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Petitioner: ALDO GROUP INTERNATIONAL AG through Authorized Signatory VS Respondent: The ALDO SHOES through Proprietor/ Manager/Partner
Court Name: Sindh High Court Judge(s): Munib Akhtar Title:ALDO GROUP INTERNATIONAL AG through Authorized Signatory vs The ALDO
SHOES through Proprietor/ Manager/Partner Case No.: Suit No. 886 of 2010 Date of Judgment:2015-08-19 Reported As: 2016 CLD 229 Result: Appeal allowed Judgment MUNIB AKHTAR, J.---This suit, and the application that falls for determination, raise important and interesting issues in respect of the Trade Marks Ordinance, 2001 ("2001 Ordinance"). C.M.A. 5709/2010, seeking interim conjunctive relief, was filed by the plaintiff along with the suit. On this application an ad-interim order was made on 01.06.2010. The other application, C.M.A. 520/2014, has been filed by the defendant. It seeks recall of the ad-interim order. Before turning to the dispute may note that determination of these applications has required consideration of both of the 2001 Ordinance and the predecessor legislation, the Trade Marks Act, 1940 ("1940 Act), and reference has had to be made to the trade mark legislation in other jurisdictions. For convenience, the relevant statutory provisions have been gathered in the Annex to this judgment, which also contains a list of abbreviations used in this decision. 2. Learned counsel for the plaintiff submitted that the plaintiff was part of the Aldo group of companies, which has global annual sales of USD 1.4 Billion (at the time of the filing of the suit). The group's founder is one Mr. Albert "Aldo" Bensadoun, and it has its origins in Canada. The plaint contains a detailed narration of how the Aldo group came about, from its beginnings in the 1970's, its growth in Canada (where it has more than 450 stores operating under the Aldo banner and other names), its expansion into the United States (where it has 125 stores), and its further progress into the United Kingdom, Ireland and elsewhere. As presently relevant, I am concerned with two aspects of the Aldo global business. Firstly, Aldo has a trademark registered in many countries around the world, both for goods and as a service mark. This trademark is the word "Aldo" in a certain stylized form. It is this trademark that is now also
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registered in Pakistan and which, the plaintiff claims, has been infringed by the defendant in the manner described below. I am not therefore concerned with any other intellectual property rights (i,e., in respect of other brands, etc.) to which the Aldo group lays claim. Secondly, as explained in some detail in the plaint, the group's business had its origins in footwear, i,e., shoes. Thus, para 2.2 of the plaint states: "In 1972, Aldo Organization started as a footwear concession within a chain of popular fashion boutiques and four ALDO stores within these boutiques were opened in Canada". As just noted, the group then expanded by opening its own stores throughout Canada and later the United States, United Kingdom and Ireland as well. It is stated that in the four countries just mentioned, the group itself operates the stores. In addition, the group also has a franchising model, which is referred to in the plaint as the "ALDO franchise system". It is averred that using this "system" the group has expanded its business to over 40 countries in six continents. A list of those countries is given in paras 3.4 to 3.6 of the plaint. It includes many countries in the Gulf region and other Arab countries, and also India, Malaysia, Australia, China, Thailand, Turkey, Indonesia and South Africa. Thus, it is averred, as of 2009 the group had a total of 1415 Aldo stores in 46 countries worldwide. In the plaint, in para 3.9, the plaintiff has given photographic images of the frontages of some of the Aldo stores. However, the Aldo group does not have, own, operate or franchise any stores in Pakistan. 3. Although the group's business had its origin in footwear, which still appears to constitute the major component thereof, the group has also diversified into selling other goods at its stores. According to para 5.5 of the plaint, "ALDO retails fashion shoes, boots and sandals, as well as accessories such as handbags, hats, belts and jewelry". A key aspect of the plaintiffs case is how the Aldo stores are organized and the goods sold there displayed for customers, A detailed description in this regard is given in para 5 of the plaint and its various sub-paras (which bear the heading "The ALDO Retail Concept"). The store design and construction, visual presentation (i,e., "the manner in which products are displayed both inside the store and also in the store's front window display"), marketing and sales, and organization of the Aldo way of business are highlighted and detailed in para 5. In addition to the description just quoted of the visual presentation, para 5.4 also avers as follows: "By excelling in VP [visual presentation], ALDO creates