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J Santa Ram (Stores) Pte Ltd v Divya Selection Supplies Ltd [2022] FJHC 81; HBC208.2021 (28 February 2022)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 208 of 2021

BETWEEN: J SANTA RAM (STORES) PTE LIMITED of a limited liability company having its registered office at Suva in the Republic of Fiji.

PLAINTIFF

AND: DIVYA SELECTION SUPPLIES LIMITED a limited liability company having at 49 Sikeci Place, Laucala Beach Estate, Suva.

DEFENDANT

Counsel : Plaintiff: Mr. Singh. R

: Defendant: Mr. Singh. S
Date of Hearing : 23.11.2021
Date of Judgment : 28.02.2022


Catch Words
Trade Marks- Registration- Territorial Protection- Registration of Trade Mark-Parallel Imports- TRIPS-WTO- passing off-Fijian Competition and Consumer Commission Act 2010 Sections 75,76, - Sections 38 and 40 of Trade Marks Act 1933, Section 87.88 of Trade Marks Act 2021.

JUDGMENT

INTRODUCTION

  1. Plaintiff sought and obtained injunction against the Defendant from importing selling marketing or distributing razor blade under brand name “Swish”, by way of ex parte motion. Both parties were importing razor blades made by one manufacturer but from different exporters. Trade Mark (TM) “Swish” in Fiji is registered by Plaintiff as representative of manufacturer. Plaintiff claimed passing off and breach of Sections 75 and 76 of Fijian Competition and Consumer Commission Act 2010. These provisions are contained in Fijian Competition and Consumer Commission Act 2010, in Part 7 of the Act headed ‘consumer protection and unfair practices’. So they are measures to deal misleading and unconscionable conduct of traders, and or ‘unfair practices’ in order to protect the consumers. Razor blades under brand name ‘Swish’ bearing TM “Swish” imported by both parties, are admittedly manufactured by the same manufacturer. There was no allegation of counterfeit products being imported by Defendant so as to mislead consumers. Hence there was no need to protect consumers or apply such law for this application. The dispute between Plaintiff and Defendant had arisen due to, Defendant directly importing razor blades with TM Swish (Parallel Imports). This is not an ‘unfair practice’ in terms of Section75 and 76 of Fijian Competition and Consumer Commission Act 2010.

TM protection under Intellectual Property (IP) law in Fiji in terms of Trade Marks Act 1933 gives territorial protection upon registration in Fiji. Section 38 of said Act gives exclusive right to use TM, but once released the item to market it can be resold without infringement of TM rights (Exhaustion of IP).

At the hearing counsel for Plaintiff admitted Defendant’s products are Parallel Imports. There is no TM Law violation in Fiji by Parallel Imports. There is no passing off regarding Parallel Imports by Defendant. Without prejudice to what was stated, the commercial get ups of, two products are easily distinguishable due to high contrast in colours selected by parties and also inscriptions on that. So on admitted facts, there are no serious question to be tried at hearing. Even if I am wrong on above balance of convenience favors immediate dissolution of ex parte injunction obtained by Plaintiff considering, TM Law, Competition Law, Parallel Imports, IP Policy, Passing Off, and Economic Freedom. Overall justice of the case does not warrant restraining Parallel Imports, considering undisputed facts and relevant laws.
FACTS

  1. Plaintiff filed an ex –parte notice of motion on 15.10.2021 seeking following orders

ii. the total sales generated from selling "Swish" brand razor blades in Fiji from the date of first import to-date.

iii. a complete inventory of its "Swish" brand razor blade currently in stock from the date of first import to Fiji.

