nv philips gloeilampenfabrieken vs aloyce ngowi ta nm hardware and ac general traders 2005 tzhccomd 45 6 july 2005

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DARES SALAAM COMMERCIAL CASE NO. 38 OF 2005 N.V. PHILIPS’ GLOEILAMPENFABRIEKEN ............. PLAINTIFF VERSUS ALOYCE NGOWI t/a N.M. HARDWARE AND AC GENERAL TRADERS.................................. DEFENDANT Date for Final Submissions: 29th June 2005 Date of Ruling: 6th July 2005 RULING MASSATI, J: A suit has been filed in this Court for infringement of a registered trade mark. The Plaintiff seeks to permanently restrain the Defendant from infringing the Plaintiffs Trade Mark (Philips), from offering or exposing for sale or advertisement, or passing off of electric goods resembling those of the Plaintiff, an order for the obliterations of the words PHILIPS on all boxes, packages, labels and display matter in respect of all goods in the Defendant’s possession, for an order for an inquiry as to damages or an account of profits and payment found due and for an order for the Defendant to furnish the Plaintiff with full details and contents of the source of the infringing goods, for general and punitive damages and costs. Along with the plaint the Plaintiff has also filed an application for temporary injunction under O. XXXVII Rule 2 (1) of the Civil Procedure Code 1966. On 27/5/2005, it was agreed that the chamber applications be argued in writing. This ruling is in respect of that application. Before me Ms. 2 Kasonda, learned Counsel appeared for the Plaintiff/Applicant on the instructions of Mkono & Co. Advocates. The Defendant was represented by Mr. Mtafya, learned Counsel, on the instructions of Ms. IMMA Advocates. The application was supported by an affidavit taken out by the Plaintiffs agent Mr. GERMANICO MTEZIDYO of RUBEGA & Co. Ltd, which is countered by a counter affidavit taken out by ALOYCE NGOWI described as the Respondent herein. Miss PAULINE HILDA KASONDA, filed a reply to the counter affidavit. I will refer to the contents of these affidavits if necessary in the course of my ruling. Ms. Kasonda, learned Counsel for the Applicant submitted that as there is no dispute that the Applicant is the registered owner of the trade mark “PHILIPS” since 1964 and marketing its products in Tanzania under that name, there is evidence that the Respondent has been selling counterfeit products marked PHILIPS in Tanzania. She said that was an infringement. She went on to submit that in the circumstances the Applicant was inviting the court to exercise its discretion and grant the injunction. She said on the basis of the principles set out in ATILIQ V. MBOWE [1969] HCD 284 and since the applicant has shown that - (i) There are serious questions to be determined by the Court and a prima facie case has been established. (ii) That the Court’s interference is necessary to protect the Applicant from suffering irreparable loss and that 3 (iii) On a balance of convenience there would be greater mischief and hardship on the Applicant than on the Respondent, if the injunction is not granted. this Court should exercise its discretion in favour of the Applicant and grant the injunction. She supported her arguments by a basketful of authorities other than ATILIO v MBOWE (cited above). These include; E.A’S INDUSTRIES LTD vs TRUFOOD LIMITED [1972, EA 420; GIELLA vs CASSMAN BROWN & CO. LTD [1973, E.A 358; COLGATE PALMOLIVE COMPANY vs ZAKARIA PROVISION STORES & 3 OTHERS (Civil Case No. 1 of 1997 (unreported) and CPC INTERNATIONAL INC, vs ZAINABU GRAIN MILLERS LTD. Civil Appeal No. 49 of 1999 (CA) unreported). Unfortunately the learned Counsel did not attach copies of the unreported cases. Elaborating on each of the principles set out in MBOWE’s case Ms. Kasonda, learned Counsel, briefly, submitted that since the Applicant is the undisputed registered owner of the PHILIPS trade mark, and therefore has a sole and exclusive legal right to use it, an infringement thereof is prohibited under s. 32 of the Trade and Service Marks Act No. 12 of 1986, and since the Respondent alleges that he has been selling genuine products obtained from various sources (but does not show to have obtained the same from the Applicant) but which were counterfeits, establishes a prima facie case against the Respondent. To support her case Ms. Kasonda learned Counsel also referred this Court to the decision of Kalegeya, J in KIBO MATCH GROUP LTD V. MOHAMED ENTERPRISES (T) LTD (Commercial Case No. 6 of 1999. (Unreported) 4 Ms. Kasonda submitted also that since it has taken the Applicant over 40 years