visually appealing stores, provide value to ALDO's products and create a great impression on ALDO's customers, Lifestyle pictures and displays complete the look of the store. Instructions are given to all of our stores throughout each season so that a consistent global look is maintained. Extensive training, supported by manuals and periodic memos, .keeps the store personnel up to date on how the merchandise should be placed, how shoes should be grouped, when product sequences should be changed and maintaining a focus on the best selling products. Additional examples of the basics of VP, which must be adhered to in the same manner across all of ALDO's stores, including cleanliness of the store and displayed products, lacing of footwear, labeling, stuffing products and the proper use of boot weights and shapers". In other words, what the plaintiff avers is that to walk into (or indeed, perhaps even to approach) an Aldo store is to be immersed in what may be called the "Aldo shopping experience", and that this experience is global, i,e., would essentially be the same all over the world. I would not go so far as to regard the plaintiffs averments to mean that to experience one Aldo store is to experience all, since, e.g., the experience in and of a small franchised store operating in some mall or shopping centre would be clearly different from that when entering a flagship store (such as the ones that, it is averred, operate at such well known shopping locations as New York's 5th Avenue and London's Oxford Street and Covent Garden). However,
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as I understood it, what learned counsel submitted and emphasized was that there was an established "feel" and "look" to Aldo stores that was instantly recognizable. 4. In addition to the foregoing, it is averred that the Aldo group has a well established presence on the Internet. Furthermore, it is averred (and details have been given in this regard) that the Aldo group spends huge sums of money on a worldwide basis for advertising, marketing and promotional activities, which include efforts to establish, maintain and enhance awareness of the Aldo brand. As noted above, Aldo does not have any stores in this country. However, it is averred as follows in the plaint: "9. That as stated above, ALDO products have also been extensively sold in the developed countries as well as sold to various countries surrounding or in close geographical proximity to Pakistan, where a large number of Pakistani expatriates and nationals live, as well as work, such as Saudi Arabia and United Arab Emirates. 9.1 In addition to the aforesaid use, (products under the trademark ALDO have been available in Pakistan for the last many years by finding their way through various trade channels), and have also been purchased by Pakistani public in foreign countries, which are brought back to Pakistan for personal use in Pakistan and/or as gifts. Such ALDO products are also purchased and used by thousands of Pakistani expatriates, who also send such products as gifts to their relatives and friends in Pakistan." On the foregoing basis, and other factors as listed in para 9.2 of the plaint, it is averred that "the reputation and goodwill of the Plaintiffs trademark and service mark ALDO have been created and continue to exist in Pakistan for the last many years". It is also averred that the plaintiff has also sold footwear to a commercial customer/importer in Pakistan. The plaintiff's grievance is that in violation of the Aldo group's rights, the defendant is running a shoe store in Karachi, where it sells shoes under the brand "The Also Shoes" (written in a stylized manner). In respect of some of its shoes, which are in the "executive class", the defendant uses a logo or device along with the inscription, which is a stylized "A" in an oval shape with "The Aldo Shoes" appearing on top of the oval. The name of the defendant's shop is also "Aldo Shoes". Learned counsel submitted that this was a clear and ongoing violation of the plaintiff's rights under the 2001 Ordinance. (Of course, the plaintiff is simply the Aldo group company that holds or claims the said rights, in essence acting for and on behalf of the group at large.) At the time the suit was filed, the plaintiff did not in fact have any registered trademarks in Pakistan. At that time it had four applications pending for registration of "Aldo" as a trademark. These applications were in classes 14, 18 and 25, which relate to goods, and in class 35, which relates to services. All the applications were filed on or about 07.06.2009. All of these facts have been properly disclosed in the plaint. By the time the CMAs now being considered came up for hearing, three of those applications had materialized in registered trademarks, in respect of classes 14, 18 and 35. In respect of the application under class 25, the defendant has filed an opposition and proceedings in respect thereof are still pending. In addition, the defendant has itself filed an application for registration of its mark under class 25. That application is being opposed by the plaintiff and those proceedings are also still pending. Thus, the position as regards the plaintiff's marks when the present CMAs were heard was as follows:
