CHIWESHE
JA:
This
is an appeal against the whole judgment of the Intellectual Property
Tribunal of Zimbabwe “the Tribunal” delivered at Harare on 29 May
2019 wherein the Tribunal upheld the appeal noted by the respondent
against the decision of the Registrar of Trade Marks.
Aggrieved
by that turn of events the first appellant has noted this appeal to
this Court for relief. The appeal was noted in terms of section 16 of
the Intellectual Property Tribunal Act [Chapter
26:08].
The
second appellant was not party to the proceedings before the
Registrar of Trade Marks nor was it party to the subsequent appeal
before the Tribunal. Similarly it played no active part in the
present appeal.
It
has been joined in this appeal because the trade marks forming the
subject matter of the appeal were duly registered in its name on 27
January, 2016. It thus has a direct and substantial interest in the
outcome of this appeal.
Its
mere joinder shall have no bearing on the outcome of this appeal. The
dispute to be determined is, to all intents and purposes, between the
first appellant and the respondent.
FACTUAL
BACKGROUND
The
facts of the matter are as follows:
The
respondent (hereinafter referred to as “Lion Match South Africa”)
owned the first appellant (then registered as Lion Match Rhodesia)
during the period 1906 to 1954.
During
the year 1954 the respondent sold its business, including its
trademarks and goodwill, to the first appellant. It was understood
between the parties that the “Lion” brand was alive in the then
Rhodesia by reason of that sale. On that understanding Lion Match
South Africa withdrew from Rhodesia.
In
1979 the first appellant changed its name to Lion Match Limited and
subsequently became Lion Match (Zimbabwe) Limited, as it is presently
known. It continued with the business it had inherited from the
respondent.
In
2006 the first appellant experienced financial difficulties and
labour unrest. Its operations were interrupted which resulted in its
trademarks lapsing.
In
the meantime the respondent started trading within Zimbabwe using the
first appellant's trademarks.
It
submits that it was entitled to use first appellant's trademarks by
virtue of the authority given to it by the first appellant through a
letter written by the first appellant's Chief Executive Officer,
one Mr Banda.
Not
content with trading under the authority of the first appellant, the
respondent sought to take over these trademarks for its own.
Believing
the first appellant's trademarks had lapsed due to non-use or
abandonment, the respondent approached the office of the Registrar
with an application to register as its own, the first appellant's
trademarks.
The
applications are detailed below:
APPLICATIONS
BY THE RESPONDENT LION MATCH, SOUTH AFRICA
1.
On 4 June 2010, Lion Match South Africa applied to register LION
(word mark) No. 493/10.
2.
On 4 June 2010, Lion Match South Africa applied to register the LION
SAFETY MATCHES Label No. 495/10.
3.
On 8 June 2010, Lion Match South Africa applied to register LION
DEVICE No. 517/10.
APPLICATIONS
BY FIRST APPELLANT LION MATCH ZIMBABWE
After
learning of the respondent's applications, the first appellant
thereafter applied to register its trademarks in November 2010 as
follows:
1.
On 3 November 2010, Lion Match Zimbabwe applied to register the LION
MATCH (word mark) No. 1128/2010.
2.
On 3 November 2010, Lion Match Zimbabwe applied to register the LION
DEVICE No. 1129/2010.
3.
On 22 November 2010, Lion Match Zimbabwe applied to register the LION
MATCH (word) and LION DEVICE No. 1246/10.
On
9 February 2012 Lion Match South Africa filed notices of opposition
against the registration of trade-marks No. 1127/10, 1128-9/10 and
1246/10.
On
12 July 2012 Lion Match Zimbabwe filed counter statements in respect
of trademarks No. 1127/10, 1128-9/10 and 1246/10.
DECISION
OF THE REGISTRAR
The
Registrar found in favour of the first appellant and granted its
application to register the above trademarks. In doing so he noted
the similarities between the first appellant's trademarks and those
applied for by the respondent.
He
opined that allowing both parties to register these trademarks would
lead to confusion in the market as they were visually and
conceptually identical.
He
noted that the appellant had not used its trademarks since the year
2000.