to develop, market protect and promote PHILIPS products, the Applicant has built a strong goodwill on the trade mark. Therefore the Application is about to suffer an irreparable damage if the court would not interfere. The learned Counsel referred me again to the KIBO MATCH case. This, she submitted, was the compelling reason why the Court’s interference was necessary. On the third principle the learned Counsel submitted that since the Applicant has dedicated enormous finances and so many years to develop the goodwill the Applicant stands to suffer more if the injunction is not granted, than would the Respondent, if it was granted since the Respondent has not invested much, nor has he any claim in law or equity to sell the counterfeit products. So the balance of convenience is in favour of the Applicant. She thus prayed that the application for injunction be granted. On the other hand, Mr. Mtafya learned Counsel for the Respondent submitted that while the Respondent has maintained to have been selling genuine PHILIPS products, it was a misinterpretation to allude that this was an admission that the Respondent was selling counterfeit products. Secondly, the learned Counsel attacked the Applicant for widening (in her submission) the scope of the subject matter of the plaint, from merely products bearing the mark PHLLPS to electric products marked PHILIPS. His client’s case was that he was importing and selling genuine PHILIPS products, and not counterfeit electric products marked PHLLPS. For the above reasons he submitted that there was nothing for this Court to stop, 5 because the Respondent is not doing what is sought to be stopped. In the alternative, the learned Counsel submitted that he had no objection if the application was for restraint against the mark PHLLPS provided that since the Respondent is not to blame, he should not be condemned to costs. In the further alternative, Mr. Mtafya learned Counsel submitted that on the principles governing injunctions and on the facts shown in the counter affidavit, there is a contention whether the respondent was selling counterfeit products marked PHILIPS, which has to be tried and evidence received. According to the learned Counsel, where there is such controversy, the practice of the Court is to desist from issuing injunctive orders. For this proposition the learned Counsel cited the decisions of this Court in GLAXO GROUP LTD v AGRIVET (Commercial Case No. 73 of 2002) (unreported) and TANZANIA CIGARETTE CO LTD, v IRINGA TOBACCO CO. LTD ( Commercial Case No. 12 of 2005) (unreported). On the premises, the learned Counsel invited the Court to dismiss the application with costs. A copy of a ruling in Commercial Case No. 12 of 2005 was annexed to the learned Counsel’s submission. In her rejoinder, Ms Kasonda submitted that the Respondent’s submission did not at all address in answer to any point in her submission, as it never touched on any of the principles governing the grant of temporary injunctions. She said since the Respondent had no objection to the application, the Respondent be restrained from selling products marked PHILIPS whether properly spelt or not. The learned Counsel submitted that the Applicant’s case as shown in paragraphs 8, 9 and 10 of the plaint is that the Respondent has in fringed the Plaintiffs registered trade mark by selling 6 counterfeit lighting products. She then referred me a definition of the term “counterfeit” from BLACK’S LAW DICTIONARY, 5th edition. Page. 349. She went on to submit that so long as there was an allegation that the Respondent was selling counterfeit products of PHILIPS it does not matter whether the word was spelt correctly or not. She submitted that the cases cited by the Respondent’s Counsel were cited out of context as they were decided on different facts as in each of the cases, each party had a registered trade mark which is not the case here. She concluded by repeating her prayers for the grant of the temporary injunction with costs. The law relating to the grant injunction is no doubt, fairly well developed but by no means static. The principles set out in ATILIO v MBOWE [19691 HCD 284 are by and large still good law as confirmed by the recent affirmative declaration by the Court of Appeal of TANZANIA in RAVINDRA DESAI & ANOTHER V. CRDB Civil Reference No. 2 & 3 of 1996 (Unreported) which followed E.A. INDUSTRIES V. TRUFOODS [1972] E.A. 420. But the requirement that the Plaintiff has to establish that he has a probability of success at the trial, has been put on test ever since the pronouncement of Lord Diplock in