Unregistered trademarks do not provide grounds for opposition

In D H Brothers Industries v Olivine Industries (unreported SCZ judgment No 10/1912, Appeal No 74/2010), the Supreme Court of Zambia has announced that a trademark application in Zambia may not be opposed on the basis of an earlier, similar, but unregistered trademark, even if that earlier trademark is well known.

This statement of the law ('the Zambian concept') contrasts with the general principle held in numerous other jurisdictions that, in certain circumstances, marks are unregistrable if they deceptively resemble existing but unregistered trademarks.

The Zambian concept was put forward by the registrar of trademarks in March 2009 in Olivine Industries v D H Brothers Industries (Opposition No 111/2005 [DAILY], formerly reported on the Zambia Patents and Companies Registration Agency's website).

Olivine, a Zimbabwe company closely linked to the government of Zimbabwe, had applied to register the word DAILY for goods in Class 3 of the Nice Classification, including soaps. D H Brothers, a South African family-owned company, had opposed the application on the grounds of its prior use and reputation in Zambia of the word 'daily' as a trademark for soaps. The opponent’s mark was not registered in Zambia.

The Trademarks Act (Chapter 401 of the Laws of Zambia, effective since 1958) is based on the UK Trademarks Act 1938. D H Brothers cited Section 16, equivalent to UK Section 11 (“Prohibition of registration of deceptive, etc, matter”) in support of the general principle. D H Brothers did not plead Section 17(1), which prohibits registration of marks that conflict with earlier registered trademarks (as per UK Section 12(1)).

The registrar accepted that D H Brothers had established reputation and goodwill in the Zambian soap market, connected with its trademark. She found the parties’ marks to be confusingly similar. Nevertheless, she dismissed the opposition, opining that Section 16 “cannot… be read in isolation”, but must be “read with, and in the context of, Section 17(1)”. Therefore, she held that “Section 16 envisages a trademark registered under the Trademarks Act” and that the Zambian concept applied.

The registrar declined to follow respected authorities from other countries supporting the general principle - including the United Kingdom, where the relevant sections originated. For example, commenting on the UK 1938 act, successive editions of "Kerly’s Law of Trade Marks and Trade Names" indicated that UK Sections 16 and 17(1) supplied separate, alternative grounds of opposition. "Webster & Page - South African Law of Trade Marks", 3rd edition expressed the same view of the corresponding South African Act of 1963.

Observers hoped, cautiously, that on appeal the High Court might apply more generally-accepted precedent and rules of construction to find that Sections 16 and 17(1) have independent, separate functions and so overturn the registrar’s decision. On the contrary, the High Court judge agreed with the registrar that the effect of Section 16, read with Section 17(1), is limited to registered trademarks. She went further to hold that Section 16 must be considered in conjunction with:

• The preamble to the act, which describes it as “an act to make provision relating to the registration of trademarks and for other purposes incidental thereto”;
• Section 7, which states that no person shall be entitled to institute any proceedings to prevent or to recover damages for the infringement of an unregistered trademark; and
• Section 9, which describes the rights given by registration of a trademark.

Accordingly, the High Court upheld the registrar’s decision that D H Brothers’ trademark could not be afforded protection on account of non-registration. D H Brothers appealed to the Supreme Court of Zambia, having final appellate jurisdiction.

The Supreme Court was referred to UK case law and extracts from "Kerly" in support of the general principle. In its judgment, the Supreme Court cited those authorities together with the other representations made to it by the parties and the decisions of the registrar and the High Court. Without revealing reasons for declining to follow the UK authorities, or other detailed grounds for its conclusions, the Supreme Court simply stated its total agreement with the arguments it had received on behalf of Olivine and with the High Court’s analysis of the act. It concluded that the registrar and High Court had been on firm ground; and so dismissed the appeal.

Proprietors and practitioners must note the simple result that Zambia, unlike most Commonwealth and other jurisdictions, is now a 'first-to-file' country where an unregistered trademark, however well-known, cannot afford grounds for opposition proceedings. It may still, however, be useful in an action for passing-off.

The decisions have evidently placed Zambia in breach of its obligations under Article 6bis of the Paris Convention. New legislation would have to be introduced in order to remedy the situation. Fortunately, the WIPO model laws which may be followed for such purpose contain generally-recognised and acceptable provisions for the protection of well-known, unregistered trademarks.

Mac Spence, Spoor & Fisher Jersey, St Helier

A slightly different version of this article was first published in INTA Bulletin Vol 67 No 13 dated July 15 2012