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

imgf0001

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.

Continue reading

Advertisements

Revisiting Registrar’s Ruling in Weetabix v. Multibix Trade Mark Dispute

weetabix multibix oatibix ip kenya

Recent media reports indicate that United Kingdom-based cereals maker Weetabix Limited has asked the High Court to bar a Kenyan company Manji Food Industries from marketing one of its products—Multibix—arguing that the name infringes on its rights under the law of trade marks and as a result Weetabix has suffered or will suffer loss and damage.

In the suit papers filed at the High Court, Weetabix has reportedly contended that: “Manji Food Industries has put up on the Kenyan market whole grain biscuits not of Weetabix’s manufacture bearing the name Multibix, that is a deceptive imitation of the well-known products of the plaintiff namely Weetabix and Oatibix”

In reply, it reported that Manji has denied the allegations by Weetabix, arguing that the Multibix brand is not intended to confuse consumers of Weetabix’s products and that it is an independent brand with its own following.

The Kenyan cereals manufacturer reportedly contended in its replying affidavit that:

“Manji admits that it manufactures, packs and distributes its product known as Multibix, but denies that it does the same deceptively to imitate Weetabix’s products. Manji denies that it is passing off its product as that of Weetabix or that it has led to confusion”

As many readers may be aware, Weetabix successfully opposed an attempt by Manji to register ‘Multibix’ as a trademark. A copy of the ruling by the Registrar of Trademarks in this matter is available here.

Despite this ruling, it is reported that Manji has continued marketing its product using the Multibix name which Weetabix argues infringes on its well-known trademarks, Weetabix and Oatibix. In this connection, Manji contends that it had lodged an intended appeal against the decision of the Registrar in the opposition proceedings. In reply, Weetabix reportedly asserted that “An intended appeal is not an appeal. An appeal is not in any way a stay of the decision of the registrar and therefore this decision is unchallenged”.

In light of the above, this blogpost revisits some of the salient findings of the Registrar’s ruling in a bid to provide necessary context for Manji’s appeal and Weetabix’s current suit against Manji.

The facts of In Re TMA No. 66428 “MULTIBIX”, Opposition by Weetabix Ltd, 31 August 2012 are briefly that Manji Food Industries Limited lodged an application for registration of trade mark KE/T/2009/066428 “MULTIBIX” (a word mark). The mark was applied for in class 30 in respect of “biscuits”. The Registrar of Trade Marks duly examined the mark in accordance with the provisions of the Trade Marks Act Cap 506 of the Laws of Kenya and the mark was approved and published in the Industrial Property Journal on 30th April 2010 on page 20.

Thereafter, Weetabix Limited filed a Notice of Opposition against registration of the mark. According to the registrar, there were two issues for determination, namely:

1. Is Manji’s mark “MULTIBIX” so similar to the Weetabix’s mark “Weetabix” as to cause a likelihood of confusion in contravention of the provisions of section 14 of the Trade Marks Act?

2. Is Weetabix’s mark “WEETABIX” a well-known mark in Kenya and therefore deserving of protection under section 15A of the Trade Marks Act?

Regarding the first issue, the Registrar relies on the test set out in the American case of Eli Lily & Co v Natural Answers Inc 233, F. 3d 456 to determine whether or not marks are similar. In that case, some of the factors to consider include:
(a) The strength of the complainant’s mark;
(b) Similarity between the marks in appearance and suggestion;
(c) The degree of care likely to be exercised by consumers; and
(d) The area and manner of concurrent use of the products.

On the claim of similarity between the marks in appearance, the Registrar makes the following finding:

“The common element between the two marks “WEETABIX” and “MULTIBIX” is the suffix “BIX” which is also a registered mark of the Opponents. The term “BIX” is not an English word and is a creation of the Opponents, which I had earlier indicated that it is a strong mark. The Applicants’ mark is comprised of the word “MULTI” and the said suffix “BIX”. I am therefore of the view that the two marks are similar in appearance.”

