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Luxury Cosmetics Ltd v Royal Mokosoi Pty Ltd [2018] FJHC 514; HBC172.2015 (4 June 2018)

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 : 1st, 2nd and 3rd August, 2017
Date of Judgment : 4th June, 2018


Catch words -
Passing off - trade mark - trade name - registration abroad - online marketing within jurisdiction - reputation or goodwill in jurisdiction- export market - manufacturing in jurisdiction - dilution of trade name - name associated with a specific plant - same words but written differently - different get up- no confusion in get up


JUDGMENT

INTRODUCTION

  1. The Plaintiff filed action against the two Defendants seeking inter alia permanent injunction for using words ‘Royal Mokosoi’ in Fiji and also desist from selling cosmetic, skin and body care products under the said name. The Plaintiff is seeking for damages too. The Defendant is also seeking similar orders against the Plaintiff. The Plaintiff in the statement of claim stated that it intended to launch ‘Royal Mokosoi’ products in December, 2014. Plaintiff received a letter from the lawyers for the Defendants that it was passing off their products no sooner they entered Fiji market with a threat of an action to restraint them. The Defendant is making a counter claim for passing off and infringement under Commerce Commission Decree 2010[1] also seeking orders to restrain the Plaintiff from using name ‘Royal Mokosoi’ through a permanent injunction.

FACTS

  1. Following Facts were admitted in the pretrial conference

‘It is agreed that the Plaintiff received a letter from Sherani & Co Solicitors for the 1st Defendant alleging that the Plaintiff had breached the 1st Defendant’s trade mark called “Royal Mokosoi” where it was alleged that the Plaintiff was passing off the 1st Defendant’s products.


It is agreed that the Plaintiff responded to Messrs Sherani & Co through its solicitors where the Plaintiff’s Solicitors informed the 1st Defendant’s Solicitors that their client was passing off the Plaintiff’s products as their products.’


