AMERICAN CYANAMID COMPANY LTD v VITALITY PHARMACEUTICALS LTD (SC 12/1989) [1991] NGSC 7 (8 February 1991)

AMERICAN CYANAMID COMPANY LTD (PLAINTIFF/APPELLANT)

v.

VITALITY PHARMACEUTICALS LTD (DEFENDANT/RESPONDENT)

(1991) All N.L.R. 257

Division: Supreme Court of Nigeria

Date of Judgment: 8 February 1991

Case Number: SC 12/1989

Before: Mohammed Bello, Gcon, CJN; Adolphus Godwin Karibi-Whyte; Saidu Kawu; Salihu Modibbo Alfa Belgore; Olajide Olarewaju Olatawura, JJSC

ISSUES

Is the protection afforded to the defendant by Section 7 of the Trade Marks Act 1965 justifiable?

Has it been proved that the defendant is the successor-in-title to Vitality Medicine Stores?

Was the Court of Appeal justified in coming to the same conclusion as the trial court on facts which are in conflict with those on which the trial court had based its decision?

FACTS

The plaintiff was an American company that manufactured and distributed a product known as Gonocin, an antibiotic. In June 1973 the plaintiff caused its antibiotic product to be registered as a trade mark under the name Gonocin. It appointed an agent a second plaintiff in the initial proceedings to market and sell its product in Nigeria.

There was evidence that the defendant company had been selling in Nigeria, a pharmaceutical product named Gonorcin since 1968, five years before registration of the plaintiff's trade mark. There was no evidence that the defendant had ever registered its trade mark. Defendant acted as agents for a company based in Germany, and was responsible for the marketing and sale of Gonorcin in Nigeria.

The defendant company was incorporated as such in 1980. Prior to that, and inclusive of the time when it started selling the German company's products in Nigeria, the firm was known and traded as Vitality Medicine Stores, that name being changed to its present title upon registration of the firm as a company with limited liability in 1980.

Leaning on its registered trade mark, the plaintiff approached the trial court in an effort to stop the defendant from infringing, as the plaintiff believed and alleged, the plaintiff's legally protected trade mark.

In its judgment, dismissing the plaintiff's claim, the trial court invoked the provisions of Section 7 of the Trade Marks Act 1965, which offers specific protection of a trade mark that had been in "continuous use" prior to the later registration of a trade mark that is "identical (to) or nearly resembling" the trade mark so first used.

This decision was upheld by the Court of Appeal and the plaintiff now turned to the Supreme Court. The Supreme Court unanimously dismissed the plaintiff's appeal, upholding the conclusions of both the trial court and the Court of Appeal for essentially the same reasons.

HELD (Unanimously dismissing the appeal)

1.      On interpreting Section 7 of the Trade Marks Act 1965

In order to comply with the prerequisite of "continuous use" laid down in Section 7 of the Act, it is not necessary for the party relying on this provision to prove "daily sales" of the product. The natural, normal meaning of words must be ascertained and applied when interpreting the words in a statute. There is no room for speculation over the true meaning of words. Olajide Olatawura, JSC, at page 272.

2.      On applying Section 7 of the Trade Marks Act 1965

[1] The reliance on Section 7 of the Act constitutes a valid defence. Olajide Olatawura, JSC, at page 273.

[2] Not even an owner or registered user of a trade mark has the right to interfere with an existing, even unregistered, trade mark that has been in continuous prior use and bears an identical or nearly resembling name. It has been proved that the defendant had issued and marketed Gonorcin since 1968, roughly five years before the plaintiff's registration of Gonocin. The plaintiff was therefore not entitled to interfere with the defendant's use of its Gonorcin trade mark. Section 7 of the Act thus applies. Karibi-Whyte, JSC, at page 280.