Relying
on the decision of the Canadian Federal Court in Governor
Inc v The One Group LLC (Gouverneur)
2015 FC 128 he held that the non-use of the appellant's trademarks
was justifiable. In the above case it was held that non-use of a
trademark may be justified by special circumstances which may be
determined by a consideration of the following factors:
(i)
The length of time the trade mark has been in use;
(ii)
Whether there is serious intention on the registrant to shortly
resume use, and most importantly;
(iii)
Whether the circumstances alleged to justify non-use were beyond the
registrant's control.
Applying
these principles the Registrar found that the first appellant had
been affected by external circumstances which were beyond its
control. He also found that the evidence before him showed that the
first appellant had the intention to continue using its trademarks.
He also ruled that the lapse of a trademark due to effluxion of time
does not equate to abandonment of the trade mark.
For
that proposition he relied on the case of Crash
Dummy Movie LLC v Mattel Inc
601 F 3d 1387, Court of Appeal, Federal Circuit 2010 wherein it was
held as follows:
“Although
Mattel later allowed its trademark to lapse, cancellation of a
trademark registration does not necessarily translate into
abandonment of common law trademarks rights. Nor does it establish
its owner's lack of intent to use the mark.”
For
these reasons the Registrar rejected the argument advanced by the
respondent that since the first appellant's trademarks are deemed
to have lapsed the first appellant had lost the right to use them.
As
for the respondent's claim that it had accrued goodwill since 1995,
the Registrar noted that the entry of the respondent in the late
1990's into the Zimbabwean market was improper as the appellant was
at the time using its trademarks. The respondent's conduct in this
regard was illegal. No goodwill can arise out of respondent's
illegal activities in Zimbabwe, reasoned the Registrar.
He
observed, on the contrary, that the first appellant had enjoyed
goodwill in Zimbabwe since 1954 and that the appellant's brand is
well known throughout the country.
The
Registrar concluded that although the first appellant's trade marks
had lapsed, they still belonged to the first appellant.
He
allowed registration of these trademarks because he was of the view
that the appellant possessed prior existing rights which in the
circumstances of the case had not been eroded.
The
Registrar's order reads as follows:
“The
grounds of opposition cannot succeed because:
(a)
Lion Match Zimbabwe has a proven goodwill of over 100 years. Goodwill
is an essential element in passing off. Lion Match has a better
standing in that respect.
(b)
The issue of non–use is invalid especially construed from a view
that it equates to abandonment. Lion Matches proved that they
actually did not abandon their marks.
(c)
The marks applied for are related to earlier trademarks rights, which
have been determined as valid, thus the opponent cannot derive
strength (517/2010) in the mark basically invalidly registered.
(d)
Trade mark (517/2010) is invalidly protected in Zimbabwe as it is
predated by earlier rights
(e)
I find the application for revocation of marks 1127/2010, 1128-9/2010
and 1246/2010 fails
As
such I hereby declare that the marks applied for by the applicant be
sealed.”
It
was against that order that the respondent noted an appeal with the
Tribunal. It did so on the following grounds:
“GROUNDS
OF APPEAL
1.
The Registrar erred in finding that the goodwill built by the
appellant since the late 1990's in Zimbabwe was a nullity and
bordered on illegal conduct. On the contrary, the Registrar ought to
have found the appellant traded lawfully and that by June 2010, when
the appellant applied to register its Lion trademarks, the
appellant's products were well known to a substantial number of
consumers in Zimbabwe, that the appellant had a substantial
reputation and goodwill in the mark LION in relation to match
products, and that the appellant was the true proprietor of the LION
trade marks in relation to matches in Zimbabwe.
2.
The Registrar erred in finding that the respondent had a residual
goodwill in the LION trade mark when the evidence showed, inter-alia,
that the respondent:
2.1
had for a long time ceased to trade in the products;
2.2
had allowed its trade mark registration to lapse in 2006; and
2.3
had been (and remains) incapable of supplying any of the products to
consumers for more that 10 years.
3.
The Registrar erred in finding that there was a common law basis for
protecting the respondent's trademarks when the registrations had
long expired in 2006 and had not been renewed. On the contrary, the
Registrar ought to have found that the respondent had abandoned its
trademarks, and that it was no longer the true and bona fide
proprietor of the LION trade marks in Zimbabwe, and that it is not
entitled to enjoy legal protection of trademarks, as provided for at
common law and in terms of the Trade Marks Act (the “Act”).
