Victoria Nile Plastics Limited v Li Yao Industry Limited (Civil Suit 607 of 2021) [2024] UGCommC 264 (2 September 2024)

## THE REPUBLIC OF UGANDA

## IN THE HIGH COURT OF UGANDA AT KAMPALA

## (COMMERCIAL DIVISION)

## CIVIL SUIT NO. 607 OF 2021

VICTORIA NILE PLASTICS LIMITED ::::::::::::::::::::::::::::::::::::

#### **VERSUS**

## LI YAO INDUSTRY LIMITED ::::::::::::::::::::::::::::::::::::

Before: Hon. Lady Justice Patricia Kahigi Asiimwe

#### Judgment

#### Introduction:

The Plaintiff sued the Defendant for infringement of its $\mathbf{1}$ industrial design, passing off, damages and a permanent injunction.

## The Plaintiff's case:

- The Plaintiff is a company registered in Uganda in the business $2.$ of manufacturing plastic basins. On the 5<sup>th</sup> day of September 2018, the Plaintiff was granted a certificate of grant of industrial design of a basin by the Uganda Registration Services Bureau. - The Plaintiff alleges that the Defendant is engaged in 3. infringement of the Plaintiff's industrial design by reproducing or manufacturing and stocking basins with the Plaintiff's registered design and offering the said infringing basins for sale without the Plaintiff's consent. It is further claimed that because of the Defendant's illegal actions, the Plaintiff has suffered great financial loss, inconvenience, and anguish and seeks general and aggravated damages.

## Representation:

The Plaintiff was represented by Philip Kasimbi of M/S $4.$ Okalang Law Chambers. The matter proceeded ex parte the Defendant having been served and failed to make an appearance.

#### Issues:

- Whether the Defendant's actions amount to infringement of $\mathbf{I}_{\bullet}$ Industrial Design No. UG/D/2018/000028 - What remedies are the parties entitled to? $\Pi$

#### Evidence

$\phi$

- At the hearing, the Plaintiff called one witness, Simon Musoke, 5. a director in the Plaintiff's Company. He testified that on 23<sup>rd</sup> day of April 2018, the Plaintiff made an application for the registration of an industrial design in respect of a basin to the Uganda Registration Services Bureau. On 11<sup>th</sup> May Industrial Design No. UG/D/2018/000028 was published in the Uganda Gazette. No objection was raised by the Defendant or any other party in relation to the application and on 5<sup>th</sup> September 2018, Design No. Industrial granted was Plaintiff the UG/D/2018/000028. - The witness stated that the registered industrial design for the 6. Plaintiff's basins includes the shape of the basin, 3 circular rings underneath the base of the basin with multiple lines running from the centre ring to the edge of the base, multiple horizontal lines running along the sides of the basin and rectangular shaped handles. He adduced in evidence the certificate of grant marked PE 5 and pictures of the Plaintiff's basins marked PE 6. - PW further stated that the basins manufactured and sold by $7.$ the Defendant have a similar design to that of the Plaintiff's

registered design and cause confusion in the market to the detriment and prejudice of the Plaintiff. He adduced in evidence pictures of the Defendant's basins marked PE 7.

That on 29<sup>th</sup> October 2021, this court issued an order of 8. temporary injunction vide M. A No. 1188 of 2021 restraining the Defendants from further infringement of the Plaintiff's design but the Defendant has since continued to manufacture, stock and sell the impugned basins.

## Resolution:

Issue I: Whether the Defendant's actions amount to infringement of Industrial Design No. UG/D/2018/000028

- Counsel for the Plaintiff filed written submissions which I have 9. taken into consideration in resolving this matter. - 10. An industrial design is defined under Section 70 of The Industrial Property Act, Cap 224 as "that aspect of a useful article which is ornamental or aesthetic that may consist of three dimensional features like a shape or surface of an article or a three dimensional feature such as patterns, line or colours." - 11. Section 73 of the Industrial Property Act provides for registration of industrial designs. The Plaintiff submitted in evidence a certificate of grant of an industrial design (PE 5). The court therefore recognizes the Plaintiff as the registered owner of the design reflected on the certificate. - 12. The rights of a registered owner of industrial designs are provided for under Section 78(1) of the Industrial Property Act, which provides that Registration of an industrial design shall confer upon its registered owner the right to preclude third parties from performing any of the following acts in Uganda:

