Mobile applications have lately become very popular among Kenyans. From online shopping to same-day delivery services, the applications have become irresistible for many innovative businesses eyeing efficiency and convenience.
One of the innovators saw a niche in the thriving matatu industry and came up with online bus ticketing services.
That was in 2017 when Buupass Kenya Limited was registered as a trademark as the absolute proprietor of Registration Number 97821.
The company then acquired significant goodwill and a remarkable reputation over the years having won the prestigious international Hult Prize Challenge 2016 for its innovation and social entrepreneurship.
Three years later, a rival registered Buspass Kenya Ltd, and noticing that the new entrant was ‘eating’ into its base, Buupass Kenya made a complaint to the Registrar of Companies accusing the former of infringing on its trademark.
In the complaint lodged on January 25, 2022, Buupass Kenya accused Buspass Kenya of misrepresentation and confusing users because of the similarity of the names.
The Registrar of Companies conducted investigations on the complaint and in a letter dated February 10, 2022, directed Buspass Kenya to change its name within 30 days, failure to which it would strike off from the companies’ register.
Buspass did not comply, forcing Buupass to move to court to challenge the registration of the rival’s name arguing that it was eroding its profits and goodwill.
In this case, it is not disputed that the plaintiff is the absolute legal and registered owner of the Trade Mark BuuPass as from June 29, 2017, whereas the defendant after following the due process with the interested party had its company incorporated on November 27, 2020.
Mr Wyclife Omondi, a director and founder of Buupass Kenya explained that the innovation involves downloadable software for urban commuters to pre-book public buses and pay using mobile phones, electronic tickets, and the provision of SMS-based ticketing platforms for urban commuters.
The app also has computerised ticket booking services for travel.
Mr Omondi said he incorporated the company on November 25, 2016, as Magic Bus Ticketing Kenya Limited, under Registration number PVT/2016/032650.
On May 11, 2017, he changed its name to Buupass Kenya Limited, a name that Kenyans would relate to, since it was operating in the Kenyan Market.
He stated that he discovered that the entrant was misrepresenting the public, and using its name to confuse by creating downloadable software for online bus ticketing in the name of BusPass and “BusPass Staff’ under the category Maps and Navigation, which he submitted amounts to infringement of his trade mark.
Mr Omondi added that the continued use of the name violated the trademark rights and exposed his company to unquantifiable risk and loss.
He said the trade design of using the names Buupass and Buspass interchangeably and copying his mode of trade is computed to confuse the public, especially his customers by misrepresenting that Buspass Kenya’s services are similar to and related to those of his firm.
Mr Omondi added that since the name Buspass came into operation around 2020-2021, he had noticed a decrease in the number of their app being downloaded.
He further testified that the business model is such that customers download the app, book bus tickets, and Buupass make money.
However, in this case, when customers search for Buupass on their laptops and computers, the word Buspass also appears hence Buupass loses clients to Buspass.
He asked the court to issue a permanent injunction stopping Buspass from using the name and for him to be paid damages for infringement of his rights.
Mr Omondi asked the court to compel Buupass to pay him damages of Sh10 million.
He gave an example of the confusion stating that a city commuter transport firm- Citti Hoppa, which was of Buupass Kenya’s client, uses both names BuuPass and BusPass as an advertising and marketing strategy.
According to Mr Omondi, the similarity is in the name “Buu” which is a slang word for “Bus”, and which is strikingly similar to his trademark, was likely to deceive or cause confusion to the public.
The defendant contended that its name is not so strikingly similar to that of the plaintiff’s as alleged, thus it has not caused any confusion to the public. The defendant urged this Court to dismiss the plaintiff’s suit with costs to the defendant.
She stated that the defendant was incorporated on November 27, 2020, and a certificate of incorporation was issued by the interested party. Before the said incorporation, the defendant carried out an official search with the office of the interested party who confirmed the availability of the name Buspass for registration.
She further stated that after registration of the defendant company, the defendant started its operations which included selling electronic bus tickets. Counsel submitted that the defendant has never infringed on the plaintiff’s trademark in any way and that the only similarity between the parties herein is that they operate in the same industry.
In opposing the case, Busspass Kenya submitted that the two names were distinctive and easily differentiable to the consumers hence there is no confusion and or deception as alleged. The firm asserted that the parties ought to be allowed to trade in their respective names as there was no breach of trademark rights or confusion among the general public as the same was not substantiated.
This was because Mr Omondi did not call any member of the public to shed light on the alleged confusion, to support his case.
Further, Buspass said that since Mr Omondi changed its name from Magic Bus Ticketing Kenya Limited to Buupass Kenya Limited, the goodwill attached to Magic Bus Ticketing Kenya Limited ceased to exist.
In the judgment, High Court judge Njoki Mwangi said section 58 of the Companies Act gives the Registrar of Companies power to direct change of name in case of a similarity to an existing name.
In this case, the judge said, it was not disputed that Buupass wrote to the Registrar complaining that it had approved a name for registration, which was phonetically and visually almost similar to its name.
“In view of the evidence adduced, documentation relied on by the plaintiff, I am persuaded that the defendant’s name Buspass is strikingly similar to the plaintiff’s Trade Mark, thus it is likely to deceive or cause confusion in the course of trade,” said the judge.
Justice Mwangi said the common man was likely to be easily confused about which app to use when booking travel tickets online, thus leading to assumptions that the two names might belong to the same company.
“In essence, this means that the defendant has tapped into the plaintiff’s customer base causing it to potentially suffer losses as a result of reduced customer traffic on its app,” Justice Mwangi said.
The judge directed an enquiry on the damages or an account of profits and payment of all sums found due to Buupass Kenya by Buspass Kenya for passing off and infringement of intellectual property rights.
She directed the chairman of the Institute of Certified Public Accountants of Kenya to appoint an accountant to undertake the task of establishing the profits made by Buspass Kenya in its use of the trade name and for passing off Buupass Kenya’s goodwill and services.