  1. The Writ of Summons and Statement of Claim was filed in the High Court on 5th May, 2015 according to that Plaintiff is a legal entity incorporated in or around 2013 by Ms. Chute and Mr. R. Choudhary.
  2. The Plaintiff was incorporated to launch cosmetic , Skin and body care products under the brand names ‘Royal Mokosoi’ and ‘Rosalia’ and it was ready to be launched in December, 2014.
  3. For the Plaintiff only Ms. Chute gave evidence and she is also majority shareholder of a legal entity called Mokosoi Products (Fiji) Limited (MPFL) which is not a party to this action. The said entity was incorporated by ex-husband of Ms. Chute who also gave evidence for the Defence.
  4. Ms. Chute in her evidence said that she was educated to form 7 and she had involved as a product developer and marketing of a family business. She said that her ex-husband manufactured a unique soap, whereas she was involved in the development of shampoo in 1988 and was there till about 2000. She was divorced and rejoined MPFL in 2010. In 2010 her ex-husband was abroad and she was the major shareholder of MPFL.
  5. She had also bought a company by the name Antare and had applied to obtain registration of trade mark Royal Mokosoi in Fiji.
  6. The Plaintiff’s products had an agreement with a known chain of retail shops in Fiji, but the 2nd Defendant had written to owner of retail shop chain, claiming products range Royal Mokosoi belongs to her company hence claiming against the Plaintiff for passing off.
  7. The Plaintiff is not claiming any damages and no evidence was produced in that regard.
  8. In cross-examination she rejected her knowledge about products of ‘Royal Mokosoi’ from Nature Fiji an entity owned by 2nd Defendant.
  9. Four of the products under Royal Mokosoi product range of the Plaintiff are made in a factory in overseas and others are made in Fiji.
  10. Ms. Chute admitted that email of 20th Sep, 2013 where word ‘Mokosoi’ is used to refer to MPFL, if that is what was intended by 2nd Defendant.
  11. She also admitted neither MPFL nor Plaintiff had registered brands ‘Mokosoi’ or ‘Royal Mokosoi’ in Fiji. In 2013 an attempt was made to register ‘Royale Mokosoi’ through the Plaintiff’s lawyers and she said the spelling difference is a mistake of the solicitors in the application, but this was also not approved.
  12. She said there is no confusion or similarity as to the packaging of the products from the Plaintiff and Defendants.
  13. The official launch of the Plaintiff’s Royal Mokosoi products were in December, 2014 and before that in October, an order was received for her products.
  14. According to her evidence she was unaware of another product by the name of Royal Mokosoi in the market till she received a letter from the Defendant’s solicitor on 30.12.2014 marked as P 14.
  15. 2nd Defendant gave evidence and she said that after her post graduate qualification she was employed by Australian Government and her husband was posted to Fiji as their Trade Commissioner in Australian High Commission. Till 1994, where she was with them. In 1999 she was the Trade Enterprises of New Zealand which she held till she got employment with MPFL as its General Manager. She had met Kenneth Roberts, who was the owner and manager of MPFL and she was offered the employment with his entity.
  16. She rejected that Ms. Chute was employed in MPFL at the time she joined as its
    GM and worked there for about 3 years, before she started her own companies Natural Fiji and Organic Fiji.
  17. Natural Fiji Pty Ltd was registered as an entity in Australia 2009 and it had obtained trade mark for Royal Mokosoi (D1) in Australia from 19th March, 2014 for products Bar Soap, Bath Soap, Body Soaps, Cosmetic Soaps.
  18. An entity Royal Mokosoi Pty Ltd was incorporated in Australia on 22.2.2014 and its former name was Mokosoi Fiji Pty Ltd.
  19. On 3rd December, 2014 and application for trade mark Royal Mokosoi (D2) which is identical to D1 was made to Intellectual Property Office in UK and it was duly registered for Anti-Bacterial Soap, Detergent, Soap Sugar Soap, Bath Soap, Soap, Shaving Soap, Disinfectant, Soap (Cakes of ) Deodorant and Soap (Deodorant).
  20. She said Royal Mokosoi products were already in the market through Natural Fiji at the time of Plaintiff’s launch and Trade Mark is owned by Natural Fiji Ltd.
  21. Initially her company had few employees and they were not from MPFL but later about two of MPFL employees had joined and there were Akanisi and Waisale.
  22. Waisale was approached by Plaintiff’s Director Ms. Chute as he was very close to Kenneth Roberts, and had worked in Organic Earth Fiji factory.
  23. Royal Mokosoi products of 2nd Defendant were started in 2009 and they were marketed through their retail shop and also handicraft shops and also online sales in Fiji.
  24. The reference to ‘Mokosoi’ in the email of 21st September, was in reference to MPFL and according to the witness said her Royal Mokosoi products are sold in outlets such as MHCC.
  25. 2nd Defendant said that she would not invest if she knew there was another product by the name Royal Mokosoi.
  26. She said that all her products are authentic Fijian made and the Plaintiff’s products are made from imported material so they are like Australian products.
  27. In the cross-examination 2nd Defendant said that she was employed in MPFL from 2006- 2009. She also said her company had made sales in Fiji.
  28. Organic Earth (Fiji) Ltd is an entity formed by the 2nd Defendant as the manufacturing arm of the products including Royal Mokosoi range which is marketed by Natural Fiji Ltd.
  29. Royal Mokosoi products are marketed to Korea, China, Japan and also to India, as opposed to Plaintiff’s product launch in 2014 only to retail market in Fiji.
  30. Waisale who had a long association with MPFL and also its founder CEO and Chairman Kenneth Roberts said that he had on his own accord left the MPFL and joined Organic Earth (Fiji) Ltd and was involved in the manufacturing process with the Defendant’s factory for over 2 years. He said that already the Organic Earth (Fiji) was having Royal Mokosoi products in their product range. He also said Royal Mokosoi was not a product that was made by MPFL at that time and when he rejoined MPFL he was specifically asked about the product range of Organic Earth (Fiji) and also about Royal Mokosoi products. He said he was a soap cutter and also mixer and knew that Royal Mokosoi products were marketed in Fiji by Defendant’s company.
  31. He also said Plaintiff was operating from the premises of MPFL and he said there was no work at MPFL and he left it and again joined Organic Earth (Fiji) Ltd as a security officer.
  32. Ms. Akanisi who gave evidence for the Defendants said she started work in MPFL and joined Organic Earth (Fiji) Ltd in late 2009 and at that time already 2nd Defendant had set up two entities and was involved in manufacture and sale of products made out of coconut oil. She said Royal Mokosoi products were only made by Organic Earth Fiji and also sold in Fiji and named the shops that sold that items. They were USP Book Shop, Cost U Less, Fiji Museum, Island Pharmacy, etc. She also confirmed mailed orders for overseas as well as for local market.
  33. Kenneth Roberts gave evidence and said he was the founder Chairman/CEO of MPFL and he was inspired by Mokosoi flower and its fragrance to incorporate the fragrance of said flower to his products. He also said Royal Mokosoi was not a product range of MPFL and those two words were used only by the 2nd Defendant in her product range.
  34. In the brochure of 2nd Defendant’s own manufacturing arm, Organic Earth Fiji and its international marketing division, Natural Fiji, Kenneth Roberts had described Mokosoi flower is from the as famous Cananga odorata plant. According to him, ingredients of the said flower are used for many international cosmetic and toilette products, including much sought after No.5 from brand ‘Chanel’. He further stated ‘The Mokosoi soap has its own special ingredients which have assisted the soap to win many prestigious international awards. This soap is now re-launched as premium product under the ROYAL MOKOSOI label’.
  35. He admitted writing an article to Nature Products (Fiji) about the Royal Mokosoi products in their product brochure marked as D3. This brochure had its back cover 6 international accolades and the last being year 2015.
  36. According to the said brochure Royal Mokosoi range of products had Body Lotions, Sugar Scrub, Body Oils, Body Bars (single soap, assorted soap, six soaps), Body Butter.

