Prevention is better than cure: Mauritius as a first-to-file jurisdiction

A recurring issue in Mauritius arises when a foreign-owned business becomes aware that its trademark has been registered locally in the name of a third party, often its own local distributor. This has been observed in various cases covering a wide array of trademarks in respect of goods ranging from tyres, beauty products, fittings, and braking systems to clothing and apparel, as well as services such as transportation and logistics.

This practice not only goes against the fundamental concept of a trademark, which is to allow consumers to identify the commercial origin of goods or services with reasonable certainty, but it may also deprive a business of its legitimate right to exploit one of its most valuable assets, in respect of which it has, more often than not, already acquired significant goodwill, distinctiveness, or even well-known character, whether nationally or internationally.

It is apposite to recall that trademark protection is territorial in nature and that Mauritius operates primarily as a first-to-file jurisdiction. Businesses wishing to exploit their trademark in the Mauritian market by way of, for example, commercialisation or licensing should secure trademark protection locally before commencing commercial activities or appointing distributors or licensees. This is particularly important because the exclusive right to use a trademark is acquired by registration in Mauritius. Although some protection may still be available under local law for unregistered trademarks, notably for well-known trademarks and under unfair practice legislation, the failure to register a trademark can expose the rightful trademark owner to significant business and legal risks.

Indeed, far too often, the issue arises where third parties import trademarked goods into the Mauritian market, whether directly from the foreign business owner itself or through the latter’s network of distributors. The parties then enter into distribution agreements without securing any trademark registration locally in the name of the rightful owner; namely, the foreign business owner. Such distribution agreements often do not incorporate sufficient protective clauses with regard to intellectual property rights ownership in favour of the rightful owner and may, for instance, not expressly forbid the local distributor from applying for the registration of any trademark that may be identical or similar to the trademark that is the subject matter of the agreement.

The local distributor then applies for registration of the trademark in its own name, either because the distributor genuinely wishes to protect its local business activities, because the distributor is under the misapprehension that distribution rights confer ownership rights, or, in more concerning cases, because the distributor seeks to free-ride on the market recognition of the trademark by exploiting it in Mauritius and to gain leverage over the rightful trademark owner in bad faith. Such conduct is reminiscent of trademark squatting strategies aimed at blocking market entry and extracting financial settlements from the rightful owner.

The problem often becomes apparent to the rightful owner only when the latter seeks to commercially exploit its trademark in Mauritius, enter into agreements with potential new distributors, or enforce its rights in any manner, only to realise that a third party holds the registered rights to its trademark or to encounter hurdles such as customs detainment of consignments of genuine products imported into Mauritius by the rightful owner or with its consent.

Indeed, such unauthorised registration creates significant commercial leverage and legal risk since the unauthorised registered owner obtains the exclusive right to use the trademark in Mauritius pursuant to the Industrial Property Act 2019 and may effectively impact the rightful owner’s ability to, for example, appoint other distributors or licensees, import and commercialise its products in Mauritius, and enforce its rights against counterfeiters. In addition, in cases of bad faith, the unauthorised registered owner may also use the trademark registration as leverage when negotiating the terms of the distribution agreement.

Nevertheless, the Mauritian trademark legal system provides for sound legal remedies.

Where an unauthorised trademark application is detected before its registration, the rightful trademark owner has the opportunity to file an opposition to its registration before the Industrial Property Office of Mauritius, over the course of the two-month period during which the application is published in the Government Gazette of Mauritius. The rightful owner may file the opposition on the grounds of any earlier trademark rights it may have in Mauritius. If not, the rightful owner may provide evidence of use of an unregistered trademark that is identical or similar to the mark at issue and in respect of similar goods or services.

In the event that the trademark concerned has acquired well-known character, this may be invoked as a ground of opposition. If the unauthorised trademark application was filed in bad faith, evidence may be adduced to rebut any contention that the application arose from honest concurrent use and demonstrate that the applicant was aware that the trademark was originally developed by and belongs to the rightful owner, especially if there was a prior commercial relationship between the parties.

Filing an opposition is generally the preferred route given that it is typically less time-consuming and less costly, and may allow for negotiation opportunities and a potential amicable settlement between the parties, especially where they wish to safeguard commercial interests. The trademark application may thereafter be withdrawn by the unauthorised applicant or assigned to the rightful owner.

Nevertheless, where the rightful owner becomes aware of the unauthorised trademark only after it has been duly registered, the Industrial Property Act 2019 provides an avenue for redress by way of invalidation proceedings before the Industrial Property Tribunal. These involve substantial evidence, written submissions, hearings, and additional costs.

Other remedies may be available in addition to filing oppositions or invalidation actions, depending on the facts of each case. These may include pursuing claims based on passing off or unfair competition, and where unauthorised use is continuing or imminent, the rightful owner may also seek injunctive relief and damages before the competent court.

By comparison, the cost of filing and maintaining a trademark in Mauritius is much lower and the process is simpler.

As such, it makes commercial and legal sense for businesses to protect their trademarks in Mauritius where they envisage that the territory is of commercial interest or may become of commercial interest in the foreseeable future in line with their business plan.

For businesses entering the Mauritian market, early trademark registration not only provides legal protection but also manages commercial risk and provides greater control over distribution channels, enforcement, and the long-term value of the trademark.

Trademark protection is no longer a ‘nice to have’ or an administrative afterthought in our modern business environment. It is necessary to safeguard the interests of consumers and businesses alike.

As the adage goes, prevention is better than cure. All the more so in a ‘first-to-file’ jurisdiction such as Mauritius.