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Trademark/ Application No,Status Class and description (per Trade Mark Rules, 2004)Plaintiff's specification 269118 Registered (11.06.2014) '14: Precious metals and their alloys and goods in precious metals or coated therewith (except cutlery, forks and spoons), jewelry, precious stones, horological and other chronometric instrumentsFashion accessories, namely, jewelry and watches; being goods included in class-14. 269117 Registered (11.06.2014)18: Leather and imitations of leather, and articles made from these materials, and not included in other classes, animal skins, hides, trunks and traveling bags, umbrellas, parasols and walking sticks, whips, haviess and saddlery.All-purpose carrying bags, namely, handbags, shoulder bags, tote bags, duffel bags, shoe bags and wallets; being goods included in class 18. 269115 Registered (27.06.2014)35: Advertising, business management, business administration, office functions -Retail store services and retail on- line services in the field of bags, footwear, footwear accessories, footwear and garment
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care products, clothing, leather and suede apparel, fashion accessories; being goods included in class 35 269116 Pending: under opposition from the defendant25: Clothing, footwear, headgear . .Footwear, namely, shoes, boots, loafers, walking shoes, running shoes, athletic shoes, sandals and slippers, footwear accessories, namely shoe insoles, shoe inserts, anti-slip shoe grips; footwear and garment care products, namely, shoe polish, aerosol . and non- aerosol cleaners and protectors for leather, suede and fabric; clothing, namely, coats, jackets, vests
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scarves, gloves and hats; leather and suede apparel, namely, coats, jackets, belts, gloves; fashion accessories, namely, sunglasses, hair bands, barrettes, ponytail holders, belts, hosiery
The defendant's application is No, 263362, which was filed on 24.03.2009 and is, as just noted, being opposed by the plaintiff. It is for registration of a mark that is a logo, which bears the inscription "The Aldo Shoes" in stylized form, along with a stylized "A" in an oval on the left hand side. The oval also has on top of it the words "The Aldo Shoes". 7. Learned counsel for the plaintiff submitted that the mark used by the defendant was clearly and obviously an unlawful imitation and copy of the plaintiffs registered trademark. Its use therefore infringed upon and violated the plaintiff's rights under the 2001 Ordinance. Since the plaintiff's trademark is registered in respect of three different classes I invited learned counsel to point out the specific provisions of section 40 on which he rested his case. The response by learned counsel can be conveniently set out as follows: Trade Mark No,ClassProvision of 2001 Ordinance 269118 14 Section 40, subsection (2)(a) 269117 18 Section 40, subsection (2)(a) 269115 35 Section 40, subsection (2)(b); subsections 3(a), (b), (c) and (d); and subsection (5)
Learned counsel emphasized that the plaintiffs registered trademarks were without restriction, conditions or disclaimer. With specific reference to Trade Mark No,269118 (in respect of class 14), learned counsel submitted that this also covered the use of such accessories as gold buckles used in, on or in relation to footwear. Elaborating his point learned counsel submitted that the goods sold by the plaintiff in many instances used a combination of the various articles for which it had the registered trademarks. Thus, there was an involvement of all three classes in respect of the goods sold by the plaintiff. He contended that it would therefore be incorrect to look at the infringement of each class in isolation. A more holistic approach had to be taken and it was the integrated use, in combination, of all three classes that was the hallmark of
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the plaintiff's products. It was in this manner that the grievance of infringement had to be approached and, learned counsel submitted, ought to be sustained. In addition to the foregoing, learned counsel submitted that the "Aldo" trademark was a well known mark within the meaning of section 86 of the 2001 Ordinance and was entitled to protection accordingly. Learned counsel submitted that the various factors listed in subsection (2) of section 86 were fully shown to exist in the averments made in the plaint. Therefore, a case for relief had been made out. In this regard, learned counsel also relied on the tort of passing off to press his case. I specifically asked learned counsel to assist me on the point that where the owner of a well known trademark had registered the same in Pakistan, whether he would then be entitled to the protection accorded