In determining the first issue of the opposition proceedings, the Registrar states:

“I disagree with the Applicants when they state that the respective goods of the Opponents and the Applicants are different. It is my view that the goods in respect of which the Opponents have registered their aforementioned marks are goods of the same description as the goods in respect of which the Applicants are seeking to register their mark “MULTIBIX”. This means that both the goods of the Applicants and the Opponents would be sold in the same trade channels thus enhancing the likelihood of confusion or deception. It has long been held that the closer the relationship between particular goods, the more likely any similarity in their respective trade marks would prove deceptive. For this reason, and having held that the marks are similar, then it follows that registration of the Applicants’ mark “MULTIBIX” would be against the provisions of the Trade Marks Act.

Having considered all the relevant factors in regard to similarity of the marks and having considered the two word marks and all the circumstances of these opposition proceedings as stated by Parker J in the aforementioned Pianotist’s Application, I have come to the conclusion that the two marks “WEEETABIX” and “MULTIBIX” are similar and that entry of both marks in the Register of Trade Marks would be a contravention of the provisions of sections 14 and 15(1) of the Trade Marks Act.”

The second and final issue for determination by Registrar was whether “WEETABIX” is a well-known mark in Kenya and therefore deserving protection under the provisions of section 15A of the Act. The Registrar relies on the test for well-known marks set out in the UK case referred to as Oasis Ltd’s Trade Mark Application, where the Court set out the factors to consider namely:
(1) the inherent distinctiveness of the earlier trade mark;
(2) the extent of the reputation that the earlier mark enjoys;
(3) the uniqueness or otherwise of the mark in the market place;
(4) the range of goods or services for which the earlier mark enjoys reputation; and
(5) whether or not the earlier trade mark will be any less distinctive for the goods or services for which it has a reputation than it was before.

In applying the above case, the Registrar arrives at the following finding:

“I am of the view that the Applicants have submitted adequate evidence to indicate that the mark “WEETABIX” has gained such a reputation in the Kenyan market for the mark to be considered well known in Kenya. The said reputation has been gained through promotion and marketing of the said mark on the various media in Kenya and the trade mark “WEETABIX” has come to be only associated with the goods offered for sale by the Opponents.

(….)

In the aforementioned statutory declaration sworn by Richard Martin and filed on behalf of the Opponents, it is indicated that the Opponents’ mark “WEETABIX” together with the aforementioned variants has been registered in numerous jurisdictions of the world. The Opponents have also attached a number of certificates to indicate that their said mark is registered and subsisting in the Register of Trade Marks in the respective jurisdictions. Further, there is an indication as to the various countries where the Applicants’ goods bearing the mark “WEETABIX” have been marketed. In Kenya, the trade mark “WEETABIX” was entered in the Register of Trade Marks with effect from 28th June 1954. This means that the said mark “WEETABIX” has been in the Register of Trade Marks in Kenya for the last fifty-eight (58) years. Further, records at the Registry of Trade Marks indicate that the Opponents have registered several other marks that comprise the suffix “BIX” and which are still subsisting in the Register of Trade Marks.

Further, and as earlier indicated, the mark has been used in the Kenyan market for over thirty (30) years now. In my view, the above-mentioned registrations and use in several jurisdictions including Kenya indicate that the mark is well known. In conclusion and after considering all the relevant factors, it is my opinion that the mark “WEETABIX” is quite well known in Kenya and deserves protection under the provisions of section 15A of the Trade Marks Act.”

As a result, the Registrar found that Weetabix was successful in its opposition of Manji’s application therefore the MULTIBIX application would not proceed to registration. The Registrar also awarded the costs of the opposition proceedings to Weetabix.

With this background in mind, this blogger will be keenly following the developments in the dispute before the High Court.