- a) reproducing the industrial design in the manufacture of a product; - b) importing, offering for sale and selling a product reproducing the protected industrial design; or - c) stocking of that product for the purposes of offering it for sale or selling it. - 13. Under section 91 of the Industrial Property Act, any act specified under section 78 cited above performed by a person other than the owner of the patent or of the registered utility model or industrial design without the owner's authorisation, in relation to a product or a process falling within the scope of a validly granted patent or certificate of registration shall constitute an infringement. - 14. In the case of Migoo Industrial Company Versus Risa International Industry Civil Suit No. 359 of 2021 Justice Mubiru held that:

design provides protection the for registered $\mathbf{A}$ appearance of the whole or a part of a product. This appearance can result from the shape, lines, contours, colours, texture or materials of the product itself and / or its ornamentation.

A registered design may be infringed in two ways: (a) the infringing article bears a design which is exactly the same as or identical to that which has been registered; or (b) the infringing article bears a design which is not substantially different from that which has been registered. A design is not regarded as new if it differs from a registered design only in immaterial details or in features which are variants commonly used in the trade. There will be no infringement if the alleged infringement is substantially different from the look of the registered design as a whole.

#### Justice Stephen Mubiru further held that: 15.

To establish infringement, the owner of the design must prove that in the eye of an ordinary observer, giving such attention as a purchaser usually gives, the protected and accused designs are substantially the same. The court will find an infringement if the resemblance is such as to deceive such an observer, inducing him or her to purchase one supposing it to be the other.

- The Plaintiff adduced the certificate of grant that has photos 16. of the protected design. In addition, the Plaintiff adduced in evidence the gazette notice. Under the notice the protected "The features of shape, design covers pattern. and ornamentation of the basin as represented." - In order to prove infringement, the Plaintiff must prove that 17. there was an act of infringement and that the infringing design is the same or sufficiently similar to fall within the scope of the monopoly protection (See **Thorne C & Bennett** $\mathbf{S}_{\boldsymbol{\cdot}}$ $\mathbf{A}$ User's Guide to Design Law, **Bloomsbury** Professional, 2010 pg. 21) - PW testified that the photos submitted in evidence were taken 18. of basins that were being sold by the Defendant around the country. He further testified that they were informed by the people selling the basins that they were supplied by the Defendant. Therefore, the Defendant cannot claim as a Defence that the basins were for private use. - The Plaintiff also adduced photos of the basin that allegedly 19. infringes on the design of the Plaintiff. - I have compared the photos of the Plaintiff's design and the 20. offending basins and note the following Defendant's similarities. - Both basins are round

- Both have rectangular handles. - Both have three circular lines at the bottom of the basins - Both have lines at the bottom running from the inner circle to the edge of the basin. - 21. I have also noted that the offending basin has the following words at the bottom.

"LI YAO INDUST. LIMITED Made in Uganda"

- 22. Save for the names of the manufacturers written under the basins, the two basins are substantially similar and an ordinary person would assume that they are manufactured by the same company. - 23. The Plaintiff has proved that its industrial design is registered in Uganda. There is no evidence in court to the effect that the Defendant's design is registered. There is also no evidence before court to prove that the Defendant had the authority to use the Plaintiff's design. I, therefore, find that the Defendant's actions amount to infringement of the Plaintiff's Industrial design. The issue is therefore answered in the affirmative.

# Issue II: What remedies are the parties entitled to?

$\mathcal{A}$

24. The Plaintiff prayed for a permanent injunction against the Defendant restraining the Defendant from infringing its industrial design, general damages, aggravated damages, interest, an order that the Defendant accounts and pays the Plaintiff all proceeds earned from the infringement and an order for delivery and destruction of all infringing goods at the defendants cost. - 25. Under Section 92 of The Industrial Property Act, Cap 224 Upon the request of the owner of an industrial design, the court may grant, any of the following relief: - $(a)$ an injunction to prevent infringement where infringement is imminent $\overline{or}$ to prohibit the continuation of the infringement once infringement has started: - (b) damages; or - (c) any other remedy provided for in law. - A permanent injunction - 26. In the case of Akena Christopher & 9 Ors Versus Opwonya Noah Civil Appeal No. 0035 of 2016 Mubiru J, held that:

It is settled law that a permanent injunction is a remedy for preventing wrongs and preserving rights so that by single exercise of equitable power an injury is both restrained and repaired, for the purpose of dispensing complete justice between the parties. Permanent or final injunctions are granted as a remedy against an infringement or violation which has been proven at trial. Such an injunction will be granted to prevent ongoing or future infringement or violations.

