Conform Uganda Ltd v Megha Industries (U) Ltd (Civil Application No. 20 of 2015)

The full judgment

Read the complete, verbatim text of this judgment.

Holding

The Court of Appeal considered an application for stay of execution of a High Court Commercial Division order arising from contempt-of-court proceedings, by which exemplary damages, a penalty and costs were awarded against the applicant for breaching a consent decree concerning trademark infringement. Because the respondent conceded to a conditional grant, the Court granted the stay pending the appeal on terms, including deposit of security of UGX 150,000,000 within seven days, cessation of manufacture and sale of products bearing the disputed cover design and trademark, and restriction to a single plain-colour design with the company logo. The Court declined to determine the disputed right of appeal, leaving that for the hearing of the appeal. Costs to abide the result of the appeal.

Facts

Both the applicant and respondent manufacture foam mattresses in Uganda. The respondent registered a trademark for its mattress cover design. From April 2011 the applicant sold mattresses with a same or similar cover design. The respondent sued for a permanent injunction against passing off and trademark infringement, and a consent judgment was entered against the applicant providing for injunctions, nominal damages and costs. The applicant later obtained its own trademark for mattress covers, which the respondent contended was a replica of its own. The respondent filed Miscellaneous Cause No. 21 of 2014 in the Commercial Court alleging contempt of the consent decree. The High Court awarded exemplary damages of UGX 300,000,000, a penalty of UGX 100,000,000 to be deposited in court, costs, and a suspended committal sentence against the applicant's directors. Leave to appeal was refused by the High Court, but the applicant filed a notice of appeal and the appeal, and obtained an interim stay. The applicant then sought a substantive stay of execution pending appeal.

Issues

1. Whether the applicant satisfied the conditions for a stay of execution of the High Court order pending the determination of the intended appeal.

Orders

• The order of the High Court in High Court Miscellaneous Cause No. 21 of 2014 is stayed pending determination of the appeal, on terms.
• The applicant shall deposit UGX 150,000,000 in court as security for due performance of the order, by bank draft or transfer, within 7 days.
• The applicant shall cease forthwith to manufacture, sell or distribute its products using the cover design that is the subject of the consent judgment in High Court Civil Suit No. 269 of 2011.
• The applicant shall cease to manufacture, sell or distribute its products under the disputed Trademark No. 47874.
• The applicant shall only manufacture, sell and distribute products using a design cover of one plain colour and its company logo or name until the appeal is determined or further order.
• The costs of this application shall abide the result of the appeal.

Key headnotes

Legislation cited (2)

• Rules of the Court of Appeal r.6(2)(b)
• Trade Marks Act

Cases cited (2)

• Kyambogo University v Prof. Isaiah Omolo Ndiege (Civil Application No. 341 of 2013)
• P. K. Sengendo v Busulwa Lawrence & Male Abdu (Civil Application No. 207 of 2014)