stayed. Further there is no urgency demonstrated and therefore the application is an abuse of process of the court. Neither is the application supported by the claims.

6. The Defendant also filed Replying affidavit sworn by its director, Rajan Shah. He reiterated that, the court has no jurisdiction to hear and determine the matter as no cause of action can lie in respect of unregistered Trade mark. That the Defendant’s trademark “Amaize” was applied for on 15th December 2017 and approved vide a letter dated 22nd August 2018, therefore it has priority over the Plaintiff’s Trademark applied for on 22nd August 2018.

7. That, there is no Passing off as alleged in that, the two brands of maize flour being “Hostess” and “Amaize” are distinct as evidenced by the comments from social media and the Plaintiff’s affidavits. Thus the Trademark “Amaize” does not infringe on the Plaintiff’s trademark “Hostess”. Further, the Plaintiff’s application relates to the Trade mark “Do Amaizeing with Hostess” and not “Hostess” yet, the complaint is against the Defendant’s the trademark “Amaize” and the entire get up products.

8. The Defendant  reiterated  that, the Plaintiff has not shown that it has goodwill or reputation in the trademark; “Do Amaizeing with Hostess” on the grounds that; the artistic works allegedly infringed have not been put before the court and/or written down, recorded or otherwise reduced to material form to entitle it to copyright protection. That the mere ownership of “Do Amaizeing with Hostess” does not entitle the Plaintiff to exclusive use of the mark “Amaize”.  Finally the Plaintiff is guilty of delay in making the Application and non disclosure of material facts.

9. However, the Plaintiff filed a further affidavit by Garama Chome, dated 18th February 2019, whereby a copy of the certificate of registration of Copyright works dated 10th April 2017 was produced. Similarly, the Defendant filed a further affidavit sworn by Rajan Shah dated 1st February 2019. He averred that, the Plaintiff Copyright work entitled “Do Amaizeing with Hostess” is an artistic and not a literally work and does not grant the Plaintiff exclusive use to the use thereof. Further the plaintiff cannot claim any copyright over the word “Amaize” because the words are only protected under the Trademark Act.

10. That the Plaintiff’s move to challenge or file proceedings before the Registrar of Trademarks on the use of the work “Amaize” by the Defendant, after the filing of the suit was in bad faith and the Defendant has filed an extension application dated 15th November 2018, and notice of opposition “opposition proceedings, to challenge the registration of the mark “Do Amaizeing with Hostess”.

11. The parties disposed of the Application by filing written submissions. The Plaintiff submitted that, the unregistered trade mark can be protected by the court and relied on the cases of; Clips Limited v Brand Imports (Africa) Limited formerly named Brand Imports Limited [2015] eKLR  and J.W. Seagon & Co. Insurance Brokers (k) Limited v Liaison Group (IB) Limited & 2 Others [2017] eKLR .

12. That, it is the Plaintiff that first used the word “Amaize” in connection with the maize flour and that, the Trade mark “Do Amaizeing with Hostess” was registered under Section 10 of the Copy right Act as Copyright works in April 2017.  Thus the word “Amaize” is a component of the registered copyright and the exhibited  certificate  of registration of copyright, is prima facie evidence thereof, as held in the case of; Nonny Gathoni Njenga & Another v Cathrene Masitsa & 2 others [2015] eKLR. That whether or not the Plaintiff’s copyright are artistic or not, is not an issue before the court;

13. The Plaintiff further submitted that, goodwill may be established by long usage of trademark “Hostess” since 1963. The Plaintiff relied on the case of; Pastificio Lucio Garofalo SPA v Debenham & Fear Limited [2013]eKLR, where the court held that, goodwill may be established by long usage of a Trademark. That the court further held that, goodwill can be established by evidence of marketing, advertising and promotion of goods and services.

14. The plaintiff submitted that it has given evidence of advertising including; registering a copyright to promote its Hostess brand of maize flour. It is therefore misleading for the Defendant to argue at paragraph 49 of the submissions that, evidence goodwill should be adduced by members of the public. The Plaintiff argued that good will cannot be adequately compensated with damages, and relied on the case of; Nonny Gathoni Njenga & Another v Cathrene Masitsa & 2 others [2015] eKLR, where the court held that damages are not always an adequate remedy where there has been a breach of the law.

15. The Defendant in response submitted that, unregistered Trademark cannot be infringed and as there is pending notice of opposition filed on 19th December 2018 against the registration thereof; pursuant to Section 22 of the Trademark Act, the subject Trademark cannot be registered. Therefore no injunction order can be issued in respect to an unregistered trademark.  Reference was made to Section 5 of the Trade Mark Act and the case of; British United Provident Association vs Bupa Kenya Limited [2006] eKLR .

16. That, the Plaintiff’s alleged Copyright work entitled “Do Amaizeing with Hostess” is a slogan and not a copyright.  That there is no evidence that, sufficient effort has been expended on making the words an original character. Further, the certificate afore-mentioned, is a document that provides the prima facie proof that, a party is the owner of a registered trade mark, and in the absence thereof a court cannot grant an injunction order based on trade mark infringement. The case of; Civil Suit No. 133 of 2018 - ABSA Kenya Limited v Barclays Bank of Kenya [2018] eKLR, was relied on.

17. That in the case of; Jiwani v Going Out Magazine & another [2002] KLR 1, the court held that, in order to make a finding on whether the Plaintiff has shown a prima facie case of infringement of a copyright, the Plaintiff must satisfy the court that, the works in question are as a result of exercise of sufficient labour and skill on its part, which has given the work some original character and that, the Defendant had reproduced the same.

