Under both the Kenyan and South African Trademark Acts, there are several provisions which limit the right to the use of a trade mark granted by registration. For purposes of this blogpost, let us consider the provision of section 10 of the Kenya Trade Mark Act and its equivalent section 36 in South Africa’s Trade Marks Act. This provision, referred to in Kenya’s Act as the Saving for vested rights, creates a defence against trade mark infringement claim by a trade mark owner.
In a recent South African case of Etraction (Pty) Ltd v Tyrecor (Pty) Ltd (16926/11,16926A/11)  ZAWCHC, a dispute arose over the trade mark INFINITY registered by Etraction in Class 12 in respect of “vehicle components and accessories; tyres, wheels, rims”. Etraction was therefore seeking an interdict to restrain Tyrecor from infringing its trade mark.
In its defence, Tyrecor argued that its predecessor in title had commenced using the trade mark prior to Etraction applying for registration of INFINITY in its own name. In this regard, the court accepted that the aim of the statutory defence relied upon by by Tyrecor was to “preserve common law rights that are antecedent to the rights of the registered proprietor”.
After reviewing the submissions of the parties, the court found that Tyrecor could not be restrained from using INFINITY since it had made continuous use of INFINITY since July 2006 and before the Etraction’s application for registration was accepted on 15th April 2008.
In order to discharge the onus of proving an earlier right under Section 10 of the Kenya Trade Marks Act, it must be demonstrated that the use of a trade mark would amount to passing off or infringement of another earlier right. This reasoning has been cited with approval in the case between Trans-National Bank Limited vs Equity Bank Limited where Trans-National opposed Equity’s application for registration of “fanikisha” before former Registrar of Trade Marks, Prof. Odek. A copy of the Registrar’s decision is available here.
In the “fanikisha” case, the Registrar interprets Section 10 of the Act to the effect that an anterior mark is:
(i) an earlier mark having an earlier application date taking any priority into account or
(ii) an earlier registered mark or
(iii) if unregistered, an earlier mark that exists by virtue of continous use under Section 5 of the Act or
(iv) is an earlier well known trademark.
In the case of where the anterior mark is unregistered, the Etraction case is significant as it demonstrates that the availability (or lack thereof) of an action for passing-off is an important determinant of whether reliance can be placed on the defence. In the present case, Tyrecor successfully argued that Etraction’s abandonment of the possibility of a passing-off action strongly indicated that Etraction recognised that it had no exclusive right to INFINITY prior to its application for registration.
Another important finding from the Etraction v. Tyrecor case is in relation to the “predecessor in title” option in the defence. In the present case, Tyrecor claimed that it was the successor of an entity known as Falck Trading (Pty) Limited, a company which it took over in 2009. However, Tyrecor did not adduce any formal documents or agreements before the court relating to the take-over of the business. Nonetheless, Tyrecor claimed that the take-over was done verbally due to the common shareholders and directors of both the predecessor and successor.
Despite the absence of documentation relating to the transfer of business from Falck to Tyrecor, the court held that Tyrecor is still entitled to the defence of anterior use. The court stated, as follows:
I am persuaded that there was a transfer or an assignment of rights and obligations between the predecessor and successor in relation to the import and sale in INFINITY branded tyres. That [Tyrecor] appears not to have a written contract in its possession or that relevant provisions of the Companies Act have not been complied with, does not vitiate such a transfer of rights and the [Tyrecor] faces sanctions embodied in the Companies Act. However, it does not in my view affect the [Tyrecor]’s defence available in terms of Sections 36 of the Act.