Protection of Well Known Marks in Kenya

On this subject of well known marks, this blogger invites readers to listen to audio recordings of the presentations made by KIPI trade mark examiners during a workshop held in January 2014 available here. Readers may also wish to download Caroline Muchiri, Advocate’s powerpoint presentation made in February 2014 available here.

Below are my reactions (in bold) to some of the issues addressed in Caroline’s presentation

Read the full article here.

Anton Piller Orders Issued Against Kenya Broadcasting Corporation and One FM for Intellectual Property Rights Breach

IPKenya has been informed that the Music Copyright Society of Kenya (MCSK) conducted raids on two broadcasting stations, namely the popular urban radio station, One FM and the national broadcaster, Kenya Broadcasting Corporation (KBC) on January 31, 2014. These raids were carried out after MCSK successfully obtained Anton Piller orders in suits filed for copyright infringement.

In its application for Anton Piller orders against the two stations, MCSK’s lawyers relied on the following two grounds:

“1. The Defendant is engaged in and will continue to be engaged in unlawful broadcasting and reproduction of copyrighted musical works falling within the Plaintiff’s repertoire. Therefore this application seeks to enable the Plaintiff to take inventory and seize digital database(s) and libraries of musical works, related records and documents in the premises of the Defendant.

2. The Plaintiff has a well-founded apprehension that infringing copies of fixations of copyrighted musical works and related materials in possession of the Defendant will be hidden, disappear or will not be available at the time of the hearing unless this matter is heard as a matter of urgency and the orders sought granted.”

In the case of KBC, MCSK alleges that the national broadcaster owes over KES 3,000,000 in royalty arrears since 2012. This figure encompasses the controlled music content in KBC’s television station Channel One as well as its radio station. However, according to MCSK, the case of One FM illustrates the most flagrant infringement of copyright as the radio station has never taken out a broadcasting license from MCSK despite being in operation for several years. One FM’s royalty arrears are estimated to be well over KES 4,000,000.

On hearing the application by MCSK, the Court sitting at Milimani ordered that an order be issued under section 37 of the Copyright Act allowing MCSK by itself, its servants, employees or agents to access or enter the offices or premises of the Defendnat to observe and take inventory of all musical works the infringing stations broadcast.

A copy of the court order obtained against KBC can be viewed below. A similar order was issued against One FM:

KBC COURT ORDER

In a recent press statement, the Chief Executive at MCSK states:

“MCSK has over the past years been negotiating with some of the defaulting broadcasters and it was after lengthy negotiations where ONE FM, KBC and others in the pipeline, failed, refused and / or neglected to comply with the legal requirement for taking of broadcasting license from MCSK. There are several other broadcasting stations that have been lined up for Court action if they do not acquire the MCSK license such as MEDIA MAX LTD, SOUND ASIA.

MCSK shall be seeking a permanent injunction to restrain both ONE FM and KBC from broadcasting any and all musical works in KENYA since MCSK controls both local and international works. This could then mean that both ONE FM and KBC will be off air when the permanent injunction is granted.

It really would be a shame since the two media houses have positioned themselves as promoting local music yet they are not paying royalties. The local musicians who they seek to promote cannot at all benefit since no monies are paid to them by MCSK since no royalties are paid by the said media houses.”

Comment:

The recent Annual Global Economic Survey of Authors’ Society Royalty Collections by International Confederation of Authors and Composers Societies (CISAC) reveals that 7.8 Billion Euros was collected worldwide. 75% of these collections were from public performance royalties, which is predominantly made up of collections from broadcasters. Within the CISAC African region, MCSK is ranked in the top 3 highest royalty earners despite broadcasters in Kenya being among the lowest royalty payers in proportion to their music usage. It is estimated that MCSK stands to collect over KES 110,000,000 in royalty arrears from television and radio broadcasters spread throughout the country.

Current statistics from the Communication Commission of Kenya (CCK) indicate that there are over 100 licensed FM frequencies and over 15 TV frequencies therefore MCSK ought to be collecting about KES 52,000,000 annually in broadcasting royalties alone!

