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Justices Overrule Lower Court ruling on Heineken Breweries vs Kangaroo Plast

Justices at the Supreme Court ruled two weeks ago denying Kangaroo Plast Plc its long fought claim to hold onto the trademark rights on the brand Ibex.

The Supreme Court’s judgment was given based on an appeal lodged by Mahlet Habtewold and the Ethiopian Intellectual Property Office (EIPO) after lawyers representing both appealed a ruling by judges at the Federal High Court, in January 2017.

Kangaroo, a company owned by Yirga Haile family, has been bitterly fighting for the last six years after it brought civil charges against Mahlet, a delegate to Heineken Brewery S.C, but limited to a registration of the trademark, and the Ethiopian IPO.

The latter had granted the trademark registered under the name Ibex to Mahlet and Welwalo Cultural Drinks in February 2011, after the applicants submitted their request, claiming Kangaroo Plast had failed to use the trademark for over three years.

Kangaroo had a greenfield project to open up a brewery in Modjo, 76Km east of Addis Abeba, in a joint venture with Heineken, whose products it used to distribute in Ethiopia. The planned joint venture did not carry on following Heineken’s acquiring of state owned breweries in Harer and Bedelle, a move that led it to launch a new brand under the name Walya.

Kangaroo replied in a letter to the Ethiopian IPO in April 2014 that it could not use the trademark owing to reasons beyond its control, that is, force majeure. Its managers cited a fire that broke out at a foam and plastic plant owned by a sister company.

Kangaroo further argued that since it converted its full attention to re-establishing its foam factory, it could not develop its new brewery or use the trademark it had acquired. This, according to the company, does not mean that it had given up the brand, asserting that they have been paying the required amount of tax for the brewery factory.

After analysing both claims, Ethiopian IPO decided to cancel the trademark, citing that the brewery plant and the foam and plastic factory that had burned down were two different companies that should handle their gains and losses. The Office also asserted that the foam and plastic factory could not be taken as a factor that hindered the brewery plant from entering production.

Aggravated by this decision, Kangaroo appealed to the Federal High court in June 2014, seeking the restoration of its trade name and argued that the brewery is on a project level. At that time, Kangaroo claimed that it did not stand on its own as it only had an investment license, not a trade license. It also claimed that the burnt down foam factory was the source of the funding for the brewery, saying that the two companies could not be reviewed separately.

Mahlet argued that the two companies were engaged in two different business sectors. Hence, the beer plant, she claimed, had nothing to do with the factory that was destroyed. She also claimed that Kangaroo got 21.1 million Br in compensation from the Ethiopia Insurance Corporation (EIC). She concluded that the accident was nothing more than a mere inconvenience.

It was after hearing the two arguments that the High Court reversed the decision of Ethiopian IPO and granted the Ibex trademark to Kangaroo Plast Plc.

Mahlet sought judgement reversal at the Federal Supreme Court. The Supreme Court returned the case to the High Court ordering the lower court to make Ethiopian IPO the main party.

Receiving the order from the Supreme Court, the High Court ordered Ethiopian IPO to explain why it passed the administrative decision to cancel the trademark it granted to Kangaroo. The High Court also examined whether the cancellation of the trademark was appropriate or not.

After reviewing the memorandum of associations of the brewery and foam plants, the High Court again ruled in favour of Kangaroo, reasoning that the two companies are under a parent company so that one can be affected by damages occurred on the other.

It is thus based on this judgment that Ethiopian IPO and Mahlet brought appeals to the Federal Supreme Court. Mahlet, among other things, claimed that Kangaroo did not deny that it received compensation from EIC. Whereas Ethiopian IPO argued that the company is engaged in 15 different businesses and the damage on one of the businesses cannot be a reason for force majeure.

Although judges at the Federal High Court ruled in favour of Kangaroo, that the Ibex trademark belongs to it, the defendants appealed in their separate files challenging the ruling at the Supreme Court. Justices had earlier passed a decision in joining the appeals into a single file, before they overruled the lower court on June 4, 2017.

Hearing the case from both sides, the Supreme Court reversed the lower court’s ruling. The Court mentioned that Kangaroo diverted its attention to the damaged plan knowing that its trademark would be cancelled after a three-year lapse without being operational. And it awarded the Ibex trademark to Mahlet, keeping the cancellation of Kangaroo’s entitlement for Ibex.

Getnet Yawekal, a specialised lawyer related to intellectual property, sides with the Supreme Court’s ruling.

“The foam and brewery plant have their own legal personality; therefore one cannot be mentioned as a reason for the failure of the other and vice versa,” he said. “Therefore, force majeure does not work for this case.”

The Supreme Court judgement clearly distinguishes for which cases force majeure can be applied, according to Mahlet’s attorney, Mehari Redae (PhD).

For Kangaroo Plastic’s attorney, Taffesse Yirga, the verdict completely missed the core issue of the case.

“If the brewery plant has its own legal personality, it could have secured the mark with its own name, but in reality, the mark was obtained by Kangaroo Plastic,” said Taffesse.

Source : AddisFortune

Tags: Kangaroo Plastic Plc,, Heineken Brewery Ethiopia,, Yirga Haile Family,, Ethiopian Intellectual Property Office (EIPO),

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