PROCEEDINGS BEFORE THE REGISTRAR

Transcription

1 WHAT S IN A NAME? THE REGISTRATION OF COMMON ENGLISH WORDS IN A TRADEMARK LAW SENSE: A REVIEW OF HIGH COURT CIVIL APPEAL NO 13 OF 2015: NAIROBI JAVA HOUSE LIMITED V MANDELA AUTO SPARES

2 INTRODUCTION: On 9 February 2016, the Commercial Court of Uganda (Justice C. Madrama) delivered a landmark intellectual property law judgment in High Court Civil Appeal No 13 of 2015: Nairobi Java House Limited v Mandela Auto Spares. Civil Appeal No 13 of 2015 was a fascinating trademark law dispute between two leading restaurant chains in Uganda. The competing composite marks that formed the subject of the case both incorporated the word combination java in a pure grammatical sense, on one hand, and as part of an invented made-up word on the other hand. The novel decision discussed and affirmed the position of trademark law regarding the use and registrability of common words by businesses in the course of trade, the scope of international protection that should be extended to prior-registered trademarks and the importance of preserving the right to trade without unjustified inhibition within the borders of the East African Community. PROCEEDINGS BEFORE THE REGISTRAR OF TRADEMARKS: On 15 August 2013, the appellant in Civil Appeal No 13 of 2015, Nairobi Java House ( Java House ) submitted two trademark applications to the registrar of trademarks 02 What s in a name? ( the registrar ) for registration in Class 43: Trademark Application No Java House and Java Sun and Trademark Application No Nairobi Java House. The trademark applications submitted by Java House contained two features that were to prove extremely critical in the legal proceedings that ensued and the decision on appeal by the Commercial Court. The first key feature is that registration was applied for in Part B of the register. Part B registration is in respect of marks which lack sufficient distinctiveness to be included in Part A, which requires inherent distinctiveness. The second key feature is that Java House s applications were disclaimed. The applications were opposed by Mandela Auto Spares ( MAS ), the proprietor of the Javas and CaféJavas trademark in Uganda. Principally, MAS argued that the marks submitted for registration by Java House were, visually and phonetically, confusing and or deceptively similar to its marks. MAS argued that taken as a whole, the two competing marks are similar and their co-existence would cause confusion among members of the public.

3 JAVA HOUSE MARKS MAS MARKS In response, Java House asserted that on an objective inspection, the competing marks are visually, phonetically and conceptually distinct. Secondly, and fundamentally, Java House argued that its composite marks incorporated the common English word java, which, in the trade that it is synonymous with, is recognized as referring to coffee and a place where various variations of coffee are served. Accordingly, Java House asserted that the word java is trade descriptive and it [Java House] is entitled to use it in a trademark law sense provided that no claim of exclusivity is imposed. The registrar, in a ruling delivered on 21 May 2015, found in favour of MAS, determining that although the competing marks are visually dissimilar, they both share the common word feature java. The registrar ruled that the dictionary definition of the word java is coffee, and not coffee-shops or restaurants. Here, the registrar reasoned that although java describes coffee, it does not describe what coffee is used for, how it is sold or other usage. The registrar further decided that there is no evidence that consumers in Uganda perceive the word java to refer to restaurant services. Finally, the registr a r ruled that on account of the similar word feature java in both marks, there would be a likelihood of confusion. APPEAL TO THE COMMERCIAL COURT: Java House filed an appeal to the Commercial Court. The main points of argument presented by the appellant were that: The registrar failed to conduct a proper visual, aural and conceptual comparison of the two competing composite marks as a whole. Java House s marks consist of entire phrasing, with each constituent element being a recognisable well-known word of the English language and which together form a complete phrase. In stark contrast, the word java did not exist as a dominant element in the MAS trademarks, which consisted solely of the phonetically invented words CafeJavas and Javas. The registrar erred by failing to find that the word java is a descriptive word. In making this assertion, Java House emphasized that as a matter of trademark law, a descriptive term must not be confused with a generic term. Descriptive terms describe either the services or a characteristic of the services in a primary sense. Generic terms are secondary meaning words that are the accepted and recognized description of a class of services, having displaced the primary meaning over the passage of time. Java House sought to register the word java as a descriptive term, and the registrar committed an error in failing to recognize and apply the difference between a descriptive and generic term. Further, the registrar erred by misconstruing the function of a descriptive word. The dictionary meaning of a descriptive word does not contain a detailed description of the various usages of the word. Rather, the true function of a descriptive word is to provide an immediate association between the word and the services; an association that is sufficiently specific and direct to show that the mark enables the relevant public to identify the services in question immediately. Relatedly, Java House did not appropriate the word java from MAS CafeJavas and Javas trademarks. Java House asserted that it has, without modification, applied a common English noun in the course of trade and in a trademark law sense, and has applied it descriptively as a component part to a more complex c o m p o s i t e mark, which in its totality is distinctive of t h e s e r v i cfor e s which registration is sought. The marks presented by Java House for registration incorporated matter that is common to the provision of services of that description (by incorporating a descriptive English noun), and therefore qualified for registration provided that the marks were appropriately disclaimed in accordance with the Uganda s Trademarks 03

