Ferodo Limited Vs Ibeto Industries Limited (2004)

LAWGLOBAL HUB Lead Judgment Report

DAHIRU MUSDAPHER, JSC. 

The appellants herein were the plaintiffs in the Federal High Court and the appellant at the Court of Appeal, Lagos. The claim in the Federal High Court was against the respondent herein (as the defendant and was in the following terms:-

“An injunction to restrain the defendant whether acting by itself, its servants or agents or any of them, or otherwise howsoever from doing the following acts or any of them that is to say–

(i) Infringing the 1st plaintiff’s registered Trade Mark No. 38604.

(ii) Passing off or causing or enabling or assisting others to pass off the defendant’s UNION brake findings as and for the plaintiffs’ FERODO brake linings.

(iii) Setting or offering for sale or supplying brake linings or brake pads with labels or in packages having distinctive red, black and white package design or get up of the plaintiffs’ FERODO brake Linings’ package design or get up or so closely resembling it as to be calculated to lead to the belief that brake linings not of the plaintiffs’ manufacture and merchandise are products of the plaintiff’s.

DELIVERY UP for obliteration destruction of all brake linings, packages and labels containing the offending Marks or being in the offending design or get up, including printing blocks and other matters the use of which would be a breach of the injunction prayed for.

DAMAGES OF N1,000.000.00

EXEMPLARY OR AGGRAVATED

Damages of N500,000.00.

COSTS.

FURTHER OR OTHER RELIEFS.”

In the 2nd FURTHER AMENDED STATEMENT OF CLAIM filed with the leave of the trial court on 3/12/1991, the above claims were repeated by the plaintiffs.

Now, the facts of the case may be put shortly thus: The first plaintiff is an English company and the second plaintiff is its Nigerian associated company. The plaintiffs are the manufacturers and sellers of the FERODO brand of brake linings for motor vehicles sold in cardboard packages registered by the first plaintiff as Trade Mark No. 38604 and tendered in evidence at the trial as Exhibit C. They claim that the design or get up of packages in which they sell their FERODO brake linings is distinctive to them and to their product. They also claim that they had been in the Nigeria market with their distinctive trade mark for a period for over ten years prior to the suit taken in court.

The defendant on the other hand is an indigenous Nigeria company and claims to manufacture and sell brake linings under brand name of UNION. The plaintiffs claim that the packaging under which the defendant marked its UNION brake lining is so similar to the plaintiffs’ packaging, that it constituted an infringement of the plaintiffs’ registered trademark No. 38604. The sale of the defendant’s brake lining also amounted to the passing off of the plaintiff’s products. The plaintiff further allege that the Managing Director and the Marketing Manager of the second plaintiff paid a visit to the defendant’s factory in March 1990 and were shown a package by which the defendant wanted to market the UNION brand of brake linings. The package shown was almost an exact replica of the FERODO package. The plaintiffs through the Managing Director aforesaid objected to the proposed use of the package whereupon the defendant’s Managing Director undertook not to use the package. The package shown to the plaintiffs by the defendant is Exhibit E in these proceedings. While on a business trip to the eastern part of Nigeria, it was observed by the Marketing Manager of the second plaintiff, packages of the defendant’s brand of UNION brake linings in red, black and white colour combination so closely resembling the FERODO

package design as to likely deceive the public have been put up for sake in the markets. The defence of the defendants was simply that the design of FERODO box was not distinctive of the plaintiff alone. Red packaging in combination of black and white is traditional to the trade of brake linings. It was further argued that their use of the “UNION” packaging did not amount to passing off of the plaintiffs’, FERODO brand of brake linings and its use did not constitute an infringement of the plaintiffs’ trademark No. 38604. The defendants again denied ever using as its packaging exhibit F, which the plaintiffs claimed was used to infringe the plaintiff’s trademark. The defendant tendered in evidence Exhibit O which contained the packaging they use to market their UNION brand of brake lining. It is important to bear in mind that the plaintiffs, as agreed by them, would have no complaint against the defendant if the defendant were in fact only using Exhibit O to market its merchandise. On the 28/2/1994, the learned trial Judge in part of his judgment held as follows:-