3.      On whether the defendant was the successor-in-title to Vitality Medicine Stores

There was no evidence to suggest the contrary. None of the witnesses called seemed to regard the one as distinct from the other. The initial firm and the subsequent company were regarded as the same thing. The Court of Appeal had accordingly been correct in holding that Vitality Pharmaceuticals Ltd was the successor-in-title of Vitality Medicine Stores. Mohammed Bello, JSC, at page 276

4.      On whether the Court of Appeal had been justified in coming to the same conclusion as the trial court, but on different facts [Order 3 Rule 14(2)] Court of Appeal Rules 1981

There was no need for the defendant to invoke the provisions of Order 3 Rule 14(1) in order to give notice of its intention to move the Court of Appeal to come to the same conclusion as the trial court, but on other grounds. This provision can only be invoked once it is positively established that the Court of Appeal had come to the same conclusion on distinct grounds. The plaintiff's attempt to show this was based on the fact that the trial court had treated Vitality Pharmaceuticals Ltd and Vitality Medicine Stores as one and the same thing, while the Court of Appeal held that the former was the latter's successor-in-title. This alleged difference was semantic, rather than substantive. Mohammed Bello, JSC, at pages 276.

Chief G.U Uwechue and U.E Egbe for the Appellant.

Chief C Ikeazor, SAN (Obi Akpudo & Uju Ikeazor for the Respondents.

The following cases were referred to in this judgment:

Nigeria

Adejumo v Ayantegbe (1989) 3 NWLR (Part 110) 417

Alhaji Sunmonu & others v Gbadamosi Ashorota (1975) 1 NMLR 16

Ayanwale v Atanda (1988) 1 NWLR (Part 68) 22

Eliochin v Mbadiwe (1986) I NWLR (Part 14) 47

Emegokwue v Okadigbo (1973) 4 SC 113

Gbadamosi Tokunboh & another v JT Chanrai & Co Limited 2 FRCR 55 (1976)

Lagos City Council v Ajayi (1970) 1 All NLR 291/294

Mogaji v Cadbury Nigeria Ltd (1985) 2 NWLR (Part 7) 393

Niger Construction Ltd v Okugbeni (1987) 4 NWLR (Part 67)

Nwabuoku v Ottih (1961) 1 All NLR (Part 3) 487/490

Nwadike v Ibekwe (1987) 4 NWLR (Part 67) 718

Onwuka v Ediala (1989) 1 NWLR (Part 96) 182

Vincent I. Bello v Magnus A. Eweka (1981)1 SC 101

Foreign

London Housing Society Limited's Trust Deed, In re (1940) 1 Ch 777

Smith, Bartlett & Co v British Pure Oil, Grease And Carbide Co Ltd (1933) 51 RPC 157

The following statutes were referred to in this judgment:

Nigeria

Trade Marks Act, 1965: Ss 7, 13(2)

The following rules were referred to in this judgment:

Nigeria

Court of Appeal Rules, 1981: Order 3 Rule 14(2)

Olatawura, JSC (Delivered the Leading Judgment):- The competing claims of the parties in this appeal relate to the registration of a trade mark about one antibiotic registered by the appellant under the trade mark of "Gonocin" as against the respondent which had its own registered as "Gonorcin". Prima facie quite apart from the claim of infringement of the trade mark one is likely to be misled that it is also a passing off action. But their claim and counter-claim leave no one in doubt that priority of registration and continuous use claimed by the respondent played a dominant role in their claims.

There were originally two plaintiffs which filed the action in the Federal High Court of the Lagos Judicial Division against two defendants. After amendment of the statement of claim, the Claims read as follows:-

"1.     An injunction restraining the defendants, their servants and agents from infringing the plaintiffs registered trade mark, 'Gonocin'.

2.      Delivery up on Oath for destruction of all goods, cartons, packages, capsules, wrappers, blocks, discs or stamps bearing any mark or get- up that would be in breach of the injunction prayed for.

"3.     An account of the profits by the defendants by reason of their having carried out the said acts of infringements or damages of N500 000.