Law

  1. Both parties claim for the usage of name Royal Mokosoi. Mokosoi is a flower grown in Fiji and not endemic plant. The word ‘Royal’ has been added to get it qualify as a distinctive a name of product or product range. So it is not entirely descriptive or generic name.
  2. The claim as well as counter claim is for passing off and also infringement under Commerce Commission Act 2010 for deceptive conduct.
  3. The law of passing off is common law remedy. The basis of a claim for passing off is that goodwill or reputation of a product or service needs protection of law.
  4. In the written submissions both parties had not cited any local cases for passing off. In UK the claimant for passing off needs to prove reputation or goodwill of the customers of the claimant in the jurisdiction. Presence of claimant’s product through internet or even advertising in UK without considerable presence in UK market was held not sufficient, for passing off.
  5. In Starbucks (HK) Ltd and another v British Sky Broadcasting Group plc and others UK Supreme Court [2015] UKSC 31; [2015] 3 All ER 469 at 476-477 pgs discussed goodwill and reputation required for passing off as follow (Per Neuberger P).

‘[21] In AG Spalding & Bros v AW Gamage Ltd (1915) 32 RPC 273 at 284, Lord Parker of Waddington said that 'the nature of the right the invasion of which is the subject of [a] passing-off action' was 'a right of property ... in the business or goodwill likely to be injured by the misrepresentation', and, at least unless the concept of goodwill is given a significantly wider meaning than that which it naturally has, it would not extend to a mere reputation. Thus, in IRC v Muller & Co's Margarine Ltd [1901] UKLawRpAC 20; [1901] AC 217 at 235, Lord Lindley explained that goodwill 'is inseparable from the business to which it adds value, and, in my opinion, exists where the business is carried on'. As he went on to explain, goodwill can have 'a distinct locality' even within a particular jurisdiction. Observations of Lord Macnaghten, Lord James of Hereford and Lord Brampton at 224, 228 and 231-233 respectively were to much the same effect. Although the observations were made in the context of a revenue case, they purported to be general statements about the meaning of 'goodwill'.


[22] In T Oertli AG v EJ Bowman (London) Ltd [1959] RPC 1, the House of Lords unanimously upheld a decision of the Court of Appeal, where Jenkins LJ had said that it was 'of course essential to the success of any claim in respect of passing-off based on the use of a given mark or get-up that the plaintiff should be able to show that the disputed mark or get-up has become by user in this country distinctive of the plaintiff's goods'--see at [1957] RPC 388 at 397.


[23] In another passing off case, Star Industrial Co Ltd v Yap Kwee Kor (t/a New Star Industrial Co) [1976] FSR 256 at 269, Lord Diplock, giving the advice of the Privy Council, referred to and relied on the observations of Lord Parker in Spalding. Lord Diplock explained that '[g]oodwill, as the subject of proprietary rights, is incapable of subsisting by itself', having 'no independent existence apart from the business to which it is attached'. He went on to explain that it 'is local in character and divisible', so that 'if the business is carried on in several countries a separate goodwill attaches to it in each'.


[24] In Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] 2 All ER 927 at 941, [1979] AC 731 at 752, Lord Fraser of Tullybelton quoted Lord Diplock's observations in Star Industrial with approval. At [1979] 2 All ER 927 at 943-944, [1979] AC 731 at 755-756, he went on to identify five 'facts' which it was 'essential' for a plaintiff to establish in a passing off action, of which the first was that 'his business consists of, or includes, selling in England a class of goods to which the particular trade name applies'. In the same case, Lord Diplock [1979] 2 All ER 927 at 932-933, [1979] AC 731 at 742, citing Spalding, identified 'five characteristics which must be present in order to create a valid cause of action for passing off", which included 'caus[ing] actual damage to a business or goodwill of the [plaintiff]'. Viscount Dilhorne, Lord Salmon and Lord Scarman agreed with both speeches.


[25] In the passage in his speech in Reckitt and Colman, quoted in [15] above, Lord Oliver referred to 'a goodwill or reputation ... in the mind of the purchasing public', and [1990] UKHL 12; [1990] 1 All ER 873 at 889[1990] UKHL 12; , [1990] 1 WLR 491 at 510, Lord Jauncey of Tullichettle referred to a requirement that 'the plaintiff's goods have acquired a reputation in the market and are known by some distinguishing feature'. Lord Bridge of Harwich (with 'undisguised reluctance', albeit not in connection with the point at issue), Lord Brandon of Oakbrook and Lord Goff of Chieveley agreed with both speeches.