“There is no doubt in my mind that whether this court finds that the defendant marketed its products in Exhibit F or O does not infringe the registered trade mark of the plaintiffs’ No. 38604 according to Exhibit D which is the certificate for use in Legal proceedings from the Registrar of Trade Marks. What the plaintiffs registered as their trade mark is the word FERODO and in order to infringe the said trade mark, the defendant must have taken the said word in its entirety or must have a substantial portion of it.

IN KERLY’S LAWS OF TRADE MARKS AND TRADE NAMES 10th Edition page 307 paragraphs 15-02, it was stated that in an action for infringement of trade mark the plaintiff complains that the defendant has infringed his trade Mark by taking in its entirety, or by taking a substantial portion of it, or by colourably imitating it, and he relies on his statutory title to the exclusive use of the mark in question in goods of a specified kind. The right which is given by a valid registration is the right to exclude others from the use of the trade mark, in this case. “FERODO.” It is therefore clear that the defendant’s use of its own name “UNION” or “UNION SUPA” is so far away from the plaintiffs’ registered trade mark by all standards that it can never be an infringement of “FERODO” since in an action for infringement, it is the marks themselves that must be compared. I am of the firm view that the use of the defendant’s mark UNION does not in anyway resemble the plaintiffs’ registered mark FERODO as to likely to deceive or cause confusion as no device was registered along with the word “FERODO”.

The learned trial judge thus found there was no infringement of trade mark firstly because it was only FERODO that was registered as the plaintiff’s trade mark and that UNION or UNION SUPA could not by any manner amount to an infringement of FERODO. The learned trial judge further in his judgment found that the claim of passing off also failed because red, black and white colour combinations as claimed by the plaintiffs was not distinctive to them and was common to the trade of brake linings and brake pads. He found that the plaintiffs failed to prove their claims against the defendant and he non-suited the plaintiffs for the reason given in the judgment aforesaid.

The plaintiffs felt unhappy with the decision of the trial court and appealed to the Court of Appeal. At the hearing of the appeal at the Court of Appeal, the plaintiffs abandoned the appeal as it related to the issue of passing off. The appeal was limited to the issue of infringement of the trade mark. Three issues were submitted to the Court of Appeal for determination of the appeal. The issues were:-

“1. Whether the registered trade mark of the first plaintiff is simply the word mark FERODO or the representation as shown in Exhibit D.

Whether the defendant marketed its product in Exhibit F or O.

Whether Exhibit F constituted an infringement of the 1st plaintiff’s trade mark registered, under No.38604 in class 17.”

The Court of Appeal in its judgment delivered on 17/2/1999 affirmed the decision of the trial court and dismissed the plaintiffs’ appeal. The findings of the Court of Appeal are consistent and concurrent with the findings of the trial Court. The court below in parts of its judgment specifically held: –

“xxxxxxxxxx A careful and analytical consideration of the registered trade mark of the appellants impresses me that in actually what was registered was “FERODO” xxxxxxxxxxxxxx It cannot be taken that those fanciful and ornamental characters which colour the face of the package form part of the trade mark xxxxxxxxxx.”

The plaintiffs still felt disgruntled and have now appealed to this court. The plaintiffs, are hereinafter referred to as the appellants while the defendant, as the respondent. On the 25/10/2000 with the leave of this court an amended Notice of Appeal containing eight grounds of appeal was filed. On the 9/1/2001, the respondent filed a Notice of Preliminary Objection to the hearing of the appeal on the grounds that:-

“1. The appellants’ appeal is incompetent.

The appellant have not complied with requisite law and Rules of Court and

The appeal constitutes an abuse of the process of the Court.”

