South Africa: Supreme Court of Appeal
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THE SUPREME COURT OF APPEAL
OF SOUTH
AFRICA
Reportable
Case No 123/2004
In the matter between:
A M MOOLLA GROUP LIMITED First
Appellant
A M MOOLLA CLOTHING
(PROPRIETARY) LIMITED
Second Appellant
SALT OF THE EARTH CREATIONS
(PROPRIETARY)
LIMITED Third Appellant
KINGSGATE CLOTHING
MANUFACTURERS
(PROPRIETARY) LIMITED Fourth
Appellant
MAJESTIC CLOTHING MANUFACTURERS
(PROPRIETARY)
LIMITED Fifth Appellant
STAR SHIRT &
CLOTHING
(PROPRIETARY) LIMITED Sixth
Appellant
RICKEMP (PROPRIETARY) LIMITED Seventh
Appellant
and
THE GAP INC
First Respondent
GAP (APPAREL) INC Second
Respondent
GAP (ITM) INC Third Respondent
Coram: HARMS, STREICHER, BRAND, LEWIS AND PONNAN JJA
Heard: 15 AUGUST 2005
Delivered: 9 SEPTEMBER 2005
Subject: Trade mark “Gap” ─ well-known trade marks ─ art 6bis Paris Convention ─ principle of territoriality ─ non-use of trade marks.
J U D G M E N T
HARMS JA:
INTRODUCTION
[1] This
judgment concerns a number of registered South African trade marks, all having
the word GAP as a distinctive feature. The
first is a word mark THE GAP; there
are two device marks consisting of GAP and THE GAP (in lower case) written in a
stylised form;
and the word marks GAP STORES and GAP KIDS. Salt of the Earth
Creations (Pty) Ltd, the third appellant, to whom I shall refer as
‘the
proprietor’, is a local company and the registered proprietor of these
marks. The respondents, a holding company
called The Gap Inc and two of its
subsidiaries, are companies registered in the state of Delaware in the United
States of America.
(There is no need in this judgment to distinguish between
them and for the sake of convenience I intend to refer to each and all
of them
as ‘the respondent’.)
[2] The respondent claims proprietorship
of these marks on the ground that GAP is a well-known trade mark that is
entitled, without
registration in this country, to protection under s 35(3) of
the Trade Marks Act 194 of 1993, which incorporates the provisions of
art 6bis
of the Paris Convention into our law. Daniels J, in the court below, upheld
this claim and granted an interdict against
the seven appellants, some of the
members of a ‘group’ of companies and enterprises that call
themselves the AM Moolla
Group (not to be confused with the first appellant, AM
Moolla Group Ltd). They were enjoined from using a reproduction or imitation
of
the respondent’s GAP marks in relation to clothing or retail clothing
outlets).
[3] The respondent also applied, successfully, to have the
proprietor’s trade mark registrations expunged on the ground of non-use.
Further subsidiary grounds for expungement based on s 10(3) and s 9(1) read with
s 10(12) were raised without success, and this gave
rise to a cross-appeal but
only the s 10(3) case was persisted in during the hearing. In response to the
application for expungement
the proprietor in turn lodged a counter-application
for an interdict for trade mark infringement, which was dismissed in the light
of the expungement. This dismissal of the counter-application is another issue
in the appeal. The present proceedings are with the
leave of the court of first
instance.
[4] Previously some members of the Group sought to utilise the
provisions of the Counterfeit Goods Act 37 of 1997 to prevent the respondent
from transhipping clothing bearing a GAP trade mark through South Africa but the
attempt failed. The declaratory
order issued in favour of the respondent, which
declared that the respondent did not transgress the provisions of this Act by
transhipment,
was upheld in a case with the same name as the instant
case.[1]
[5] The story of
Gap began in 1969 when the first Gap store, under the name THE GAP, was opened
in San Francisco. The novel concept was
the provision of a speciality retail
outlet for clothing to exploit the ‘generation gap’ symbolised by
the increased
popularity of casual clothing such as jeans. The business expanded
and on 29 February 1972 a predecessor of the respondent applied
for the
registration in the USA of THE GAP as a service mark for ‘retail clothing
store services’ in class 42 of the
international Nice classification. The
year 1974 saw the beginning of the use of GAP in relation to goods and an
application for
the registration of THE GAP (and design) as a trade mark in
class 25 (which relates to clothing). Other GAP trade mark applications
followed, both in class 25 and 42, beginning in 1977. As the business expanded,
trade mark applications were filed in other jurisdictions,
for instance, in the
United Kingdom since 1983 and in Canada since 1985. GAP stores were opened in
the United Kingdom in 1987, and
by 1991 there were some 1000 stores in the USA,
Canada and the United Kingdom. By 1992 the GAP trade mark had become one of the
largest
selling apparel brands in the world measured by unit sales, and it is
now the second largest. At present hundreds of GAP trade marks
are registered in
countries alphabetically and otherwise as far apart as Albania and Zimbabwe.
