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Luxury Cosmetics Ltd v Royal Mokosoi Pty Ltd [2016] FJHC 37; Civil Action 172.2015 (29 January 2016)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

Civil Action No. 172 of 2015

BETWEEN :

LUXURY COSMETICS LTD
a limited liability company having its registered office at Suite Toti Street, Wailada, Lami
PLAINTIFF

AND :

ROYAL MOKOSOI PTY LTD
a company incorporated in Brisbane, Australia and having its registered office at 546 Gympie Road. Kedron QLD, 4031, Australia.
1ST DEFENDANT

AND:

SANGEETA DEVI REDDY aka GEETA REDDY
of “4”, 72 Wallace Street, Chermside, QLD 4032, Australia.
2ND DEFENDANT

Counsel : Mr. D. Sharma for Plaintiff
Mr. R. Singh for Defendants
Date of Hearing : 13th November, 2015
Date of Judgment : 29th January, 2016

JUDGMENT

INTRODUCTION

1. The Plaintiff filed inter partes injection against the Defendants on 5th May, 2015 and the Defendants filed a similar application for injunction against the Plaintiff, on 7th August, 2015. Both applications were seeking to restrain the usage of name “Royal Mokosoi” by the other side in their respective line of products. Both parties are using the said for their own product range in cosmetics including toiletries. No party had obtained registered trade mark to “Royal Mokosoi” in Fiji. Defendants have obtained registration of their trade mark containing word “Royal Mokosoi” in UK but not in Fiji. Defendants are alleging passing off by usage of word “Royal Mokosoi” and also recruiting one of its employee to obtain their trade secrets as well as some future marketing plans. Plaintiff and Defendant are clamming passing off and also misleading and deceptive conduct by the opposing side, relating to the usage of words “Royal Mokosoi”. Apart from the usage of said words there is no allegation of similarity in the commercial get ups of the product lines belonging to respective parties. Both parties are seeking monopoly of the usage of words “Royal Mokosoi”.
   

FACTS

2. The Plaintiff is a local company and it was incorporated on 12th September, 2013. On or around 10th December, 2014 it had launched its “Royal Mokosoi” product range in Fiji. The product range included bath soap, body soap, and cosmetic soaps. Both parties are in the business of manufacturing luxury soaps and body care products among other things.
   
3. The Defendants allege that a former employee of theirs named Waisale was employed by the Plaintiff. The said employee was very close to Kenneth Roberts, who knew about the secret formula for manufacturing of the said products, and also the future plans of the market expansion of the Defendant. They also allege that their future marketing plans were also known to the said employee and strategic information was obtained by the Plaintiff, including the secret formula for the manufacturing of the said products, to launch their line of products named “Royal Mokosoi” in late 2014.
   
4. The Defendants on 30th December, 2014 through their solicitors wrote a letter to the Plaintiff, threatening legal action unless they remove the products named “Royal Mokosoi” from the market and discontinue their product line under said name.
   
5. In the said letter the Solicitors for the Defendants stated that their similar named product had been in their line of products for several years and the “Royal Mokosoi” trade mark belong to the Defendants. It also threatened legal action if their request was not complied with.
6. The solicitors for the Plaintiff replied the said letter on 28th January, 2015 and denied the content of the letter dated 30th December, 2014 and stated that they would not accede to the request of discontinuing the use of words “Royal Mokosoi” and also said that they would defend any action filed by the Plaintiff.
   
7. Though the Defendants threatened the Plaintiff of legal action no such action was filed. After the communication dated 28th January, 2014 there was a lull in a storm till this action was filed.
   
8. The Defendants filed the present action on 5th May, 2015 and simultaneously sought injunction. In the statement of claim the Plaintiff is claiming that the conduct of the Defendants were deceptive and misleading contrary to Commerce Commission Decree 2010 by using the brand name “Royal Mokosoi” when they already knew that the Plaintiff was selling products under the same name.
   
9. The Plaintiff alleges passing off as well as misleading and defective conduct and seeks restraining of the use of name “Royal Mokosoi” in Fiji.
   
