Wakilii

Craftop Canada Limited v Grace Capital International Limited (Miscellaneous Cause 10 of 2024)

High Court · [2024] UGCOMMC 312 · 2024 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application by notice of motion under Section 45 of the Trademarks Act seeking removal of a registered trademark from the Register of Trademarks
Decision
Application granted; Respondent's trademark ordered removed from the Register of Trademarks

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that a trademark registered in Uganda must be removed where a prior identical or substantially similar trademark exists in the country of origin of the goods, both countries are Paris Convention signatories, and the Ugandan registration was made without consent and in bad faith. The court further held that bonafide use of a trademark within Uganda under Section 45(3)(c)(i) of the Trademarks Act includes online marketing through electronic means accessible to Ugandan consumers, notwithstanding the absence of physical presence in Uganda. The application succeeded and the Respondent's trademark was ordered removed from the Register.

Outcome

Application granted; Respondent's trademark ordered removed from the Register of Trademarks

Facts

The Applicant, a Canadian company, had been manufacturing and distributing agricultural tools including chain saws under the trademark 'CRAFTOP' for over 20 years, with the mark registered in multiple countries including China (2007). In 2020, the Applicant engaged the Respondent, a Ugandan company, for potential distributorship, but negotiations failed. The Respondent purchased goods from the Applicant's Chinese affiliate in 2020. Unknown to the Applicant, the Respondent registered an identical 'CRAFTOP' trademark in Uganda in 2021 under Class 7. When the Applicant attempted to register its trademark in Uganda in 2022, the application was rejected due to the Respondent's prior registration. The Applicant brought this application seeking removal of the Respondent's trademark, alleging bad faith registration and asserting its prior rights as the bonafide owner. Evidence showed the Respondent operated a shop dealing in auto spare parts with no 'CRAFTOP' branded goods visible during investigation.

Issues

  1. Whether the 'CRAFTOP' trademark registered by the Respondent in Class 7, Part A of the Register of Trademarks vide TM No. 72768 should be removed from the Register of Trademarks.

Orders

  • An order is hereby issued directing the Registrar of Trademarks to remove, from the Register of Trademarks, the Respondent's 'CRAFTOP' trademark No. UG/T/2021/072768 which is registered in Class 7, Part A of the Register of Trademarks.
  • Costs of this application are awarded to the Applicant.

Rules and key headnotes

Trademarks — Section 45 of the Trademarks Act — Requirements for Removal from Register — Prior Foreign Registration
For an application for removal of a trademark from the Register under Section 45 of the Trademarks Act to succeed, the applicant must satisfy the court that: (1) the applicant is aggrieved by the registration; (2) the trademark in issue is identical with, or nearly resembles an earlier trademark registered outside Uganda; (3) the prior trademark was registered in respect of the same goods/services or goods/services of the same description; (4) the goods/services in respect of which the trademark is used in Uganda originate from the country in which the prior trademark was registered; (5) the applicant did not consent to the registration in Uganda; (6) there is no conclusive evidence that the owner of the Ugandan trademark or predecessors have continuously used the mark in Uganda before the date of the prior registration; (7) there has been bonafide use of the trademark by the applicant in Uganda within the last five years; (8) the applicant has undertaken to apply for registration in Uganda; and (9) the country of origin equally recognises and protects trademarks registered in Uganda.
Trademarks — National Treatment Principle — Paris Convention — Reciprocity of Protection
Sections 44 and 45 of the Trademarks Act are a domestication of Article 6 of the Paris Convention for the Protection of Industrial Property and embody the national treatment principle which requires states to treat intellectual property registered in other countries in the same way as they treat that registered by their own domestic institutions. The reciprocity of treatment encourages free movement of goods and services across international markets with the assurance that marks cannot be misappropriated. Courts have an enduring duty to protect this reciprocity which the national treatment principle demands.
Trademarks — First in Time Prevails — Priority of Earlier Foreign Registration
The general principle that emerges from sections 44 and 45 of the Trademarks Act is that the mark registered first in time takes priority over a later trademark in case of resemblances. Where a trademark is duly registered in a Paris Convention country of origin of goods, it must be protected in Uganda over an identical or substantially similar mark registered later in Uganda where both countries are Paris Convention signatories.
Trademarks — Bonafide Use in Uganda — Online Marketing and Electronic Commerce — Purposive Interpretation
The requirement under Section 45(3)(c)(i) of the Trademarks Act for bonafide use of a trademark in Uganda ought to be interpreted purposively in light of contemporary technological developments. Bonafide use includes both physical and online marketing of goods through the internet. Where the owner of a trademark registered outside Uganda uses that mark to market goods using the internet and is able to secure customers in Uganda to whom the goods are shipped upon payment, this constitutes bonafide use in Uganda notwithstanding the owner's lack of physical presence in Uganda. The necessity of a physical address has been whittled down in the internet age which has turned the world into a global village.
Purposive Interpretation — Avoiding Absurdity — Technological Developments
Legislation should be interpreted purposively in light of all the logical implications necessary to fully effectuate and implement its purpose. It is the duty of the court to decipher and ascertain the true intention behind legislation. A literal construction that would cause an obvious absurdity in light of contemporary technological developments should be rejected in favour of a progressive interpretation that safeguards the ultimate statutory purpose.
Trademarks — Bad Faith Registration — Misappropriation After Failed Negotiations
Where a party purchases goods from a trademark owner's affiliate, then enters into negotiations with the trademark owner for a dealership which subsequently fail, and thereafter proceeds to register the trademark owner's mark as its own in Uganda, such registration constitutes bad faith and an appropriation of the trademark owner's intellectual property. Courts are empowered under Section 45 of the Trademarks Act to remedy such misappropriation by ordering removal of the mark from the Register.
Trademarks — Section 45 vs Section 46 — Non-Use Evidence Not Determinative Under Section 45
In an application under Section 45 of the Trademarks Act, claims and evidence of non-use of the impugned trademark by the respondent are beside the point. Section 45 primarily considers whether there was registration of a trademark in Uganda in respect of goods or services after the producer or dealer of those goods or services had registered the same or a similar mark in the country or place of origin. Evidence of non-use is relevant only in an application for cancellation of registration on grounds of non-use under Section 46 of the Trademarks Act.

Legislation cited (10)

  • Trademarks Act Cap 225 s.45
  • Trademarks Act s.44
  • Trademarks Act s.46
  • Civil Procedure Rules O.52 r.1
  • Civil Procedure Rules O.52 r.3
  • Paris Convention for the Protection of Industrial Property 1883 (as amended) Art.6
  • Paris Convention Art.3
  • General Agreement on Tariffs and Trade 1994 Art.3
  • Trademark Regulations r.12
  • Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of Registration of Marks 1957

Cases cited (5)

  • Nairobi Java House Ltd v Mandela Auto Spares Ltd (High Court Civil Appeal No. 13 of 2015)
  • Kampala Stocks Supermarket Co. Ltd v Seven Days International Ltd (High Court Civil Suit No. 112 of 2015)
  • Tecno Telecom Ltd v Kigalo Investments Ltd (High Court Miscellaneous Cause No. 17 of 2011)
  • Mohamed Allibhai v W.E. Bukenya Mukasa (Supreme Court Civil Appeal No. 56 of 1996)
  • Commissioner General, Uganda Revenue Authority v Edulink Holdings Ltd & 2 Others (High Court Civil Appeal No. 178 of 2021)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Craftop Canada Limited v Grace Capital International Limited (Miscellaneous Cause 10 of 2024) [2024] UGCommC 312 (27 September 2024)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.