  1. On 20.10.2021 an ex parte Order was granted against Defendant was restrained from the following:-
    1. From importing, marketing, distributing and selling razor blade under brand name "Swish" or similar to that of the Plaintiffs.
    2. To deceive purchaser/consumer into belief that they are purchasing "Swish" blade.
    3. Passing off of "Swish" blade/trade mark, until further order of the Court.
    4. AN injunction is granted restraining Defendant or is agents/servants from using word "Swish" on blade or similar category of items until further order of the Court.
    5. AN injunction is granted restraining Defendant by itself/servants/agents from selling "Swish" brand razor blade until further order of the Court.
    6. THE Plaintiff to serve Order, Motion and Affidavit in Support to Defendant.
    7. THE matter is adjourned to 29th October, 2021 for mention at 8.30 a.m.
  2. When the matter was called on 29.10.2021 directions were given for filing of Affidavit in opposition and hearing of injunction inter partes for setting aside of injunctive orders. The matter was heard inter partes on 23.11.2021.
  3. The Plaintiff is a limited liability company registered with the Registrar of Companies on 13.7.1979 and has been operating over 40 years. The Plaintiff was also engaged in importing, wholesaling, distributing and marketing of razor blades under TM "Swish".
  4. Sales (Fiji) Limited had obtained registration of TM "Swish" in 1993. In the application for registration, it showed that Sales (Fiji) Limited had applied for registration of TM “Manufacturers Representatives".
  5. Initial TM registration certificate was issued to Sales (Fiji) Limited being TM Certificate No. 25024.
  6. Plaintiff, was buying and selling "Swish" brand razorblades in the Fiji markets since the 1990's from Sales (Fiji) Limited.
  7. On 7.2.2017, under a Deed of Assignment of TM entered between Sales (Fiji) Limited and Plaintiff assigning TM to Plaintiff. So Plaintiff became proprietor of TM “Swish” by assignment.
  8. A Deed of Assignment was registered on trademark certificate number 25024 on 13.12.2017 being Assignment No. 45003 for remaining period of registration.
  9. Defendant bought ‘Swish’ TM razors from Plaintiff and was marketing or selling them in Fiji for some time. Plaintiff had no issue with such sale as that was with implied consent with Plaintiff when such razor blades were sold in bulk to Defendant.
  10. Recently, instead of purchasing razor blades with TM ‘Swish’ from Plaintiff, Defendant was purchasing it from another entity who had purchased the same from Laser Shaving (UK) Ltd, which was a wholesaler in UK for the product.
  11. These were manufactured by the same manufacturer whom Plaintiff had obtained registration of TM in Fiji.
  12. So Defendant is selling the same products originated from same manufacturer but marketed by Laser Shaving (UK) Ltd. There is no allegation of this product being counterfeit as TM on those are legally affixed to them and entitled to be exhibited and or sold in that manner.
  13. The registration of TM assigned to Plaintiff, expired on 17.9.2021 and Plaintiff made an application for renewal and renewal was obtained on 10.11.2021 for fourteen years from 17.9.2021.
  14. Plaintiff became registered TM proprietor as “Manufacturers Representatives” according to TM certificate issued in 2021 for seven years.
  15. Defendant contend that by obtaining registration of TM Plaintiff cannot have exclusive right to sell razor blades under TM “Swish”.
  16. Plaintiff is claiming passing off, unfair practice, deception of consumers by Defendant hence restraining them.

ANALYSIS

  1. Plaintiff obtained ex parte injunctive orders to restrain Defendant from

‘(i). importing , marketing, distributing and selling razor blade under brand name “Swish” or similar to that of Plaintiff’s’.

(ii) To deceive purchaser/consumer into belief that they are purchasing “Swish” blade

(iii) Passing off of “Swish” TM, until further order.’

  1. Plaintiff had obtained TM certificate for razor blades “Swish” as ‘manufacturer’s representative’ according to Renewal Certificate under Renewal No 50540, accordingly Plaintiff became exclusive proprietor to use it in connection with goods in respect of which it is registered in terms of Section 38 read with Section 40 of Trade Marks Act 1933.
  2. Plaintiff had obtained registration of TM. It was renewal of TM ‘Swish’ which was initially registered by Sales (Fiji) Limited, which had terminated its business in Fiji. Before termination, it had assigned their licence, for rest of validity period till 2021 to Plaintiff.
  3. So, in 2021 Plaintiff had obtained registration under its name, but this was not a new application for TM registration, but a renewal of the licence that got expired in 2021 which was registered by Sales (Fiji) Ltd. This was in terms of Section 40 of Trade Marks Act 1933.
  4. It is not disputed that Defendant was also in the business of marketing ‘Swish’ razor blades which it had previously, bought in bulk from Plaintiff. This was prior to Defendant started importing directly the same TM bearing, product from abroad.
  5. There was no allegation of infringement of TM, or passing off, by Defendant when it resold razor blade bearing TM ‘Swish’ bought from Plaintiff and marketed the same in Fiji.
  6. Defendant stopped buying from Plaintiff, and imported razor blades bearing TM ‘Swish’ for resale, from ‘Sai Exports’ who had brought goods marketed by Laser Shaving (UK) Ltd.
  7. According to affidavit in opposition Sai Exports had bought the genuine products from Laser Shaving (UK) Ltd. (see paragraph 11(iv) of Affidavit of Defendant).Defendant’s product on backside had clearly indicated that fact.
  8. This is not a disputed fact. At hearing Plaintiff’s counsel admitted this was a case of Parallel Import. This position is deduced from affidavits as well.
  9. Plaintiff in reply to Defendant’s paragraph 11 in its affidavit stated

“The Plaintiff is importing “Swish” brand razorblades directly from the manufacturer, Laser Shaving (India) Pvt Ltd and annexed herein marked with letter ‘C’ is a copy of consignment from confirming the same.