10. The Defendants have stated in their counter claim that the conduct of the Plaintiff was deceptive and contravened provisions of the Commerce Decree 2010. They are also alleging passing off by the Plaintiff.
    

ANALYSIS

11. Both parties are accusing each other for passing off and also deceptive and misleading conduct contrary to Commerce Commission Decree 2010. None of them have got registration for “Royal Mokosoi” as a trade mark in Fiji, though the Defendant had obtained the same in UK.
    
12. The Defendants had obtained the registration of the Trade Mark “Royal Mokosoi” on 3rd September, 2015, in UK on an application made on 19th Mach, 2014.
    
13. The launch of Plaintiff’s product line to the market in Fiji was in December 2014 and before that the Defendants had obtained the trade mark registration for the design of “Royal Mokosoi” in UK. The said Trade Mark was registered for goods and services in the categories of Bar Soap, Bath Soap, Body Soaps, and Cosmetic Soaps in UK, but there is no registration in Fiji.
    
14. The Plaintiff and Defendants are engaged in manufacturing and selling soaps and other cosmetic products. The Plaintiff had launched their line of products under the name “Royal Mokosoi” in December, 2014 and within few days they had received a letter from the solicitors for the Defendants to discontinue using the name “Royal Mokosoi” as it belonged to them. The said letter also threatens legal action but it was the Defendant who filed this action seeking an injunction.
    
15. Though the Defendants have registered “Royal Mokosoi” as a trade mark in UK, it had not been registered as a Trade Mark in Fiji. I have not been pointed out any law that recognizes reciprocal acceptance of Trade Marks in UK in Fiji.
    
16. Though the Defendant stated that they were engaged in selling products under said trade

mark since 2009 through web based marketing, at this moment there is no evidence to support that it had obtained any reputation and or goodwill in Fiji. In the circumstances marketing through web ipso facto does not create a reputation in the whole world. There should be some evidence to support that products marketed through the web were in fact purchased by customers in Fiji and it had created a goodwill or reputation in Fiji. The fact that web could be accessed in Fiji for purchase was not sufficient.

17. In Starbucks (HK) Ltd and another v British Sky Broadcasting Group plc and others [2015] UKSC 31; [2015] 3 All ER 469 it was held that in order to prove passing off there should be actual presence in the jurisdiction so that there should be evidence of consumers in the jurisdiction and also obtaining reputation in the said jurisdiction was required. The probability of web access to find out that there was another person who own the same name was not sufficient. The Plaintiff denies that Defendant’s position that “Royal Mokosoi” products were sold in Fiji prior to December 2014.
    
18. In Reckitt and Colman Products Ltd v Borden Inc and others [1990] UKHL 12; [1990] 1 All ER 873

Held, p 885

‘Every case depends on its own peculiar facts. For instance, even a purely descriptive term consisting of perfectly ordinary English words may, by a course of dealing over many years, become so associated with a particular trader that it acquires a secondary meaning such that it may properly be said to be descriptive of that trader's goods and of his goods alone, as in Reddaway v Banham [1896] UKLawRpAC 18; [1896] AC 199, [1895–9] All ER Rep 133.

19. The words "Royal" and "Mokosoi" were not coined by either of the parties. The word "Mokosoi" is a Fijian flower and when used with "Royal" whether it acquired a secondary meaning or distinctive characteristics associated with the line of products sold by either of the party is not clear. The Plaintiff had entered the market of luxury soap and cosmetic market with a line of products in December, 2014, about 6 months prior to this action. As soon as they entered the market Defendant claimed that the word "Royal Mokosoi". Defendants mainly rely on their registration of said words as a trade mark in UK and also using social media to promote as trade mark.
    
20. In Reckitt and Colman Products Ltd v Borden Inc and others (supra) it was further held,

The law of passing off can be summarised in one short general proposition, no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely on a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Third, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.

21. The above was applied in a recent case of Starbucks (HK) Ltd and another v British Sky Broadcasting Group plc and others [2015] UKSC 31; [2015] 3 All ER 469.
    
