Dulux (Private) Limited v Yatakala Trading (Private) Limited

### Preamble
1
HH 265-12
HC 8463/11
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DULUX (PRIVATE) LIMITED

versus

YATAKALA TRADING (PRIVATE) LIMITED

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 7 June 2012 and 27 June 2012

Opposed Application

Ms F. Nyakabau, for the applicant

U. Sakhe, for the respondent

MATHONSI J:  The applicant is the registered user of certain trade marks belonging to AECI Limited, a South African registered company. The same marks were assigned by their proprietor to ICI South Africa (Pty) Ltd which assignment does not affect the status of the registered user, the applicant.

The papers filed of record suggest, or at least the contrary has not been shown, that the said marks are still valid and protected by law.  I say this because an attempt was made to challenge the validity of the trade marks which was threadbare if not speculative given that nothing was placed on record to suggest that the registration certificates have not been renewed.  In any event the register is prima facie evidence of registration.  Section 5 (4) of the Trade Marks Act [Cap 26:04] (“the Act”) provides:

“The Register shall be prima facie evidence of any matter required or authorised by or under this Act to be entered therein or which was required or authorised by or under the repealed legislation to be entered in a register of trade marks referred to in subs (3)”

The papers show that the trade marks which form the basis of this matter are registered.  For that reason, unless the contrary is shown, those marks are extant.

The respondent, on the other hand is a Zimbabwean corporation which enjoys exclusive importation and distribution rights in Zimbabwe of certain paint products manufactured by Duraline (Pty) Ltd of South Africa by virtue of a distribution agreement concluded between the two entities.  It sells these Duraline products in Zimbabwe.

The trade marks which form the basis of this disputes are in respect of the “Dura” range of paint products, namely Dura silk; Dura thane K; Dura thane; Dura close; Dura matt 65 and Durashield in classes 2 and 19 of the trade marks register.  The applicant insists that by distributing paint products marked “Duraline” the respondent is infringing on the applicant's trade marks as that mark so nearly resembles the applicant’s trade marks as to cause confusion.  It further argues that through the sale of products marked with the prefix “Dura” the respondent is passing off the products as those of the applicant as a result of which the applicant’s trade marks are being diminished and its reputation injured, it having built a goodwill on the marks over a lengthy period in excess of 30 years.

The respondent has opposed the application.  Mr Sakhe for the respondent has taken a preliminary point that the applicant does not have locus standi in judicio to bring this application given that it is not the proprietor of the trade marks it seeks to protect, it being a mere registered user.  He maintains that as a registered user the applicant is required to comply with the provisions of s 33(4) of the Act if it is to bring the application seeking protection.

While I allowed counsel to address me on the preliminary point as well as the merits of the application, it was always on the understanding that I would first consider the preliminary point and determine it before going to the merits.

I am indebted to both counsel for the thorough and detailed submissions they have made.  The extent and quality of the research they have made is not only impressive but leaves one with a sense of pride.

Mr Sakhe has argued that, as registered user of the marks, the applicant is enjoined to disclose the nature of its agreement with the proprietor of the trade marks, which agreement would reveal its status as a registered user, that is, whether it has authority to bring this application.  He relies on the provisions of s 33(4) of the Act which reads:

“Subject to any agreement between the parties, a registered user of a trade mark shall be entitled to call upon the proprietor thereof to take proceedings to prevent infringement thereof and, if the proprietor refuses or neglects to do so within two months after being called upon, the registered user may institute proceedings for infringement in his own name as if it were the proprietor, making the proprietor a defendant;

Provided that a proprietor added as defendant in terms of this subs shall not be liable for any costs unless he enters an appearance and takes part in the proceedings.”

It is submitted on behalf of the respondent that the use of the words “subjected to any agreement” in subs (4) of s 33 imposes a limitation on the rights of the applicant as a registered user to sue for prevention of an infringement in its own name.  A registered user does not have an automatic right to sue in its own name and can only do so in compliance with that provision.  The right to sue resides with the proprietor, the applicant must request the proprietor to sue for protection and if the proprietor fails to do so, only then can a registered user sue in its own name but citing the proprietor as a defendant.

Ms Nyakabau, for the applicant has countered that argument by saying that the applicant does have locus standi in judicio to bring this application because all it has to do and has done is to show that it has a direct and substantial interest in the subject matter and out-come of the application.  Zimbabwe Teachers Association and Ors v Minister of Education 1990(2) ZLR 48 (H) at 52F.  The applicant has shown that the property in the goodwill it seeks to protect vests in it.