The Defendant is not buying from manufacturer, they are buying from a company called “SAI Exports”. They have not shown any evidence that manufacturer has authorized SAI to export the products to Fiji market. SAI might be authorized to sell in Indian market only.” (emphasis added)

  1. The sample product of Defendant annexed to affidavit in opposition on its back side indicated that it was a product ‘Marketed by Laser Shaving (UK) Ltd’. So there was no deception or unconscionable conduct and or unfair trade practice on the part of Defendant. Both products are genuine but marketed by two entities, one to Plaintiff and another to Defendant. Consumers and wholesalers and retailers can buy the product from any marketer of genuine product for consumption, or resale.
  2. In an application for injunction it is considered facts stated in the affidavit as the correct position of the parties which they will prove at the hearing, but it is unsafe to restrain a legitimate trade of Defendant entirely relying on a doubt without any evidence to support such a doubt.
  3. Plaintiff is in doubt as to alleged restraint of trade imposed by manufacturer to supplier of Defendant. So what Plaintiff is stating in their affidavit evidence is that razor blades bearing ‘Swish’ is an original product, sold by manufacturer to Sai Export, but ‘might’ had a restraint of trade clause to export abroad. No evidence was placed to such a belief.
  4. So it is not in dispute that both parties have imported products manufactured by same manufacturer after the items were released for sale. According to above averments, Plaintiff was uncertain, whether ‘Sai Exports’ were allowed to market the same product under some territorial restrictions, by manufacturer.
  5. If such restriction was made, Plaintiff should be able to submit it as sufficient time had passed from ex parte injunctive orders it had obtained, by the time of inter partes hearing. Failure to provide such material remains an issue of alleged restriction by manufacturer to Defendants exporter of items.
  6. Plaintiff cannot say that it is in doubt as to ‘Sai Export’s authorization to sell razor blade bearing TM, ‘Swish’ and request an injunction to restrain Defendant’s imports from Sai Exports. It is not justified to stop a legitimate business of Defendant since Plaintiff thinks that there were some restrictions as to export of them, placed by manufacturer regarding exporting razor blades sold in India.
  7. Restraining of Defendant from engaging in legitimate business on a fact that Plaintiff is not known, is also not justified in terms of Section 32 of the Constitution of Republic of Fiji.
  8. The general freedom of trade under Section 32 of the Constitution of Republic of Fiji can be subjected to restrictions under Section 32(3) of Constitution of Republic of Fiji. Restrictions to trade is dealt in Halsbury’s Laws of England (Vol 18 (2022) states at; 195. Classification of restraints,

“Restraints upon the general freedom to trade may be roughly divided into restraints imposed on a person by statute, by operation of law, by agreement and by the rur practices ofes of professional or other bodies controlling particular activities.”

  1. In thstance, Plaintiff relies ones on ‘an agreement’ or ‘rules’ or some other unknown restriction, which Plaintiff failed to reveal. Plaintiff is in doubt at this moment but seeks to restrain Defendant’s legitimate trade. This is not only unfair but also heavily favours rejection of interim injunction considering overall justice.
  2. Even if some restraint by manufacturer to Sai Export, is proved at the trial, Plaintiff’s request for restraining Defendant from importing cannot succeed.
  3. This contention of Plaintiff, is based on restraint to trade imposed by manufacturer of the goods, through an agreement between third parties to this action, and nothing to do with IP rights. So it should be separated from claims made statement of claim. There was no claim based on restraint of trade.
  4. Even if such a claim is made, such a restraint will prima facie not enforceable against Defendant on public policy grounds. Defendant was not a party who had such an agreement, with manufacturers, to be bound by it. Apart from that such a restraint will also infringe on economic freedom. This is a restraint on good and not IP rights including TM.
  5. Halsbury’s Laws of England (Vol 18 (2022)) states at “198. Restraints by agreement and by professional or other bodies”

“Restraints may be imposed by agreement or by the rules or practices of professional or other bodies controlling particular activities. A person may be restrained from carrying on his trade by reason of an agreement voluntarily entered into by him with that object. In such a case the general principle of freedom of trade must be applied with due regard to the principles that public policy requires for persons of full age and understanding the utmost freedom to contract, and that it is public policy to allow a trader to dispose of his business to a successor by whom it may be efficiently carried on, and to afford to an employer an unrestricted choice of able assistants and the opportunity to instruct them in his trade and its secrets without fear of their becoming his competitors”( footnotes ignored)

  1. So the restraint on Sai Exports, cannot not apply to Defendant as there was no agreement between Defendant and manufacturer. Apart from that such a restraint needs to be justified in this action and there are no facts to justify such a restraint in Fiji. In other words even if there was such an agreement, between manufacturer and exporter without justification, such a restraint cannot be the basis of injunctive relief.
  2. Apart from that such a restraint will also hinder exhaustion of IP rights.

