Tuesday, 25 June 2013

Namibia: A Talisman for Passing Off Actions?

The Namibia High Court, Main Division, has handed down a judgment this month following an application for urgent interim relief in a passing off action.

The suit was brought by Mega Power Centre CC t/a Talisman Plant and Tool Hire against Talisman Franchise Operations (Pty) Limited, a South African based company, and its new Namibian based franchisee Talisman Hire.

The RSA based franchisor advertised its new business (see here, for example) which irked Mega Power who had been using the mark Talisman to promote a part of his tool and machinery hire business, namely hiring of operator intensive machinery. Incidentally, the other part of the business was promoted under the name Coastal Hire which was licensed to Mega Power by Talisman's competitor in South Africa.

The allegations concern passing off by the new business based solely on the name Talisman which was being used by both parties in the business for plant and tool hire, generally.

The application was dismissed because Mega Power had failed to show how they might suffer damage. The case is interesting for the following reasons:

1. It sets out the Court's approach to urgency (see paras 21 and 25)

The judge was reluctant to relax the rules of Court but could not elicit any cogent argument from the Respondent on why he should not grant urgency.  He also emphasised the importance of prompt action by a party seeking urgency.

2. It explains how the Court interprets the law of passing off (see paras 39-42);

In short, the approach draws much from the laws in neighbouring RSA which are, themselves, based on similar laws in the UK. The case cites its own Supreme Court case, reported here by Afro-IP in 2008.

3. It illustrates that the likelihood of damage cannot simply be assumed; and

"I invited Ms. Schimming-Chase,... to indicate how the applicant is likely to suffer damage. The impression I gained is that the argument will have it that the public will be likely to hire the equipment they need, from the second respondent, in the mistaken belief that they are doing business with the applicant."

"Given the distinct, although related difference between what the applicant makes available for hire and what the second respondent makes available for hire, there is no possibility that the applicant will lose customers."

On that basis he dimissed the application.

Perhaps if the Applicant had argued the potential for irreperable damage to the Talisman brand if hire equipment from the Respondent was inferior or the fact that it has no control over the use of the brand by the Respondent or that customers may be confused into believing that hire equipment by one was associated with the other even though there was no loss of customers, may have been sufficient to persuade the Judge that if all the other elements of passing off have been shown that the likelihood damage must be inevitable? Perhaps, if this not been a case for interim relief the situation may have been different?

4. It illustrates the close connection between South Africa law and economy, and that of Namibia and the need to cross register trade marks.

Franchising is an increasing popular method of doing business in Africa. If one considers that in RSA there are two competing tool hire brands (Coastal Hire and Talisman), Mega Power is/was using both brands in Namibia and both companies (Coastal Hire and Talisman) have chosen to expand using the franchise model. This shows the risk of not obtaining trade mark protection in both territories.

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