Sudath Perera and Himani Perera
Sudath Perera Associates
Sri Lanka Radio station wins battle over trademark
In 2003 the Asia Broadcasting Corporation (Private) the trademark SHA FM on the basis that the mark was Limited (ABC) filed an action against a former employee, already registered in his favour. However, he failed to Sanka Amarajith Perera, for wrongfully seeking to obtain the interim relief sought. The High Court judge prevent the company from using the trademark SHA FM held that the matter at issue could be properly dealt with (the name of one of its radio stations) by registering the in the case filed by ABC and that there was no purpose in trademark under his name at the National Intellectual hearing another case based on the same facts and issues. Property Office. The Commercial High Court granted an interim Facts order in favour of ABC “restraining the defendant ABC owns several radio stations that broadcast in directly and indirectly preventing the plaintiff from Sinhala, Tamil and English – Hiru FM, Sooryan FM, Gold advertising, promoting and broadcasting a radio station FM, Sun FM and Tharu FM. under the trademark SHA FM and acting against the Perera was employed by ABC as a presenter and plaintiff within the meaning of the Code of Intellectual producer, then as assistant manager of programming and Property Act until the final determination of this action”. finally as programming manager for Hiru FM. In the interim order the judge held that: “even if the Recognising the high demand for Hindi, Baila and non- trademark is registered with the director of intellectual stop music among Sri Lankan listeners, ABC explored the property, it has no effect if it resembles, in such a way as possibility of launching a specialised Hindi, Baila and to be likely to mislead the public, an unregistered mark non-stop music radio station for the first time in Sri Lanka. used earlier in Sri Lanka by a third party in connection It was decided to close Tharu FM and, after with identical or similar goods or services or if the considering several names, the name Sha FM (which was applicant is aware or could not have been unaware of proposed by Wasantha Karunarathne, acting such use.” programming manager of Tharu FM) was chosen as the This is a ground recognised by Section 104(1)(b) of name of the new station. Perera, as a result of his position the IP Code 2003 (Act 36/2003) for non-registration of a as programming manager of another channel, was trademark. involved in the meetings relating to the launch of the During the period of Perera’s employment, ABC new station. launched a radio station under the name Sha FM. Due to various disagreements with the management However, upon leaving ABC Perera filed an application of ABC, Perera resigned in June 2001. The day after his to register the words ‘Sha FM’ as a trademark in his name resignation he applied for, and was later granted, the and successfully obtained registration. ABC filed an registration of SHA FM as a word mark in his name. action in the Commercial High Court of Colombo for a After much publicity Sha FM was launched in declaration of non-infringement and declaration of the January 2002. Unaware of the previous registration, ABC registration as null and void. applied to register the mark SHA FM in February 2002; When the interim injunction was granted against however, the trademarks registrar objected to the him, Perera appealed the interim order to the Supreme application on the basis of Section 104 of the IP Code 2003 Court but was denied leave to appeal. (previously Section 100 of the IP Code 1979 (Act 52/1979)) Before the case went to trial, Perera filed a case in – that is, that the mark was similar to an existing mark – another division of the Commercial High Court against citing Perera’s application. It was only at this stage that ABC and attempted to support the matter ex parte ABC became aware of Perera’s registration of the mark, seeking an enjoining order preventing ABC from using and it immediately filed action to prevent Perera from
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preventing ABC obtaining any rights to the mark. • a declaration that the advertising, promotion and Perera did not possess a licence to operate a radio broadcasting of its radio station Sha FM did not station, nor did he make any attempt to obtain a licence. constitute an act of infringement of Perera’s IP rights; Furthermore, Perera did not have the financial capacity • an interim injunction restraining Perera directly and to commence such an operation. In spite of these facts he indirectly from preventing ABC from advertising, sought to register the trademark SHA using the letters promoting and broadcasting a radio station under ‘FM’, indicating that the mark was associated with sound the trademark SHA FM and acting against ABC broadcasting. within the meaning of the IP Code until the final Perera made no attempt to prevent ABC from determination of the case; and launching the radio station, promoting and advertising • a permanent injunction restraining Perera directly the station or using the SHA FM trademark in any and indirectly from preventing ABC from manner either during or after his employment with the advertising, promoting and broadcasting a radio company. In his answer to the suit Perera stated that in station under the trademark SHA FM and acting view of his registration of the SHA FM mark, he against ABC within the meaning of the IP Code until possessed all rights to that mark. the case was concluded.