Exhaustion of Intellectual Property Rights


  1. When a product is sold first its intellectual property rights are exhausted. If not every time a second hand product is to be sold some kind of concurrence of person holding TM registration is needed. This will not only be cumbersome, but also unnecessarily restrict competition and create market monopoly for sale of an item as opposed to IP right.
  2. When a product is sold in the market IP rights attached to it are not transferred, hence proprietor of TM cannot restrain sale of a genuine product bearing same TM by another party.
  3. Products are marketed through wholesale by number of commercial entities. There is no IP violation by entities who are not agents of the manufacturer from sale or export of such original products by third parties. So once a product is sold in open market it can be resold without violation of TM. (See Imperial Tobacco Co of India Ltd v Bonnan [1924] AC 755 at 763. (PC) )
  4. So the proprietor of TM cannot restrict subsequent sales of such genuine product with TM. This is not a purpose of TM protection, which mainly signify quality of the product. Even the manufacturer, who is the proprietor of TM from whom Plaintiff had derived his IP rights, cannot restrain a product already sold being resold.
  5. Exhaustion of TM is a concept of trade mark which is used to curtail restrictions to competition and in a policy document of WIPO under heading “INTERFACE BETWEEN EXHAUSTION OF INTELLECTUAL PROPERTY RIGHTS AND COMPETITION LAW[1] stated,

“Exhaustion means the consumption of rights in intellectual property subject matter as a consequence of the legitimate transfer of the title in the tangible article that incorporates or bears the intellectual property asset in question. Exhaustion, therefore, is a natural consequence of the intangible nature of the assets covered by intellectual property, such as expressions, knowledge, reputation, quality, origin. Because of their intangible nature, they do not follow the tangible article with which they are associated.

As United States Appellate Federal Judge Posner said, in the absence of exhaustion, if every time a car owner wished to resell his/her used car needed to request a license from the car maker that would lead to an absurd situation of implying automatic compulsory licenses.[2] The legal solution is to assume that when that owner purchased the car, the right to use the trademark for commercial operations was consumed.

However, exhaustion is not absolute. Generally, exhaustion concerns the rights that, among all those that form the bundle of IP rights, are of an exclusively commercial nature. These are those that are consumed in any operation that leads to the transfer of title – generally an operation of a commercial nature, but not always.[3] Those rights that concern the manufacturing or physical handling of the article and that are under the exclusivity regime – such as making, reconstructing, repairing and packaging – are not exhausted as a consequence of the first sale. They may be to some extent affected,[4] but they are not entirely exhausted.”

  1. Accordingly exhaustion of IP rights is not absolute and can have some reservations, but for the purpose of this action, IP rights relating to TM is exhausted when an original products are marketed through different entities, in terms of above WIPO document. Policy in Fiji is found in Trade Marks Act 2021 which is yet to be commenced.
  2. The Policy position on “Exhaustion of rights conferred by registered trademark” in Fiji is found on Trade Marks Act 2021. Though this Act was passed by parliament, it is yet to be commence by announcing a commencement date in the gazette. Though it had not become a law, the concepts contained in Trade Mark Act 2021, can obtain more recognition than a policy on these concepts.
  3. Section 88 of Trade Mark Act 2021[5]

“88.- (1) A registered trademark is not infringed by the use of the trademark, including use for the purpose of advertising, in relation to goods that have been put on the market in any jurisdiction under that trademark under any one or more of the following circumstances—
(a) by the owner;

(b) with the owner’s express or implied consent;

(c) by an associated person of the owner.

(2) For the purposes of subsection (1)(c), a person is an associated person of the owner if -
(a) they are in the same group of companies;

(b) they are both bodies corporate and they consist of substantially the same members or are directly or indirectly under the control of the same persons;
(c) either of them has effective control of the other’s use of the trademark; or

(d) a third person has effective control of the use of the trademark by each of them.

(3) For the purposes of subsection (2)-
(a) “group of companies” includes a holding company and its subsidiaries; and

(b) a person has effective control of the use of a trademark if that person may authorise the use of the trademark or has significant influence over how it is used, regardless of how that authorisation or influence arises (for example, whether directly or indirectly and whether by way of proprietary interest, contract, arrangement, understanding, a combination of those things, or otherwise)” (emphasis added)

