The Commercial Division of the High Court in Kampala rendered a decision in August 2022 on the issue of whether a company name registered in Uganda before a trademark owner does, can amount to trademark infringement.
Brief Facts
The plaintiff stated that it was founded in 1968 by two pioneers in the semiconductor industry, who adopted the ‘dropped e logo’ as a trademark. The plaintiff first registered its INTEL trademark in class 9 in the US in 1972. The same mark was registered in Uganda in 1999, and subsequently in class 42 in 2011. On the other hand, the defendant, INTEL Computers Limited was incorporated in Uganda in 2002. Its objectives among others are to deal in computer equipment, repair, software installation and networking services.
INTEL Corporation sued the defendant for trademark infringement for the use of the name INTEL in its company name, as well as using the dropped ‘e’ INTEL logo on its storefront. The plaintiff sought orders directing the defendant to change its company name to one that does not incorporate the INTEL mark. The defendant’s essential arguments were that it registered its company in good faith and that there is no likelihood of confusion between its company name with the plaintiff’s trademark.
Court set out three issues for determination of this case as follows:
- Whether the defendant’s use of the name ‘INTEL’ constitutes infringement of the plaintiff’s ‘INTEL’ trademark.
- Whether the defendant’s use of the name INTEL Computers Limited and the defendant’s logo which imitates the plaintiff’s dropped ‘e’ INTEL logo constitutes infringement in terms of Sections 36 and 37 of the trademarks Act.
- What remedies are available to the parties.
Evidence
The plaintiff adduced evidence showing that the INTEL trademark is its primary trademark which it uses in association with virtually all aspects of its business, including products, services, packaging, communications, social media and advertising. Evidence was given showing that the plaintiff is not merely a microprocessor company but a multi-faceted business spanning health, computers and other areas. Further evidence was given to show that the use of the INTEL word in the defendant’s store front amounted to infringement, as it is a copy of its dropped ‘e’ logo. The plaintiff argued that use of the defendant’s name INTEL Computers increases the likelihood of confusion, as it is descriptive of the plaintiff’s field of operation.
The defendant’s case was that there was no trademark infringement essentially because they conducted a company search and found the name INTEL Computers was available for registration as a company, after which it was incorporated. The defendant argued further that their core area of business is provision of computer repair services, which they began many years before the plaintiff registered its trademark in class 42 for computer related services. According to the defendant, there is no conflict between the parties’ interests, as the plaintiff’s trademark was registered for protection of goods. Only later did they file for trademark protection for services, after the defendant had registered their business. Lastly, the defendant claimed that over the 9 years it has been in existence, it has gained substantial goodwill and recognition in the repair and installation of software to its small scale consumers.
Decision
Court first addressed the second issue pertaining to the use by the defendant of the name INTEL COMPUTERS LIMITED, together with the dropped ‘e’ logo to ascertain whether these amount to infringement in terms of section 36 and 37 of the trademarks Act 2010. For the record, it was argued for the plaintiff that its INTEL mark was registered in black and white colours and block capital font which affords the plaintiff wide protection in respect of all colours and fonts. The defendant conceded that it has no registered trademark but draws its legitimate rights from being duly registered as a company.
The court reviewed various provisions of the trademarks act defining a trademark and the scope of protection accorded by registration. It also referred to various cases, including British Sugar vs James Robertson & Sons Ltd [1996] RPC 281 and Vision Impex Limited Vs Sansa Ambrose & Goldman Logistics Import & Export, HCCS No. 303 of 2013. These decisions restate that ‘the test for infringement is likelihood of confusion, which is the probability that a reasonable customer in the relevant market will be confused or deceived and will believe the infringer’s goods or services to come from or be endorsed by the complainant, or that the two are affiliated’. The court arrived at the conclusion that the defendant’s business of repair and installation of software does not conform to the expression ‘goods of the same description’ when compared to the plaintiff’s goods in class 9.
