Outdoor Advertising Dispute in City Clock v Country Clock Trade Mark and Industrial Design Case

City Clock Nairobi Kenya by SE9 London

In a recently reported ruling in the case of City Clock Limited v Country Clock Kenya Limited & another [2016] eKLR, the plaintiff sought injunctive orders against the defendants barring them from conducting advertising business on the clocks units using the name “Country Clock”, which was similar to the registered trade mark “City Clock”, which it was contended, were confusingly and deceptively similar in set-up, get-up and appearance to the Plaintiff’s clock units.

According to the Plaintiff, the main issue in its application for interim orders was that the Defendants have been using a name that is so similar to that used by the Applicant for over thirty (30) years, which similarity in name, it averred, is phonetically similar to the pronunciation of the Applicant’s trademark of “City Clock”.

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New Regulations Prohibit Registered Trade Marks as Company Names – Problem?

Companies Registry at Office of Attorney General Sheria House Nairobi by Business Daily

In an earlier post here, this blogger reported that Kenya finally enacted a new and comprehensive company law legislation. The Companies Act 2015 contains an express provision on prohibited names which states that the Registrar of Companies has the discretion not to register a company if the name applied for reservation is offensive or undesirable.

The Act states that the criteria to be used by the Registrar to determine whether a particular name is offensive or undesirable shall be prescribed by the regulations. This blogger is now pleased to report that the regulations in question have been published in the Kenya Gazette. From an intellectual property (IP) perspective, it is notable that the regulations contain a provision intended to provide greater certainty in situations where a company is registered using a name that is identical to a registered trade mark belonging to a third party.

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The Litter/Sanitary Bin Patent Monopoly Continues: Court of Appeal in Hygiene Bins v. Sanitam Services

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Readers of this blog are familiar with Sanitam Services (EA) Limited, the holder of ARIPO Patent No. AP 773 entitled “Foot Operated Sanitary/Litter Bin”. Over the years, Sanitam has been involved in numerous suits pertaining this patent as previously discussed here. This blogger has recently come across a judgment in the case of Hygiene Bins Limited v Sanitam Services (E.A) Ltd [2015] eKLR.

In this case, Hygiene Bins was in the Court of Appeal seeking to overturn the ruling of the High Court allowing Sanitam’s application for an injunction restraining Hygiene Bins from selling, providing services, using its foot operated sanitary bin, offering for sale, selling, passing off the same as theirs, trading in Kenya howsoever and in any manner likely to cause Sanitam’s business to be confused with that of Hygiene Bins and/or from trading in any manner as to infringe Sanitam’s granted patent pending the hearing and determination of the suit.

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Industrial Design Protection in Kenya: The Case of SafePak Plastic Bottle Manufacturing

Safepak Ltd Kenya Bottles Industrial Design

In the recent case of Safepak Limited v Power Plast Industries Limited [2014] eKLR, Safepak applied to the High Court for an interim injunction restraining Power Plast from infringing Safepak’s Industrial Design registered as number 646 by the Kenya Industrial Property Institute (KIPI). Power Plast opposed the application on the grounds that Safepak had failed to meet the threshold of injunctive relief by not putting up a prima facie case with a probability of success.

Havelock J. sitting in the High Court found in favour of Safepak and stated the following:

In my view, the Plaintiff [Safepak] is entitled to statutory protection as regards its bottle product. I do not consider that damages will in any way compensate the Plaintiff for any sales losses that it may incur as regards its bottle products, if a temporary injunction was put in place. In any event, any such damages would be impossible to ascertain. As a result and in the circumstances, I find that the Plaintiff is deserving of an interlocutory injunction at this stage. I find that it has made out a prima facie case with a probability of success in accordance with the principles expounded in the binding authority of Giella v Cassman Brown (1973) EA 358.

In making the above ruling, the High Court agreed that KIPI only dealt with matters of registration and had no jurisdiction over infringement. On the question of infringement, Havelock J. adopted the reasoning that if only small differences separated the registered design from what has gone before, then equally small differences between the alleged infringement and the registered design will be held to be sufficient to avoid infringement. However this is not to say that a party is entitled to reproduce by way of small alterations and/or differences a particular design instigated and registered by a party. The subsequent design must possess some features to enable a person that it is completely and substantially different from the earlier design. The design and the rights conferred by registration is to prevent the manufacture and sales of the same bottles or similar bottles from the registered design. The emphasis there is on the visual image conveyed by the manufactured article.

Safepak Limited Registered Design No. 646 2011

An interesting argument made by Power Plast was that by commencing both opposition and infringement proceedings at KIPI and the High Court respectively, Safepak’s actions were monopolistic and amounted to unfair competition. Power Plast alleged that Safepak had successfully eliminated other plastic bottle manufacturers from the market by taking out similar suits in order to restrict entry thereto by other parties. The learned Havelock J. appears to dismiss this argument by expressing his doubts at paragraph 13 of the ruling. However, as a matter of interest, this blogger has prepared a comprehensive review of previous intellectual property (IP) disputes raised by Safepak brought against at least four different manufacturers of plastic bottles within Kenya.