4.      Costs.

5.      Further or other relief."

In their amended statement of claim, the plaintiffs averred as follows:-

"1.     The plaintiffs are the registered proprietors of Trade Mark 'Gonocin' No. 27409 Schedule 4 in respect of the following goods to wit "Antibiotic preparations".

2.      The aforesaid trade mark is valid and still on the Register of Trade Marks. At the trial, plaintiffs will rely on a Certified True Copy of the extract from the Register marked 'For use in Legal Proceedings' issued by the Register of Trade Marks to the plaintiffs in respect of the aforesaid trade mark.

2A.     The first plaintiff is a corporation organised and existing under the Laws of the State of Maire (sic) U.S.A. having its executive offices at Wayne, New Jersey 07470. At the trial of this Suit, the plaintiffs will rely on the Certificate of the Wayne Chamber of Commerce and other documents in proof of the legal status of the first plaintiff.

2B.     The second plaintiff is a Limited Liability Company incorporated in Nigeria under the Companies Act, 1968. At the trial of this action, the plaintiffs will found on the Certified True Copy of the second plaintiff's Certificate of Incorporation.

3.      The first plaintiffs are manufacturers and the second plaintiffs are vendors of antibiotic capsule which they have for several years imported into and sold in Nigeria under the said trade mark "Gonocin".

4.      The aforesaid capsules sold as and under the said Trade Mark "Gonocin" is widely known and used in Nigeria.

5.      The defendants are vendors of pharmaceutical drugs and preparations.

6.      The defendants have recently put on the market and offered for sale and have sold Capsules under and/or using in connection therewith the trade mark "Gonorcin". Plaintiffs will found on invoices and receipts issued by the defendants for such sales.

7.      The aforesaid trade mark 'Gonorcin' used by the defendants is similar to the plaintiffs' aforementioned trade mark 'Gonocin'.

8.      By reason of similarity the public is likely to and have been led to confuse and take the Gonorcin Capsules of the defendants' manufacture and/or sale."

The defendant filed an amended statement of defence and counter-claim. The defendant averred as follows:-"1.    The defendant makes no admission as to paragraphs 1 and 4 of the statement of claim.

2.      The defendant denies paragraphs 2, 3, 6, 7 and 8 of the statement of claim.

3.      The defendant which was first registered on 21 October 1956 as 'Vitality Medicine Stores' was incorporated as a limited liability pharmaceutical company on 6 May 1980. Hitherto it was registered under the Registration of Business Names Act on 22 February 1968 as 'Vitality Medicine Store - Pharmaceutical'.

4.      The defendant has since 3 December 1963 been the sole agent of one Herbrand K.G. Hornonforsonung -Laboratorium, Gengenbach/Baden, West Germany (hereinafter referred to as Herbrand Company) a pharmaceutical company based in West Germany which manufactures inter alia antibiotic preparation.

5.      Since 1968, the Vitality Medicine Stores as agent, has put upon the market and sold antibiotic preparation manufactured by Herbrand Company by putting them in white cardboard boxes with green designs and printings thereon, such printing bearing the word "Gonorcin" in bold green letters and other words in smaller forms. The word "Gonorcin" is a mark which the defendant has acting in good faith built up a reputation in.

6.      In 1978, the defendant caused the antibiotic preparation "Gonorcin" to be registered with the Pharmacy Board, Lagos.

7.      The defendant will contend at the trial that the plaintiff's registered trade mark 27409 registered in 1978 was not entitled to be so registered and that the registration 27409 sued upon is invalid on the ground that the trade mark interferes with the use of the name 'Gonorcin' which the defendant had been using and distributing continuously in Nigeria since 1968, a date prior to the plaintiff's registration or use.

8.      With reference to paragraph 7 of the statement of claim, the defendant denies that the use of its said label or otherwise had infringed the plaintiff's alleged trade mark no. 27409.

9.      The defendant's use of the said label in connection with the antibiotic capsule is not calculated to confuse or lead and has not infact led to any deception or to the belief by the public that 'Gonorcin' capsules of the defendant are the antibiotic capsules of the plaintiff sold under the label 'Gonocin 030'.