This situation will become even more interesting as Kenya expects a sharp rise in broadcasters once digital migration finally receives the green light from the Court of Appeal.

Patent Litigation in Kenya: Lessons from the Sanitam Services East Africa Cases

imgf0001

UPDATE: The Star Newspaper has confirmed the invalidation of Sanitam’s patent no AP 773 in an article published here.

“The [matter] before us focuses on a branch of law which has scanty litigation and therefore minimal jurisprudential corpus in this country, but which has exploded on the world stage since the end of the 19th Century when the international community formed two international unions to promote it – Intellectual Property” – Court of Appeal in Sanitam Services East Africa Limited v Rentokil Limited 2006

IPKenya’s friend and the Chief Patent Examiner at KIPI informs us that the Industrial Property Tribunal has recently made a ruling revoking patent no AP 773 granted to Sanitam Services with respect to is sanitary bin. This brings to conclusion a long and arduous battle fought by Sanitam against several manufacturers since the late 90s to protect its sanitary bin invention.

This blogpost chronicles the various court cases brought by Sanitam both nationally and regionally to assert its patent rights. It is argued that Sanitam has made an enormous contribution to advancing intellectual property law jurisprudence and raising pertinent issues in the area of patent prosecution and litigation.

In 1997, Sanitam alleges that it designed and invented a foot-operated litter/sanitary disposal bin for use in the hygienic storage and disposal of sanitary towels, tampons, surgical dressings, serviettes and other waste material. One of the novel features of the sanitary bin invention claimed by Sanitam is that it has a flap opening to receive the waste and covering the contents inside so that whoever is operating it cannot see the contents inside even when using it and also the odour is minimized by the invention. This invention titled “Foot Operated Sanitary/Litter Bin” (ARIPO patent No AP 773) was granted and issued in October 1999 by the African Regional Intellectual Property Organisation (ARIPO).

In Sanitam Services (EA) Ltd v. Anipest Kenya Ltd & Anor Civil Case No. 1898 of 2000, the late Justice Peter John Smithson Hewett sitting in the High Court dismissed a suit filed by Sanitam seeking an injunction to prevent Anipest from carrying out any acts exclusively granted to an owner of a patent under section 36 of the Industrial Property Act of 1989 (now repealed). PJS Hewett’s ruling dated March 2001 is significant as it addresses a major shortcoming in the operationalisation of the repealed Industrial Property Act, namely the absence of the Industrial Property Tribunal over 10 years after the Act came into effect. More significantly, this ruling offers the first critical analysis of Sanitam’s novelty claims in the sanitary bin invention.

The learned judge, reviews the abstract of Sanitam’s abstract and states:

“Assuming as I do, that the ARIPO rules of patentability are the same as or very similar to those of Kenya, I return to the abstract to see what it tells me particularly about novelty.
“A foot operated litter/sanitary disposal bin comprising a container (1)[”:] nothing novel there;
“closeable by a cover (2)”: nothing novel there either:
a disposal lid(3)”-still nothing novel:
“at the top, with the disposal lid being displaceable by a foot operated pedal (4)”: still nothing novel:
“and a lift lever (5)…” nothing novel,
“to move between open and closed positions. The bin is defined such that the user cannot see the contents of the container, waste scavengers cannot have access to the contents, emission of unpleasant odour is reduced and the contents cannot spill out if the bin is overturned.”
I only have to look at this matter prima facie. Are all these attributes prima facie novel. Prima facie they seem to be to me on evidence many many years old: certainly they do not seem to me to be prima facie novel-which is all I have to consider.”

This blogger submits that this finding by the learned judge paved the way for other litigants and manufacturers to question the validity of AP 773 which has now finally culminated in the revocation of the patent by the Industrial Property Tribunal.

