A fight over the trademark used in the manufacture and distribution of children’s juice known as Squishy will now be handled by an arbitrator.
This is after a bench of the Court of Appeal declined to stop Kevian Kenya Ltd (KKL) from manufacturing, distributing and selling products under the trademark ‘Squishy’.
Squishy Drinks Limited (SDL) had moved to the Appellate court arguing that a ruling by the High Court in December 2019, effectively allowed two parties to conduct business using the same trademark.
The company argues that allowing KKL to continue packaging and distributing of products, under the Squishy trademark for 90 days as directed by Justice Mary Kasango in 2019, will continue damaging its brand.
But as the case was pending, the parties agreed the matter to be heard by an arbitrator and both have filed their submissions and are awaiting a decision.
The two companies entered into an asset purchase agreement where SDL transmitted all its assets, including the Squishy trademark, to KKL.
But in an affidavit, Ms Evelyn Wairimu said the 2018 agreement is a nullity because no consent was obtained from Competition Authority Kenya (CAK), as required by law.
She said they decided to terminate the agreement after KKL failed to fulfill its part of the bargain, but all the issues they raised were ignored by Justice Kasango in her ruling.
SDL later moved to the Court of Appeal and at the same time, sought a review of Justice Kasango’s ruling.
Last week, Justices Daniel Musinga, Asike Makhandia, and Patrick Kiage declined the request by SDL to block former partner turned rival from using the trademark.
“We have established that after filing this application, Squishy has also sought for the review of the disputed order at the High Court. Thus, if we entertain this application, the same issue shall be determined simultaneously by this court and the High Court,” said the judges.
"This appears to be a case of hedging its bets by the appellant and smacks of forum shopping and an abuse of process. This is especially so when the law does not countenance the simultaneous pursuit of a review of and appeal against the same order," they added.
Squishy sought termination of the merger on grounds that Kevian delayed on its part of the agreements, a move that led to the current legal battle.
In the 2019 ruling, Justice Kasango said KKL’s case was likely succeed because it has shown that the trademark was part of the assets it purchased.
“On prima facie basis I do find that SDL has not shown a prima facie case with a probability of success because having transferred the assets, even if it purported to terminate the agreement, I am unable to find that it had the right to claim it still owned those assets, which include the trademark,” the Judge said.
Whereas Judge Kasango did not bar SDL from manufacturing or distributing Squishy juices, she directed the firm not to interfere with KKL operations.
Editor's note: The previous version of this story erroneously reported that the Court of Appeal has granted juice manufacturer Kevian Kenya Limited (KKL) the green light to register a trademark known as "Squishy" and manufacture the drink that targets children. This has been corrected to indicate that the fight will now be handled by an arbitrator.