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Analysis

The birth of a special court for IP Jurisprudence: An Analysis of the Lion Match Case IPT 01/16, Zimbabwe

March 01, 2022
Having been established in September 2010 through the Intellectual Property Tribunal Act [Chapter 26:08], the Intellectual Property Tribunal breathed life for the very first time, after years of existence on paper when it sat to decide on a appeal coming from a decision of the Controller of Patents, Trade Marks and Industrial Designs. To further enunciate the existence of this court, the Judicial Laws Amendment (Ease of Settling Commercial and Other Disputes) Act again confirmed that the IP Tribunal is now a constitutionally constituted specialized division of the High Court with the power to exercise the general jurisdiction of the High Court created in line with section 171 (3) of the Constitution which provides that: “An Act of Parliament may provide for the High Court to be divided into specialized divisions, but every such division must be able to exercise the general jurisdiction of the High Court in any matter that is brought before it”. The whole basis of setting up this court is to try and give special attention to intellectual property matters and expedite same for the ease of doing business.

This is a dream come true for IP practitioners and stakeholders who have been clamouring for a specialized court for many decades.  The court managed to hear its maiden case in 2018 in the case of Lion Match Proprietary Limited v Lion Match Zimbabwe Limited IPT 01/16. The decision will be noted for acknowledging the importance of intellectual property and its significance to the Zimbabwean economy as a whole.

Many people would wonder what ignited the matches and ended up with match companies in the Intellectual Property Tribunal. Intellectual property is one branch of property which many companies do not prioritise. They do not fully appreciate that this is one area which has great implications to the success and existence of their very business. It is not surprising that many companies in Zimbabwe have not registered their trade names, product identities and symbols. If the marks were indeed ever registered many have since lapsed as they have not been renewed. The Lion Match case tells a story about that danger. Whilst it is critical to register trademarks, there is a responsibility that comes with it. One needs to make sure that they are maintained in the register through renewals, which occur once in ten years! This is how these rights are kept alive and how one can continue to claim ownership of same.

Huge brands for instance, can end up losing the right to trading in their brand names in some jurisdictions and the answer to this is found in intellectual property law. Through the first case of the Intellectual Property Tribunal, this grey area was cleared. Intellectual property protection is not for the sluggard. Organizations do not have to learn the lessons from painful experiences. The Lion Match matter dates back to the colonial era sometime around 1906 when the Lion Match Company was formed. Lion Match (Pty) Ltd of South Africa owned Lion Match (Rhodesia) Limited which was its subsidiary in Zimbabwe (then Southern Rhodesia). Sometime in 1954, Lion Match South Africa sold its business including its trade marks and goodwill attaching thereto to Lion Match Rhodesia Limited. With the coming of Independence in 1980, Lion Match Rhodesia Limited changed its name to Lion Match Limited which subsequently became Lion Match Zimbabwe Limited.

Since then, there were two separate entities, Lion Match Zimbabwe and Lion Match South Africa both of which were trading in Lion Safety Matches using the same marks and names. Lion Match (Pty) Limited then withdrew from Zimbabwe on the understanding that Lion Match Zimbabwe limited was going to keep the LION brand alive in Zimbabwe.  Around 2000, Lion Match Zimbabwe fell on hard times and stopped trading in the Lion Match products. It even failed to renew its trade marks with the Zimbabwe Intellectual Property office and sometime in 2006 all of its Lion Match trade marks had expired and had been removed from the Trade Marks Register.

Having learnt of the expiration of the Lion Match trade marks in Zimbabwe and their subsequent removal from the Register, Lion Match South Africa which was already trading in the market in Lion match products, in June 2010 sought the registration of the Lion Match trade marks. Soon thereafter Lion Match Zimbabwe got to know that Lion Match South Africa was seeking to register the Lion Match marks, and it also made an application to register the same marks in November 2010.

The Registrar of trade marks was therefore faced with applications from two different entities seeking the registration of the same Lion Match trade marks. The Registrar was faced with the task of deciding which one between the two entities was entitled to the registration of the Lion Match trade marks. Either Lion Match Zimbabwe which had been using the marks since 1954 but left them to expire in 2006 and only sought re-registration in November 2010 or Lion Match South Africa which left its trade in Zimbabwe in 1954 but had continued trading locally throughout in a bid to fulfill market needs of this much needed commodity. 

