SANLG WORLDWIDE INVESTMENT VS WU ZHOU INVESTMENT CO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 3625 OF 2024 SANLG WORLDWIDE INVESTMENT..................... 1st APPLICANT GUANGZHOU HETIAN AUTO PARTS CO. LIMITED........................................................ 2nd APPLICANT VERSUS WU ZHOU INVESTMENT COMPANY LIMITED.......... RESPONDENT RULING Date of last order: 03/04/2024 Date of ruling: 03/05/2024 AGATHO, J.: This ruling stems from the Applicants' application for temporary injunction. The application was by way of chamber summons supported by an affidavit deponed by Frank Kifunda, advocate for the Applicants. The Respondent on her side protested the application through a counter affidavit deponed by their advocate Hakieli Mgonja. The parties were under legal representation of learned counsel. Whereas Frank Kifunda appeared for the Applicants, John E. Mponela and Hakieli Mgonja appeared for the Respondent. The application was heard by way of written submissions. I appreciate the research work done by the learned counsel for the parties. i A brief background of the application is that the parties are main battling in the main suit on the over the trademark SANLG. The Applicants have alleged they are the owners of the trademark, and the Respondent is using the said trademark in Tanzania without authorisation. That has damaged the Applicants' goodwill, an ultimately led them to sustaining financial losses. The Respondent on her side disputes the Applicants' allegation, and claims that she is a parallel importer of SANLG products in Tanzania and that she has an existing sale agreement with the 1st Applicant. Now, turning to thrust of this application, the parties are contesting for and against grant of temporary injunction. But being a legal remedy, temporary injunction is provided for under Section 68 (c), and Order XXXVII Rule 1 and 2 of the CPC [Cap 33 R.E. 2019]. Moreover, the order for temporary injunction is granted under certain conditions, which have been stated in the case of Atilio v. Mbowe (1969) HCD 284. These conditions are: One, is the existence of prima facie case: that there must be serious question to be tried on the facts alleged and a probability that the Applicants will be entitled to the relief prayed. This cannot be determined now as the Respondent has without contest from the Applicants stated in the affidavit and submission that there was a case at Fair Competition Commission (FCC), which went up to Fair Competition Tribunal (FCT) on similar facts to the case at hand, however, to the court's dismay the Respondent never raised this as preliminary objection. The Court cannot therefore heed to such allegations. Besides that, the Respondent has unequivocally admitted not to have applied for the registration of disputed trademark. But claims that she had concluded import agreement. She is thus a parallel 2 importer of the SANLG products and has disputed importing counterfeit SANLG products in Tanzania. In the case of American Cynamid Co. v. Ethicon Ltd [1975] AC 396, it was held that the application for temporary injunction must reveal prima facie case with probability of success. This principle was applied in the Court's decision in N.V. Philips' Gloeilampenfabrieken v. Aloyce Ngowi t/a N.M. Hardware and Another, Commercial Case No. 38 of 2005 HCCD at DSM. The HCCD emphasized- as held in American Cynamid's case that it is not necessary to establish the likelihood of success at trial. It is thus sufficient if it is shown that the claim is not frivolous or vexatious. Or that there is a serious question to be tried at trial. I fully subscribe to the foregoing views. Two, the Applicants may suffer irreparable loss: that the court's interference is necessary to protect the Plaintiffs/Applicarits from the kind of injury which may be irreparable before the legal right is established. The court must be satisfied that the damage which the Applicants will suffer will be such that mere money compensation will not be adequate. The Applicants have quantified the amount they are claiming as specific damages and general damages. They have also sought permanent injunction against the Respondent to protect their good wilL It is true that goodwill is incapable of being compensated in monetary terms. But a challenge here is that the Respondent claims to be a parallel importer. As per UK's Court of Appeal Case of Eli Lily and Others v. 8PM Chemist Ltd, 5th February 2008 which followed the EC! decision in Class International BVv. Colgate - Palmolive & Others the interim injunction cannot be granted against a parallel importer. But distinct from Eli Lily and Others' case where the issue of being parallel importer was undisputed in the case at hand that will 3 certainly require proof at trial. Therefore, at this stage, the allegation of the Respondent being the parallel importer of SANLG Products is inconclusive. Three, balance of convenience for the Applicants: that on the balance, there will be greater hardship and mischief suffered by the Applicants from withholding of the injunction order than will be suffered by the Respondent from granting of it. The third condition is difficult to determine especially where the Respondent is alleging to have been a parallel importer since 2006. Meaning she had acquired rights of unregistered trademark. That means the scale hangs on a balance. It is fifty-fifty between the parties. In such instance, and in my view, it will be unsafe to grant temporary injunction in favour of the Applicants