Mikoani vs Bakhresa: Case will have broad implications on business in EAC

Friday February 13 is the date for the verdict of a case in which two Tanzanian companies are feuding over a brand name, Azania, in Rwanda. Irrespective of who wins, the verdict will provide the East African Community with insights into harmonising investment laws and policies as the region moves towards economic integration. In substance, the case points to urgent need for harmony in investment laws. At the centre of the feud is a brand name, Azania; owned by Mikoani in Tanzania but was registered in Rwanda by Bakhresa. The two companies are competitors in grain milling business at home in Tanzania and are both expanding into the Rwandan market. Mikoani is currently constructing a grain milling factory in the Special Economic Zone in Kigali while Bakhresa is already in business in Rwanda. However, Mikoani cannot use the Azania brand in Rwanda because it technically belongs to their business rivals who acquired it in April 2013. Mikoani has therefore asked court to nullify the process through which Bakhresa registered the name to allow it regain ownership of the brand for use in Rwanda as in Tanzania. On January 14, lawyers representing the two firms faced off in the Nyamirambo-based courtroom presenting arguments and counter arguments. Represented by Safari Kizito of Bona Fide Law Chambers and Geoffrey Mwine of GMCC Law Chambers, Mikoani says that Bakhresa acquired the brand name in bad faith, aiming at thwarting Mikoani’s entry into the Rwanda market in order to protect their own Azam brand from competition in Rwanda. They further urged that in the spirit of regional integration, it was wrong for Bakhresa to register Azania as their own brand, yet it’s publicly known to be owned by Mikoani, a well known company in the region. They asked court to annul the process through which Bakhresa registered Azania and award their client $360,000 in consequential costs; excluding their own fees. Counter argument In Tanzania, Bakhresa produces and markets a wide range of products including Azam wheat flour; while Mikoani Traders Ltd has three separately registered companies, including Azania Wheat Flour Ltd, the producer of Azania wheat flour. Bakhresa’s lawyer, Moise Nkundabarashi of Trust Law chambers told court that his client did act lawfully to secure Azania brand name because the trademark wasn’t protected or owned by anyone in Rwanda, at the time of the application. He said that there is no law stopping anyone from owning a similar brand in another country since Mikoani’s rights are only protected in Tanzania. He argued that at the time of Bakhresa’s application, Mikoani’s rights to Azania had even expired, under Tanzania’s Trade/Service Marks Act of 1986. A certificate of registration produced in court indicated that on January 26, 2001, Mikoani registered ‘Azania Wheat Flour’ for seven years before renewal. However, another letter from Tanzania indicates that Mikoani’s ownership of Azania brand expired on January 26, 2008 and wasn’t renewed until July 24, 2014. The defense lawyers wondered why Mikoani didn’t renew ownership upon expiry. They urged court to dismiss the case, arguing that their client followed appropriate laws to acquire the Azania trademark in Rwanda. RDB’s role The office of the registrar general at the Rwanda Development Board (RDB) is the awarding authority of trade marks in Rwanda. While RDB is not a respondent in the case, the agency issued a statement saying it acted legally in letting Bakhresa register Azania as trade name. “It is mandatory to register a trademark to claim a right; the protection is territorial, there is no agreement or convention between EAC member states on trademark protection. All member states use the Paris Convention [and] Bakhresa filed the Azam and related trademarks on 7/11/2012 and received protection on April 2013 before Mikoani,” reads the statement. The RDB statement adds that the office of the registrar general followed the principle of ‘first file, first protection’ adding that since Mikoani’s Azania trademark is registered in Tanzania and not in Rwanda, it doesn’t have effect in another country. Significance If Mikoani wins the case, it will be a great relief as they regain their brand name and start using it freely on the Rwandan market. Victory for Mikoani would also mean competition between Azania wheat flour and Azam wheat flour products on the Rwanda market. But if Bakhresa wins, Mikoani would have one or two options; appealing the verdict in a higher court would be the first. Other experts say Mikoani could negotiate to buy the trademark in Rwanda from Bakhresa, or develop a new brand name. As for companies in East Africa, a loss for Mikoani would mean thousands of successful brands in the region could be up for grabs if the owners do not move quickly to secure them regionally. If a company’s brand is registered in only one of the five EAC countries, it means anyone could own it in the other countries where it’s not registered.

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Mikoani vs Bakhresa: Case will have broad implications on business in EAC