In Sanitam Services (EA) Ltd v Rentokil (K) Ltd & Anor Civil Suit No. 58 of 1999, Sanitam moved to the High Court orders of permanent injunction to restrain Rentokil Ltd and Kentainers Ltd from manufacturing, selling and distributing the sanitary bins which infringed on its patent. Rentokil and Kentainers contended that they were already manufacturing the product before the plaintiff had obtained a patent over the invention. Therefore they argued that Sanitam could not claim exclusive rights over the product.

In Justice Onyango Otieno’s ruling delivered in May 2002, the court dismissed the Sanitam’s suit holding that it failed to prove that it had obtained a patent over its foot operated sanitary bin. In addition, Sanitam was already distributing its product 2 years prior to the registration of the patent. Therefore Rentokil and Kentainers had not infringed Sanitam’s rights by creating a similar product and obtain a market for it.

This case is significant for at least three main reasons. First and foremost, the court upheld patents granted by ARIPO as valid and enforceable within Kenya pursuant to the latter’s obligations under the ARIPO Protocol.

Secondly, although the court made several obiter dicta remarks regarding the novelty of Sanitam’s bin invention, the court ultimately held that Courts of law must defer to the National Patent Office KIPI and the Regional Patent Office ARIPO on questions pertaining to the patentability of any invention in dispute. According to the court, KIPI and ARIPO are the bodies with the technical know-how to investigate the patentability or otherwise of inventions and that in the present case, one of the two had presumably investigated the invention and found it fit to grant a patent for it. Therefore whoever challenges the grant of any patent must do so before these institutions and not in court.

Finally, the court made an important finding on the burden of proof in matters relating to infringement of industrial property, particularly where the industrial property in question is unregistered. In the case of Sanitam, the court found that since there was no patent in existence at the time a similar bin to Sanitam’s was produced, Sanitam could not claim patent infringement.

In Sanitam Services (EA) Ltd v Rentokil (K) Ltd Civil Appeal No. 228 of 2004, Sanitam moved to the highest court in the land (at the time), the Court of Appeal, seeking for the Court to reverse the above decision of the lower court (High Court) in favour of Rentokil. Sanitam’s appeal against the High Court Decision was partially successful as the Court of Appeal granted Sanitam an injunction for the lifetime of the disputed patent AP 773 with effect from 16th December 1999. However the Court of Appeal did not award Sanitam any damages thereby concurring with the High Court’s determination that Sanitam had not discharged the onus of proof.

In 2008, ARIPO published an entry in its Journal to the effect that Sanitam’s patent AP 773 had lapsed for failure to pay annual fees. Soon thereafter, Sanitam brought an appeal against the decision of the ARIPO Patent Office removing its patent from the Register due to non-payment of annual maintenance fees. It was argued that maintenance fees were consistently late since the patent was granted in 1999. The ARIPO Appeal Board concluded that both parties were to blame for the delays in the payments; the Office had failed to send reminders, which it is required to do under the Harare Protocol. Therefore the Office was urged to strictly observe the provisions of the Protocol particularly those pertaining to time limits, information delivery and processing procedures.

Consequently, the Appeal Board ordered the patent be reinstated in respect of the designated states, including Kenya and Uganda.

In Sanitam Services (EA) Ltd v Bins Nairobi Services Ltd Civil Suit No. 597 of 2007, Sanitam successfully moved the High Court for orders of injunction against Bins restraining the latter from a host of acts alleged to be infringing on Sanitam’s patent AP 773.

The issue for determination by the court was found to be whether Sanitam had established a case to entitle the court to grant the orders of injunction sought. In making this finding, the court reaffirms the earlier position of the High Court in the Rentokil case that the court is not the right institution to question the patentability of any invention in dispute and is bound to respect a patent duly issued by KIPI and/or ARIPO.

Therefore with respect to Sanitam’s onus of proof, the court found that the latter had proved that it had a valid patent ARIPO Patent no. AP 773, which was infringed by Bins through the acts of offering for sale or hire of foot-operated sanitary bins without Sanitam’s authorisation.