  1. So once the owner or manufacturer has sold the items in any jurisdiction, sale of that item in any other jurisdiction is not an infringement of TM due to exhaustion of IP or policy in Fiji. This is a law that was passed by parliament but yet to be commenced through a gazette. It recognizes exhaustion as well as Parallel Imports as policy in Fiji. It is yet to be recognized as statutory law, but does not prevent being used to recognize Parallel Imports and exhaustion of TM as policy as it will be statute law. Trade Mark Act 2021, can be used for guidance in the absence of any other law or policy in conflict with that.
  2. Even if I am wrong on above, there is no prohibition of Parallel Imports of products to Fiji. This will create more competition and more choice to consumers. This will be conducive for market economy. This is specially advantageous in pharmaceutical products which are manufactured under compulsory licensing regimes found in some countries. Though this is a dominant field for Parallel Imports it is not restricted one type of goods.
  3. Similarly, exhaustion and parallel imports are concepts that have entire relevance, to type of product in issue without any reservation, considering WIPO policy. Trade Marks Act 2021 had adopted exhaustion and parallel imports without reservation.
  4. Plaintiff in the affidavit in reply at paragraph 3(c) stated that , Defendant had not shown any evidence to show that Plaintiff had no exclusive rights to import razor blades bearing TM ‘Swish’. This is again not a requirement for Defendants to engage their legitimate trade, but a burden on Plaintiff.
  5. This contention cannot hold water, as the burden is with the Plaintiff to show, that there is serious question to be tried at hearing, and balance of convenience favours them. So any exclusive right for import should be shown by Plaintiff.
  6. In order to restrain Defendant from legitimate business or restrain its legitimate conduct of importing ‘Swish’ branded razor blades, Plaintiff must show some exclusive right for them to exclude Defendant from competing with them. Trade rivalry in business is a thing that traders dislike, but healthy competition benefit all parties including consumers.
  7. Section 32 of the Constitution of Republic of Fiji under Bill of Rights safeguards ‘Right to Economic Participation’. This is not an absolute right and can be restricted only to the ‘extent that is necessary’ by a law. A limitation can be imposed only to the extent necessary.
  8. Section 32 of Constitution of the Republic of Fiji states,

“32.—(1) Every person has the right to full and free participation in the economic life of the State, which includes the right to choose their own work, trade, occupation, profession or other means of livelihood.

(2)The State must take reasonable measures within its available resources to achieve the progressive realisation of the rights recognised in subsection (1).

(3) To the extent that it is necessary, a law may limit, or may authorise the limitation of, the rights set out in subsection (1).” (emphasis is mine)

  1. So when imposing restrictions on imports of razor blades bearing TM ‘Swish’ for which there was not allegation counterfeit, or violation of TM, the basis of such injunction sought, needs to be establish by Plaintiff. Defendant can market products for resale subject to Fiji laws and its trade policy.

Trade Mark Act 1933

  1. In terms of Section 38 of the Trademark Act 1933, Plaintiff as proprietor of TM obtains the exclusive rights of the TM "Swish" to use, it. But this does not preclude another person selling genuine products with TM, as discussed in this judgment.
  2. Ownership of IP rights and ownership of goods are two distinctive set of rights. When a product is sold TM rights to that is not sold, but the purchaser has a right to exhibit it and sell it again without infringement of TM rights attached to it.
  3. Section 38 and 40 of Trade Marks Act 1933 states,

“Rights of proprietor of trade-mark


38.Subject to the provisions of section 40 and to any limitations and conditions entered upon the register, the registration of a person as proprietor of a trade-mark shall, if valid, give to such person the exclusive right to the use of such trade-mark upon or in connexion with the goods in respect of which it is registered:

Provided always that where two or more persons are registered proprietors of the same or substantially the same trade-mark in respect of the same goods, no rights of exclusive user of such trade-mark shall, except so far as their respective rights shall have been defined by the court, be acquired by any one of such persons as against any other by the registration thereof, but each of such persons shall otherwise have the same rights as if he were the sole registered proprietor thereof

Registration to be prima facie evidence of validity


In all legal proceedings relating to a registered trade-mark including applications under section 34, the fact that a person is registered as proprietor of such trade-mark shall be prima facie evidence of the validity of the original registration of such trade-mark and of all subsequent assignments and transmissions of the same.

Registration to be conclusive after seven years.


40. In all legal proceedings relating to a registered trade-mark including applications under section 34, shall last happen, be taken to be valid in all respects unless the original registration of such trade-mark shall, after the expiration of seven years from the date of such original registration or seven years from the commencement of this Act, whichever such original registration was obtained by fraud or unless the trade-mark offends against the provisions of section 10:


Provided that nothing in this Act shall entitle the proprietor of a registered trade-mark to interfere with or restrain the user by any person of a similar trade-mark upon or in connexion with goods upon or in connexion with which such person has by himself or his predecessors in business continuously used such trade-mark from a date anterior to the user or registration, whichever is the earlier, of the first-mentioned trade-mark by the proprietor thereof or his predecessors in business, or to object, on such user being proved, to such person being put upon the register for such similar trade-mark in respect of such goods under the provisions of section 20.”