4.
The Registrar erred in failing to find that the fact that the
respondent had filed fresh applications to register its LION
trademarks, some five years after its previous trademarks had
elapsed, is indicative of the fact that there was no residual
goodwill held by the respondent in its LION trademarks.
5.
The Registrar erred in finding that historical use and ownership of
similar trade marks were relevant factors under the Act in
considering the applications in the circumstances of this case.
6.
The Registrar erred in dismissing the appellant's opposition,
notwithstanding that the appellant had shown that at all material
times between 2009 and before June 2010, the respondent was aware of
the appellant's use of its own LION trade mark in Zimbabwe but
elected to take no action.
7.
The Registrar erred in failing to find that the respondent had itself
permitted the appellant to trade in the goods in Zimbabwe and that
authorisation of the respondent's then Chief Executive, Mr. Banda,
was binding on the respondent as a matter of law by virtue of section
12 of the Companies Act [Chapter
24:03].
8.
The Registrar erred in taking into account economic circumstances
where there had been for a long period non-use of the LION trade
marks by the respondent in Zimbabwe.
9.
The Registrar after finding that the appellant's and the
respondent's trade marks were identical, erred in dismissing the
appellant's opposition when the appellant had in fact applied to
register its LION trademarks prior to the respondent's application
to register its trademarks.”
The
relief sought before the Tribunal was that the appeal be allowed with
costs and that the decision of the Registrar be set aside and be
substituted with an order in the following terms:
“1.
The appellant's application for registration of the following trade
marks in class 34 in Zimbabwe:
1.1
Application No. 493/2010 LION filed on 4 June 2010;
1.2
Application No. 495/2010 - LION SAFETY MARTCHES and sitting Lion
Device, filed on 4 June 2010 be and are hereby granted;
2.
The following respondents applications for registration in class 34:
2.1
Trade mark application No. 1127/2010 LION MATCHES and LION Device;
2.2
Trade mark application No. 1246/2010 LION MATCH;
2.3
Trade mark application No. 1128-9/2010 LION MATCH (words) and LION
Device; be and are hereby refused;
3.
The respondent is to pay the costs of suit.”
The
Tribunal allowed the appeal with costs and set aside the Registrar's
decision. It proceeded to grant the respondent's application as set
out above and refused the appellant's application.
In
arriving at that decision the Tribunal reasoned as follows:
The
first appellant had allowed its trademarks to lapse through non-use
for a considerable period. It had accordingly lost its right to use
them. Any party could thereafter make an application to register them
as its own.
The
Tribunal cited various authorities in support of this view including
section 24 of the Trade Marks Act and the following cases: New
Balance Athletic
Shoe
Inc v Dajee NO and Others
(251/11/2912) ZA SCA 3 (2 March 2012); AM
Moola Group Limited v The GAP Inc 2005
(6) SA 568 at para 26.
It
further held that the respondent's applications for registration
were lodged well ahead of those for the first appellant and
consequently should prevail on the principle of first come first
served; a principle acknowledged by this Court in Philip
Morris Products Inc v Marlboro Shirt Company
SA Ltd 2001 (2) ZLR 399 (S).
The
Tribunal criticised the Registrar for treating the application by the
first appellant as one for restoration of its trademark, whereas it
was a fresh application for registration of trademarks made in terms
of section 11 of the Regulations.
It
also noted that prior to its application, the first appellant had
through its CEO, Mr. Banda, obtained permission to use the first
appellant's trademarks.
Aggrieved
by the decision of the Tribunal the appellant has noted this appeal
to this Court for relief.
GROUNDS
OF APPEAL IN THIS COURT
The
grounds of appeal in this Court are as follows:
“1.
The learned Judge in the Tribunal erred in finding that there was an
intention to abandon or that the trade marks forming the subject of
the instant dispute were abandoned.
2.
Further and in any event, the learned Judge in the Tribunal erred in
failing to place any emphasis on or satisfying himself that the
mandatory provisions set out in section 24 of the Trade Marks Act
[Chapter
26:04]
had been satisfied.