[26] The ratio of the decision of the Court of Appeal in Anheuser-Busch was indisputably that, in order to support a passing off claim, the claimant must establish goodwill in the form of customers for its goods or services within the jurisdiction. In that case the importation from the United States of bottled beer under the plaintiff's BUDWEISER mark for use and sale in US military and diplomatic establishments within the UK and other European countries did not entitle the plaintiff to establish what Lord Oliver later stated was the first element of a passing off claim in relation to the UK, at any rate outside those establishments. Oliver LJ (later of course Lord Oliver) said at 470 that the sales of 5,000,000 cases of bottles over 12 years in US diplomatic and military establishments in European countries were 'sales for a very special market having no connection with the market in the countries in which the consumption actually took place'; having said that, he accepted that there could well be 'a localised goodwill' within the diplomatic and military establishments. He also emphasised that the fact that the BUDWEISER mark may have had a reputation among a significant number of people in the UK did not assist the plaintiff as it involved 'confus[ing] goodwill, which cannot exist in a vacuum, with mere reputation', adding that 'reputation which may, no doubt, and frequently does, exist without any supporting local business ... does not by itself constitute a property which the law protects'. O'Connor and Dillon LJJ expressed similar views at 471-472 and 476 respectively.


  1. Further at p480 discussed requirement for having sufficient business in UK in the form of customers and stated,

‘[32] So far as Anheuser-Busch is concerned, as I have already indicated, the fact that the decision proceeded on the basis that a plaintiff in a passing off action must have goodwill, in the form of customers, in the jurisdiction did not represent any departure from an approach already approved by the House of Lords. As Oliver LJ pointed out at 464, Lord Diplock in Erven Warnink [1979] 2 All ER 927 at 934, [1979] AC 731 at 744 stated that a plaintiff must have 'used the descriptive term long enough on the market in connection with his own goods and have traded successfully enough to have built up a goodwill for his business', and, as Oliver LJ then observed, this 'emphasises the point that goodwill (as opposed to mere reputation) does not exist here apart from a business carried on here'. As Oliver LJ went on to say, the same feature 'emerges with even greater clarity from the decision of the Privy Council in Star Industrial'. And Dillon LJ in Anheuser-Busch at 475-476 cited Spalding, Star Industrial and IRC v Muller to make the same point.


[33] A number of first instance, mostly interlocutory, cases were cited by Mr Silverleaf to support his argument that there is or should be no requirement that a claimant in a passing off action should be able to establish goodwill, as opposed to mere reputation, in the jurisdiction concerned. I do not think that any of the decisions in question assists PCCM.


[34] In Socieìteì Anonyme des Anciens Établissements Panhard et Levassor v Panhard Levassor Motor Co Ltd [1901] UKLawRpCh 130; [1901] 2 Ch 513, it is true that the French motor car manufacturer plaintiffs, as Farwell J put it at 516, 'did not sell directly in England'. However, as he went on to explain, 'their cars were bought and imported into England ... so that England was one of their markets'. As Dillon LJ put it in Anheuser-Busch at 477-478--

'the French plaintiffs there had a market for their cars with the general public in this country through the importers who had obtained licences from the third parties who had relevant patent rights and ... the reputation, when the cars were imported into this country, enured to the French plaintiffs.'


Nor does Sheraton help PCCM. As explained in [29] above, the US hotel company had a booking office and agents in London, so it had customers in England. In Suhner & Co AG v Suhner Ltd [1967] RPC 336, Plowman J made no conclusive finding that the plaintiff had goodwill in the UK, but it is clear that its goods had been sold here--see at 337-338. In Globelegance BV v Sarkissian [1974] RPC 603, Templeman J reviewed many of the authorities at 609-613, and clearly accepted that it was necessary to have custom in this country, concluding that '[p]ure advertisement is clearly insufficient [but taking] bookings [is] sufficient [as is] carrying out orders in this country'. He then decided that the activities of the plaintiff in that case, selling patterns to a department store, who then used the patterns to make up dresses which were sold under the plaintiff's mark, was enough.