22. Both parties claim exclusive usage of words "Royal Mokosoi" but none of them claim that the 'commercial get up' of the respective product line are similar or deceptive. Even the words "Royal Mokosoi" were written differently in two product lines. Apart from this there may be other distinctive features for example, size and colour of letters and pattern of letters, the name of the manufacturer, the place of manufacturing that distinguishes the two lines of products manufactured by respective parties. Apart from using words "Royal Mokosoi" there is no allegation of any similarity between the products of the parties.
    
23. It should also be noted that I have not been told whether the colour and other characteristics of the two products are distinctive for the customers. The only issue that was raised by both parties relates to use of "Royal Mokosoi" in their products.
    

The Injunction against the Defendant

24. The law relating injunction is contained in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] 1 All ER 504 and needs no elaboration .
    
25. The first question is whether there is serious question to be tried. Considering the circumstance of the case there is a serious question to be tried as both parties are using "Royal Mokosoi" in their line of products. They are not written in the identical manner and specially looking at the registered trade mark in Uk, the way the same words are used are not similar. The Plaintiff seeks exclusive usage of words 'Royal Mokosoi'. The Defendant states that it had even used this name for their products as far back in 2009.In the absence of registered trade mark in Fiji for "Royal Mokosoi" whether any party could claim monopoly over the usage of said words needs to be determined at the hearing. That is a serious question of law.
    
26. At this stage it is not appropriate to consider the conflicting evidence as the Plaintiff denies the prior usage of the words "Royal Mokosoi" by the Defendants. (See American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] 1 All ER 504 at 510). These are matters to be dealt at the trial.
    
27. The serious question to be answered is whether there is a passing off of the products manufactured by the Plaintiff and or whether there is a deception or misleading conduct by the Defendant in violation of the Commerce Commission Decree 2010.
    
28. The next issue is balance of convenience favours the grant or refusal of the injunction. For that whether damages would be an adequate remedy and whether the Plaintiff is in a position to pay if at the hearing it was held otherwise needs to be determined. Both these questions cannot be answered affirmative at this moment. The Plaintiff had no product line in the market before December, 2014. As soon as they entered the Defendant accused them of passing off and or infringement of their Trade Mark. The financial position of the Plaintiff is also not clear as they have just entered the market and the Company had no proven track record compared with the Defendant's.
    
29. Plaintiff has entered the market only in December, 2014 with their line of products under the name "Royal Mokosoi". The Plaintiff had not obtained registration prior to the launch of the said products, which would grant them a monopoly. The Plaintiff's products had been market in less than 6 months prior to institution of this action and during this time whether they acquired reputation or goodwill enough for an injunction cannot be decided in favour of the Plaintiff considering the balance of convenience.
    
30. The counsel for the Plaintiff relied on an email correspondence between the parties, and emphasized on an email in September, 2013, but I do not wish to elaborate on such evidence and hold the scale of balance of convenience at this moment as that would amount to analyzing conflicting of affidavit evidence. (See American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] 1 All ER 504 at 510).
    
31. The Defendant alleges their trade secrets including the formula for the products were obtained by recruiting an employee who had been very close to the brain behind the luxury soap manufacture for a considerable time. The Plaintiff is a new entrant to the market in December, 2014. There is no evidence of their products obtaining reputation since the launch. The Defendants even allege that their product line named "Royal Mokosoi" was already in the market. There is no evidence of sales and it cannot be assumed that during the relatively short period it had obtained reputation for words "Royal Mokosoi" to give it a secondary meaning associated with their products. These are mattes for the trial. In such an instance it cannot be said at this moment that the consumers were being deceived or misrepresented in terms of the Commerce Commission Decree 2010.
    
32. There is no evidence of similarities between the two product. The colour and the manner in which the words depicted and the type of font or design and the size of it all matters to a consumer when selecting a particular product. The total appearance of the commercial get up is important to consider likelihood of misrepresentation or deception to the consumers. The balance of convenience does not favour the Plaintiff in granting an injunction preventing the Defendants using words "Royal Mokosoi". In the circumstances I refuse the injunction sought by the Plaintiff.
    