The learned counsel for the respondent in the respondent’s brief expatiated on his objections to the hearing of the appeal. In the appellants’ reply brief filed on 5/2/2001, the appellants conceded to grounds 5, 7 and 8, that they are grounds of mixed law and facts and that no leave was sought and obtained to argue them. Thus the appellants have conceded the incompetence of grounds 5, 7 and 8. These grounds without much ado, are hereby struck out by me. In the aforesaid brief the respondent further argued that the remaining grounds 1, 2, 3, 4 and 6 are also incompetent either on the grounds that the complaints as contained in the grounds of appeal did not flow directly from the judgment of the court below or that the grounds of appeal contain complaints on facts or at best complaints on mixed law and facts for which leave to canvass the grounds was necessary.

It shall be necessary now to reproduce the remaining grounds of appeal as contained in the amended Notice of Appeal filed on the 25/10/2000: –

(i) The learned justice of appeal erred in law in enquiring into the entitlement of the 1st plaintiff/appellant to the exclusive use of certain components of the representation of the trade mark registered under No.38604.”

PARTICULARS

(a) By the provision of Trade Marks Act, in any legal proceedings a registered trade mark must be presumed as having been validly registered.

(b) Enquiring into the entitlement of the proprietor of the trade mark to the exclusive use of any component of the trade mark, where no disclaimer has been entered in the register of trade marks in respect of such component, is to enquire into the validity of the registration of the trade mark.

(c) The court can enquire into the validity of a registered Trade Mark at the instance of a defendant, only where the defendant has challenged the validity of the trade Mark. However, the defendant/respondent herein did not challenge the validity of the Trade Mark No. 38604 at the Federal High Court.

(ii) The learned justice of the appeal erred in law in holding that the trade mark registered under No. 38604 is the word FERODO and that other components of the device affixed to Exhibit D were mere garnishes and not intended to form part of the trade mark.

PARTICULARS

(a) The presumption at law is that all components of a Trade mark as registered are intended to form part of the trade mark unless disclaimer under Section 15 of the Trade Mark Act.

(b) No disclaimer was shown to have been entered against any of the components of the devise registered as trade Mark No. 38604.

(c) The representation of the trade mark registered as No.38604 is not the word FERODO alone but the device affixed to Exhibit D.

(iii) The learned Justice of appeal erred in law in concluding that in so far as red cardboard was easily available in the market, the plaintiffs appellant do not have an exclusive right to use red cardboard in the marketing of their products.

PARTICULARS

(a) The learned Justices of appeal failed to give consideration to the manner in which red colour was used in combination with other colours and shapes in trade mark No. 38604 in comparison to the manner in which red colour was used in Combination with other colour and shapes in design of the packaging of the defendant/Respondent’s product.

(b) A registered trade mark made up of several elements, can comprise of elements individually common to the Trade, yet be distinctive as a composite unit such a the proprietor thereof will be entitled to the exclusive use of all those individual elements in the manner in which they have been used in the trade mark.

(c) The use by any person other than the proprietor of the Trade mark of elements contained in a registered trade Mark in a combination which is so similar to the combination in which those elements have been used in the registered trade mark as to be likely to deceive or cause confusion in the course of trade is an infringement of the trade mark.

(vi) The learned Justice of Appeal erred in law in accepting the finding of Exhibit L to the effect that, brake pads and brake linings are normally purchased only by mechanics and spare parts traders when there was no pleadings to those facts in the Statement of Defence.

PARTICULARS

(a) The question as to who the mark complained of is likely to deceive, is a material fact, and should be pleaded, unless it is the general public that is likely to be deceived.

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(b) Case law requires that opposing party to be put on Notice of the results of opinion surveys before they could be relied on.

(c) There was no pleading in the statement of defence suggesting that the product to which the contending marks are applied are purchased by a restricted class other than the general public.

(vii) The learned Justice of Appeal erred in law in placing reliance on Exhibit L in order to decide that the Defendant/Appellant’s package design is not likely to deceive, in comparison to the 1st plaintiff/appellant’s trade mark No. 38604.