[35] In a significant number of other cases at first instance, it is clear that, well before the Court of Appeal decision in Anheuser-Busch, Chancery judges considered that a plaintiff had to establish at least an arguable case that it had business in the UK before it could obtain an interlocutory injunction against passing off. Before turning to them, it is instructive to refer to Maxwell v Hogg [1867] UKLawRpCh 8; (1867) 2 Ch App 307, which appears to have been the first case in which an English court specifically decided that mere reputation, without customers, was not enough to found a passing off claim. The Court of Appeal held that the plaintiff's advertising campaign in respect of a proposed new newspaper called 'Belgravia' with a view to imminent publication did not give him any right to enjoin the defendant from publishing a newspaper with the same name. Turner LJ, after mentioning the inconvenience of a plaintiff who had not even used the mark being able to restrain someone else from doing so, said at 312 that the plaintiff had 'neither given, nor come under any obligation to give, anything to the world; so that there is a total want of consideration for the right which he claims'. Cairns LJ at 313-314, explained that the plaintiff had no 'right of property' for which he could claim protection, as 'there has been no sale, or offering for sale, of the articles to which the name is to be attached'.


[36] More recent cases which support Sky's case include the decisions of Pennycuick J in Alain Bernadin et Cie v Pavilion Properties Ltd [1967] RPC 581, Brightman J in Amway Corp v Eurway International Ltd [1974] RPC 82, and Walton J in Athletes Foot Marketing Associates Inc v Cobra Sports Ltd [1980] RPC 343. In Alain Bernardin, Pennycuick J held that the plaintiffs could not obtain an injunction against the use of the mark CRAZY HORSE in the UK, even though they could establish a reputation here for its cabaret in Paris under that name. The plaintiff's problem was that they could not identify any business done in the UK, either directly or indirectly (to use Farwell J's expression in Panhard), in connection with their 'Crazy Horse Saloon' in Paris, and the mere distribution of advertisements was not enough (hence Templeman J's observation in Globelegance [1974] RPC 603). In other words, there does not seem to have been any evidence of any customers in England of the plaintiffs' Paris establishment as opposed to people in England who visited that establishment when they were in Paris (see at 582).


  1. After discussing decision in UK and other jurisdictions Neuberger P in Starbucks (HK) Ltd and another v British Sky Broadcasting Group plc and others [2015] UKSC 31; [2015] 3 All ER 469 at p 483 held, that

‘In other words, when considering whether to give protection to a claimant seeking relief for passing off, the court must be satisfied that the claimant's business has goodwill within its jurisdiction.’


  1. There are differences in opinion relation to passing off in some jurisdictions including Australian Federal Court decision, in ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 106 ALR 465, handed down by Lockhart J (Gummow and French JJ agreed) UK position remains unaltered and claimant needs to establish reputation and goodwill in jurisdiction. In Singapore are more relaxed position is taken. (See Jet Aviation (Singapore) Pte Ltd v Jet Maintenance Pte Ltd [1998] 3SLR (R) 713.
  2. In a decision of Court of Justice of European Union sales through website was held to be insufficient to prove that product or services were targeted at consumers in jurisdiction. (See L’Oreidl SA v eBay International AG (2011 RPC 77).
  3. JW Spear & Sons Ltd and others v Zynga Inc (No 2) [2016] 1 All ER 226 UK Court of Appeal, had applied Starbucks (HK) Ltd and another v British Sky Broadcasting Group plc and others [2015] UKSC 31; [2015] 3 All ER 469.
  4. In ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 106 ALR 465 it was held that, international commerce needs deviation from the requirement for the claimant to prove goodwill and reputation in the jurisdiction by actual selling of goods or providing services in the jurisdiction where passing off is claimed. In contrast UK Supreme Court held that such a deviation from common law remedy should be left to the parliament.

ANALYSIS

  1. If the name of product is distinctive and had acquired reputation or goodwill, it will reduce search cost for the consumers. This allows the manufacturer to invest more on quality. In order to acquire reputation or goodwill the quality of the good needs to be enhanced and investment by research and development is needed in this regard. Advertising and marketing are also another investments. The type of good or service is also a factor that needs to be considered for passing off. In cosmetic products names of the products or product ranges attach more product loyalty than other products or services. Most people stick to one brand of cosmetic product for a long time.
  2. The claim and counterclaim are regarding use of words Royal Mokosoi in the product range of respective parties. The Plaintiff which was incorporated in 2013 entered market in December, 2014. The Plaintiff’s goodwill in relation to passing off is from the time it entered market.
  3. The Defendant’s solicitors had written a letter to the Plaintiff on 30th December, 2014 that ‘Royal Mokosoi’ is a Trade Mark belonging to their client and they have been distributing body care products under the name and style ‘Royal Mokosoi’ for several years and Plaintiff is infringing their rights by using ‘Royal Mokosoi’ in Plaintiff’s products.
  4. The solicitors for the Defendants had stated in the said letter

‘Your prompt compliance is required failing which we are instructed to commence legal proceedings against you without further notice to you seeking an injunction against your company substantial damages which have been incurred by our client because of your activities.