The court assessed similarity in the trade channels and found that no evidence was adduced by the plaintiff to prove its case. It found furthermore that the plaintiff had failed to prove that the defendant’s use of the name INTEL COMPUTERS Limited as a company, or the logo on its store front infringed its class 9 trademark by selling goods that are identical or of the same description as those of the plaintiff. Accordingly, there was no likelihood of confusion. To quote verbatim, ‘the likelihood of confusion which would otherwise be created to the public by the way the defendant uses its sign is far fetched’.
In closing her judgement on the first issue, the court appears to have been persuaded by the defendant that the company name INTEL COMPUTERS limited does not constitute infringement of the plaintiff’s trademark in respect of class 42.
The court dealt with the next issue as to whether the defendant’s use of the name ‘INTEL’ constituted infringement of the plaintiff’s ‘INTEL’ mark and resolved it in the negative. The court’s reasoning was similar to the one in its resolution of the first issue. The court further castigated the plaintiff for not adducing evidence to controvert the defendant’s testimony that it chose the name INTEL Computers Limited in good faith. Having failed on the two issues, judgement was entered in favour of the defendant with costs.
Key observations
Trademark practitioners and brand owners will review this decision with great concern. The court appears to have appreciated the facts of the case and the principles of trademark law, specifically those that determine the likelihood of confusion. However, its application of these principles was wrong and may lead to an appeal on some aspects of the decision. From a practical point of view, some of the major takeaways are as follows:
The plaintiff seems not to have dwelt much on calling the court’s attention to the argument that INTEL is a well known mark in Uganda. Probably 80 to 90% of the PC industry in Uganda is driven by Intel processors, a fact that survey evidence could have brought out. Article 6 bis of the Paris Convention to which Uganda is party clearly provides protection for trademarks of the stature of INTEL. This provision has been adopted by the TRIPS agreement to which Uganda is also party. The High Court of Tanzania in 2021 saw JCDecaux SA prevail in its trademark infringement suit against JP Decaux Tanzania Limited for infringement of its trademark JCDecaux. The commercial court Judge held in favour of the plaintiff by noting the likelihood of confusion arising out of similarity between JCDecaux and the locally registered JP Decaux Tanzania limited. The court held that this similarity was not innocent. The Court further held that even though the defendant had registered its company name in 2014 before the plaintiff’s trademark registration in 2015, a well known trademark cannot be blocked on the local market simply because it was not registered at the time the local company was registered. The principle in this case shows that trademark rights can trump company names, especially where the plaintiff is able to show that their mark is well known and should be followed in Uganda.
Whereas there is currently no legal provision compelling URSB (the agency that handles Trademark and Business registration) to cross link its business and trademark registers, to avoid costly cancellation proceedings, the court should have given directions that can guide URSB on such matters. For instance, if cogent evidence of prior registrations can be confirmed, URSB can under s. 37 of the Companies Act advise the party with a company registration to change its name.
The court’s position in this case that there is no likelihood of confusion is extremely puzzling. The courts may need to appreciate that the NICE classifications are in some ways elastic and need to be interpreted, where there is a conflict in line with the explanatory notes. The impact of technology and convergence between goods and services needs to also be considered.
The court in this case appears to have raised the standard of proof for infringement beyond that set out in civil matters by other courts. Evidence pointing to likelihood of confusion does not require the offended party to prove specific injury suffered. It is sufficient that generally considering the circumstances of the case, the market or consumers in the relevant market are likely to associate the contentious goods or services. The court can then make a determination based on prior registrations in the same market or other jurisdictions, local presence and goodwill, as well as any other factors that can help it arrive at a justiciable decision.
Enforcement of IP rights remains precarious, time consuming and expensive in countries like Uganda. As such, foreign brand owners would be well advised not to be overly reliant on common law rights. It would be advisable for them to actively file defensive marks for those that may fit the category of being well known. An example of a well known mark that has been filed in Uganda as a defensive mark is LEGO. Brand owners should actively check the trademarks and business register for potentially infringing third parties that file trademarks in bad faith or register companies intending to sell them on to the genuine owners of the name. These precautionary measures are cheaper than litigating after the fact and should as much as possible include reviewing Ugandan top level domain names for potential infringement.
Paul Asiimwe, Sipi Law Associates. September 2022