In Rentokil Initial Kenya Ltd v Sanitam Services (EA) Ltd Civil Suit No. 702 of 2008, Sanitam successfully defended a suit filed by Rentokil seeking that the former be restrained from threatening, intimidating, harassing, embarassing and confusing Rentokil’s clients and customers over sanitary bins it provides.

Rentokil moved to the High Court after Sanitam wrote letters to the former’s clients warning them to stop using its sanitary bins, which Sanitam considered an infringement of its patent AP 773. Rentokil’s line of reasoning was that it had developed a new bin by changing certain features to distinguish it from Sanitam’s bin registered as AP 773. Therefore Rentokil claimed that by writing letters to its clients, Sanitam was seeking to enforce a patent over a completely different bin.

Sanitam’s defence was simply to focus on its granted patent and prove to the court that Rentokil’s bin was similar to its AP 773. To this end, Sanitam presented an expert report to substantiate that the two bins were similar and that the functionality of Rentokil’s bin was same as that covered under patent AP773.

It is argued that if Rentokil had focussed on Sanitam’s threatening letters rather the differences between its bins and Sanitam’s patent, Rentokil may have been successful with its application for injunction at the Industrial Property Tribunal under section 108 of the Industrial Property Act. This section reads:
“108. (1) Any person threatened with infringement proceedings who can prove that the acts performed or to be performed by him do not constitute infringement of the patent or the registered utility model or industrial design may request the Tribunal to grant an injunction to prohibit such threats and to award damages for financial loss resulting from the threats.”

All in all, this case is instructive to all litigants in industrial property matters to purse their matters with the Industrial Property Tribunal rather than with the High Court, in the first instance.

In Chemserve Cleaning Services Ltd v Sanitam Services EA Ltd [2009], the Industrial Property Tribunal ruled that it had no jurisdiction to hear applications to revoke patents granted by ARIPO. Sanitam challenged the Tribunal’s jurisdiction in a preliminary objection stating that section 59 of the Industrial Property Act only incorporates patents granted by ARIPO in relation to their effect in Kenya and that other issues such as revocation and not expressly contemplated in the section.

The section reads as follows:

“59. A patent, in respect of which Kenya is a designated state, granted by ARIPO by virtue of the ARIPO Protocol shall have the same effect in Kenya as a patent granted under this Act except where the Managing Director communicates to ARIPO, in respect of the application thereof, a decision in accordance with the provisions of the Protocol that if a patent is granted by ARIPO, that patent shall have no effect in Kenya.”

Therefore the main issue between the parties was the meaning of the word “effect” in the above section. Sanitam successfully convinced the Tribunal that “effect” simply means “the powers conferred to a right holder by the patent in Kenya”, therefore the only matters the Tribunal can hear related to infringement and compulsory licensing.

This decision by the Industrial Property Tribunal was reversed by the High Court in an ex parte judicial review application heard and determined by Justice Musinga on December 1, 2010. Chemserve Cleaning Services Ltd obtained an order to compel the Tribunal to reinstate, hear and determine an application for revocation of ARIPO patent AP 773 filed by Chemserve in 2008.

In Sanitam Services (EA) Ltd v Tamia Ltd Petition No. 305 of 2012, Sanitam sought reliefs from the court to have Tamia prevented from violating its IP rights over the invention patent no. AP773, including the destruction of all infringing bins in Tamia’s possession. Justice Majanja’s ruling sheds crucial light on the state’s obligations under the Constitution with regards to intellectual property rights under Articles 11 and 40.

The learned judge rightly dismissed Sanitam’s petition with two well-reasoned findings: firstly, the petitioner had failed to demonstrate how the State (in this case, KIPI and/or the Industrial Property Tribunal) had failed to honour its obligations under the Constitution. Secondly, it was unnecessary for the petitioner to invoke Article 22 of the Constitution to enforce IP rights since these are “ordinary rights” that can be enforced through the legal mechanisms provided by statute law (in this case the Industrial Property Act).

