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Elecktrotechnische Fabrik Schmidt and Co. v. Bateria Slany Narodni Podnic

Supreme Court of Nigeria

Judgement delivered on Friday, March 3, 1972
Citation: 15 NIPJD [SC. 1972] 241/1969
SC.241/69      Jurisdiction: Nigeria

GEORGE SODEINDE SOWEMIMO, J.S.C.
UDO UDOMA, J.S.C.
GEORGE BAPTIST AYODOLA COKER, J.S.C. (Delivering the Lead Judgement)

Appearances: D. L. Garrick for the Appellant
A. C. Grant for the Respondent

This appeal is sequel to an application by the appellants, Elektrotechnische Fabrik Schmidt & Co. otherwise Daimon-Werke GMBA to the High Court, Lagos, for “an order that trade mark No. 9636 be expunged from the register of trade marks”.

The application was directed against the respondents, Bateria Slany Narodni Podnic. At the date of the motion the said respondents were, as they still are, the registered proprietors of  trademark No. 9636. The application is supported by an affidavit filed on behalf of the appellants stating, inter alia, that although both the appellants and the respondents were companies originally founded and owned by the same person, yet after World War II the respondents’ company, which was based in Switzerland, was nationalised by the government of that country; that the appellants were the registered proprietors of the trade mark “DAIMON & DEVICE” which was registered as No. 4578 in the register of trade marks as far back as 1936; but that in 1958 the respondents’ company, which had then ceased to be a part of the appellants’ company, obtained registration of the trade mark “DAIMON” under trade mark No. 9636. The respondents resisted the application and filed a counter-affidavit denying virtually all the facts deposed to in the affidavit in support of the appellants’ motion and stating that the respondents were always an independent company, that they duly applied for and obtained the registration of their trade mark when they did so and that the mark had been registered as No. 9636 in their favour.

In course of time the parties applied for and obtained an order for pleadings to be filed and delivered. The appellants’ statement of claim repeats more or less the facts deposed to in the affidavit accompanying their application and avers in effect that in or about the year 1936 the appellants were registered as the proprietors of the trade mark “DAIMON & DEVICE” as No. 4578 in Class 8 in respect of electric dry elements and batteries, incandescent lamps and lanterns and casings or carrying devices for dry batteries and incandescent lamps; and that in the year 1959 the respondents also obtained the registration of the trade mark “DAIMON” as No. 9636 in Class 5 of the register in respect of galvanic monocells and cases for electric torches. The statement of claim finally avers in the concluding paragraphs as follows:

“10. The trade mark registered by the defendants is identical with or otherwise so nearly resembling that of the plaintiffs as to be calculated to deceive.

11. By reason of such identity or resemblance the goods of the defendants are likely to be mistaken by the public as and for the goods of the plaintiffs.”

The statement of defence filed on behalf of the respondents admits the registration of the trade mark by them and pleads that they had always used the trade mark which was duly registered and used by them as far back as 1958 and that the plaintiffs were equally always aware of such user. In due course a date was fixed for the hearing of the application. On that day and before for the appellant, as well as learned counsel for the other side, were recorded as having stated as follows:”Mr Garrick: Mr Grant and I have agreed on the following points:

(i) That the two trade marks are identical

(ii) That they are in respect of the same goods or description of goods and,

(iii) That if they are used by two different companies, it is bound to lead to confusion.

Mr Grant:-I agree that the three grounds stated by Mr Garrick are the basis upon which the case will be conducted.”

Thereafter evidence was led by both parties in support of their respective averments in their pleadings. The trade mark, which is the subject-matter of the proceedings, consists of the word “DAIMON” written in black capitals and a photographic representation of it was attached to the certificate of registration which was put in evidence at the hearing of the application as exhibit 5. As stated before, it was used at any rate by the respondents as a trade mark in connection with electric torches; indeed one such torch-light and its case bearing the representation of the trade mark was produced in evidence as exhibit 27.

