Uganda: Court Awards 400 Million Shillings for Contempt of Court in Trade Mark Infringement Suit

MEGHA INDUSTRIES ROYALFOAM MATTRESS SCREENSHOT COMFOAM PASSING-OFF INFRINGEMENT UGANDA

This blogger has come across a recent judgment from the Commercial Division of the Ugandan High Court in the case of Megha Industries (U) Ltd v Comfoam Uganda Limited [2014] UGCOMMC 162 relating to alleged infringement by Comfoam of cover designs on mattresses registered under the trade mark “ROYALFOAM” by the Megha. Coincidentally, many readers of this blog will note that the expression "going to the mattresses" used in the classic 1972 movie The Godfather, is a euphemism that means “going to war”. So, Megha went to war over its mattresses and Comfoam admitted to passing off Megha’s goods so the parties entered into a consent judgment on 03.02.12, which was sealed by the court on 17.02.12. By the consent decree, a permanent injunction was issued restraining Comfoam, its agents or servants from passing off its goods as Megha’s ROYALFOAM brand of mattresses. The injunction also restrained Comfoam from further producing and or manufacturing mattresses with the infringing mattress cover design the subject of the suit. In the course of the court case, Megha was able to successfully prove that Comfoam’s mattress cover designs were similar to that of Megha’s mattress cover design.

However, in the present case, Megha contended that in total disregard of the consent judgment, Comfoam has continued to manufacture the mattresses using covers similar to its own. Megha further pointed out that an interim order issued by court on 08.07.14 restraining Comfoam from continued passing off of its mattresses as those of Megha had been disregarded hence its prayer that Comfoam be found in contempt of court. In its defence, Comfoam admitted that parties reached a settlement and entered a consent judgment and in obedience to the judgment immediately stopped manufacturing the offending mattresses, changed their designs and registered Trade Marks on them and are lawfully producing mattresses with their covers under the lawfully registered trademarks and are therefore not in contempt of court orders. Comfoam argued that the order did not prohibit them from manufacturing mattresses per se but prohibited them from manufacturing or selling or passing off its mattresses as those of Megha.

In arriving at its finding that Comfoam were in contempt of court orders, the court observed that the mattresses covers by Comfoam were very similar to those of Megha in design and color and the only difference is that Comfoam’s covers bore its own company name. The court’s ultimate decision was as follows:

The application is allowed for all the reasons set out herein and the following orders are made:-

1. A suspended sentence of six months committal is to be meted out to the Directors of the Respondent Company, if the acts that were forbidden by court in the consent order persist.

2. Exemplary damages of shs. 300,000,000/- are awarded to the Applicant Company with payment of interest at court rate from date of this ruling till payment in full.

3. The sum of shs. 100,000,000/- is awarded against the Respondent as a penalty for contempt of court orders in Civil Suit 269/2011. The sum is to be deposited in court.

4. The mattresses with the infringing cover design shall be removed from the market for destruction with the assistance of police following the procedures set out in the Trade Marks Act, upon failure of which a writ of sequestration will issue.

5. Taxed cost of the application are also granted to the Applicant.

A copy of the full judgment is available here.

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