  1. Section 38 read with Section 40 of Trade Marks Act 1933 does not preclude a person selling a genuine product for which manufacturer had annexed its TM. Sale of a genuine product is not an infringement of TM. The purpose of TM is its utility in sale by any person, so that consumers identify the product properly and also saves time in searching it. Hence sale of a Parallel Import with TM does not violate its proprietor’s exclusive rights contained in Section 38 and 40 of Trade Mark Act 1933.
  2. When a product had attached TM, the product is sold not IP rights of TM. But the person who bought has a right to keep that TM attached to the product and either use the product or sell it or exhibit it, without infringing IP rights relating TM.

Passing off


  1. Plaintiff is also claiming passing off and in paragraph 8 of the statement of claim stated

“The Plaintiff’s razor blade under the brand name of ‘Swish” is very well known in every household in Fiji as it has been in Fiji Market since 1993. Since 1993, to the present, the brand name “Swish” has been used in the market and it has been since then using the same picture/font, design, write up and colour on its labels for the packaging and sale of its razor blade “Swish”.

  1. Plaintiff allege that Defendant had also used a similar commercial ‘get-up’ under same “Swish” TM for importing and sale of products. The two commercial get-ups are distinctive as one is white and other is dark blue. Apart from that Defendant’s product clearly indicate that it is a product marketed by ‘Laser Shaving (UK) Ltd, Wembley HAO 1JJ, United Kingdom.
  2. Though neither party relied, that two TMs are not identical but since both had same word ‘Swish’ this change may not be significant. Commercial get ups were not designed or its copyright owned by Plaintiff or Defendants as they are importing and selling assorted product, in Fiji. Despite having same ‘Swish’ they are distinct enough to first glance.
  3. Without prejudice to above distinct characteristics, Parallel Imports by its nature is unlikely to succeed in passing off as the goods are original. So, by law Parallel Import of Defendant cannot infringe TM, reputation and or goodwill. These are all characteristics attached to TM, hence when TM is affixed such attributes are also acquired to products of such TM.
  4. Plaintiff cannot claim passing off against Parallel Imports. See Imperial Tobacco Co of India Ltd v Bonnan [1924] AC 755 at 763. (PC)

Sanderson CJ said,


“..... No trade mark or trade reputation of either of these Companies is infringed. The right on which it claims to have earned for itself since 1910; and this right, as the learned Judges have found, it has failed to establish.

There is nothing to prevent a tradesman acquiring goods from a manufacturer and selling them in competition with him even in a country into which hitherto the manufacture or his agent has been the sole importer...”(emphasis is mine)


  1. The Plaintiff’s contention is that they do not know whether manufacturer authorized, Said Exports to export razor blades bearing TM ‘Swish’ cannot be a ground for injunction.
  2. Without prejudice to above there is no evidence that Plaintiff had any IP rights to get-up or design of the package of the razor blades it imported from India. In such an instance Plaintiff cannot seek passing off on a Parallel Import on the basis of similarity in commercial ‘get up’.
  3. Reckitt and Colman Products Ltd v Borden Inc and others, [1990] UKHL 12; [1990] 1 All ER 873 at p 880 House of Lords UK 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 time 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.”

  1. Plaintiff did not submit commercial get up of Defendant’s import razor blade with trade mark ‘Swish’, when ex-parte order was obtained. Defendant had produced both products in its affidavit in opposition. At first glance they are distinct from each other due to high contrast in two colours and inscriptions on two assorted packs.
  2. There is no evidence to show that Plaintiff had obtained any reputation or goodwill for razor blade with ‘Swish’TM. This is not to state that TM ‘Swish’ had not attained a reputation but it cannot be exclusive to Plaintiff. The commercial get up of Plaintiff’s imported assorted packs were marketed in Fiji by Defendant. Hence any good reputation in said product cannot be a cause for passing off against Defendant who had also marketed the same previously.
  3. None of the parties can at this stage allege that razor blade ‘Swish’ and its commercial get ups are recognized by public as distinctive product of theirs. Previously, Plaintiff, imported White coloured box bearing TM which they obtained registration, but goods were marketed locally by both parties. I do not know how long this white box with its commercial get up was used.
  4. I do not have even volumes each party sold directly to consumers to claim such a recognition synonymous with respective parties. Any goodwill of the product is attributed to manufacturer. Marketing strategy can be different and same product may come in different colours with slight variations of TM, but as long as they are genuine products there is no passing off, by Defendant.
  5. Defendant is also importing same product but from its importer Sai Exports. In such an instance invariably TM will be shown in Defendant’s products too. That is the reason they are called Parallel Imports. Plaintiff cannot prevent genuine product being sold by Defendant on basis of passing off.
  6. Both Plaintiff and Defendants are importing products in their respective packets from abroad. Defendant had produced actual samples of both packages. Both are similar in size. This is not unusual as razor blade packets resemble to its standard size.
  7. Plaintiff’s package is Blue with white letters and Defendant’s assorted products in white box with Blue letters. Neither Plaintiff nor Defendant had designed them as they were imported from abroad. Even their names do not appear in the product as an importer. So there is no room for a claim for passing off.
  8. In Klissres Farmhouse Bakeries Ltd v Harvesh Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129, Davidson CJ held,

