Two beauty products firms locked in ‘coconut’ trademark fight

The dispute involves allegations of infringement of trading rights, confusion in the market and diversion of customers.

Court papers show that both companies are engaged in the same or a closely related line of business, specifically concerning coconut oil-based products.

Sime Darby Oils claims that it is the registered proprietor of the trademark for its coconut oil-based beauty products and that the registration was regularised two years ago.

It says that although the Registrar of Trademarks expunged the Nairobi Beauty World’s trademark through a ruling dated April 9, 2021, the latter has continued to use it.

It says the company has engaged in infringing activities by distributing, selling and manufacturing products bearing an identical or deceptively similar mark.

Pending the determination of the dispute, the High Court has temporarily stopped Nairobi Beauty World from using the registered trademark “CBC Brand” (words and devices).

It has also been restrained from interfering with its rival’s exclusive rights of importing and exporting, marketing, selling, manufacturing and in any way whatsoever transacting with the trade name “CBC Brand” or any other confusingly similar mark.

In the orders issued by Justice Peter Mulwa, the court also directed Nairobi Beauty World Ltd to seal and keep seizure of all offending merchandise bearing the trademark “CBC Brand” or any other mark that is phonetically and visually similar to the disputed trademark.

The judge found that Sime Darby Oils has a strong case with a likelihood of success.

“This court is satisfied that it is the Sime Darby Oils, and not the respondent, who stands to suffer irreparable loss if the alleged infringement is allowed to persist pending the full hearing of the suit,” said the judge.

“The ongoing confusion in the market, the potential diversion of customers and the erosion of the goodwill associated with the applicant’s registered trademark constitute harm that may not be adequately compensated by a mere award of monetary damages. The intangible value of a brand and its reputation are often difficult to quantify in monetary terms.”

Nairobi Beauty World, through its director, Abdirahman Abukar Hassan, had opposed the grant of the temporary orders, arguing that it was the duly registered owner of the trademark until April 2021, when the Assistant Registrar of Trademarks ordered the expungement.

He contended that the registrar’s decision was appealed to the Court of Appeal and that the present application was premature.

Mr Hassan also stated that the applicant had not demonstrated the irreparable loss it stood to suffer, adding that any pecuniary loss could be remedied by an award of damages, as his company is a person of sufficient financial means.

However, Justice Mulwa ruled that the continued use of the same or a strikingly similar brand name by Nairobi Beauty World Ltd for such products was highly likely to create confusion among consumers, who associate the "CBC Brand" with Sime Darby Oils.

“A preliminary comparative analysis between the Nairobi Beauty World’s mark, as described in the pleadings, and the Sime Darby Oils’ registered trademark “CBC Brand” reveals a sufficient degree of similarity as to render it probable that members of the public, exercising ordinary caution, may be misled into purchasing the goods of one party under the mistaken belief that they originate from the other,” said the judge.

He observed that the use of a mark that so nearly resembles the registered mark, and which is likely to cause confusion or deceive, constitutes a clear case of infringement.

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