27. Having found that the Defendant is infringing on the rights of the Plaintiff, a permanent injunction is hereby granted restraining the Defendant from reproducing offering for sale and selling and stocking for the purposes of offering for sale basins with the Defendant's industrial design.

General damages and Aggravated damages

28. In Uganda Revenue Authority Versus Wanume David Kitamirike Civil Appeal No. 43 of 2010 Remmy. K. Kasule, JA, Citing Ahmed Ibrahim Bholm Vs Car and General Ltd, Civil Appeal No. 12 of 2002 (SC) stated that;

$A$

General damages are awardable by court at large and after due court assessment. They are compensatory in nature in that they should offer some satisfaction to the injured plaintiff.

like general damages, are, damages Aggravated compensatory in nature, but they are enhanced as damages because of the aggravating conduct of the defendant. They reflect the exceptional harm done to the plaintiff by reason of the defendant's actions/omissions.

Both general and aggravated damages focus on the conduct of the defendant in causing the injury to the plaintiff that is being compensated for.

## 29. Furthermore, in Migoo industrial Company Versus Risa International Industry supra Mubiru, J. stated that:

The amount recoverable as damages suffered by the owner of the infringed industrial design can be assessed by multiplying the number of counterfeits assigned by the infringer by the sum of profits per unit of the goods which the owner of the infringed industrial design could have sold had there been no such infringements, which is not to exceed the amount corresponding to the ability of the owner to exercise its right. Alternatively, if the infringer enjoys profits due to the infringement on the registered design, the sum of the infringer's profits is presumed to be equivalent to the damages suffered by the right holder.

30. In this case the Plaintiff did not submit any evidence of the number of counterfeit basins sold by the Defendant or the losses made as a result of those sales thus making it difficult for the court to assess the general damages. PW did however testify that when they discovered that the Defendant was selling the basins of the same mold they stopped production. I note that the Plaintiff must have suffered damages. However the Plaintiff did not submit any evidence to prove the damages.

That notwithstanding, I award general damages of UGX. 20,000,000. I decline to grant aggravated damages as no exceptional harm has been proved.

The Defendant accounts and pays the Plaintiff all proceeds earned from the infringement

31. The Plaintiff's claim is for a remedy of an order for an account of the Defendant's profits arising from the infringement of the Plaintiff's industrial design. This remedy is sought as an alternative to a remedy for damages. (see Alpin T & Davis J, 2013 Intellectual Property Law, Text, Cases and Materials (2<sup>nd</sup> Edition), Oxford University Press, at page 867.) Having granted general damages, I decline to grant this remedy.

An order for delivery and destruction of all infringing goods at the *defendant's cost*

- 32. One of the remedies for registered design infringement is an order for delivery up or destruction of the infringing goods. (See Thorne C & Bennett S, A User's Guide to Design Law, Bloomsbury Professional, 2010 pg. 22). Our legislation does not provide for such orders, however, they can be made under the inherent jurisdiction of this court (See Halsbury's Laws of England Confidence and Informational Privacy (Volume 19 (2011))1). According to Halsbury's Laws of England (supra) "Delivery up will be ordered when the claimant is the owner of the infringing articles or documents; and destruction will be ordered when the documents or articles, such as copies, are the property of the defendant." - 33. In this case the basins in issue are the property of the Defendant. The appropriate remedy is therefore destruction. - 34. As noted above the Defendant infringed on the Plaintiff's industrial design and therefore the Plaintiff is entitled to this remedy. The Defendant is therefore directed to destroy all the

infringing basins in their possession within 14 days from the date of this judgment.

- 35. In conclusion therefore judgment is entered for the Plaintiff on the following terms: - a) A permanent injunction is hereby issued restraining the Defendant from reproducing, offering for sale and selling, and stocking for the purposes of offering for sale basins with the Plaintiff's industrial design; - b) The Plaintiff is awarded general damages of UGX. 20,000,000; - c) Interest of 18% on b) above from the date of this judgment until payment in full; - d) The Defendant is directed to destroy all the infringing basins in their possession within 14 days from the date of this judgment; and - e) The Defendant shall pay the Plaintiff's costs.

## Dated this 2<sup>nd</sup> day of September 2024

**DOOR** Patricia Kahigi Asiimwe Judge **Delivered on ECCMIS**