“The principles applicable to the grant of an interim injunction are well known. The Courts in this country have generally followed the decisions in American Cyanamid Co v Ethicon Ltd [1975]96 and Fellowellowes v Fisher [1975] 2 All ER 829. The threshold question in each case must be whether the plaintiff has established that there is a serious question to be trib>In to dine thae that question the Court must consider - first, what each of the pahe parties claims the facts to be; second, what are the issues between the parties on these facts; third, what is the law applicable to those issues, and, fourth, is there a tenable resolution of the issues of fact and law on which the plaintiff may be able to succeed at the trial: see Shotover Gorge Jet Boats Ltd v Marine Enterprises Ltd [1984] 2 NZLR 157. In AmeriAmerican Cyanamid Lord Diplock said at pp 406-407:

"... where the legal rights of the parties depend upon facts that are in dispute betweem, the evidence available to the court at the hearing of thof the application for an interlocutory injunction is incomplete. . . .

"It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations." (emphasis is mine)

  1. Whether there is a serious question to be tried is first hurdle, on the affidavit evidence there is no dispute as to main facts.
    1. Plaintiff had renewed TM registration for ‘Swish’ for Class 12, in November 2021, which was earlier registered by third party, who had terminated its business in Fiji.
    2. Plaintiff started importing, marketing, distributing, retailing of razor blades bearing TM ‘Swish’.
    1. Defendant had earlier bought razor blades TM ‘Swish’ from Plaintiff and resold them in Fiji.
    1. Defendant is now importing directly from Sai Exports in India, razor blades bearing TM ‘Swish’.
    2. Plaintiff’s imports are contained in White box with TM ‘Swish’ and its back inter alia contains the name ‘Laser Shaving (India) Private Limited and Indian address.
    3. Defendant’s imports are contained in Blue box with letters in white and its back stated “Marketed by Laser Shaving (UK) Ltd with UK address.
    4. Both products indicate they are made in India.
  2. Allegation against Defendant was that it had attempted to take advantage of the good name of razor blade under brand name and TM “Swish”. Plaintiff allege that commercial get up of Defendant’s imported razor blades under “Swish” TM is similar and will deceive customers.
  3. Parallel Import is an area of law that had been intentionally left even in widely accepted international IP treaty of WTO[6] such as TRIPS[7] agreement. In other words, Parallel Imports are left to each country to formulate its own policy. At the moment Fiji had enacted a new Trade Marks Act 2021 which had recognized parallel imports.
  4. In Fiji there is no prohibition, contained in Trade Policy regarding, Parallel Imports[8]. Parallel Imports, are bases on the doctrine of exhaustion[9] of rights at the point of sale of a commercial good and resale or importation of the same is item is not an infringement of IP right. This position is statutorily recognized in Fiji in its Trade Mark Act 2021(Act No 36).
  5. Both parties did not rely on differences on TM on two products. They are not identical and coupled with high contrast in two colours used in packaging and inscriptions on back side there was no deceptive or misleading behaviour of Defendant. Defendant is importing products ‘marketed by Laser Shaving (UK), Wembley HAO 1JJ, United

Kingdom’. This inscription is clearly stated and only found in Defendant’s product.


  1. Parallel Imports can reduce the price of an item, and give more choice to the consumer and also create competition, without infringement of IP right. So inefficiencies in monopoly through TM protection can be mitigated to some extent. So over exploitation of a market by single person on the basis of territorial registration of TM was mitigated.
  2. There was no deception or unconscionable conduct on the part of Defendant. In Parallel Imports the consumer is the ultimate winner through competition and also more choice. This is most common in pharmaceutical market. The good will and reputation of TM “Swish” in Fiji cannot be exclusive to Plaintiff as its proprietor of TM through registration in 2021.
  3. So on the application of relevant law to admitted facts show there is no serious question to be tried at the hearing. Defendant is a parallel importer and under law there is no infringement of TM Law or passing off. There was no infringement of Section 75 and 76 or section 146 of Fijian Competition and Consumer Commission Act 2010.
  4. Without prejudice to above on the analysis of law relating to Parallel Imports to facts it is clear that balance of convenience lies with refusal of injunction to restraint Defendant from its legitimate business. Defendant cannot be compelled to purchase its item from Plaintiff. Apart from other grounds discussed above it will also be infringing Defendant’s right to purchase items from any entity as long as they are not violating any law.
  5. Even considering overall justice of the case does not warrant grant of injunction to restrain its import and sale of razor blades bearing TM ‘Swish’ as this will reduce competition and create a monopoly in the market.