PARTICULARS

(a) For the purpose of comparing one trade mark to the other the appropriate point of view to be adopted by the court in deciding whether the defendant’s trade Mark is so similar to the plaintiffs as to be likely to deceive in the course of trade, is the point of view of a man with an imperfect recollection of the Plaintiff’s Trade Mark.

(b) Interviews conducted and reported in Exhibit L did not rest the likelihood of the interviewees to be deceived on the basis of an imperfect recollection of the 1st Plaintiff/Appellant’s trade mark. Rather the opinion of the interviewees were sought based on a side by side comparison.

(c) A report of the opinion of persons not called as witnesses is hearsay evidence and should not be relied upon as proof of the truth of the assertions made by them.”

Now, it is firstly argued in respect of ground one above, that the complaint of the appellant did not directly flow from the decision of the Lower Court. The ground is therefore irrelevant and incompetent. It is also argued that the ground of appeal is a complaint or a question of fact or mixed law and fact and no leave of either the court below or this Court was sought and obtained. It is argued by the learned counsel for the appellant, that the court below decided that despite all the representations contained in Exhibit D, what was registered as a trade mark was only the word FERODO. It was adjudged by the Court below that the appellants are not entitled to have the exclusive monopoly of the other features in the colours red, black, and white as contained in Exhibit D. So, the issue of what was the registered trade mark or whether the other features other than the word FERODO were registered as part of the trade mark or they were in fact so registered so that the appellant might have the monopoly to exclusively use them to market his goods. I agree with the learned counsel for the appellants that the complaint as contained in first ground of appeal clearly emanated from the decision of the Court of Appeal. I accordingly overrule the first part of the preliminary objection in relation to the first ground of appeal.

The next objection in relation to ground number 1 is that it is a ground complaining on findings of fact or findings on mixed facts and law. In my view, what is called for determination in ground number one has to do with the subject of registration as a trade mark. Was it the word FERODO, alone? As adjudged by the lower courts? Or was it the entire representative as shown in Exhibit D? It is, in my view, a matter of law whether the components of the device as contained in Exhibit D are also registered or are registerable under the Act, Or are they common to the trade of brakes linings and brake pads. Or are they only decorative ornaments and not being crucial and essential as to amount to or be part of trade mark. In my view, no matter what angle you examine it, the first ground of appeal is a ground of law: The preliminary objection in respect of the ground one is accordingly not made out and is overruled by me. In my view the second ground of appeal is also complaining on the decision of the lower court on what was the registered trade mark. It is almost the same is the first ground, though differently and more clearly drafted. I also overrule the objection against the second ground of appeal.

But grounds No.3, 4 and 6 are clearly complaints on questions of facts or at best questions of mixed law and facts. No leave of the court below nor of this court has been sought to argue the grounds of appeal. I rule that they are incompetent and are also struck out by me. Thus since grounds 3, 4, 5, 6, 7 and 8 are incompetent and the issues premised upon these grounds are also incompetent and must also be struck out. Therefore issues 3, 4, 5, and 6 are not relevant to the decision in this appeal and are struck out.

Thus the only valid issues remaining for the determination of this appeal are issues number one and two which read as follows:-

“1. Whether the Court of Appeal should at all have looked into the registerbility or the entitlement of the plaintiffs/appellants to exclusive use of the individual components of the trade mark registered under No. 38604?

If the Court of Appeal was right to have looked into the registerbility of any component of trade mark No.38604, whether the court was right in deciding that only FERODO was registered under trade mark No. 3874.”

ISSUES 1 AND 2.