Our client may also institute criminal prosecution for breaches of the Fair Trading Decree which carry heavy fines and/or imprisonment terms unless there is full compliance as requested above’


  1. In spite of that letter of threatened litigation no such action was instituted by the Defendants and Plaintiff stole a march on them by filing this action in court seeking injunctive relief against the Defendant for passing off. This was possible because of low or absence of significant market share by Defendants’ Royal Mokosoi products in local market.
  2. There is no counterclaim for any breach for Fair Trading Decree though it was mentioned in the said letter of the Defendants’ solicitors, as a prospective cause of action.
  3. There is no evidence that Plaintiff had manufactured or marketed products under the name Royal Mokosoi prior to 2014, in order gain goodwill or reputation for the name.
  4. So it is a far cry for the Plaintiff to seek injunctive relief against Defendants for passing off, despite a warning in 2014 by the solicitors for the 2nd Defendant.
  5. As stated earlier UK Supreme Court held that passing off can only be maintained when the party claiming it had entered the market and had gained reputation or goodwill in the said market within the jurisdiction. In this instance there should be proof that in Fiji Royal Mokosoi products have obtained goodwill or reputation among Fijian customers.
  6. The Plaintiff is alleging some change of names of a legal entity belonging to 2nd Defendant, which is not the basis of passing off claim of the Plaintiff. The passing off alleged in the claims are the usage of the words Royal Mokosoi in relation to certain cosmetic products and, not the name change of an entity in Australia belonging to 2nd Defendant. The action for passing off is in relation to products and use of name Royal Mokosoi.
  7. This action was instituted in May 2015 with a claim for permanent as well as interim injunction against the Defendant. The Plaintiff in the statement of claim pleaded Commerce Commission Act 2010 and also passing off of their products under name ‘Royal Mokosoi’.
  8. The Plaintiff’s application for interim injunction was refused by the court.
  9. The Plaintiff had admittedly entered the market only December, 2014 and as soon as they entered the Defendant’s solicitors have written a letter alleging the infringement. So any reputation or goodwill of the Plaintiff in relation to its products rage under name Royal Mokosoi, from the launch of products in Fiji by the Plaintiff. There is no such proof of goodwill or reputation proved though evidence since the launch to the institution of this action which is nearly 6 months.
  10. The Plaintiff cannot claim for any right for MPFL, though a significant shareholding in two entities remains in the hand of Ms. Chute, as the damage from the passing off should be to the Plaintiff and not to any other party. It should be noted a failed attempt to register ‘Royal Mokosoi’ as well as ‘Royale Mokosoi’ was done by the Plaintiff.
  11. In Starbucks (HK) Ltd and another v British Sky Broadcasting Group plc and others - [2015] UKSC 31; [2015] 3 All ER 469 at 475 stated, (Per Neuberger P)

‘[15] As Lord Oliver of Aylmerton explained in Reckitt and Colman Products Ltd v Borden Inc [1990] UKHL 12; [1990] 1 All ER 873 at 880[1990] UKHL 12; , [1990] 1 WLR 491 at 499, '[t]he law of passing off can be summarised in one short general proposition--no man may pass off his goods as those of another'. As he immediately went on to say, a claimant, or a plaintiff as it was then, has to establish three elements in order to succeed in a passing off action:


'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 ... Third, he must demonstrate that he suffers or ... 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.'