In a reserved judgment the learned trial judge (Caxton-Martins J.) concluded that there was no justification for disturbing the use by the respondents of the trade mark of which they are registered proprietors. He found and held that:

“Both parties extended their trading operations to West Africa and to Nigeria. The Second World War interrupted their trading activities and the hostilities deprived the plaintiffs of their trading operations in Nigeria. Plaintiffs’ trade mark become vested in the Custodian of Enemy Property.”

He further found that it was not until 1966-several years after the end of the Second World War-that the Custodian of Enemy Property reassigned to the appellant their trade mark, hence that trade mark was only restored to the register of trade marks on the 29th November, 1966.

The learned trial judge also found that in the meantime and on the 3rd March, 1959 the respondents’ trade mark-“DAIMON”-had already been registered to take effect from the 15th January, 1958 and to remain in force for a period of 14 years there from. With respect to the competing claims on registration, the learned trial judge in his judgment observed as follows:

“In 1958, when the defendants’ trade mark was being put on the register, there was no objection from any quarter, not even from the Custodian of Enemy Property. I do not find any false claim on the part of the defendants in the registration which they then obtained without any objection.  The absence of any objection was a fatal hitch to the plaintiffs.  The only defence which I found was the sale in package bearing more description than was registered in exhibit 5.   Fraud, like estoppel, is not a cause of action but a rule of law and fraud must be especially pleaded and supported with full particulars. I do not find anything improper or fraudulent or false on part of the defendants in the’ registration which they obtained in 1958.”

In concluding his judgment by which he dismissed the application of the appellants, the learned trial judge remarked:

“In my view, there is no proof upon which I should order the expurgation of defendants’ trade mark. The defendants are, however, restricted from further use of the exhibit 27 in its present form and are ordered to get the package in the form in which their trade mark is contained and registered in exhibit 5.”

The appellants have appealed against this judgment on the grounds that the learned trial judge wrongly refused to expurgate the respondents’ trade mark from the register by holding that there was acquiescence by the appellants in the “concurrent user” with themselves of the trade mark as registered by the respondents. There was also a cross-appeal by the respondents complaining, firstly that the learned trial judge was in error of law in ordering the respondents to restrict themselves on their goods, e.g. exhibit 27, only to the word of the trade mark which they had registered and, secondly, that the learned trial judge wrongly awarded costs against the respondents when in fact the appellants should have paid the costs of the proceedings.

In support of the appeal, learned counsel submitted that on the basis of the issues already agreed by both counsel at the commencement of the trial, the only question left to the learned trial judge for determination was whether the respondents had any right to register their trade mark in this country. We observe that if this was the only question to be determined the answer was and is simply that the respondents do not now seek to register the trade mark. Their trade mark had been registered already; indeed, it was registered on the 3rd March, 1959 to take effect from the 15th January, 1958 as No. 9636 in Class 5 of the register and in respect of galvanic monocells and cases for electric torches. The appellants themselves deposed to this in paragraph x of the affidavit in support of the motion grounding these proceedings. Besides, that was not the issue raised by the application. The question on the application was, and still is, concerned with the expurgation from the register of the registration of the respondents. Concerning the fact of registration the learned trial judge had indeed found that both were registered as proprietors of their marks.

There is of course no dispute that a trade mark remaining improperly on the register might be expurgated there from by order of court.
Section 42(I) of the Trade Marks Act, Cap. 199 provides as follows:

“42. (1) The court may, on the application of any person aggrieved by the omission without sufficient cause of the name of any person or of any other particulars from the register kept under this Act or by any entry made without sufficient cause in any such register, or by any entry wrongfully remaining on the register, make such order for making, expunging, or varying the entry as the court thinks fit, or the court may refuse the application, and in either may make such order with respect to the cost of the proceedings as the court thinks fit.”

