A question of association in East Africa

The use of associated trademarks is becoming more prevalent in East Africa, but there are a number of important factors that brand owners need to keep in mind.

In East Africa, the value of associated trademarks is becoming more apparent all the time. This coincides with the growing presence in the region of foreign corporations that own well-established brands and an increase in the uptake of franchising, joint venture and commercial licensing agreements. It is clear that registered owners are seeing a use for such marks, which are recognised in Kenya, Tanzania and Uganda. However, there are certain nuances in each of these jurisdictions of which rights holders need to be aware, while the lack of relevant case law means that many of these legal provisions remain untested.

Recognition in Uganda, Tanzania and Kenya

Associated trademarks are useful to any rights holder that wishes to use similar marks (in whole or in part) in different markets. They arise where an owner has two or more trademarks of a similar description, in the same class, which are largely identical to one another. The concept is used to avoid any deception or confusion that may arise from the similarity of the marks.

Associated trademarks are expressly defined in Tanzanian and Ugandan law, with Kenya adopting a slightly different approach. Under Section 29 of the Uganda Trademarks Act 2010, two identical trademarks registered in the name of the same owner can be registered as associated marks. In addition, the threshold of definition for such marks has been expanded to include services that relate to identical trademarks. Similarly, in Tanzania, under Section 41(1) of the Trade and Services Marks Act 12/1986, trademarks that are significantly alike may be registered as associated marks.

However, the system in Kenya differs somewhat, in that the Trademarks Act (Chapter 506) of the Laws of Kenya does not define what constitutes an associated mark. Instead, recognition is established in Section 30(3) of the Trademarks Act, which allows a defensive mark and other trademarks registered in the name of the same owner to be registered as associated trademarks.

Distinguishing associated trademarks from series marks

Series marks can also be used to establish a link between separate trademarks. They occur where several distinct trademarks are registered under the same application and possess identical registration numbers. Owners can use series marks to register trademarks that have minor differences in character but which are visually or phonetically similar. These similarities usually relate to appearance, sound and meaning, and arise despite differences in colour, typeface, borders, shading or punctuation. From a practical perspective, series marks are much quicker to register than lodging several separate trademark applications.

All three jurisdictions recognise the right of a trademark owner to connect several distinct trademarks together via the use of series marks. In Kenya, Section 24(3) of the Trademarks Act allows for several similar trademarks (with differences in description, colour, price or quality) to be registered as a series in a single application. Similarly, Section 30(1) of the Uganda Trademarks Act allows series marks to be used where the particulars of the trademark differ in terms of price, colour, use or services, among other things. Meanwhile, in Tanzania, separate trademarks can be registered as a series in one application in a single registration process under Sections 25(2)(d) and 41(3) of the Trade and Services Marks Act.

Cancellation for non-use

Another benefit of associated trademarks – depending on the priorities of the owner – is the protection that they offer against cancellation for non-use.

Cancellation for non-use ensures that registered owners of trademarks make genuine commercial use of them. This, in turn, prevents third parties from opportunistically copying big brands and registering trademarks in jurisdictions when they have no genuine intention to make commercial use of them. The ability to cancel trademarks for lack of bona fide use is recognised in all three jurisdictions.

In Kenya, a trademark can be cancelled after five years of non-use on the part of the owner. In Uganda, the registrar may remove a trademark from the register after a continuous period of three years of non-use by the owner. Similarly, in Tanzania, an aggrieved third party can apply to remove a registered trademark or service mark from the register where there is non-use for a continuous period of three years.

 

By contrast, when an owner wants to protect a trademark but has no plans for genuine commercial use, associated marks are an attractive option, as they allow the trademarks registered within the bundle of an associated mark to remain unused yet protected, provided that at least one mark in the bundle is being used. Further, they reduce the time and costs incurred in defending cancellation proceedings.

In Kenya and Uganda, the use of one associated trademark automatically constitutes use of another. However, in Tanzania, the use of an associated trademark “may” count as use of another, creating ambiguity and suggesting that protection against cancellation for non-use will be decided on a case-by-case basis.

Assignment of associated marks

Trademarks are assigned in business and asset sales where the assignor wishes to pass on its legal and beneficial rights in a mark to a third party, the assignee. The assignee can be a natural or artificial person, as well as a wholly owned holding or subsidiary company.

The right of an unregistered trademark owner to assign its mark to another person is not only recognised, but clearly and unambiguously provided for in the trademark legislation of all three countries.

However, the assignment of associated trademarks is more nuanced because an owner must transfer its ownership rights in a trademark altogether, rather than separately and apart from one another.

Although associated trademarks are registered as individual trademarks in Uganda and Tanzania, their independence is not recognised at the point of assignment. In Tanzania, for instance, associated trademarks can only be assigned together as a whole and not separately and apart from one another. Therefore, any attempt to assign an associated trademark must be as a complete bundle. This position, which is similar to that of Uganda, is significant for any party that wants to enter into a business asset transfer agreement or a contractual joint venture agreement but has no interest in purchasing all of the associated trademarks.

Again, Kenya’s approach differs here. Before 2006 the country mirrored the position of Uganda and Tanzania, allowing only the assignment of trademarks as a whole. However, this was altered when Section 26 of the Trademarks Act was repealed by Section 6 of Act 4/2002. Now, the previous position is preserved solely for trademarks that were registered before the repeal of Section 26. According to the transitional and savings provisions of the Trademarks Act, associated marks continue to be assignable as a whole and not separately.

Dissolution of the association

The owner of an associated trademark may wish to dissolve the association and hold its marks separately from one another. In all three countries, the registrar has the power to dissolve the association between trademarks; however, the implication of dissolution is different in each jurisdiction.

In Uganda and Tanzania, the association between two or more associated trademarks can be dissolved if the registrar is satisfied that the individual marks would not deceive or confuse consumers making use of the goods or services on which the mark is displayed. However, the dissolution of the association between two associated trademarks will not be deemed to dissolve the association between others. Therefore, in a bundle of associated marks, the owner must file separate applications to dissolve the association between each and every mark. From a practical perspective, this is not ideal as it can lead to increased costs and delays.

By contrast, in Kenya, the Trademarks Act is silent on whether dissolution of the association between trademarks should be done as a whole or separately. This gap in the law is not ideal either, as it creates uncertainty for rights holders looking to end the association of their marks.

A call for legislative clarification

The increasing use of associated trademarks in East Africa proves that registered owners recognise a need for them. However, a few legislative amendments could be helpful.

In order to enhance the autonomy of an owner, for example, the laws in Tanzania and Uganda should be reformed to allow for the assignment of trademarks separately. Section 29 of the Uganda Trademarks Act creates confusion by stating that an associated trademark arises where there are identical services. This is incorrect, as associated trademarks should relate to the use of identical marks only, rather than identical services.

In terms of cancellation for non-use, in Tanzania, Section 35(1)(d) of the Trade and Service Marks Act should be amended to remove the uncertainty that owners bear from the use of the word ‘may’. Rather, in line with Kenya and Uganda, the association of trademarks should offer protection against cancellation for non-use.

Although Kenyan law has done away with the provisions that relate to associated marks, there is still ambiguity as to the use of the term ‘associated’ in Section 30(3) of the Trademarks Act. Therefore, the Trademarks Act should be amended to bring clarity to all registered trademark owners.

Ultimately, more case law is needed in all three jurisdictions to give life to the legislative provisions regarding associated marks.

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