Digicel (St Lucia) & Ors v Cable & Wireless Plc & Ors

01 May 2010

Paul McMahon

The High Court recently explored some of the competing arguments in relation to the concept of “contrary to honest practices” in trade mark usage, ultimately concluding that the body of case law in this area could not be lifted out of context and applied to a similarly worded provision in Trinidad & Tobago’s Protection Against Unfair Competition Act 1996 (PAUCA).

Context

The background for this was the ongoing multi-jurisdictional dispute between Digicel and Cable & Wireless. The claimants, Digicel, relied on section 4(1) of PAUCA as their sole cause of action in Trinidad & Tobago. Section 4(1), as amended by section 4 of the Intellectual Property (Miscellaneous Amendments) Act 2000, provides that (inter alia):
 
 “…any act or practice, in the course of industrial or commercial activities, that is contrary to honest practices shall constitute an act of unfair competition.”

Considerable emphasis was placed on the breadth of PAUCA by Mr Justice Morgan. The defendants accepted that the matters alleged would, if proven on the facts, amount to “any act or practice, in the course of industrial or commercial activities”. Section 3 of the Act defines “practice” as including an omission to act and consequently “any act or practice” is any act or omission. In conjunction with the wide scope of “industrial or commercial activities”, it can be appreciated that the conception of “contrary to honest practices” preferred by the court would be key to defining the range of behaviour that could fall foul of Trinidad & Tobago’s unfair competition legislation.

The arguments

The Defendants argued that the only thing which is contrary to honest practices is an act or practice which is dishonest. The Claimants countered that the proper construction was more nuanced and (though the issue at hand did not involve intellectual property) sought to use the recent body of trade mark case law on this point to argue that the duty imposed by Section 4 was a duty to act fairly in relation to the legitimate interests involved.

A further strand of the Claimant’s argument involved an attempt to construct an objective standard for “practices” based on the notion that the word suggests an element of continuity or regularity. Mr Justice Morgan felt unable to accept this, however, due to the fact that the reference in PAUCA was to “any act or omission”, which could quite easily be a single, discrete act. Moreover, the reference was not to practices in general but to honest practices. As honesty can only be assessed in the light of all the circumstances (including the state of mind of the individual in question), this undermined the Claimant’s argument regarding an objective standard of practices in general.

Mr Justice Morgan relied upon the concept of dishonesty expounded in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378, where Lord Nicholls stated that in the civil context dishonesty “means simply not acting as an honest person would in the circumstances.” This was further elucidated by Lord Hoffman in Barlow Clowes Limited v Eurotrust International Limited [2006] 1 WLR 1476, where he said:

“Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If by ordinary standards a defendant’s mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards.”

Mr Justice Morgan made it clear that his provisional view was that only behaviour which is dishonest in the sense described above would be contrary to section 4(1) of PAUCA. However, this was where the claimants submitted that the concept of “honest practices” in section 10(6) of the Trade Marks Act 1994 was relevant to the interpretation of PAUCA. They claimed that, given both pieces of legislation arose out of national obligations under the Paris Convention for the Protection of Intellectual Property (which, as revised in Stockholm in 1967, also dealt with unfair competition), it was necessary to consider the recent jurisprudence of the English courts on this issue in order to properly construe the national legislation in Trinidad & Tobago.

Mr Justice Morgan expressed some reservation over whether this was entirely correct. Although the debates in the Trinidad & Tobago House of Representatives on the Bill which became PAUCA were used in argument by the Claimants it was, he said, “far from clear” that they were able to do so. In any event, the official report of the debate shed doubt on their argument that the Paris Convention (as amended) was the sole model for the Bill and therefore a legitimate tool for its interpretation. However, it was also stated in the debate reports that the notion of honest practices would have to be interpreted by the judicial authorities with assistance from the case law of other nations with similarly worded legislation. This appears to have been sufficient to persuade the court that the recent English authorities on this point should at least be examined.

Consideration of English case law

The definitions of “honest practices” in the English cases were therefore briefly reviewed by Mr Justice Morgan. He appeared to agree with the Claimant that the definition suggested by these was considerably wider than that which he was initially minded to apply to section 4(1) of PAUCA. In the context of the defence to trade mark infringement under section 10(6) of the Trade Marks Act 1994, Barclays Bank plc v RBS Advanta [1996] RPC 307 and Cable & Wireless plc v British Telecommunications plc [1998] FSR 383 both suggest an objective test for satisfying the honest practices proviso, in line with the Claimant’s arguments regarding the correct interpretation of PAUCA.

Substantial consideration was also given to the own name defence in section 11(2), which was recently considered by the Court of Appeal in Hotel Cipriani v Cipriani (Grosvenor Street) Limited EWCA Civ 110. The statement of Arnold J in the High Court that the requirement to act in accordance with honest practices in industrial or commercial matters “constitutes in substance the expression of a duty to act fairly in relation to the legitimate interest of the trademark proprietor” was approved, as was his statement that the test was an objective one.

The court’s findings

However, Mr Justice Morgan declined the Claimant’s invitation to transfer this wider requirement to act in accordance with honest practices in industrial or commercial matters to the Trinidad & Tobago context. Foremost in his consideration of this question was the sheer breadth of activity that could potentially be prohibited were he to do so. He commented:

 “I am not prepared to foist onto Trinidad & Tobago an interpretation of that width particularly when the language used in the provision is clear and is much narrower. The ordinary meaning of the words used in section 4 is limited to acts or omissions involving dishonesty. Accordingly, I hold that section 4(1) of PAUCA refers to any act or practice in the course of industrial or commercial activities which involves dishonesty, in accordance with the meaning of that word given in Royal Brunei Airlines v Tan.”

Comment

This approach is theoretically convincing and difficult to fault on practical grounds. Avoiding the conflation of legislation relating to unfair competition with concepts defined in trade mark cases is, in this instance, surely correct. It would be potentially difficult for such a clear and narrowly defined provision to be expanded in the way the Claimants argued, solely on the basis of the interpretation of similarly worded legislation in a different jurisdiction and field. This is all the more relevant when that different context provides greater constraints on the range of activity potentially prohibited by such an interpretation. The decision is, moreover, likely to provide reassurance to trade mark practitioners that the English courts will not be favourably disposed to arguments which, conversely, attempt to import conceptionss of “honest practices” in other legislation, particularly from other jurisdictions, into the interpretation of section 10(6).