The earliest reported IP matter involving Safepak is the case of Safepak Limited v Malplast Industries Limited [2007] eKLR. The fact of this case were similar to the Power Plast case above. Safepak applied to the High Court for prohibitive injunctive orders to restrain the Malplast from manufacturing and distributing bottles which Safepak claimed infringed its design registered as No. 385 on September 26, 2003. The court ruled in favour of Safepak and granted the injunctive orders sought. In its ruling, the learned court considered that Malplast was a late entrant in the market and that it’s bottle design was substantially similar to Safepak’s registered design.

Subsequently, there’s another reported matter involving Safepak and Malplast namely, In the matter of an opposition against the Industrial Design Application No. KE/D/2009/00940 decided on November 9, 2012. Safepak filed a notice of opposition against the registration of Industrial Design Application No. KE/ID/09/00940 entitled “Juice Bottle” in the name of Malplast. The KIPI Managing Director ruled that Malplast’s design lacked novelty in light of the existence of the prior art design application No. 539. The Managing Director noted that while industrial design law does not require that an industrial design be made up entirely of new features and, in fact that a design can be registrable even if it is composed of already existing features, in the present case, the features of Malplast’s design do not confer it with sufficient individual character to make it registrable. Safepak has subsequently enjoyed similar success in opposition proceedings against another plastics manufacturer, namely Dynaplas Limited as per In the matter of an opposition against the Industrial Design Application No.KE/ID/2010/001069.

In the case of Nairobi IPT No. 36 of 2002, General Plastics Ltd, which was requesting the Industrial Property Tribunal (IPT) to revoke Safepak’s design, found additional evidence that Safepak’s design had been registered in other countries around the world. General Plastics therefore sought to adduce this new evidence on the grounds that the evidence would demonstrate that the industrial designs in dispute had been anticipated by prior art. This evidence according to General Plastics would influence the outcome of the case. Safepak opposed this move and argued that there had been inordinate delay in bring the evidence and that the matter was res judicata. According to Safepak, it would be an abuse of the Court process if fresh evidence was admitted since the application has been filed nine and a half years after revocation proceedings were filed. The IPT held that there was no res judicata issue arising in the case. The Tribunal allowed further evidence to be admitted and stated that the decision is in furtherance of the doctrine of natural justice. The IPT stated that the Applicant had sufficiently demonstrated that there was no intentional delay on their part and they took all necessary steps to file the motion immediately upon receiving the new piece of evidence. The IPT further affirmed its decision by stating the provisions of the constitution that require judicial authorities to administer justice without undue delay on account of technicalities.

Thereafter, in the case of Safepak Limited v General Plastics [2012] eKLR, Safepak filed an appeal in the High Court against the IPT’s ruling allowing General Plastics to file further evidence in the above matter which seeks the revocation of the registration of Safepak’s Industrial Design No. 186. The High Court granted Safepak’s application as General Plastics stood to suffer little or no damage or loss as a result of the stay being granted. In addition, General Plastics would continue to benefit by continuing to use its unregistered Industrial Property Design in competition against Safepak’s registered Design No. 186.

Returning to the Power Plast case above, many may recall that Havelock J. previously presided in another case involving Safepark namely: Safepak Limited v Asili Plastics Limited [2013] eKLR. In this case, Asili filed a Notice of Preliminary Objection stating that the High Court lacked the requisite jurisdiction to entertain Safepak’s infringement suit in light of sections 106, 113 (1) and 115 (1) of the Industrial Property Act. However, the learned court found that Safepak it could institute court proceedings under section 92 (3) of the Act against any person, in this case Asili Plastics, who infringes its industrial design being ID No. 646 and therefore the High Court has jurisdiction.

In sum, Safepak is no stranger to the world of IP enforcement and has enjoyed a successful track record of protecting its industrial designs. Safepak’s commercial monopoly lies in the shape, configuration and/or pattern of the bottles it has registered and these exclusive rights are enforceable by both the Industrial Property Tribunal and the High Court.

Lessons for Kenya: South African Copyright Tribunal Sets Aside License Tariff for Use of Sound Recordings

PicknPay

It is recommended that a tariff to be set by the tribunal should neither be too high nor too low, but a tariff which the owners of the royalty will realise profits on the one hand and the consumers will purchase voluntarily. It is hard, in my view, to satisfy the preferences of either party. It has already been indicated that I am not tasked to judge as to which case is superior in law but to set a tariff that may be said to be reasonable. – Foschini Retail Group (Pty) (Ltd) and 9 (Nine) Others v South African Music Performance Rights Association (0003/2009) [2013] ZAGPPHC 304 at Paragraph 76.

Recently this blogger reported a major victory for Kenya’s related rights collective management organisations (CMOs) when the court upheld their statutory mandate to license for the communication to the public right (See here). It is clear that the majority of these disputes between the related rights CMOs and users arise because the latter contest the license fees charged by these CMOs. The genesis of this contestation stems from the users’ perceived “double taxation” of paying both a copyright CMO on the one hand and the related rights CMOs on the other hand.

