• A-Plus brought a passing-off action against A-Class, arguing that A-Class’ name confused the public on the Ugandan market
  • The court found that the similar phonetic sound was insufficient to prove the passing off of A-Plus’ name
  • The test applied to reserve company names before incorporation is whether the name is misleading – not phonetic similarity

Under the Uganda Trademarks Act 2010, a person may not generally institute proceedings to prevent, or recover damages for, the infringement of an unregistered trademark. This, however, does not prohibit the common law right of action in passing off. This position was considered recently in the case of A-Plus Funeral Management Ltd v A-Class Funeral Services (U) Ltd (CivilSuit 355/2020 [2023] UGHCCD 186, 30 June 2023).

Background

The plaintiff, A-Plus, brought an action against the defendant, A-Class, arguing that the defendant’s name constituted infringement and passing off of A-Plus’ name. While both parties provide funeral and estuarial services, A-Plus has built a reputation over time in the industry. A-Plus thus claimed that A-Class’ name was confusing the public on the Ugandan market since it had a phonetic sound similar to ‘A-Plus’. Further, A-Plus argued that A-Class was incorporated to cause said confusion or free-ride on the goodwill of A-Plus, which amounted to passing off.

However, A-Plus did not have a registered trademark for funeral or estuarial services and did not base its action on trademark infringement.

Decision

The court found that the similar phonetic sound would not likely confuse the public in the funeral service industry and that the two trade names were distinct. Further, based on evidence from the registrar of companies, the test applied to reserve names for companies before incorporation is whether the name needs to be more accurate – and not phonetic similarity. Hence, the similar phonetic sound was not sufficient to prove the passing off of the plaintiff’s name.

Comment

Although a passing-off action can be brought to enforce an unregistered trademark, the plaintiff must prove misrepresentation as an element of passing off and adduce evidence of actual deception or confusion among customers in that industry. A-Plus, as the plaintiff in this case, failed to do so.

The case emphasises the need to align the register of companies and the register of trademarks as regards the reservation of company names, even though two different directorates run them.

Although the registrar of companies has a general power to reject a proposed company name for being misleading, the law does not prescribe any factors to consider when exercising that power. However, one factor that should be considered is whether the phonetic similarity of a name could mislead the public or cause confusion. Another factor to consider is whether the proposed company name is similar to another trade name that is widely known to the public.

Authored by:
Brian Kalule (Partner) and Judith Kagere (Associate)