  1. The Plaintiff who had entered Fiji Market in December, 2014 and within days of launch it received a letter from the solicitors for the 2nd Defendant of the infringement of their product name Royal Mokosoi. The Plaintiff did not have a reputation for their products under Royal Mokosoi prior to December, 2014 as they have not entered the Fiji Market before that.
  2. Ms. Chute who gave evidence for the Plaintiff said that it took 2 years to develop the product range Royal Mokosoi. According to her their products were developed in Australia, but no evidence was produced of their cosmological tests in Australia since 2013. Even if this is accepted, time period relevant to goodwill, for passing off starts not when the goods are tested in laboratory or research and development happens, but after they are launched to the public. Goodwill or reputation of a product is associated with the public, and it will take time to gain goodwill and or reputation to a product. Though no definite time period cannot be determined arbitrarily, the burden of proof is with the claimant, Plaintiff and this was not proved at hearing.
  3. The claim for passing off needs to establish three things and they are
    1. Goodwill or reputation attached to product or service to public.
    2. Misrepresentation of the goods or services to public.
    1. Damage from the erroneous belief in the public to the claimant.
  4. The Plaintiff had only been in the market for few days when they received a letter from Defendant’s solicitors claiming for the usage of Royal Mokosoi in the range of cosmetic goods similar to the Plaintiff. The entire product range of Royal Mokosoi is not identical. There was no reputation or goodwill during that time period.
  5. So there was no reputation or goodwill created before the dispute arose as to the usage of words Royal Mokosoi by the Plaintiff hence no infringement of passing off by the Defendants jointly and or severally. Even if one takes the time of institution of this action the reputation or goodwill of the Plaintiff needs to be restricted up to May, 2015. (i.e 6 months). There is no evidence to prove a notable reputation or goodwill during this time period to qualify for a claim for passing off.
  6. Without prejudice to what was stated above, there cannot be any claim against the 1st Defendant as it was not an entity involved with 2nd Defendant’s Royal Mokosoi products. The undisputed evidence presented at the hearing proves that the products under name Royal Mokosoi, belonging to 2nd Defendant are manufactured by Organic Earth Fiji Limited in Fiji and they are manufactured through Natural Fiji. These entities are not parties to this action.
  7. Plaintiff’s claim for passing off fails as the Plaintiff was unable to establish that it had in any way associated with Royal Mokosoi to gain a goodwill or reputation in Fiji. The Plaintiff was incorporated in 2013 and their product launch was in December, 2014. Plaintiff cannot manufacture any product prior to its inception in 2013 and no evidence of Plaintiff establishing a reputation or goodwill for Royal Mokosoi products even in 2014.
  8. The Plaintiff had also claimed under Commerce Commission Act, 2010 for deception and misleading the public, but both parties at hearing said that their respective commercial get-ups are different hence products are distinguishable. The claim for passing off is for use of words Royal Mokosoi. The evidence for the Plaintiff was that as soon as launch of the products under Royal Mokosoi range, solicitors for the 2nd Defendant had not only informed them but also their exclusive retail outlet chain (in March 2015) about the alleged infringement of passing off by the Plaintiff. (See P15). This is not the conduct of person who is attempting to mislead or deceive public. So there is no proof of misleading or deception of the consumers by the Defendants by use of name Royal Mokosoi. In fact the 2nd Defendant had taken steps to safeguard the reputation and goodwill attached to goods named as Royal Mokosoi and to prevent any misleading or misrepresentation to the consumers. The claim under Commerce Commission Act, 2010 against the Defendants also fails.