3.
The learned Judge in the Tribunal erred in finding that the trade
marks forming the subject of the instant dispute had been lawfully
removed from the register.
4.
The learned Judge in the Tribunal erred in law in finding that no
rights were retained by appellants, one or either of them, following
the lapse of the trade marks in question and in particular the
learned Judge in the Tribunal erred in disregarding the provisions of
section 14(1) of the Trade Marks Act [Chapter 26:04].
5.
The learned Judge in the Tribunal erred in failing to have regard to
the fact that appellants, or one or either of them, had established a
reputation and had goodwill in respect of the trade marks.
6.
The leaned Judge in Tribunal erred in upholding the application for
registration brought by respondent.”
The
appellants seek the following relief:
“1.
The appeal be and is hereby allowed with costs.
2.
The judgment of the Tribunal be set aside and the following is
substituted:
'The
appeal against the decision of the Registrar be and is hereby
dismissed with costs.'”
ISSUES
The
sole issue for determination in this appeal is whether the
appellant's registered trade-marks had lapsed and were as such open
to use by other parties.
ANALYSIS
In
coming to the conclusion that the appellant's trade marks had
lapsed, the Tribunal dealt extensively with the law regarding lapse
and loss of trademarks in general.
However
the Tribunal failed to deal with one decisive factor which was raised
before the Registrar by the appellants.
At
para 4 of its founding affidavit the first appellant stated as
follows:
“4.
Applicant has a valid Trade Mark on the register, Trade Mark 172/99
which is due for renewal in February 2019. This mark comprises a
sitting lion and the words 'lion reds, superior quality safety
matches' and registered subject to disclaimers.”
Further
at para 5 of the same affidavit it is stated as follows:
“5.
The applicant's Trade MARK 'Lion Match' accompanied by a
device of a sitting lion in numerous variations have been in use in
Zimbabwe since 1906 as evidenced by the following marks:
Trade
Mark No. Trade
Mark Class
755 Lion
Match 34
Label
and design
352/52 Lion
Device 34
15–18/85 Lion
Device 16,28,
34,35
11-14/85 Lion
PAC 16,28,
34,35
172/99 Lion
Reds and Lion
device 34
The
appellant's contention, inter
alia,
is
that Trade Mark 172/99 above is still on the register and was due for
renewal in February 2019.
The
respondent has not disputed this fact, although it says it has lodged
an application to deregister trade mark 172/99.
Until
such an order for deregistration is granted, trade mark 172/99
remains alive and available for use by the appellants.
It
is common cause that the respondent wishes to register the
appellant's trade marks on the basis that they have lapsed.
However
Trade Mark 172/99 has not lapsed.
The
lapsed trademarks which the respondent seeks to register bear a
substantial resemblance to Trade Mark 172/99 which is still
registered and therefore valid.
Accordingly
the Tribunal's decision allowing the application by the respondent
runs foul to the provisions of section 14(1)(a) of the Trade Marks
Act [Chapter
26:04]
which provides:
“Prohibition
of registration or maintenance of registration of deceptive, etc
matter
14(1)
A mark -
(a)
The use of which would be likely to deceive or cause confusion; or
(b)-------------------;
or
(c)--------------------;
or
(d)--------------------;
or
(e)--------------------;
or
shall
not be registered as a Trade Mark.”
DISPOSITION
The
Tribunal erred in ordering registration of the respondent's trade
mark when there was already in existence a similar trade mark
registered in the name of the appellant, namely trade mark 172/99.
The resemblance between the appellant's trade mark 172/99 and
respondent's proposed trade marks would have caused confusion in
the market.
For
this reason the appeal must succeed. Costs shall follow the result.
It
is accordingly ordered as follows:
1.
The appeal succeeds with costs.
2.
The Judgment of the Intellectual Property Tribunal of Zimbabwe be and
is hereby set aside and in its place substituted the following:
“The
appeal against the decision of the Registrar be and is hereby
dismissed with costs.”
UCHENA
JA: I Agree
CHITAKUNYE
JA: I Agree
Costa
and Madzonga,
appellant's legal practitioners
B
Matanga IP Attorneys, respondent's legal practitioners