by section 86, or would be limited to that provided by subsection (4) of section 40. Learned counsel submitted that both were available to the proprietor of such a trademark. Learned counsel also submitted, with specific reference to the plaintiff's pending application under class 25 and the opposition thereto by the defendant, that for purposes of section 86 it was irrelevant whether such an application had been filed and/or was being opposed. The section granted protection in its own terms and had to be applied accordingly. In support of his submissions, learned counsel relied on a number of decisions, which are considered below as and to the extent considered appropriate. Learned counsel submitted that all of the well known "ingredients" for interim relief were in the plaintiff's favour and prayed accordingly. Learned counsel for the defendant opposed the plaintiff's application and submitted that the ad interim order ought to be vacated and recalled. With reference to section 86 learned counsel submitted that the various factors listed in subsection (2) had to be read together. Each had equal weight. The reference to "worldwide" in the various clauses of the subsection was a reference to the business or commercial world. Learned counsel submitted that "Aldo" was not known in the business world and no material had been produced to establish that the plaintiff's trademark had "worldwide" recognition in this sense. It was submitted that the "Aldo" trademark was not well known in the sense of such brands/trademarks as Boeing, Pepsi, McDonald's, etc. The various factors listed in section 86 had to be read accordingly. Learned counsel also submitted that admittedly the registration in the three classes had been granted in 2014 whereas the suit had been filed in 2010. No loss or damage had been shown or established. Insofar as the pending opposition applications (of both parties) in respect of class 25 were concerned, learned counsel submitted that a decision on the CMAs before me could have an adverse impact on those proceedings. Learned counsel prayed that the plaintiff's application be dismissed. Learned counsel for the plaintiff exercised his right of reply. I have heard learned counsel as above, examined the pleadings and the material on record, and considered the case law. Before proceeding further, it is appropriate to make certain prefatory remarks about the 2001 Ordinance from a comparative law perspective, and especially with reference to the UK Act and the Singapore Act. In Soneri Travels and Tours Ltd. v. Soneri Bank Ltd. 2011 CLD 193 ("Soneri Travels"), a Division Bench of this Court (of which I was a member) referred to the background, in terms of Pakistan's international treaty obligations, that led to the promulgation of the 2001 Ordinance: see paras 7 and 8. Commenting on the differences between the 2001 Ordinance and the 1940 Act the Bench, inter alia, observed: "Cases decided under, or in relation or with reference to, the 1940 Act mug therefore be reread and reappraised carefully before they are applied to the provisions of the 2001 Ordinance, even if those provisions may appear at first sight to be equivalent to those under the former
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enactment". The cases cited by learned counsel for the plaintiff, which were decided under the 1940 Act, must therefore, in my respectful view, be considered accordingly. The position is similar in English law, with respect to the UK Act. I have had occasion to note elsewhere that the 2001 Ordinance appears to be modeled on the UK Act (see Rupali Polyester Ltd. v. Baba China Builders and Developers 2014 CLD 1601 (SB), para 17). The UK Act was enacted in order to give effect in the United Kingdom to the EU 1988 Directive. Thus, the said Directive has also had an influence on the 2001 Ordinance. The effect of the changes made in English trade mark law on account of the new legislation, as regards consideration of case law decided under the predecessor UK 1938 Act, was put as follows in West v. Fuller Smith and Turner [2003] EWCA Civ 48, [2003] FSR 44 (CA): "To a much greater degree, this case illustrates the break with our domestic past brought about by the 1994 Act.... As the respondent submits, one has to start by forgetting the preconceptions of pre-1994 Act trade mark law" (at [69]). In Kerly (13th) (2001), the first edition of that treatise to come out after the UK Act, it was stated as follows (in
para 1-11, titled "Old authorities"): "... reference to cases decided under previous Acts is frequently of assistance. But assistance only: it should not be forgotten at any point that the system is fundamentally different and frequently demands a fresh look". This statement is repeated in the next edition, though, in a more nuanced form: see Kerly (14th)(2005), para 1- 011. It is interesting to note that in the edition just mentioned, the assistance is stated to be "limited" and in the next, current edition (15th, 2011) its described as being "very limited". The trajectory is clear.