So, the grounds on which an order of expurgation could be made are as follows:
(i) If there has been an omission without sufficient cause of the name of any person or of any other particulars from the register; or

(ii) If any entry has been made without sufficient cause in any such register; or

(iii) If any entry wrongfully remains on the register.

We advert at this juncture to the affidavit of the appellants in support of the present application for the reasons deposed to by them, as justifying their request for expurgation of the respondents’ trade mark. Paragraph (xi) of the affidavit reads thus:

“(xi) The trade mark DAIMON being already on the register in the name of the applicants, the registration by the respondents of the same trade mark is contrary to s. 13, 25 and 42 of the Trade Marks Act.”

Again, if one turns to the statement of claim filed by the appellants for the reasons which they had sought to rely on for the order sought by them, one would find that the only relevant sections are in paragraphs 10 and II of the statement of claim which read as follows:

“10. The trade mark registered by the defendants is identical with or otherwise so nearly resembling that of the plaintiffs as to be calculated to deceive.

11. By reason of such identity or resemblance the goods of the defendants are likely to be mistaken by the public as and for the goods of the plaintiffs.”

Neither the affidavit in support of the application nor the statement of claim filed by the appellants contains any of the grounds which by law must be established before the court could make an expurgation order. Nevertheless, the respondents defended the action and resisted the application.

One of the defences raised by them is contained in paragraphs 10 and 11 of the statements of defence which reads:

“10. The defendants aver they and their predecessors have used the mark which they registered as No. 9636 in the year 1958 for sales of their goods in Nigeria and other parts of West Africa since they commenced manufacture in the year 1927.

11. The defendants further aver that the plaintiffs have been aware of this for more than 20 years and have acquiesced in the defendants’ use of the said mark and have never at any time challenged their use of it before this action was commenced.”

The paragraphs postulate a defence of acquiescence and it is the contention of the respondents therefore that they had used the trade mark in dispute since 1927 without registration of it and that in and since 1958 they had procured the registration of it; that these facts were notorious for over 20 years before the institution of the present proceedings and that in the event of the appellants having registered a similar or identical trade mark they, that is the appellants, had never objected to the concurrent user of the trade mark and could not now object to the use of it by the respondents.

The principles on which the courts act in finding acquiescence in case of concurrent user are clear. In Kerly on Trade Marks, 7th Edition, p. 451, the following statement of the law by the learned authors is relevant:

“(b) Acquiescence in the infringement on the part of the plaintiff is a complete defence, if it amounts to consent; but it can only be inferred where he is shown to have had knowledge of it. Even if it is shown that the plaintiff knows of the infringement, the Court will not readily infer that he has assented to what is likely to be so detrimental to this property. It has been held that, where it is pleaded in answer to a motion to commit the defendant for the breach of an injunction restraining him from infringing, it must amount to a license ‘sufficient to create a new right in him’.”

In the case in hand, it is manifest that the respondents had used this mark for many years during which their business had acquired a good deal of reputation within the same market in which the appellants claim their own goods were distributed. Surely it must have come to the notice of the appellants that the respondents were using as of right a trademark identical with theirs. We have already stated that the trademark itself consists merely of the word DAIMON written in block capitals and apparently always in black colour. It is manifest from these facts that the failure by the appellants to object to the use by the respondents of the mark is tantamount to a surrender by them of their right to question the concurrent use of the same trade mark by the respondents. In the case of Mouson and Co. v. Boehm [1884] 26 Ch. D 398, Chitty, J. in circumstances not dissimilar, refused to expurgate a trade mark already registered by the applicants. In the course of his judgment, he observed as follows at p. 407 of the report:

“Then the last point is the application to expunge Mouson’s mark from the register. That was practically given up by Mr. Whitehorne at the Bar. Mouson has been two years on the register, he has acquired title bona fide and independently, and he has enjoyed during those two years a considerable trade, in fact a greater trade than Boehm has done during the eight years that preceded 1882, and it seems to me that I ought therefore to refuse the application to expunge Mouson’s trade mark, which I do. The case of In re Powell, In re Pratt (before the late Master of the Rolls, on the 12th January, 1878), is an authority for the proposition that there may be, as I have already stated, two identical trade marks on the register when the parties have used the mark independently and each party claims bona fide.” We are not in any doubt that the same principles are applicable in this matter and we are in agreement with the learned trial judge when in his judgment he observed as follows with respect to the defence of acquiescence:

“The defendants had used the exhibit 7 since 1958 and I accept the evidence, not rebutted, that the defendants had done good business and without opposition. I am satisfied that their use of the trade mark has been honest and concurrent. In my view, there is no proof upon which I should order the expurgation of defendants’ trade mark.”

We share the views of the learned trial judge in this respect as we are of the view ourselves that the appellants openly acquiesced in the concurrent use of the trade mark similar or indeed identical with their own for a considerable length of time and it would be unjust at this time to ask the respondents to stop using the mark. The appeal of the appellants must and does therefore fail.

The respondents have for their part appealed to this Court against the orders made by the learned trial judge with respect to the restriction imposed on them in regard to the markings on the labels used on their products sold under the trade mark in dispute. The respondents have also appealed against the order for costs made against them when as they complain the appellants should have been asked to pay the costs.

In concluding his judgment, the learned trial judge had stated as follows:

“The defendants are, however, restricted from further use of the exhibit 27 in its present form and are ordered to get the package in the form in which their trade mark is contained and registered in exhibit 5.”

We have already referred in this judgment to exhibit 5, the certificate of registration bearing a representation of the registered trade mark “DAIMON”. We also have referred to exhibit 27, i.e. one of the products of the respondents being an electric torchlight in its packing case with the trade mark impressed thereon. The markings on exhibit 27 are in the usual fashion in which the respondents distribute their products. Now exhibit 27 contained apart from the facsimile of the registered trade mark some hexagonal drawings and other minor markings, i.e. electric bulb, shadow lines, etc. which the respondents also apply on their covers. The learned trial judge thought that the respondents should be confined strictly to exhibit 5 i.e. the word “DAIMON” which was registered for and on their behalf. The learned trial judge, we must point out in this respect, overlooked the fact that neither side had asked for this order or complained about the inclusion of these markings or commented adversely or otherwise as to the presence of the markings on the casing of the torchlight. This in short is the complaint on appeal by the respondents and we think that the complaint is well founded.

Then again, the respondents argued before us that the appellants and not the respondents should have been ordered to pay the costs of the proceedings. We observe that, according to the records, as soon as the learned trial judge concluded the reading of his judgment, learned counsel for the appellants made an application for the costs of the action and suggested a figure of 600 guineas. Learned counsel for the respondents then informed the court that “the plaintiffs have not succeeded on the major point in their claim.” Nevertheless, the learned trial judge made an order for costs of 350 guineas to be paid by the respondents to the appellants. Before us, learned counsel for the respondents referred to his submissions to the High Court on this point.

We think ourselves that the point lies outside the realms of any doubt for in the proceedings the respondents and not the appellants had won and there was absolutely nothing on the record to deprive them of their costs. We think that the learned trial judge was wrong to order the respondents to pay the costs of the proceedings, when clearly it was the appellants who should pay.

In the event, the appeal of the respondents must succeed on the two grounds for which they had come to this Court.

We make the following orders:

(i) The appeal of the appellants is hereby dismissed with costs.

(ii) The appeal of the respondents is hereby allowed and it is ordered thereon as follows:

(a) The restriction ordered by the judge against the respondents with respect to the use of their registered trade mark only as in exhibit 5 and not as on exhibit 27 is hereby set aside.

(b) The order of the learned trial judge awarding costs of 350 guineas against the respondents is also hereby set aside.

(iii) The appellants shall pay the costs of these proceedings fixed in this Court at 46 guineas and in the High Court at 350 guineas.

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