Eunice Parua, Partner, Leahy Lewin Lowing Sullivan Lawyers: Viewpoint

Viewpoint: Eunice Parua

The growth of Papua New Guinea’s economy in the last decades, as a result of large-scale development projects primarily in the extractive industries, has had both positive and negative consequences for the country. With a growing consumer base and an emerging middle class, one negative consequence has been the influx of counterfeit consumer goods.

The courts and law enforcement agencies have had to deal with an increasing number of cases involving the infringement of trademarks and the confiscation of counterfeit goods. This has been of great concern for the population, as some counterfeit products have impacted iconic PNG brands and designs. This trend has surged in the country in the last few years, affecting basic consumer items such as beverages, cigarettes, alcohol, clothing, household accessories and frozen goods. One way that manufacturers are taking action against counterfeit goods is by suing importers and distributors in the civil courts for infringement of a registered trademark (TM). Legal action is also taken for “passing off”, which is a common law tort.

One recent case in point is the action taken by Paradise Foods against Paradise Supermarket. The plaintiff, a local manufacturer of food and beverages, is the registered proprietor of PNG TM No. 70107, which is registered in the PNG Trade Mark Register until 2021. TM 70107 is registered for the following goods: beer; mineral and aerated waters and other non-alcoholic drinks; fruit drinks and fruit juices; and syrups and other ingredients used to create beverages. The defendant, Paradise Supermarket, had been importing cans of Pepsi into PNG, with “imported and distributed in PNG by Paradise Beverages” written on them.

The plaintiff sued the defendant, claiming that: the cans infringed the plaintiff’s TM 70107, as it used the mark “Paradise Beverages”; the defendant used this mark in the course of trade; they used this mark in relation to goods for which the plaintiff’s trademark is registered, and used it without permission of the plaintiff; and they used a mark that is deceptively similar to the plaintiff’s trademark such that it would cause confusion to a reasonable consumer as to the source of the goods in question, given that it would most likely be assumed that the goods were connected to the plaintiff.

Although the defendant argued that TM 70107 is not sufficiently broad to extend to the plain text words “Paradise Beverages” contained on the Pepsi cans and therefore was not an infringement of that trademark, the national court held that those words are part of TM 70107 and they were used on a product for which the trademark was registered, under the category of “mineral and aerated waters and other non-alcoholic drinks”.

The court accordingly found that the defendant had infringed TM 70107 and made a declaration to that effect, pursuant to Section 53(1) of the Trade Marks Act, Chapter 385. The court also granted a permanent injunction under Section 56 of this act, preventing the defendant from importing cans of Pepsi or any other product with the Paradise Beverages mark or any other mark substantially identical with TM 70107, and an order that the subject cans of Pepsi be seized and disposed of.

The local manufacturing industry in PNG needs to be protected. Cheaper imports that deceive consumers by being associated with trusted local brands affect the business and reputation of these manufacturers. The court’s tough stance on this issue is welcome progress, and the Paradise Foods case affirms the common law principle of the protection of trademarks and passing off in PNG. It is positive that the consumer base is growing and boosting the nation’s economy, but care must be taken to offset negative side effects such as counterfeit goods and passing off in order to protect manufacturers.