Now the learned counsel for the appellants argued issues 1 and 2 together. These are concerned with the decision of the court below that the trade mark registered by the 1st appellant No. 38604 was only the word FERODO and as such the appellants have no right

to the exclusive use of the other components as contained in Exhibit D. That is to say that the appellants have monopoly to the exclusive use of the design of the packaging in which they market the FERODO brake linings and brake pads. It is submitted that if the decision of the Court below is correct, any person can apply to the Registrar of Trade Marks Section 38(1) of the TRADE MARKS ACT cap 436 LAWS OF THE FEDERATION OF NIGERIA (1990) and demand that the trade mark register be rectified by the removal or amendment of the entry under No. 38604 to reflect the decision that what was registered was only FERODO. It is further submitted that the decision of the trial court and the Court of Appeal went further than the issue of whether the appellants’ trade mark was infringed, it also devalued the trade mark of the appellants. That the decision is clearly contrary to Section 5 of the Trade Marks Act cap 436, Laws of the federation of Nigeria, 1990. Learned counsel also referred to Section 9, 15 and Section 11 of the Trade Marks Act. It is submitted further that the implication of the decision of the lower courts is that the appellants’ trade mark was invalidly registered which was clearly not the case of the respondent. It is again argued that by virtue of section 49 of the Trade Marks Act, there is a presumption of the legality of the registration of the trade mark and the lower court ought to have reminded itself of this legal presumption. In any event, the respondent never doubted the validity of the appellant’s trade mark and did not claim that the trade mark be declared invalid. All what the respondent pleaded in its statement of defence is that the appellants have no exclusive right to use the colours red, black and white for packaging their brake linings.

It is further argued, that it was the entire representation as contained in Exhibit D that was registered and not only the word FERODO appearing therein as adjudged by the lower courts. It is again submitted that the decision in RE CLEMENT ET CIE TRADE MARK (1900) CH. D 114 at 121 or (1899) RPC 611 at 618 was wrongly applied by the lower Court. See also Section 9 and 67 of the Trade Mark Act. It is again argued that in any event, the facts in the RE CLEMENT case above and the instant case are not the same. In conclusion, it is submitted, that the appellants did not register “FERODO” as their trade mark alone, but allthe component parts as contained in Exhibit D were registered and the appellant are entitled to the exclusive use of all of them to market their merchandise.

The learned counsel for the respondent on the other hand argued that Exhibit D consists of the word “FERODO” written in white against a black background with chequered strip and all in a red background.

The appellants tried to convince the lower courts that it was not the name “FERODO” alone that constituted the registered trade mark, but the trade mark included the graphic design which is characterized by the chequered strip device. The respondent however argued that the red, black and white colours which feature in Exhibit D are mere embellishments or garnishes which do not form part of the registered trade mark. It is argued that by Section 9(1)(a) of the Trade mark Act, the registered mark of the first plaintiff can only be the word “FERODO”, Learned Counsel referred to KERLY’S LAW OF TRADE MARKS AND TRADE NAMES 10th Edition page 136 paragraph 8 – 57 where it is stated:-

“A mere geometrical outline, such as is commonly used as border for embellishing other marks, will not be accepted as a distinctive mark.”

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The respondent, therefore, submits, that the colour outlay with the geometrical outlines of a chequered strip which appear on the background of the representation on which the distinctive word “FERODO” is set do not constitute a component part of the 1st appellants registered trade mark.

In addition, the respondent says that the colour outlay and combination and the geometrical outlines are not a distinctive character of the said mark within the contemplation of Section 9(1) Trade Marks Act; as they only qualify as embellishments and are merely added for decorative value of flourishes colourably placed on the representation Exhibit D.

The learned counsel for the respondent further argued that an examination of exhibits C, K and K1 and Exhibit D, and bearing in mind that the appellants’ mark could only have qualified for registration under section 9(1)(a) of the Trade Marks Act, it becomes clear that only the word FERODO was registered as trade mark No.38604. Further to above P.W.2 gave the name of the appellant’s brake pads as FERODO”.