10.     The defendant will contend at the trial that the word 'Gonorcin', used by the defendant is a bona fide description of the character or type of antibiotic preparation.

11.     The defendant will further contend at the trial that the plaintiffs are not competent to institute this action.

12.     The defendant will at the trial rely on the following document (sic) in proof of its case:-

"(a)    Receipt books issued by the defendant in respect of Drugs including 'Gonorcin' since 1969 -ie

(i)      Issue 801 - 900.

(ii)     Issue of Foreign Goods; 5601 - 2600.

(iii)    Issue Invoice 1 - 100.

(iv)    Issues 1631, 1659, 1653, 1655, 1659, 1667, 1675, 1683, 1695, 3610, 3613, 3614, 3615.

(b)     Performa (sic) Invoices issued between 1968 to 1973 in respect of drugs including 'Gonorcin' particularly proforma dated 5 and 30 July 1968 by Herbrand Company.

(c)     Sales books where sales of drugs including 'Gonorcin' were recorded since 1968.

(d)     Letter dated 30 July 1968 to the defendant by Dr. Herbrand K.G.

Whereof the defendants contend (sic) that the plaintiffs' claim is misconceived and frivolous and should be dismissed.

Counter-Claim

And by way of counter-claim the defendant repeats paragraphs 1-12 of the statement of defence and counter-claim for:-

(1)     An Order that the entry in the Register of Trade Marks in respect of Trade Mark 'Gonocin' No. 27409 be deleted;

(2)     Further or other relief;

(3)     Costs."

Evidence was called by both parties. It was on 19 June 1973 that the first plaintiff registered "Gonocin" as a trade mark with Registration number 27409. A certified true copy of the registration was admitted in evidence as Exhibit 'A'. It is not necessary to go into the controversy whether the first plaintiff could have maintained an action in this country bearing in mind it was a foreign company. That issue was resolved in the court of trial and was not an issue in the lower Court nor has it been raised in this Court. I will come to the issues before us shortly.

The first plaintiff manufactured the drug which was marketed by the second plaintiff as "Gonocin". The plaintiffs later found in the Nigerian Market a similar product under the trade mark of "Gonorcin" and was marketed by the defendant. The sample of "Gonocin" was admitted in evidence as Exhibit 'D' while the sample of "Gonorcin", so to say the offending product, was admitted in evidence as Exhibit 'E'. It was also the case of the plaintiffs that the second plaintiff was incorporated under the Companies Act 1968 on 2 December 1980. But before the incorporation of second plaintiff, the "Gonocin" has been introduced to the Nigerian Market by J. L. Morison and Company and it was after the incorporation of the second defendant company that it took over the marketing of the drug from J. L. Morison and Company. Exhibit 'D' is simply described as Gonocin 030 and bore the label "Gonocin 030". The first plaintiff witness was however unable to say whether "Gonorcin" registered by the defendant is an antibiotic. He agreed that there is a difference in spelling between the two products. Another witness called Ayodele Oboise confirmed that he bought "Gonorcin" ie Exhibit 'E' from a chemist. The last witness for the plaintiff was one Georg Eze who identified Exhibits 'D' and 'E' as having been bought from the plaintiff and defendants respectively.

In their own defence Chief Nkadi Chiwete the Chairman and Managing Director of the defendant company gave evidence that the defendant company was formerly registered under the business name of "Vitality Medicine Stores" before it was incorporated as a limited liability company in May, 1980. It was incorporated and registered as "Vitality Pharmaceuticals Ltd". Before the incorporation they were the representatives of Dr. Herbrand K.G. Company, the manufacturers of other drugs and antibiotics. The defendants were the sole agents of "Gonorcin" ie Exhibit 'E', a product of Dr. Herbrand K.G. and they have been dealing with this drug, "Gonorcin", since 1968. Certain proforma invoices and letter dated 16 May 1973 were admitted in evidence as Exhibits 'G-G3' and 'J' respectively. Agreement between the d