4 Act Relatedly, the fact that the Java House marks sought registration in Part B of the register meant that the marks only needed to be capable of distinguishing, and not inherently distinctive. In making the determination that a likelihood of confusion would occur, the registrar wrongly relied on the subjective opinion of only two individuals. Java House argued that the subjective opinion of two individuals is not statistically representative of the average consumer at all. As such, no material weight should have been given to that evidence. COMMERCIAL COURT FINDS IN FAVOUR OF JAVA HOUSE: The Commercial Court found in favour of Java House, setting aside the decision of the registrar in its entirety. Marks are dissimilar The court found that the competing composite marks are visually, phonetically and conceptually dissimilar. The word java is a descriptive word that is associated with coffee-shops and restaurants Notably, the court found that that word java is a common noun that is associated with coffee-shops and restaurants, and that the registrar made an error of law and fact in failing to arrive at this conclusion. The court evaluated the inherent meaning of the word java and after referring to both the dictionaries and internet sources, arrived at the conclusion that java has three well-known meanings: the first is that java refers to a large island in Indonesia that is separated from Borneo by the Java Sea, the second is that java refers to computer programming language used to develop applications that can operate on different platforms and the third is that java means coffee. Having determined that the word java is a common English word, the court concluded that it amounted to an error of law for the registrar to fail to find that java is common to the provision of coffee-shop and restaurant services. The court ruled that the word java is a descriptive term that can be used to refer to the business of coffee-shops and restaurants provided that the word is properly disclaimed. No evidence of confusion The court found, further, that the evidence of confusion submitted by MAS was not representative of the wider public, and the registrar erred in relying on the subjective opinion of two individuals to reach the finding that a likelihood of confusion had occurred. Auxiliary findings The court also made two further auxiliary findings. Firstly, the Java House marks enjoyed prior registration in Kenya (since 8 May 2000) and the court determined that the length of time that the Java House marks had been in use is a relevant factor under Article 6(C)(1) of the Paris Convention for the Protection of Industrial Property ( the Paris Convention ), of which Uganda is a member. The court ruled that that Article 6(C)(1) of the Paris Convention, read together with Uganda s Trademarks Act 2010, 2 meant that the registrar was not entitled to refuse the application for registration of the Java House marks due to the proven continuous use of the trademark in the country of origin, Kenya. Secondly, the court found that the refusal by the registrar to allow the objection lodged by MAS amounted to a violation of the guaranteed freedoms under the Treaty for the Establishment of the East African Community ( the EAC Treaty ). Article 7(1)(c) of the EAC Treaty provides that the principles that shall govern the practical achievement of the East African Community shall include the establishment of an export oriented economy for the partner states in which there shall be free movement of goods, persons, labour, services, capital, information and technology. The court ruled that the erroneous decision of the registrar stifled the free movement of services within the East African Community by imposing an unjustified bar against the registration of a trademark registered prior in time in Kenya. SIGNIFICANCE: The decision of the Commercial Court affirms that businesses are free to use descriptive English words in a trademark law sense, while simultaneously reinforcing the well-known rule against the monopoly of descriptive English words. The rule is that where descriptive words are included in a registered trademark, the courts have always (and rightly) been exceedingly wary of granting a monopoly in their use. 3 1 Sections 19 and 26 of the Trademarks Sections 44 and 45 3 The European Limited v The Economist [2001] RPC What s in a name?

5 The court ruled that Java House is fully entitled to register the word java as part of its composite mark provided that the registration is appropriately disclaimed and there is no attempt to levy an exclusive claim over what is a common descriptive word. Equally noteworthy is the progressive finding by the court that the partner states to the East African Community (as well as private businesses) must not take unjustified actions that seek to stifle the free movement of goods and services within the East African Community, and in contravention of the spirit of the EAC Treaty. 05

6 CONTACTS James Mukasa Sebugenyi Partner Nicholas Ecimu Partner Gertrude W Karugaba Partner gwkarugaba@sebalulule.co.ug Patson W Arinaitwe Senior Associate parinaitwe@sebalulule.co.ug Paul Mbuga Senior Associate mbuga@sebalulule.co.ug Sebalu & Lule Advocates is a member of the DLA Piper Africa Group, an alliance of leading independent law firms working together in association with DLA Piper across Africa. Copyright 2016 DLA Piper. All rights reserved. FEB