AMERICAN CYNAMAD CO v ETHICAN LTD [1975] 1 All ER. 504. There was no rule of law that the Court was precluded from considering whether on a balance of convenience an interlocutory injunction should be granted unless the plaintiff succeeded in establishing a prima facie case or a probability that he would be successful at the trial of the action. All that was necessary was that 7 the Court should be satisfied that the claim was not frivolous or vexatious i.e. that there was a serious question to be tried”. And at p. 510 of the report Lord Diplock powerfully reasoned: “ It is not part of the Court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavits as to the facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are to be dealt with at the trial ”. He went on at p. 512. “ ...to express an opinion now as to the prospects of success of either party would only be embarrassing to the judge who will have eventually to try the case. ” From the above extracts, I surmise that in deciding whether or not to grant a temporary injunction it is not necessary to establish a likelihood of success. It is sufficient if it is shown that the claim is not frivolous or vexatious, or that there are serious questions to be tried. The AMERICAN CYANAMAD’S decision was received in East Africa with mixed feelings. In SALIM v OKONG’O AND OTHERS [1976] KLR. 42, the former East African Court of Appeal rejected the CYNAMAD rule. However that was obiter since the matter was finally decided on some other consideration. It appears however that Courts in East Africa would 8 now settle for the existence of an arguable case as one of the minimum conditions for grant of a temporary injunction, but I believe that CYNAMAD case is still an invaluable guide to the exercise of the Court’s disrection although of course, not binding. Applying those principles in the present case and going through paragraphs 3, 4, 5 and 6 of the Applicant’s affidavit and paragraphs 4, 5, 6 and 7 of the counter affidavit I am satisfied that the Applicant has managed to establish an arguable case of infringement. There is also no dispute that the Applicant is the registered owner of the trade mark PHILIPS and since Courts are here to enforce the provisions of the law I am also satisfied that the Court’s interference is necessary, not only to protect the Plaintiff from irreparable injury but also to enforce the law. And since the Plaintiff/applicant is the indisputable owner of the trade mark for over 40 years in Tanzania, it must have acquired a valuable goodwill. Weighing the scales of convenience I find that while the Respondent in the event of success could, adequately be compensated by way of damages, the Applicant would loss the goodwill if the injunction is not granted and the goods sold by the Respondent were subsequently found to be counterfeit as alleged. I am unable to estimate in monetary terms, the value of that loss. Therefore the balance of convenience tilts in favour of granting the injunction. In fact, even Mr. Mtafya, learned Counsel for the Respondent, is not seriously disputing the injunction provided that the Respondent does not shoulder the burden of costs for he is blameless. Sympathetic as this suggestion may sound we should not loss sight of an old legal adage 9 formulated in an old English case of COOPER v WHITINGHAM 15 CH.D. 501, that if a person commits a wrong he cannot be allowed to say he committed it innocently. This adage was adopted by CHITTY J in UPMANN v FORESTER [1883] 24 CH.D 23, that - “ As there is no fund out of 'which successful Plaintiffs can receive costs, their costs must be paid by the Defendants although they may be innocent So, although, under s. 30 of the Civil Procedure Code 1966, costs are in the disrection of the Court, this is a judicial discretion, which must be exercised on established principles. A successful party cannot therefore be deprived of his costs if there is no material before the Court on which it can exercise that disrection. And certainly the fact that the Respondent was /is innocent when he committed the wrong is no such material. In the event, after considering all the circumstances and finding that the facts in the present case are distinguishable from those in TANZANIA CIGARETTE CO. LTD v IRINGA TOBACCO LTD above cited and decided by Kimaro J, I am inclined to allow this application as prayed, with costs. It is so ordered. 10 S.A. MASSATI JUDGE 6/7/2005 2,305 words I Certify that this is a true and correct of the origirfsT^rder Judgement Ruiling ./W _ ___ Registrar ComnierciJ Court Dsrn. Date / S IO !c>\