Relevant legislation The second cause of action was for: On these grounds ABC claimed that it was entitled to relief under Section 181 of the IP Code 1979 (replaced by • a declaration that the registration of the mark SHA Section 172 of the IP Code 2003) for a declaration of non- FM was null and void; and infringement. • an order notifying the National Intellectual Property This section states that: “the court may, on the Office of the order for nullification of Trademark application of any person showing a legitimate interest to 104241 under Section 131(2) of the IP Code. which the registered owner of the industrial design, patent or mark, or any other matter provided under the ABC provided evidence that the mark SHA FM and act as the case may be, shall be made party, declare that the Sha FM name and logo were identified with and the threatened performance or performance of a specific had become distinctive of ABC, and that it spent a large act does not constitute a threatened infringement or sum of money on the launch and promotion of the infringement of the said industrial design, patent or radio station. mark or any other matter provided for under the act.” ABC cited in evidence Karunarathne, who had ABC also submitted that the trademark registered by suggested Sha FM as a name for the radio station. ABC Perera was contrary to the provisions of Chapter XXIX of also proved that Perera was privy to its decision to name the IP Code 1979 (replaced by Chapter XXXIII of the IP the planned radio station Sha FM by reason of his Code 2003) relating to unfair competition. position in the company. ABC stated that under the provisions of Section 130 Perera stated that he had suggested the name Sha FM, of the IP Code 1979 it was entitled to an order declaring but produced no documents or witnesses in support of the registration null and void as registration was this, whereas ABC produced two witnesses to show that precluded under the provisions of Section 100 of the IP the name was suggested by Karunarathne. Both witnesses Code 1979 (replaced by Section 134 of the IP Code 2003). had been present at the board meeting at which the launch The section states that: “the court may, on the of the radio channel was discussed. In addition, an application of any person showing a legitimate interest, affidavit sworn by Karunarathne and the minutes of the or of any competent authority including the director meeting were filed in support of the oral evidence. general, to which the registered owner of the mark and ABC believed that Perera had maliciously, every assignee, licensee or sub-licensee on record shall be wrongfully, unlawfully and in breach of his fiduciary made party, declare the registration of the mark null and duty to protect ABC’s trade secrets made the application void if its registration is precluded under the provisions to register the SHA FM mark with a view to obstructing of Sections 103 and 104.” ABC from carrying on its legitimate broadcasts and injuring the reputation and goodwill of ABC and, more Plaintiff’s case specifically, of the SHA FM radio station. ABC’s complaint was divided into two causes of action ABC stated that Perera’s intentions in making the and two forms of relief were sought. application to register the SHA FM word mark were The first cause of action was for: demonstrated by his conduct as:
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• Perera had filed the application to register the regard to the said mark, and believed that he could purported mark just one day after resigning from appropriate the exclusive property of the plaintiff ABC; company by proof of a certificate of registration of the • the mark applied for clearly referred to a radio trademark SHA FM in his name. Had he written at least station, despite the fact that Perera did not possess a a letter, opposing and/or challenging the plaintiff licence to operate a radio station and ABC believed company from using the mark SHA FM at the launch of that he had not attempted to obtain such a licence, the Sha FM radio station, the plaintiff company would and Perera did not have the financial capacity to have become aware of the surreptitious application of the operate a radio station; and defendant to register the said trademark in his name and • Perera failed to protest to ABC against the use of SHA vehemently opposed it.” FM, despite the station’s highly publicised launch, ABC filed this action on the basis that it had prior the advertisements and the fact that ABC had been usage of the trademark SHA FM. It reiterated that at the operating Sha FM since January 2002. launch of the radio station Perera had taken no steps to prevent ABC from continuing to use the trademark SHA ABC stated that in these circumstances Perera had no FM. right to the SHA FM mark, and that the SHA FM mark was and continued to be the exclusive property of ABC, Decision which had prior use of the mark. The High Court declared that Perera’s registration of the ABC stated that “irreparable loss and damage and trademark SHA FM was null and void. Furthermore, it irremediable mischief would be caused to the plaintiff ordered the registrar of the court to notify the National unless the defendant is restrained from obstructing the Intellectual Property Office of the order for nullification plaintiff from carrying on Sha FM radio broadcasts”. of the trademark under Section 131(2) of the IP Code. The High Court held that Perera had filed the Defendant’s case application to register SHA FM in his own name with the Perera, in his answer to the complaint, stated that he had intention of preventing ABC from lawfully operating the created the name Sha FM and proposed it to the radio station and causing damage to the goodwill and management of ABC. However, before a decision could reputation of the company that the radio station acquired be reached he had to resign from its employment as a over a period of time. It further held that this act was result of certain problems with the ABC management. performed with malicious and unlawful intent and in Furthermore, he stated that he knew no details breach of Perera’s fiduciary duty to protect ABC’s trade regarding the name of the proposed radio station until it secrets. was launched, and that when he became aware that ABC The judgment went on to state that Perera’s act was had launched the radio station as Sha FM he could not deemed an act of unfair competition contrary to honest take legal action since, at the time of the launch, he did trade and commercial practice, and that he was not not possess the certificate of registration of the SHA FM entitled to any rights in the mark SHA FM which he had trademark. registered in his name. The court held that ABC was However, in court Perera put forward a new entitled to the costs of the action, but made no order argument, not contained in his written answer, that the regarding the amount. managing director of ABC had rejected the name Sha FM as proposed by him, and this rejection was the main Conclusion reason for his resignation. Perera filed a notice of appeal against this judgment to In its written submissions ABC contended that the the Supreme Court, but this was later withdrawn only reason Perera had filed an application to register the following an undertaking by ABC that it would not seek mark SHA FM in his name was to obstruct ABC from the costs to which the court had held it was entitled. The using the name and to cause damage to its reputation separate action which Perera filed in another division of and goodwill. the Commercial High Court for infringement of the ABC further submitted in the written submissions trademark SHA FM on the basis that ABC had no right to that: “the defendant could not have taken any steps as promote and do business using the trademark which was stated above because he had no right whatsoever with registered in his name was withdrawn at the same time.
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Sudath founded the law firm in 2002. He is also chairman of SPA Corporate Sudath Perera Services (Pvt) Ltd, which handles IP and company secretarial matters, and Partner SPA Recovery Services (Pvt) Ltd and SPA Tax Consultancy Services (Pvt) Ltd, Tel +94 112 559949 which handle debt recovery and taxation respectively. Sudath has practised Email [email protected] law for 15 years and is a member of INTA and the APAA. The firm is the Sudath Perera Associates legal representative for several international brands in their Sri Lankan anti- Sri Lanka counterfeiting operations.
Himani is a senior associate in the law firm and a director of SPA. She Himani Perera currently handles all the company’s IP matters. Himani handles trademark Senior Associate and patent applications for local and foreign clients and advises on Tel +94 112 595407 copyright and corporate matters for several multinational clients. She also Email himani handles shipping and aviation matters. She is a member of the firm’s anti- @sudathpereraassociates.com counterfeiting team. Sudath Perera Associates Sri Lanka
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