CONCLUSION

  1. Plaintiff sought interim injunction to restrain Defendant from importing or marketing razor blades bearing TM ‘Swish’. The claims are based on passing off and sections 75 and 76 of Fijian Competition and Consumer Commission Act 2010. Plaintiff is in doubt as to such a restriction imposed on Defendant’s supplier Sai Export. There are no serious issues relating to parallel imports regarding infringement of passing off or alleged protection of consumers in terms of Section 75 and 76 of Fijian Competition and Consumer Commission Act 2010. This is not to decide that Plaintiff’s action needs premature struck off. Even a weak case needs courts time. Plaintiff is in doubt as to some facts and all facts are not before me. On undisputed facts and law there are no serious issues to be tried at hearing so as to pass threshold for injunction. Even if I am wrong on above balance of convenience favours Defendant considering exhaustion of IP rights regarding TM. Considering all the facts and circumstances overall justice of this matter favours rejection of injunctive relief. The issues relating parallel imports are fairly complex and novel. Considering legal importance of the issues involved and complexity of subject of Parallel Imports I do not wish to award costs.

FINAL ORDERS

  1. Ex parte injunctive orders granted on 20.10.2021 dissolved.
  2. No costs.

Dated at Suva this 28th day of February, 2022.


.....................................

Justice Deepthi Amaratunga

High Court, Suva

[1] prepared by the Secretariat of WIPO Intellectual Rights and Competition Law prepared under the Project on Intellectual Property and Competition Policy (CDIP/4/4/Rev) https://www.wipo.int/edocs/mdocs/mdocs/en/cdip_8/cdip_8_inf_5_rev.doc


[2] “It is one thing to say that a manufacturer of copying machines who requires his customers to buy from him the copying paper that is used in the machines is conditioning the sale of the machines on the customer’s purchase of a distinct product; it is quite another to say that General Motors lets you use the name Buick on condition that you buy the car to which the name is attached. That is a fantastical description of the transaction and the cases reject the proposition that a tie-in claim be based on it. [citation omitted] To accept it would be to impose in the name of antitrust a regime of compulsory licesning of trademarks – an absurd project.” Jack Walters & Sons Corp. v. Morton Building, Inc., [1984] USCA7 543; 737 F.2d 698, 704 (7th Cir. 1984).


[3] For this reason, it is commonly said that exhaustion is caused by the first sale. However, any legitimate transfer of title results in exhaustion of the commercial IP rights. This matter is clarified by Article 6(2) of the WIPO Copyright Treaty (WCT), of 1996 (“the conditions, if any, under which the exhaustion of the right [...] applies after the first sale or other transfer of ownership of the original or a copy of the work with the authorization of the author.” – emphasis added) and Articles 8(2) (concerning performers’ rights) and 12(2) (concerning phonogram producers’ rights) of the WIPO Performances and Phonograms Treaty (WPPT), of 1996. However, it is generally understood that when the transfer has not a commercial nature – a donation, for example – the IP owner can impose downstream restrictions on the use and disposal of the article by the person in whose favor the donation was made. This is however, an exception and must be expressed at the time the donation occurs. Otherwise, exhaustion will operate as usual.


[4] Some sort of repairing has been admitted by courts in various jurisdictions; repackaging – provided the trademark in question is not affected – has also been accepted.
[5] This Act had not come in to operation though passed in parliament. It can show the policy consideration but yet to be applied as a statute law.
[6] WTO (World Trade Organization) - successor to GATT (https://www.wto.org/english/thewto_e/history_e/history_e.htm) (24.01.2022)
[7] “Most comprehensive multilateral agreement on intellectual property (IP).” https://www.wto.org/english/tratop_e/trips_e/trips_e.htm

“All the WTO agreements (except for a couple of “plurilateral” agreements) apply to all WTO members. The members each accepted all the agreements as a single package with a single signature — making it, in the jargon, a “single undertaking”.

The TRIPS Agreement is part of that package. Therefore it applies to all WTO members. (More on the single undertaking.)”
See https://www.wto.org/english/tratop_e/trips_e/tripfq_e.htm (24.1.2022)
[8] https://www.mitt.gov.fj/wp-content/uploads/2018/10/Fijian-Trade-Policy-Framework-min.pdf
[9] https://www.wipo.int/edocs/mdocs/mdocs/en/cdip_4/cdip_4_4rev_study_inf_2.pdf(24.1.2022)

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