In Chemserve Cleaning Services Ltd v Sanitam Services EA Ltd [2013], the Industrial Property Tribunal rejected Chemserve’s request for the invalidation of Sanitam’s patent no AP 773.
This case is significant as the Tribunal makes several findings on the time period and burden of proof requirements when requesting revocation of a patent.

With regard to the time period requirement to revoke a patent, the Tribunal held that the legislative intent behind section 103 was to prevent a situation where a party becomes aware of a patent, then “literally sits on the right to revoke it until a later date for commercial convenience in the form of damages and accounts for profits”. The Tribunal also noted that Chemserve had failed to file for an extension of time under Rule 33 at the time it filed the request for revocation.

Even if Chemserve had filed its request in a timely manner, the Tribunal held that it had failed to meet the burden of proof required to establish that the patent was invalid. Chemserve argued that the patent lacked novelty and inventive step and formed part of prior art however it chose not to produce any evidence other than the affidavit and statement by its General Manager!

We are back full circle to 2014, where a recent report indicates that the Industrial Property Tribunal in a ruling made on 21 January 2014 has revoked patent no. AP 773. This blogger will examine this ruling once it is made available to the public.

All in all, it is beyond dispute that the long list of Sanitam cases presented above have in one way or another shaped the landscape of intellectual property litigation in Kenya and in Africa.

L’Oréal Acquires Nice & Lovely Trademark in Multi-Billion Shilling Deal

Media reports (here, here and here) indicate that the world’s largest multinational cosmetics company L’Oréal has acquired Kenya’s Interconsumer Products Ltd’s flagship Nice & Lovely brands, in a multi-million dollar acquisition reported this past week.

L’Oréal opened shop in Nairobi in late 2011 and has for the past 18 months been in talks with Interconsumer Products Ltd for a buyout deal. To facilitate the conclusion of the deal, Interconsumer Products Ltd transferred the beauty division to a new company dubbed Interworld Cosmetics, which has now been acquired by L’Oreal. The French based cosmetics giant has now renamed the new business Interbeauty Products.

This blogger salutes Interconsumer Products Managing Director Mr. Paul Kinuthia. We have all read the story of how Mr. Kinuthia grew his business from a modest sole proprietorship in the late 1990s to a major cosmetics manufacturer in East Africa. This success story of Interconsumer Products Ltd is even more significant and instructive when viewed from an intellectual property (IP) perspective.

The mark NICE and LOVELY was registered in favour of Interconsumer Products Ltd at the Kenya Industrial Property Institute (KIPI) in 2002 but had been in use by Interconsumer since 1999. From this date onwards, Interconsumer has been actively policing its intellectual property rights in the NICE AND LOVELY mark particularly as its products begun to gain prominence not just in Kenya but in neighbouring countries, particularly Uganda.

In 2004, Interconsumer moved to the Commercial Division of Uganda’s Commercial Court to seeking restrain Nice & Soft Investments Ltd., its servants and/or agents and/or distributors from manufacturing, selling or exposing for sale or in any way dealing in cosmetics using the names “Nice & Soft”. This case was reported as Interconsumer Products Ltd V Nice & Soft Investments Ltd (2003) Miscellaneous Application No. 256 Of 2004 (available here and here). In this case Interconsumer alleged, inter alia that the respondents without any form of authority were selling cosmetics goods in Uganda under the mark “Nice & Soft” and had attempted to register a trademark under the said names to the detriment of Interconsumer. Therefore, Interconsumer argued that it’s trademark was in danger of being wasted and irreparably damaged by virtue of such use by the respondent who is selling inferior goods similar to those of Interconsumer. On the question of whether there was trademark infringement, the court noted that the respondent’s application for registration was before the Registrar of Trademarks prior to the filing by Interconsumer of the suit which suit does not aver that it is a challenge to registration. On the question of whether there was passing off, the court found that the Interconsumer pleaded the ingredients of passing off, namely the acquired reputation. The actions taken by Interconsumer to protect its NICE AND LOVELY trademark in Uganda are instructive and must be borne in mind when considering the amount L’Oréal has just paid to acquire this well-known mark.