Insofar as the Singapore Act is concerned, like the 2001 Ordinance it also was enacted to give effect to international treaty obligations. The predecessor legislation was the Trade Marks Ordinance 1938, which was based on the UK 1938 Act. The latter statute was also the model for the 1940 Act. An examination of the Singapore Act shows that it is influenced by the UK Act/EU 1988 Directive, which, as just noted, is also true for the 2001 Ordinance. Thus, Pakistani and Singapore trade mark law have had, and continue to have, many shared features. Professor David Llewelyn, one of the learned editors of Kerly, has, in a case-note on a 2013 decision of the Singapore High Court, noted that "[m]any countries outside Europe have adopted many of the changes and much of the wording in the European Union ... regime in a general worldwide move towards greater ease of registration of trade marks and a broadening scope of protection for those that achieve registration" (see "Is there confusion in the law of trade marks in Singapore?" (2013)25 SAc LJ 339,340-1: available at http : //www . sal . org sg/digital library/SAcLJ2013 25 mar. aspx). English courts, on account of the continuing harmonization of trade mark law at the EU level, are now guided and bound by the judgments of the European Court of Justice ("ECJ"). However, as Professor Llewellyn notes (ibid), Singapore is one jurisdiction that "stands out for those wishing a more circumspect reaction to this headlong rush for "ever more and ever wider", and that Singapore "judges have remained resolute in their determination to examine seriously the expansive claims of trade mark proprietors". There is thus, in some respects, a certain divergence between EU/English law and Singapore law. One point that needs to be considered here is whether these differences impinge on a consideration of the 2001 Ordinance, given the many commonalities among our law, the UK Act, the EU 1988 Directive and the Singapore Act. To the extent that those differences may be relevant for present purposes, it will be necessary to consider whether, in this jurisdiction, we should adopt the approach taken by ECJ/English.
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'decisions or that preferred by the Singapore courts, or indeed, whether some other course should be charted. One last comment. The registered trademark is sometimes referred to as the "senior mark" while the allegedly infringing mark is referred to as the "junior mark". This is convenient terminology, which I have also used. With these matters out of the way, I turn to consider section 40 of the 2001 Ordinance. The equivalent provision in the 1940 Act was section 21. When the two sections are compared, the contrasts are immediately apparent. For present purposes, it suffices to note that section 21 deemed it to be an infringement of a registered trademark if an unauthorized person used, in the course of trade, a mark (a) in respect of the same goods for which the (senior) mark was registered, the said (junior) mark being (b) either (i) identical with the registered mark, or (ii) "so nearly resembling it as to be likely to deceive or cause confusion". Section 40 on the other hand covers a range of situations. These start from use of a mark identical with the registered mark in respect of identical goods or services, as the case may be (subsection (1)), and continue through to subsection (4), which prohibits the use of an identical or deceptively similar mark in respect of goods or services which are not even similar to those for which the mark is registered, if the registered mark is a well known trade mark or has a reputation in Pakistan, and the other conditions laid down in the subsection are also met. (Other aspects of section 40, though also important, are not relevant for this part of the analysis.) Thus, while the exercise of determining infringement was relatively simple under the 1940 Act, it is of some complexity under the 2001 Ordinance. Under section 21, infringement claims, at least on the statutory language, came within one common rule of general application. Under section 40 it is important that the plaintiff be made to specify exactly the situations of infringement that he bases his case on, i,e., the particular subsection(s)/clause(s) that he relies upon. It was for this reason that, as noted above, I had asked learned counsel for the plaintiff to particularize the basis of his claims. The response has been set out in the table in para 7 above. I turn therefore to consider in detail the various subsections/clauses of section 40 relied upon, while also continuing to examine the section at large. (There is of course also a claim in terms of section 86; that will be considered separately.)
16. Subsection (2) of section 40 deals with three infringement situations. These can be stated as follows: The first situation is where the junior Mark is identical with the senior mark, and is used in relation to goods or services (as the case may be) that are similar to the goods or services for which the senior mark is registered. This is clause (a) of the subsection. The…
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