The Registrar of Trade Marks quickly dismissed the application of Lion Match South Africa and proceeded to register the Lion Match Marks as applied for by Lion Match Zimbabwe. The decision of the Registrar was that the lapse of trademark did not equate to abandonment of the trademarks. Although the trademarks of Lion Match Zimbabwe had lapsed, there was sufficient explanation for the no-use of those trademarks which was excusable on the part of Lion Match Zimbabwe, though not legally standing. Lion Match Zimbabwe had given a reason of the harsh economic environment in Zimbabwe since around 2000  for its failure to trade in the lion match products and had obtained the Registrar’s sympathy in that regard to reinstate them on the register but without any valid legal reason for that decision.

Aggrieved by the decision of the Registrar of Trade Marks above, Lion Match South Africa appealed to the Intellectual Property Tribunal which had not yet been constituted by then. The then Chief Justice, the late Honourable Chief Justice Chidyausiku appointed Honourable Justice Hungwe as the President of the Tribunal with effect from June 2016. The court was faced with the same hurdle as that of the Registrar of trademarks over which of the two entities was legally entitled to the registration of the Lion trademarks after their expiration and removal from the Register. What the court was facing were two fresh applications for registration of Lion Match marks. One by Lion Match South Africa filed in June 2010 and the other by Lion Match Zimbabwe filed in November 2010.

The court therefore had to consider the consequences of non-renewal of a registered trademark. After a careful analysis of Section 24 of the Trade Marks Act, the court found that where a trade mark has been removed from the Register for non-payment of renewal fees, it can only be restored on the register if the proprietor of the trade mark applies within three years of such removal for the trade mark to be restored. In the application for restoration of the mark, the proprietor will be expected to prove that it was using the mark or give satisfactory reasons as to why there was no use of the mark.

After the expiration of three years from the date of removal of the mark from the register, there can be no restoration of the trademark once it is removed from the Register. After the three years, the trademark enjoys no protection at law and the previous owner can lose that trademark/legal rights to any other another applicant. The court further held that once removed from the register and the three years have expired, a trademark may be appropriated by another applicant if that applicant satisfies the requirements for registering a trademark. Once a party has lost all rights flowing from registration, it is on an equal footing with a party who had not previously registered any trademark.
  
With respect to the explanation for non-use of the mark, the court found that such an explanation was going to be considered if Lion Match Zimbabwe had made an application for restoration of its trademarks within three years as provided in Section 24 (5) of the Trade Marks Act (Chapter 26:04). In the present case, Lion Match Zimbabwe had filed fresh applications for registration of the Lion Match marks on the understanding that their previous marks had expired and could not be restored on the register. This was an admission on their part and any other reason for reapplying was already skewed.

The court further found that the fact that Lion Match Zimbabwe had built a reputation over the years having bought goodwill from Lion Match South Africa was inadequate to defend their position. This is so because Lion Match Zimbabwe had ceased trading in the lion matches and had even left its trademarks to lapse. It further did not seek the restoration of the marks within three years of removal from the register hence it therefore irredeemably lost any legal protection it may have enjoyed at law.

In the end, the court found in favour of Lion Match South Africa on the basis that they were the first to register the marks after their expiration and removal from the register. Lion Match South Africa were now on an equal footing with Lion Match Zimbabwe since Lion Match Zimbabwe had left its trademarks to expire and did not seek the renewal or restoration of the marks on the register on time. The rationale behind the decision of the Court came from the legal maxim qui prior est tempore potior est jure meaning he has better title who was first in point of time.

Critical lessons therefore ought to be learnt from this judgment and companies and organizations should take heed. Once a trademark is registered, that is not the end of the story. The mark is supposed to be renewed once every ten years. If not renewed and left to lapse, as what happened in the Lion Match case, another person can apply to register the same mark and appropriate it.
Most entrepreneurs stop renewing their trademarks on the basis that their marks have acquired goodwill and reputation such that they cannot be appropriated by another entity. That position is misplaced as the law requires the marks to be renewed and if not renewed, they will not enjoy the protection of the law. Period.

Lastly, it is critical to make sure that before purchasing trademarks or an entity with a trademarks portfolio one conducts a trade marks search to ascertain whether the marks are registered and are still valid. It is unfortunate that in the Lion Match case, the Lion Match trademarks had already been sold and at the time of the sale the marks enjoyed no protection at law and could be appropriated by anyone else. This is where the importance of IP practitioners come in and it is high time that Zimbabwean companies get to appreciate the importance of intellectual property and the need for its protection.
Brenda Matanga