Regarding compliance with s 33(4) of the Act, Ms Nyakabau argues that the use of the word “entitled” should be given its grammatical meaning, namely to confer on the registered user a right to sue but is not a mandatory or compulsory provision.  She goes on to say that the applicant is not obliged to call upon the proprietor of the trade marks to institute proceedings or to join the proprietor as a defendant.  There is no bar in that provision to the applicant to institute the proceedings the manner it has done.

Ms Nyakabau strongly contends that, applied in the context of the section, the ordinary grammatical meaning of the word “entitled” is that the applicant has a right to call upon the proprietor to institute proceedings to prevent an infringement but this does not mean that the registered user is obliged to exercise this entitlement.  In the event that it was designed for the applicant to call upon the proprietor before instituting proceedings in its own name, the section would have excluded the words “be entitled to.”

This argument is indeed ingenious and impressive.  The compliment should however end there because not only is it untenable both logically and grammatically, it is demonstrably fallacious.

In order to understand the provisions of subs (4) of s 33 on must have regard to subs (1);(2) and (3) of that same section.

They provide:

“33 Registered Users

Subject to this section, a person other than the proprietor of a trade mark registered in Part A or Part B of the Register may be registered as a registered user thereof in respect of which that trade mark is registered.

The use of a trade mark by a registered user thereof in relation to goods or services-

With which he is connected in the course of trade; and

In respect of which for the time being the trade mark remains registered as a registered user;

being use such as to comply with any conditions or restrictions to which his registration is subject, is in this Act referred to as the “permitted use” thereof.

The permitted use of a trade mark shall be deemed to be use by a person other than the proprietor for the purposes of s 31 and for any other purpose for which such use is material under this Act or any other law.”

By clear and unambiguous language the legislature gave the proprietor of a trade mark the permitted use of a trade mark in the first instance and no other person other than the proprietor has the permitted use of such trade mark.  Subs (4) of s 33 must therefore be understood as providing an exception to that rule.    The exception being that a registered user is given rights to sue for the prevention of an infringement such right derives from the specific provisions of that subs which must then be interpreted strictly.

The rights given to a registered user are “subject to any agreement” of the parties.  The phrase “subject to” in a statue was interpreted in PTC v Retrofit (Pvt) Ltd 1994 (2) ZLR 71 (S) at 77G-H and 78A as follows:-

“Subject to’ is a commonly used and simple phrase.  It means ‘except as curtailed by’ – See Hawkins v Administration of South West Africa 1924 SWA 57.  It may not always be easy to know in what way the one thing is curtailed by the other – see, for example, R v Rahman 1940 NPD 398 at 399 in fine to 400, but that is another

matter.”

See also Hickman v AG 1980 ZLR 21 at 26

What it means, in my view, is that except as curtailed by a subsisting agreement of the parties, a registered user is entitled to require of the proprietor of a trade mark, that the proprietor institutes proceedings to prevent an infringement.  It is only after the proprietor has failed to do so, that the registered user acquires a right to institute those proceedings in its own name.  Even then, the registered user is required by the Act to cite the proprietor as a defendant to those proceedings. The applicant has not shown that its agreement with the proprietor curtails the provisions of s 33(4).  In my view a registered user who has not called upon the proprietor to take action to prevent an infringement does not have a right to take action in that regard in his own name.  That right of action only exists which it can be shown that the proprietor is “refusing or neglects” to take action.  In addition, even where it is shown that the proprietor is refusing or is neglecting to do so, a registered user who elects to sue in his own name is still required to cite the proprietor as a defendant.

It is illogical to suggest that despite such clearly defined procedure, the registered user possesses a right to ignore the procedure set out in the Act and still go ahead and sue for prevention of an infringement as if the registered user is the proprietor.  If that was the case, the legislature would not have included that requirement at all.

I agree with Mr Sakhe for the respondent that to the extent that the relief sought is statutory in nature, there must be full compliance with the statute in order for the benefit to flow from those protective provisions. Until such time that has been done, the applicant cannot be entertained.

There may be a good case for an order for the prevention of the infringement but that can only be discussed once the applicant has complied with the enabling legislation.  It is therefore unnecessary for me to go to the merits of the matter.  The applicant must first comply in order to be heard.

In the result, the application is dismissed with costs.

Gill, Godlonton & Gerrans, applicant’s legal practitioners

Messrs Kantor & Immerman, respondent’s legal practitioner