However before this acquisition deal, many will remember that in Interconsumer had previously locked horns with L’Oréal in both the Ugandan and Kenyan courts over the NICE AND LOVELY trademark. In the Ugandan case reported as L’Oreal and Another vs Interconsumer Products Ltd Application no. 13 of 2006 (available here), L’Oreal moved to the Commercial Division of the High Court to review the decision of the Registrar of Trademarks setting aside opposition proceedings and granting registration of two trademarks, SMOOTH & LOVELY and NICE and LOVELY applied for by Interconsumer.

In the Kenyan case, L’Oréal once more moved to the High Court to challenge the decision of the Registrar of Trademarks in rejecting its opposition of the registration of the mark NICE & LOVELY HERBAL OIL MOISTURIZER by Interconsumer. In a ruling delivered last year on 21st February, the High Court dismissed L’Oréal’s appeal against the decision of the Registrar rejecting L’Oreal’s opposition to the registration of the mark by Interconsumer. The court agreed with the Registrar on several important grounds including that the mark NICE & LOVELY was not similar to DARK AND LOVELY (owned by L’Oréal) and that there could be no confusion as defined under section 14 and 15 of the Trade Marks Act. The Court also agreed with the Registrar’s conclusion that L’Oreal had failed to show that its trademark was well known in Kenya. Furthermore, the Court agreed with the Registrar’s finding that the respondent had used the mark NICE and LOVELY since 1st March 1999 and the appellant had not tendered any evidence to show that it had objected to the use of the mark in the last five years. Therefore, the common law doctrine of honest concurrent use was applicable therefore both NICE & LOVELY and DARK AND LOVELY marks could co-exist in the Trademarks Register. A detailed synopsis of this unreported case is available over at the afroip blog here.

Viewed against the above backdrop, L’Oréal’s acquisition of NICE & LOVELY is an important lesson for trademark owners not only in Kenya but throughout the East African region. Interconsumer’s investment in registration and enforcement of its (IP) rights was a crucial factor in sealing this major buy-out deal.

The Rise of Constitutional Intellectual Property in Kenya

In a recent judgment in the case of Patricia Asero Ochieng, Maurine Atieno and Joseph Munyi vs Republic H.C.C.C. Petition No. 409 of 2009 handed down by Lady Justice Mumbi Ngugi (also known as “Kenyan Jurist” in blogging circles), the Constitutional Division of the High Court held that one of Kenya’s intellectual property laws namely the Anti Counterfeit Act was unconstitutional.

The full text of the judgment is available here.

At paragraph 87 of the judgment, the court’s ruling on the unconstitutionality of this IP act reads as follows:

Sections 2, 32 and 34 of the Anti Counterfeit Act threaten to violate the right to life of the petitioners as protected by Article 26 (1), the right to human dignity guaranteed under Article 28 and the right to the highest attainable standard of health guaranteed under Article 43 (1) and the court hereby grants the declarations sought by as follows:

(a) The fundamental right to life, human dignity and health as protected and envisaged by Articles 26(1), 28 and 43(1) of the Constitution encompasses access to affordable and essential drugs and medicines including generic drugs and medicines.

(b) In so far as the Anti Counterfeit Act, 2008 severely limits or threatens to limit access to affordable and essential drugs and medicines including generic medicines for HIV and AIDS, it infringes on the petitioners’ right to life, human dignity and health guaranteed under Articles 26(1), 28 and 43(1) of the Constitution.

(c) Enforcement of the Anti Counterfeit Act, 2008 in so far as it affects access to affordable and essential drugs and medication particularly generic drugs is a breach of the petitioners’ right to life, human dignity and health guaranteed under the Constitution.

Continue reading