Now, the question of what was registered as a trade mark No.38604 by the first appellant must be answered. The essence of a trade mark is that it indicates a connection in the course of trade between the goods and some person having the right to use the same. A mark, in this connection includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof. A trade mark on the other hand is a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connection in the course of trade between the goods and some person having the right either as a proprietor or a registered user to use the mark. An action for infringement will therefore lie where a competitor uses registered trade mark in connection with proprietor’s goods for the purpose of comparing them with his own goods in the same class. See BISMAG LTD VS. AMBLINS (CHEMISTS) LTD. (1940) Ch 667. A trade mark can also be defined as a distinctive picture which would indicate to a purchaser of an article bearing it the means of getting the same article in future by getting an article with the same mark on it. A trade mark if registered gives the proprietor the exclusive right to use the trade mark in marketing or selling his goods. And without his consent if any one else uses an identical mark or one mark so nearly resembling it as to be likely to deceive or cause confusion, will entitle the proprietor to sue for infringement of the trade mark, or to sue in action for passing off or both.

Now, the appellants claim that what was registered as trade mark in the instant case is the entire representation as shown in Exhibit D.

Exhibit D contains the word FERODO in the context of a specific graphic design which comprises of the following elements:

“A large red rectangle, a black and white chequered strip stretching from one side to the other at the lower end of the rectangle. A small black rectangle centrally positioned in the upper half of the red rectangle in which it is inscribed in white capital letters the word FERODO.”

The appellants claim that the lower courts were wrong to have held it was only the word FERODO that was registered and that the graphic design is not intended to be registered but merely fancial or ornamental coloration intended merely to decorate. In the case of WOODARD LTD VS. BOOLTON MACRO LTD And in THE MATTER OF THE REGISTERED TRADE MARK OF WOODWARD LTD No. 100(1915) 32 RPC 173 at 196. It was observed thus:-

“xxxxxxxxxx The first matter that I have to determine upon that is – what is the trade mark? It has been urged on the part of the defendant that there is no infringement because the trade mark is not that which the plaintiffs allege it to be, the words “GRIPE WATER” but is infact the words “GRIPE WATER” printed in letters which I have described and the scroll or decoration upon which they are so printed. The answer to that – and I think it is good answer – is this; that this is infact a word mark, it was infact registered as a word mark, and that it is not a case in which I can either say that the mark is the ornamentation with the words added, or that it is a mark made up of a combination of words in common use with an ornamentation. I think that Mr. WALTER’S argument is right, that which ever it was, if it was a good mark, the abstraction from it and the user by others of the words “GRIPE WATER” would constitute on infringement.”

Thus the ornamental way in which “GRIPE WATER” was written did not affect or change the basic and essential idea, that the intended trade mark is the name GRIPE WATER. Similarly the idea of the trade mark in the instant case is clearly the word FERODO. This is significantly proved to be so, by the witness called by the appellant, who not only swore that the appellants’ products are identified and sold by their brand name, but also by swearing, that they would not sue the respondent, if it was using the package in Exhibit O which was a package in an identical colour outlay with Exhibit C.

There is no doubt that the appellants claim registration of their trade mark under Section 9 of the Trade Marks Act CAP 436 LFN.

Section 9 reads:-

“9(1). In Order for a trade mark (other than a certification trade mark) to be registrable in part A of the register it must contain or consist of at least one of the following essential particulars.

(a) the name of a company, individual, or firm, represented in a special or particular manner;

(b) the signature of the applicant for registration or some predecessor in his business.

(c) An invented word or invented words.

(d) A word or words having no direct reference to the character or quality of the goods, and not being according to its ordinary signification or geographical name or surname.

(e) Any other distinctive mark:

(2) For the purpose of this section, “distinctive” means adopted, in relation to the goods in respect of which a trade mark is registered or proposed to be registered, to distinguish goods with which the proprietor of the trade mark is or may be connected in the course of the trade mark from goods in the case of which no such connection subsist, either generally or, where the trade mark is registered subject to limitation, in relation to use within the extent of the registration.

(3) In determining whether a trade mark is adapted to distinguish as aforesaid, the tribunal may have regard to the extent to which –

(a) the trade mark is inherently adapted to distinguish as aforesaid; and

(b) by reason of the use of the trade mark or of any other circumstance, the trade mark is in fact adapted to distinguish as aforesaid.”

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SC. 95/1999