Ownership of a Trademark – The Kasea case

Uche Bishop Enterprises company limited & 5ors V Patrick Nwagu (Carrying on business under the name and style of VINELIGHT GLOBAL LINK & 2 ors. Judgement given on 22nd Day of November 2018.

Background Patrick Nwagu (VINELIGHT GLOBAL LINK) and Uche Bishop Enterprises are both importers of motorcycles and spares parts from Guangzhou Haojin Motor cycle Co. Ltd, a Chinese company and manufacturers of the KASEA brand of motorcycles and spare parts like Haojin, Stallion, Qingqi and so on.

VINELIGHT GLOBAL LINK registered the trademark, KASEA in class 12 in Nigeria without the consent of Guangzhou Haojin Motor cycle Co. Ltd. Subsequently, Uche Bishop Enterprises company limited and 5 ors applied for the registration of “HERO KASEA”, “SUPERIOR KASEA” AND “ROYAL KASEA”. Hence VINELIGHT GLOBAL LINK instituted an action of infringement against them.

While, in 2016 Guangzhou Haojin Motor cycle Co. Ltd, filed an application for the registration of the trademark, but their application was refused on the grounds that it is in conflict with the KASEA trademark registered by VINELIGHT GLOBAL LINK. It is important to note that Guangzhou Haojin Motor cycle Co. Ltd was not a party in this suit.

At the trial at the Federal High court, the plaintiff/1st respondent, VINELIGHT, sought an injunction restraining Uche Bishop Enterprises company limited from infringing, misrepresenting and passing-off on the Trademark KASEA. The Plaintiff also requested for a Delivery upon oath of all offensive products and general damages for infringement or passing-off of the plaintiffs registered mark.

During the trial, VINELIGHT admitted that the company is not a manufacturer but an importer of KASEA products. However, the company refused to reveal the source of the products. The Defendant/appellant’s, Uche Bishop Enterprises Company Limited also admitted to being importers of KASEA products, however they revealed the source of their KASEA products to be Guangzhou Haojin Motorcycle. They filed evidence of the SONCAP and Product Certificate issued after its conformity assessment by Guangzhou Haojin Motorcycle with Brand Name KASEA and KS Model numbers.

The trial court ruled in favour of the plaintiffs. The Trial judge held that the registration of the trademark KASEA by the plaintiff entitled him to the protection of his trademark and the use of same to the exclusion of the Appellants in line with Section 5(1) of the Trademarks Act of Nigeria (referred to as the Act). The court awarded damages of about USD60,000.

Appeal

The defendant/Appellant appealed the decision at the Court of Appeal. Two issues were raised, whether the 1st Respondent had successfully proved that he was entitled to the use of KASEA trademark to the exclusion of the Appellants which entitles him to the reliefs sought and if the Learned Trial Judge ought to have awarded the 1st Responded the damages.

The Appellate court ruled in favour of the appellant holding that the 1st respondent had failed to prove that he was entitled to the use of the KASEA trademark to the exclusion of the Appellant, particularly as there was no proof that KASEA Trademark originated by him.

The Appellate court placed great weight on the Sections 7 of the Act, stating that although Section 5 of the act gives exclusive right to the registered owner, the exclusive right to the use of that trade mark in relation to those goods is subject to Section 7. The section provides that a proprietor will not be allowed to interfere with the registration of a Trademark by any person that has continuously used the trademark from a date prior to the registration date of the proprietor’s trademark in relation to those goods of the proprietor. The court cited the case of Virgin Enterprises Ltd v. Richday Beverages where it was held that the exception can be raised as proper defence.

Also, the Appeal court opined that both parties to the suit are not the true owners of the KASEA trademark as envisaged by section 18 of the Act which requires true inventors/proprietors of a mark to register the trademark with the intention of using it. The true owner was identified as Guangzhou Haojin Motorcycle, the manufacturers of KASEA products.

Further the Appeal Court stated that the registration of KASEA by the 1st respondent and 1st appellant were invalid as Guangzhou Haojin Motorcycle did not authorize the parties to register the KASEA trademark.

This judgement may have altered ‘the first to register rule’ in Nigeria. As it clearly protects brand owners from scrupulous business partners despite being “second in law” to register.

This is indeed good news for brand owners as the opinion of the judge confirms that in some cases, unregistered trademarks can be protected by statute regardless of the provisions of section 3 of the Act which states in part, that the infringement of unregistered trademarks can only be protected by an action in passing off.

Finally, it is now established that the source of a trademark may determine the validity and ownership of the trademark in Nigeria despite the first to register rule.