COURT OF APPEAL EMPHASIZES ON THE SANCTITY OF TRADEMARK REGISTRATION

The Court of Appeal in Anthony Kiai T/A High Flyer Services and Publishers & another v Peter Mwangi Gichuki T/A High Flyer Publishers & another (Civil Appeal No. E003 OF 2021) recently emphasized on the process and importance of trademark registration.

In this case, the 1^st Appellant and 1^st Respondent were erstwhile business partners in an entity that started as High Flyer Services which was later registered as High Flyer Services Limited. They were engaged in the business of publishing books in a series known as Comprehensive Topical. They later parted ways and each continued with the same publishing business in their individual capacities.

A dispute arose in the year 2011 which led to the Appellants filing HCCC. No. 45 of 2011 citing trademark infringement as well as the tort of passing off. The 1^st Appellant case was that on 2^nd November, 2006, he registered a trademark that comprised an image of a flying eagle holding three books by its talons with the phrase High Flyer Series next to it.  Thereafter, the 1^st Appellant used his company, the 2^nd Appellant, in publishing, promoting, selling, supplying and distributing books under the said trademark. In 2007, the 1^st Appellant introduced and published the High Flyer Series Combined (8) Encyclopedia and updated it from time to time. The appellants further averred that the 1^st Respondent continued to publish books under the previous brand i.e., Comprehensive Topical. However, in 2011, the 1^st Respondent stopped using the said brand on his books and copied the design, name, content, pictures and colour of the 1^st Appellant’s books. The 1^st Respondent published a book known as Combined Encyclopedia            Standard 8 using the Appellants’ trademark. The 1^st Appellant further alleged that the 1^st Respondent had not only changed the brand name but he also had an image of a flying eagle holding a manuscript with its talons with the phrase High Flyer Series next to it.

The Respondents on the other hand filed a Defence and Counterclaim and contended that the 1^st Appellant illegally and fraudulently registered the trademark High Flyer Series in 2006 yet the mark had been extensively marketed and used by High Flyer Services and High Flyer Services Limited which they co-owned, and without the 1^st Respondent’s knowledge. He also claimed damages for loss of business.

The trial court held that the 1^st Appellant did not have good intentions when registering the trademark as his action amounted to stealing a march from the 1^st Respondent on the basis that they had both used the mark High Flyer Series as a business brand in their company. It was further held that the 1^st Appellant was quiet about the registration for about 4 years before putting up the notice in the daily newspaper, and that he had acquiesced to the 1^st Respondent’s usage of the trademark and could not be heard to cry foul. The Court subsequently dismissed the plaint and awarded general damages to the tune of Kshs. 20 million for the loss of business.

On appeal, the Court of Appeal relooked at the evidence afresh and came up with two issues for determination:

• Whether the trial court erred by failing to consider whether there was infringement of trademark; and
• Whether the court erred by awarding damages of Kshs. 20 million for loss of business.

The court began by looking at the definition of trademark under the Trademarks Act, requirement for registration under the Act as well as opposition to registration upon advertisement of the same by KIPI. The Court noted that the 1^st Appellant lodged an application for registration of trademark which was subsequently advertised in the KIPI journal for 60 days and no objection was raised. The Court faulted the trial judge for failing to consider the relevant issue before him, to wit, registration of the trademark. It was held that upon making an application and the same being advertised in the KIPI journal, the 1^st Appellant had no obligation to inform the 1^st Respondent or any other party that he had intentions of registering the trademark.

The Court observed that the 1^st Respondent not only copied the 1^st Appellant’s book (Encyclopedia for Standard 8) but also used the 1^st Appellant’s trademark which was an infringement, and that this action intended to confuse the consumers of the Appellants’ products. The Court highlighted that the trademark was a combination of a flying eagle holding three books with its talons with the phrase High Flyer Series. However, the 1^st Respondent did not claim the flying eagle holding three books with its talons, yet the trademark comprised both the image and the writing. It is noteworthy that the 1^st Respondent admitted that in his Encyclopedia for Standard 8(New Edition), he had a brown flying eagle holding a manuscript with its talons with the phrase High Flyer Series and the book had yellow-green colour, similar to the appellants’ encyclopedia.

It was noted that in assessing trademark infringement, the Court ought to consider the likelihood of confusion on the part of the public. Further, the Court found that the trial judge erred for not appreciating the trademark as registered, the requirements of the law and for also finding that the 1^st Appellant acted in bad faith or fraudulently. The Court emphasized that the trademark ought to have been appreciated holistically i.e., the mark together with the phrase as opposed to looking at the phrase which is one single element. Section 7 of the Trademarks Act was relied on in showing that a proprietor of a valid trademark has exclusive rights to the use of the trademark and that the right is infringed when a person uses a mark that is similar or nearly resembling the trademark in question which is likely to cause confusion.

Finally, the Court analyzed the claim for loss of business and found that the same was not specifically pleaded. It was emphasized that claims of loss of business due to trademark infringement are akin to claims for special damages and must therefore be specifically pleaded and supported by evidence. In light of this, the award of Kshs. 20 million was overturned.

Conclusion

This case lays emphasis on the importance of trademark registration and the rights that accrue from such registration. It gives a proper road map of assessment of trademark infringement in order to ensure that no party suffers injustice as a result of improper assessment of infringement claims.