Fresh battle between Harry J and Zaki Alif goes to Court

Stassen Exports gets injunction preventing unfair competition by Osh Holdings

Commercial High Court Judge Amendra Seneviratne last week issued an interim injunction after inquiry, restraining Osh Holdings Ltd. from using the packages and cartons used by Stassen Exports Ltd. and Stassen International Ltd.

Commercial High Court Case 10/2015/IP was filed by Stassen International Ltd. and Stassen Exports Ltd. against Osh Holdings for the unauthorised and unlawful use and disclosure of secret, confidential, and undisclosed information belonging to the Stassen Group of Companies and for unfair use of trademarks and designs claimed by them.

It was alleged in the plaint filed in Court that Osh Holdings was a company which was formed by the former employees and children of shareholder and former Director of Stassen Exports Zaki Alif.

It was alleged that the former Tea Manager Thosesan who had worked and been trained by Stassen for the past 30 years had along with the former Group Financial Controller committed illegal acts of commercial espionage by utilising and disclosing secret, undisclosed and confidential information belonging to Stassen Group such as the client list, blend sheets, proprietary blend, financial information and pricing strategy to newly-formed Osh Holdings in contravention of Intellectual Property Act No. 36 of 2003.

It was also alleged that Osh Holdings had surreptitiously approached a longstanding customer of Stassen and begun exporting the proprietary blend belonging to Stassen in the packages with trademarks and designs claimed to be belonging to Stassen, which amounts to unfair competition.

The order delivered by Judge Seneviratne held with the Stassen Group in prohibiting Osh Holdings from exporting tea in the packages and cartons claimed in the plaint to belong to Stassen’s Group. The Court has recognised Stassen has been using these packages, trademarks, and designs exclusively for a long time and that Osh Holdings use of the same amounts to unfair competition under the Intellectual Property Act No. 36 of 2003.

The learned Commercial High Court Judge held with evidence placed by Stassen in Court  that the fact that former employees of Stassen are now actively involved in the business of Osh Holdings seems to suggest that in using the connections and knowledge of former Stassen employees, Osh Holdings had engaged in unfair business practices.

As regards the question relating to use of the specific tea blend being exported, the Judge held that there was insufficient evidence at the stage of the interim injunction inquiry to conclusively determine the ownership of the blend in question.

The order refers to letters provided to Court by Osh Holdings specifying that it is not Stassen but the customer in question that holds the ownership of the particular tea blend in this matter. However Seneviratne found that it was difficult to believe that the customer owns the tea blend when they themselves sent a sample to Osh Holdings for the purpose of matching it.

Further, he stated that the fact that Osh Holdings matched the sample within 14 days lends itself to the fact that Osh Holdings had to have been in possession of knowledge with regard to the particular blend of tea previously exported by Stassen.

The Judge went on to state that the Stassen Group has showed Court that a former employee who was trained by them and in possession of secret information was now in employment of Osh Holdings. It is on this basis that the Judge stated that the sample could have been matched in such a short period of time.

The Judge also observed that the fact that the time the former employee left the Stassen Group was also the time Osh Holdings was incorporated and shows that there has been some connection in this manner between the former employees, the customer of Stassen and Osh Holdings.

In addition, the Judge held that the fact of the customers whom have been buying tea from Stassen for a long period of time stopped placing orders at the same time Osh Holdings was incorporated was something to be seriously considered.

However, the Judge held that it is not possible at this stage to conclude ownership of the blend without further evidence and did not grant an interim injunction based on the ownership of the blend without further evidence but an interim injunction was granted based on unfair competition, restraining Osh Holdings Ltd. from directly or indirectly using, applying, attaching affixing, printing the marks in packets referred to in the Plaint and selling or marketing or promoting or trading or exporting out of Sri Lanka goods bearing the said marks as set out in the packets referred to in the Plaint filed by Stassen Exports Ltd.

Nihal Fernando, President’s Counsel with Harshula Seneviratne, Romali Tudawe and Rhadeena De Alwis appeared for Stassen Exports Ltd., instructed by Upendra Gunasekara, Attorney-at-Law. K. Kanag-Isvaran, President’s Counsel with Lakshmanan Jeyakumar and Niranjan Arulpragasam appeared for Osh Holdings Ltd., instructed by G.G. Arulpragasam, Attorney-at-Law.