Injunction against the Plaintiff

33. The Defendants also seeks injection against the Plaintiff based on Passing off and or deceptive and misleading conduct of the Plaintiff. The Defendant's counter claim was based on them.
    
34. There is a serious question to be tried as to the allegation of passing off and or misleading conduct. The Defendant alleges that even their trade secrets were obtained by recruiting a former employee who had access to such information. The Defendant also alleges that their marketing plans were also known to this employee. These are all facts that needs to be tested at trial. It is not possible to consider such facts from affidavits unless admitted. Whether the Plaintiff was aware of the alleged usage of words "Royal Mokosoi" by the Defendants cannot be considered on affidavit evidence.
    
35. The next question is balance of convenience and whether it favours grant of injunction in favour of the Defendant restraining the Plaintiff. First it has to be considered whether the grant of damages would be adequate if an injunction is not issued and whether the Plaintiff is in a position to pay. On the available evidence I cannot say for certain both issues favours grant of the injunction. On the reverse if an injunction is granted and at the trial and if it was held otherwise, the adequacy of damages needs to be considered. The Plaintiff had just entered the market, hence it would be difficult to measure their damage. Such an injunction might even put a new entrant permanently out of market, and that may be irreparable damage to the Plaintiff.
    
36. In Starbucks (HK) Ltd and another v British Sky Broadcasting Group plc and others [2015] UKSC 31; [2015] 3 All ER 469 held that there should be presence in the jurisdiction and reputation in the jurisdiction.
    

37. The monopoly to use a Trade Mark is available when it is registered, but in this case nether side had done so. The Plaintiff had launched the line of products under "Royal Mokosoi" on or around 10th December, 2014. This action was filed by the Plaintiff even before a lapse of 6 months from the entering the market. According to the affidavit of the Defendants they had done their marketing of "Royal Mokosoi" product line, through internet using social media and had their products in their outlets, but again these are not matters that can be decided on affidavit as there was no evidence in support of that fact that they were in the market for long to create reputation for "Royal Mokosoi" product line. It should also be noted that Defendants were in a business luxury soap industry for some time, but had not used "Royal Mokosoi" name for their products till 2009, according to their evidence. When they knew about the Plaintiff's product line they threatened with legal action but did not seek an injunction for more than 8 months.

38. So, on the balance of convenience it does not favour the grant of injunction prayed by the Defendants against the Plaintiff.
    
39. When considering the overall justice also does not favour grant of injunction allowing monopoly for usage of words "Royal Mokosoi" to any party at this juncture. In Fiji Court of Appeal Civil Appeal No ABU0012 of 2003S Chung Exports Limited et al Vs Food Processors (Fiji) Limited (unreported) decided on 26th August, 2003 it was held that damages would be an adequate remedy in a passing off and misrepresentation claim and refused the grant of injunction on the basis that overall justice does not warrant such an injunction.
    

CONCLUSION

40. Although there is a serious question to be tried regarding the issue of passing off and or misrepresentation regarding the use of "Royal Mokosoi" in the line of products manufactured by each party the overall justice does not warrant grant of injunction favouring either party . Both parties were fully aware of both lines of products under "Royal Mokosoi" in the market since the launch in December 2014. It took nearly six months for the Plaintiff to seek injunctive remedy against t*-he Defendants. There is no evidence that words "Royal Mokosoi" had obtained any secondary meaning associated with any of the parties. These are issues that needs to be tried at the hearing. By granting an injunction at this moment would put one party at an advantages position. If the Defendant is granted an injunction it could prevent market penetration by a new entrant. If the injunction is granted to the Plaintiff it could also put them in a favourable position over competitor who even alleges obtaining their trade secrets through a former employee. Overall justice does not warrant injunction granting monopoly to any party under the circumstances of this case. The both applications for injunctions are struck off. Considering the circumstances of the case I would not grant any costs.
    

FINAL ORDERS

a] The inter partes summons dated 5th May, 2015 filed on the same date by the Plaintiff is struck off.

b] The summons filed on 7th August, 2015 by the Defendants seeking injunction is struck off.

c] No costs.

Dated at Suva this 29th day of January 2016

Justice Deepthi Amaratunga
High Court, Suva