Counter Claim of the Defendants

  1. It is common knowledge that the 2nd Defendant was already manufacturing range of cosmetic products from 2009 and they are exclusively made in Fiji and had obtained “Fijian Made” certification awarded by the government of Fiji. In the analysis of evidence it is proved on the balance of probability that 2nd Defendant as the owner through Organic Earth Fiji was manufacturing its cosmetic products and marketing them through Natural Fiji, had established international reputation for product range under name ‘Royal Mokosoi’ before the entry of the Plaintiff to Fiji market.
  2. 2nd Defendant through Natural Fiji, had marketed in Fiji in limited outlets but their volume of sales are not known. Royal Mokosoi products manufactured by Organic Earth Fiji, had obtained international Trade Mark registrations in UK and also in Australia for ‘Royal Mokosoi’ trade mark for class 3 category of goods. These Royal Mokosoi products had won international awards, too. They were marketed to Australia, and then to Korea, China, Japan and India.
  3. There is evidence that Organic Earth Fiji was manufacturing Royal Mokosoi products for a considerable time period. Though MPFL was manufacturing coconut soaps and some cosmetic products it had not used the name ‘Royal Mokosoi’ in their products. Even if they did Plaintiff cannot claim passing off. The founder GM/CEO of MPFL gave evidence and denied Royal Mokosoi product range manufactured in MPFL.
  4. There is evidence that even MPFL was interested about the products Organic Earth Fiji was manufacturing prior to the establishment of Plaintiff. Waisale in his evidence said the curiosity of Ms. Chute about the products made by Organic Earth Fiji Ltd, specially Royal Mokosoi range of products
  5. There is no evidence that Plaintiff had used product name Royal Mokosoi prior to their product launch in December, 2014.
  6. According to the 2nd Defendant’s evidence products made by her entities, had been in the market since 2009 and this is justified by oral evidence of the witnesses called for the Defence.
  7. From the emails that had exchanged prior to the launch of Plaintiff’s products to the market it can be deduced that 2nd Defendant was manufacturing Royal Mokosoi products though she was not interested in the company MPFL where Ms. Roseline Chute had majority shares. This email cannot give a strained meaning as contended by the Plaintiff. There is reference to Mokosoi in previous communication where reference was made to MPFL (see email of 20.9.2013 by Rosie Chute) and not for Royal Mokosoi products. So email of the 2nd Defendant on 21.9.2013 cannot take in isolation, but has to read with the previous email from Ms. Chute.
  8. 2nd Defendant had also informed the owner of the well-known outlet chain, where Plaintiff had entered exclusive sales agreement that the Plaintiff was passing off her brand ‘Royal Mokosoi’. In that email she had informed that her products are sold in Fiji though email orders. If there were other sales in the retail outlets why such a thing was not stated? So it can be assumed at that time there were no significant sales in retail outlets in Fiji or there were no retail sales of Royal Mokosoi products in Fiji. Even the letter of the solicitors written on 30th December, 2014 had not indicated any retail shop or retail outlets in Fiji where Royal Mokosoi products were sold. (See P15)
  9. Organic Earth Fiji Limited is manufacturing world renowned cosmetic range which had won international accolades since 2010. The said range includes ‘Royal Mokosoi’ and this was also registered as a Trade Mark in UK and Australia even before the product launch of the Plaintiff.
  10. So the Defendant had established a reputation and or goodwill for Royal Mokosoi and it has certain characteristics and it is Fijian Made and accordingly certified. Plaintiff’s all Royal Mokosoi range of products are not made in Fiji and some are made in Australia and some are also made from imported substances. So there is a difference in the quality of the goods and Defendant’s product being ‘diluted’ by its quality of exclusive Fijian Made, authenticity, in an established market where they gained goodwill.
  11. In the submissions for the Defendants, they had argued that Plaintiff’s action for passing off was wrongly instituted against the 1st Defendant and it should have been Natural Fiji Pty Ltd. This is correct. There is no proof that the 1st Defendant manufactured or marketed Royal Mokosoi products. I accept the Defendant’s contention, and at the same time this will apply to their counterclaim for passing off against the Plaintiff. The claim for passing off needs to be made from the entity whose reputation and goodwill is damaged. 2nd Defendant is only a shareholder of the entities that manufacture and market products under name Royal Mokosoi. So the counterclaim needs to be struck off, too. The 1st Defendant is not the entity responsible for manufacturing or marketing Royal Mokosoi products. So, the claim under Commerce Commission Act, 2010 also fails on the same ground.
  12. Apart from the said deficiency in order to counterclaim passing off against the Plaintiff there should be reputation and or goodwill among the customers in Fiji. International recognition can be a factor to be taken in to consideration but, presence of their goods in Fiji is needed to claim for goodwill to succeed a claim for passing off. In order to apply test in Reckitt and Colman Products Ltd v Borden Inc [1990] 1 All ER 8 there needs be misrepresentation and also loss of revenue (damages) and for this purpose their presence in the market is needed. 2nd Defendant’s email to the owner of retail chain that sells Plaintiff’s Royal Mokosoi products had only indicated about email orders. No details of such orders were presented in court at the hearing to assess whether such orders were substantial to be considered as having a goodwill or reputation. (See P15). The wittiness called for the Defendants, Akanisi said that some sales of Royal Mokosoi products were done to few outlets but again failed to provide volume of sales and or proof of such sales to such outlets, at the time of hearing or before that. Such evidence is needed in this case to prove goodwill.
  13. Even when there is some modest reputation through advertisement or offer of goods through website or other uses of internet, more than de minimis, it is not sufficient for an action for passing off until a good will is created by the customers in Fiji. To gain goodwill though such orders, Defendant must provide details of such internet sales such as volume, frequency etc. These were not provided in the evidence. So, there is no proof of goodwill among the customers in Fiji for the Royal Mokosoi products for an action for passing off, in favor of Defendant. So the counter claim for passing off is struck off.

CONCLUSION

  1. The Plaintiff’s claim for passing off fails as there is no proof that the Plaintiff had gained any reputation or goodwill for her products under Royal Mokosoi name. The Plaintiff was incorporated in 2013 and started marketing products under Royal Mokosoi only in December, 2014. The 2nd Defendant through Organic Earth Fiji and Natural Fiji had initiated production as well as marketing a product range under name Royal Mokosoi and they are certified Fijian Made products, unlike Plaintiff’s products which are not Fijian Made. Natural Fiji’s products are being exported to several countries including Australia, Korea, Japan, China and India. The products under name Royal Mokosoi are manufactured by Organic Earth Fiji and marketed by Natural Fiji. None of the said entities are parties to this action so no counter claim can be made for passing off or under Commerce Commission Act, 2010 by the Defendants. At the same time there is no proof that the Defendants had obtained goodwill for their Royal Mokosoi products in Fiji. Even details of email orders are not before the court to determine goodwill of the Royal Mokosoi range of goods. The commercial get ups for Royal Mokosoi products of the two parties are not similar and there is no confusion in that regard. Even the way Royal Mokosoi is written differently. The counter claim is dismissed. Each party to bear their costs.

FINAL ORDERS

  1. Plaintiff’s claim is struck off.
  2. Defendants counter claim is struck off.
  1. No costs.

Dated at Suva this 4th day of June, 2018
....................................
Justice Deepthi Amaratunga
High Court, Suva

[1] Commerce Commission Act 2010

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