18. That the existence of sufficient originality is a question of fact and degree. Thus, what precise amount of the knowledge, labour, judgment or literary skill or taste which the author of any compilation bestow upon its composition in order to acquire copyright in it depends largely on the special facts of the case, and is in each case be a question of degree. Reliance was placed on the case of; GA Cramp & Sons Ltd v Frank Smythson Ltd [1944] A.C. 329,where the court stated that; where the copyright is not established, there can be no infringement.

19. The Defendant submitted that the Plaintiff has not established a prima facie case as per the principles laid down in the case of; Giella vs Cassman Brown & Co. Ltd (1973) EA 398 & Mrao Limited vs First American Bank Kenya Limited & 2 Others (2013) KLR 125), due to lack of evidence of registration of trademark and members of the public. That without prima facie case, there is no need to consider irreparable, as held in the case of; Kenya Commercial Finance Co Ltd vs Afraha Education Society [2001] 1 EA 86  where the Court of Appeal was emphatic that the conditions in laid down in the Giella case (supra) have to be considered sequentially. Thus the court held:

“The sequence of granting an interlocutory injunction is firstly, that an applicant must show a prima facie case with a probability of success if this discretionary remedy will issue in his favour; secondly, that such an injunction will not normally be granted unless the Applicant might otherwise suffer irreparable injury; and thirdly, when the court is in doubt, it will decide the application on the balance of convenience –( see Giella vs Cassman Brown and Co Ltd [1973] EA 358 at 360). These conditions are sequential so that, the second condition can only be addressed, if the first one is satisfied and when the court is in doubt then the third condition can be addressed.”

20. The Defendant argued that the Plaintiff can be compensated by an award of damages and relied on the case of; Hoswell Mbugua Njuguna v Equity Bank Limited [2012] eKLR. That if the orders sought are granted, they will greatly impact on the Defendant’s business, as such the court should consider lower risk as held in the case of; Albert Mario Cordeiro & another v Vishram Shamji [2015] eKLR.

21. The Defendant revisited the issue of delay and submitted that, the Plaintiff sat on its alleged rights for almost a year after making demand for alleged infringement of its rights. Initially the Plaintiff only made a demand against the Defendant in February 2018, for trade mark infringement and passing off. The Plaintiff never alleged any infringement of its alleged copyright because it knew that such infringement did not exist. That after receiving the Defendant’s letter in March 2018, detailing the ongoing registration of the Defendant’s AMAIZE trademark, the Plaintiff rushed to the Registrar of Trademarks and applied for the registration of its slogan “DO AMAIZEING WITH HOSTESS” as a Trade mark.

22. Therefore, the Plaintiff has been indolent and since equity does not aid the indolent, the Plaintiff has deprived itself of the benefit of the discretion of the Honourable court to grant the equitable remedies sought. The case of; Kennedy Nyamai vs Kioko Ngone (2008) Eklr Civil Appeal No. 185 of 2006, was relied on.

23. I have considered the entire application based on the materials before the court and I find that, there is no dispute and indeed it is conceded that the Plaintiffs’ trademark “Do Amaizeing with Hostess” is not yet registered. Further a notice of opposition dated 19th December 2018, has been lodged by the Defendant, with the Registrar of Trademarks, opposing the registration of the Trademark. Similarly, the Plaintiff has lodged an application by challenging and/or opposing the registration of the Defendant’s trademark “Amaize”. Therefore both trademarks are a subject of proceedings before the Registrar of Trademarks.

24. Be that as it were, several questions have arisen from the arguments of the parties herein which include but are not limited to the following matters:-

a) whether the court has the jurisdiction to that the subject  trademark of; “Do Amaizeing with Hostess” is not registered;

b) whether the court should hear and determine the application and/or a suit or stay the proceedings in view of the fact the trademarks challenged are a subject of proceedings before the Registrar of Trademarks.

c) If the court hears and determines the application and/or the suit, what legal effect will it have, if any, on the pending proceedings before the Registrar of Trademarks;

d) Is the certificate of registration produced in support of the Plaintiff’s copyrights, prima facie evidence of its right in   the artistic works in “Do Amaizeing with Hostess”?

e) which among the two subject trademarks, has priority over the other;

f) has the plaintiff established a prima facie case to be granted the restraining order sought and can the court determine the same without delving into the evidence and/or the merit of the case;

25. It suffices to note that most of these issues go to the root of the case and will require evidence to be adduced in support thereof. Indeed the issue of which party applied for the registration of their respective trademark first is crucial to determine who among them is infringing in the others right. The parties have filed several affidavits and elaborate submissions and a consideration thereof reveals that most of the averments are factual issues that require evidence. That material will be very useful at the hearing of the suit.

26. Be that as it were, it is in evident that the Plaintiff applied for registration of its Trademark on 4th July 2018, while the Defendant had applied for its Trademark on 23rd November 2017 and for its amendment on 15th December 2017. It was approved on 22nd August 2018. However, as aforesaid the issue of priority of these applications will need to be determined before any substantive orders are made.  Further in view of the fact that, the Trademarks are still a subject of proceedings before the Registrar of Trademarks, the grant of any orders at this stage in favour of or as against any of the parties will not be in the interest of justice as it will have far reaching impact on their business operations and/or may determine the matter at this stage.

27. In that regard, I shall not grant any of the orders sought for at this interim stage hold and order that, the parties proceed expeditiously to deal with the matter at the Registrar of Trademarks and/or prepare this matter for hearing of the main suit.  The costs of the application herein to abide the outcome of the main suit.

28. It is so ordered.

Dated, delivered and signed in an open court this 20th day of May 2019

G.L. NZIOKA

JUDGE

In the presence of;

Mr. Kamau for the Plaintiff/Applicant

Mr. Mbaya for Ms Mwango for the Defendant/Respondent

Dennis ..............................Court Assistant