Legal Capacity of Distributor in Trade Mark Action: Ruling in Harleys Ltd v Ripples Pharmaceuticals Ltd & Anor

VITABIOTICS LTD UK

This blogger has recently come across the reported case of Harleys Limited v Ripples Pharmaceuticlas Limited & another [2015] eKLR. Vitabiotics Limited, a UK-based drug manufacturing company had previously engaged Ripples Pharmaceutical Limited and Metro Pharmaceuticals Limited to import, distribute and sell their products in Kenya. Thereafter, Harleys Limited became Vitabiotics exclusive distributor in Kenya. Harleys then went to court and obtained temporary orders blocking Ripples and Metro from importing, packaging, selling as well as distributing products bearing a trademark similar or confusingly similar in get-up to the trademarks owned by Vitabiotics.

The court’s ruling was focused on two main issues namely; (1) Whether or not the Harleys had legal standing/locus standi to institute the proceedings? and (2) If so, was Harleys entitled to the orders it had sought in its application?

The court found against Harley’s and stated as follows:

“While the Plaintiff argued that it was necessary that the Defendants be restrained from distributing the Products based on the principles of traceability and recall from the market in case the Products harmed the general public, it was abundantly clear that any cause of action could only lie against the Company and not against the Plaintiff, which was merely a distributor of the Company’s Products. (….)
The court was clear in its mind that in case of such an eventuality, the Plaintiff could not be said to be the one that would suffer loss and damage necessitating the granting of an interlocutory injunction herein. (….)
As there was a previous agreement between the Company and the Defendants, the Plaintiff could not purport to act on behalf of the Company. In any event, just as the Plaintiff had correctly submitted, it could not bring proceedings on behalf of another corporate without a board resolution from the Company authorising it to commence proceedings on behalf of the Company, if at all. It was therefore evident that the Plaintiff therefore had no locus standi to institute the proceedings herein. (….)

Having found that the Plaintiff had no locus standi to institute the proceedings herein, it could not therefore purport to restrain the Defendants from dealing with Products in the manner it had set out in Prayers (4) and (5) of its application for the reason that it was not the manufacturer of the said Products and it could not claim the trademarks. It did not demonstrate to the court that it had registered the said trademarks as is provided in the Trade Marks Act Cap 506 (Laws of Kenya). (….)

It appeared to the court that the Plaintiff’s major concern was that it was not meeting its targets while the Defendants were continuing to make enormous profits. This was not a ground that could persuade this court to grant the Plaintiff an interlocutory injunction as it had sought. (….) the court found and held that the Plaintiff did not remotely demonstrate that it was entitled to the orders that it had sought. Granting the said orders would create an absurdity as the Plaintiff was not the owner of the trademarks it was seeking to protect, and which it admitted were owned by the Company.”

A copy of the ruling is available here.

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