without first determining whether the Respondent is really the parallel importer. That again is a matter that will go to the wire in the trial. It will be determined at trial not in this application. That seems to in line with the case of Tanzania Cigarette Company Limited v. Mastermind Tobacco (T) Limited, Commercial Case No. 11 of 2005 HCCD at DSM. It is true though that the existence of registered trademark does not deprive the rights of unregistered trademark protected by the tort of passing off. However, in the case at hand there is no counterclaim, and, even if it would have been there, it will be premature to determine at this stage. Nevertheless, it would have dented the application for temporary injunction. But let us not forget that in November 2018 the Respondent applied for registration of her mark HONLG and obtained registration No. TZ/T/2018/000610 for manufacturing, importing, distributing, and selling of motorcycles, automobiles chains, automobile chasis, tires, brake shoes, among other products. Following complaints at BRELA by the 1st Applicant whose 4 mark was registered in 2015, the Respondent's trademark was adjudged to be similar and non-distinctive from SANLG belonging to the 1st Applicant. Hence BRELA de-registered it. The Respondent further claims that when the 2nd Applicant was assigned the registered trademark TZ/T/2015/1687 in 2019 by the Zengcheng Benma Industries Co. Ltd class 12 of the international classification of goods and services, the Mark SANLG & Devoice of three pointed stars, there was encumbrance to the trademark assigned. That the Respondent had concluded Sale Agreement with assignor, 1st Applicant. This again will require proof at trial. The Respondent claimed he had been using the mark since 2006 and that it was her own oversight, she should have registered it in Tanzania much earlier. She does not dispute that she has not registered the mark. She is only banking on the sale agreement between the 1st Applicant and herself. This distinguishes the present case with that of Tanzania Cigarette Company Limited (supra). Reading from the pleadings, the Respondent objection to the application for temporary injunction anchors on the allegation that, first, she has good will for she has used the mark prior to the registration by the Applicants in 2015. And the second ground is that she has a valid sale agreement she had concluded with the 1st Applicant which operates as an encumbrance to the assignment of the SANLG trademark to the 2nd Applicant. The big question is whether these constitute grounds to deny the Applicants grant of temporary injunction? In the application at hand, there several issues that deserve serious scrutiny: (1) whether is a prima facie case? (2) whether the applicants have risk of suffering irreparable loss? Along with that whether the applicant has good will in SANLG products that cannot be 5 compensated in monetary terms? (3) whether the Respondent is a parallel importer of products bearing SANLG trademark? This cannqt be answered without going to trial. (4) whether the Applicants have registered SANLG trademark in Tanzania? Begin with the last issue, the Respondent has conceded that the Applicants own the trademark. Applying this Court's stand in N.V. Philips' Gloeilampenfabrieken (supra), I find merit in Applicants application. They have managed to establish an arguable case. It is trite that at this juncture, they do not need to prove that there is likelihood of success at trial as rightly held in American Cynamid (supra). What is more is that the Applicants have been operating in Tanzania since 2015 with their registered trademark SANLG. There is no iota of doubt that the same has acquired goodwill in Tanzania. In addition to that the Applicants are owners of the registered trademark SANLG. It is the Court's respectful finding that if the said goodwill is left to continue to be breached, the Applicants will suffer a loss that cannot be compensated in monetary terms. Although the Respondent has claimed that she is a parallel importer, and used the mark for a long time that does not eliminate a concern that what if it turns out at trial that the SANLG products she is selling in Tanzania are indeed counterfeit. The goodwill of the Applicants will have suffered irreparably. In contrast to the Respondent's view, I am of the firm view that unlike the Applicant's position, the Respondent in case she emerges victorious at trial, her loss can be compensated in monetary terms. In the end there is no dispute that the mark used in the Respondent's products and that is found in the Applicants' trademark is similar. For that reason, there is indeed prima facie case established. The Applicants were thus justifiable to seek for temporary injunction. If 6 the marks were dissimilar, it would have been hard to convince the Court to grant the interim injunctive order. For the foregoing reasons the temporary injunction order is granted in favour the Applicants. Regarding costs, since the parties are still battling in the main suit, it is fair that each party bears its costs. Order accordingly. DATED at DAR ES SALAAM this 3rd day of May 2024. Date: 03/05/2024 Coram: Hon. U. J. Agatho J. For Applicants: David Kasanga, Advocate For Respondent: John E. Mponela, and Hakieli Mgonja, Advocates C/Clerk: E. Mkwizu Court: Ruling delivered today, this 3rd May 2024 in the presence of David Kasanga, earned counsel for the Applicants, and John E. Mponela, and Hakiel Mgonja, Advocate for the Respondent. 7