In this regard, this blogger has argued on several occasions (see here, here and here) that the Competent Authority must be immediately operationalised to deal with the rising cases of CMO-user disputes. Meanwhile, in South Africa, the Copyright Tribunal (equivalent to the Competent Authority under the Kenya Copyright Act) has recently issued a landmark judgment in which it set aside the license tariff for retailers as fixed by the South African Music Performance Rights Association (SAMPRA) holding that the tariff was not reasonable and proceeded to set a tariff to be applied by SAMPRA. In addition, the Copyright Tribunal ordered SAMPRA to pay the the retailers’ costs of referring the matter to the Tribunal.

For Kenya, this judgment is of great importance as the tariff determined by the Copyright Tribunal in South Africa is significant lower than that of the concerned related right CMO in Kenya. Therefore this blogger submits that there is a need for a review of all tariffs set by related rights CMOs using the methodology of the South African Copyright Tribunal.

In the present case, the retailers, namely Foschini Retail Group (Pty) (Ltd), Pepkor Retail Limited Stores, Just Kor Fashion Group (Pty) (Ltd), Mr Price Group Limited, Pick ‘n Pay Retailers (Pty) (Ltd), Truworths Limited, New Clicks SA (Pty) (Ltd), Dunns Stores, Metrotoy (Pty) (Ltd) and Young Designers Emporium (Pty) (Ltd) contended that SAMPRA had unilaterally set a tariff, and that it basically adopted a take-it-or-leave-it approach, when demanding payment. The retailers claimed that the tariff was inflated and without economic justification. They said that they had tried to negotiate with SAMPRA, but that the parties had been unable to reach agreement, hence they referred the matter to the Copyright Tribunal for determination.

As many know, the South African Music Performance Rights Association (SAMPRA) is a national, non-governmental, organization that licenses to third parties specific copyrights that vest in record companies that are members of the Recording Industry of South Africa (RiSA). It is therefore clear that SAMPRA’s equivalent in Kenya is the Kenya Association of Music Producers (KAMP).

In response to the retailers’ contentions, SAMPRA claimed that its tariff was reasonable. It stated that its tariff was bench-marked with international best practice, with reference to the UK, Australia and Canada being mentioned. SAMPRA’s tariff was based on the square meterage of the ‘audible area’, in other words those parts of the store where the music can be heard even if they are inaccessible to customers. Therefore according to SAMPRA’s tariff, the annual fee for a store of 51 to 100 square metres was ZAR 1000.00, whereas the annual fee for a store of 201- 300 square metres was ZAR 2000.00.

The Tribunal agreed with the retailers that the SAMPRA’s tariff was too high, even compared with lower tariffs in developing countries such as Australia. The Tribunal also agreed with the retailers that SAMPRA’s take-it-or-leave-it approach in setting its tariff was wrong both under the Copyright Act and the Collecting Society Regulations. In this connection, the Tribunal found that it would not be in the interest of justice to “cut and paste” the international practice without engaging the market forces prevailing in South Africa.

Therefore the Tribunal was of the view that tariff to be set must be a tariff that “optimizes public welfare”, in other words “a tariff that is neither too high nor too low, by which the service providers would realize profits, whereas the consumers would purchase voluntarily”. The Tribunal therefore set a tariff which, for example, saw the annual cost for shops of 50 to 100 square metres drop down to ZAR 389.00, whereas the annual fee for shops of 200- 300 square metres was set at ZAR 620.00.

As alluded to above, the tariff set by the Tribunal does not compare favourably with KAMP’s tariff here in Kenya. According to KAMP’s recent tariffs available here, the annual cost for shops of 50 to 100 square metres is currently set at KES 6500.00 which is approximately ZAR 650.00. In other words, a Kenyan shop half the size of a South African shop pays twice as more in license fees per year.

In light of the above, this blogger submits that there is a pressing need for the relevant government agencies to intervene and regulate the license tariffs, terms and conditions imposed by CMOs in Kenya to protect the public interest.

Nestle S.A. v Cadbury UK: The Problem with Registering Colour Trade Marks

cadbury dairy milk chocolate

“….unconventional or “exotic” marks, such as colours, sounds and smells, give rise to conceptual problems, which are not encountered with more conventional trade names and logos. As the registration of a trade mark creates a form of intellectual property conferring a potentially perpetual monopoly in the mark and excluding everybody else from use in various ways, the point of principle has some public importance.”

Recently, the England and Wales Court of Appeal in the case of Société Des Produits Nestlé S.A. v Cadbury UK Ltd. [2013] overturned a decision of the High Court to proceed with an application to register a trade mark for Cadbury’s chocolate, which featured a specified shade of the colour purple. In particular, the trade mark applied for by Cadbury was shown as a rectangle, which is a purple block when reproduced in colour, and described as:-

“The colour purple (Pantone 2685C), as shown on the form of application, applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods.” [Emphasis Mine]

Read the rest of this article here.