Haco Industries has been ordered to refund Sh15 million it was paid by Doshi Iron Mongers to settle the counterfeiting of its BiC brand of pens.
Mombasa’s High Court said Haco breached the agreement by continuing to pursue claims against Doshi.
“I do enter judgment as prayed in the counter-claim as follows … Sh15 million being the sum paid to the plaintiff pursuant to the breached agreement,” Justice Patrick Otieno said in the March 9 judgement.
Haco was also ordered to pay Doshi Sh690,800 being the legal fees the latter incurred while defending itself in the criminal cases of 1996 and 2002.
It will also pay Doshi’s costs of the now determined suit which it filed in 2006.
The decision comes after Haco sold the BiC pens manufacturing and distribution business back to the franchise owner Société Bic on January 1, 2019.
Doshi was found in possession of 3,600 ballpoint pens in 1996 which it was passing off as BiC brand of stationery.
The company was charged for dealing in counterfeits the same year but was acquitted.
Doshi then reached an agreement on February 20, 2002, in which it paid Haco Sh15 million for the trademark infringement.
As part of the settlement, Haco also committed not to pursue any past, present and future claims against Doshi in relation to the 1996 batch of pens.
Doshi was subsequently investigated and prosecuted for multiple alleged trademark infractions which it said were instigated by Haco in breach of their agreement. In its defense, Haco said it is the duty of the State to enforce laws and that the new charges were distinct from the pens that were seized in 1996.
The judge said Haco did not prove that the additional enforcement actions were not related to the goods that formed the basis of the agreement.
“In this matter, the defendant (Haco) offered no evidence to challenge the counter claimants’ position that the charges brought subsequent to the agreement were in fact grounded on the 1996 goods which were exempt from such pursuit,” the judge said.
“That evidence stood uncontroverted and it is the only evidence the court must rely upon to come to a decision.”