[6] Prior to the 1990s, the respondent showed little interest in the local
market. The explanation given was that because of the political
climate in this
country, as an American company it was under a number of financial, political
and legislative constraints that precluded
expansion into South Africa. However,
if one considers that in 1991 there were GAP stores in only three countries, and
since then
the respondent’s attempts to enforce its rights locally have
been at less than a pedestrian pace, the explanation rings somewhat
hollow.
[7] Turning then to the Gap tale in this country: During 1971, at a
time when the respondent had 25 THE GAP retail outlets in six
states in the USA,
and had not yet used a GAP trade mark in respect of clothing, one Hirsch
‘coined’ the trade mark GAP
and began using it locally on clothing,
and on 21 March 1973 he applied for the registration of the trade mark GAP in
class 25 in
relation to articles of clothing, including footwear (TM 73/1378).
This registration pre-dates any of the respondent’s trade
marks in class
25, even in the USA, and there is nothing on record to suggest that Hirsch had
copied or derived his inspiration from
the respondent’s use of the GAP
name on its stores. During the 1970s, the proprietor, to whom Hirsch in the
meantime had assigned
this mark, manufactured and sold substantial numbers of
jeans under the mark. A further GAP mark (‘the first device mark’
TM
80/5548), which consists of the word mark in a stylised form, was registered
during 1980.
[8] During 1983 the Group obtained control over the proprietor.
Capitalising on the fact that South Africa was subject to trade sanctions
and
that art 6bis protection did not then exist, the proprietor changed its 1973 GAP
trade mark to THE GAP, the corporate and trading
name of the respondent. In
1988, the proprietor applied for registration of a second THE GAP (TM 88/4994)
device mark, a blatant
copy of respondent’s logo; it also applied for GAP
KIDS (TM 88/8783), an appropriation of respondents’ name for its
children’s
stores, first begun in 1985; and in 1989 it applied for GAP
STORES (TM 89/5087) in class 42. These applications were all granted.
Another
application, in respect of GAP STAR, was filed in 1993 but is pending because of
opposition by the respondent.
THE PRINCIPLE OF
TERRITORIALITY
[9] At the outset I wish to deal with the principle of
territoriality applicable to trade marks. Nicholas AJA explained the principle
in Victoria’s Secrets[2]
in these terms:
‘In the Moorgate judgment Mr
Trollip[3] stated that
“. . . a trade mark is purely a territorial concept; it is legally operative or effective only within the territory in which it is used and for which it is to be registered. Hence, the proprietorship, actual use, or proposed use of a trade mark mentioned in s 20(1) [of the Trade Marks Act 62 of 1963] are all premised by the subsection to be within the RSA.”
It
follows that the fact that a trade mark is registered and has been used, even
extensively used, by one person in a foreign country
does not in itself
constitute a bar to its adoption and registration by some other person in South
Africa.’
Nicholas AJA continued:
‘In the case of a foreign
trade mark, there is no legal bar to its adoption in South Africa unless it is
attended by something
more. Thus in delivering the unanimous judgment of the
Full Court in P Lorillard and Co (supra at
356G-H),[4] Boshoff J said:
“The basis of the challenge on this ground is that the objector was
to the knowledge of the applicant the proprietor of such
a trade mark in the
United States of America and that the applicant improperly appropriated the
mark. In the present state of the
law a trade mark is a purely territorial
concept and there is, generally speaking, nothing to prevent a person from
asserting a
proprietary right in a trade mark in relation to which no one else
has in the same territory asserted a similar right.”’
Nicholas
AJA also cited a number of judgments from foreign jurisdictions to show that the
principle is not peculiar to this country
but is generally
accepted.[5]
[10] More recently,
in the Barcelona.com case,[6] a
US Federal District Court of Appeals dealt with the same underlying principle
(per Niemeyer, Circuit Judge):
‘The relevant substantive provision in
this case is Article 6(3) of the Paris Convention, which implements the doctrine
of territoriality
by providing that “[a] mark duly registered in a country
of the [Paris] Union shall be regarded as independent of marks registered
in the
other countries of the Union, including the country of origin.” . . . As
one distinguished commentary explains,
“the Paris Convention creates nothing that even remotely resembles a ‘world mark’ or an ‘international registration’. Rather, it recognizes the principle of the territoriality of trademarks [in the sense that] a mark exists only under the laws of each sovereign nation.”
J. Thomas McCarthy, McCarthy on Trademarks and Unfair
Competition § 29:25 (4th ed. 2002).
It follows from incorporation of
the doctrine of territoriality into United States law through Section 44 of the
Lanham Act that United
States courts do not entertain actions seeking to enforce
trademark rights that exist only under foreign law. See Person’s Co.,
Ltd. v. Christman, 900 F.2d 1565, 1568-69 (Fed. Cir. 1990) (“The
concept of territoriality is basic to trademark law; trademark rights exist in
each country
solely according to that country’s statutory
scheme”).’
[11] Accordingly, the legality and propriety of
Hirsch’s adoption of the first two trade mark registrations is beyond
dispute.
Although one may query the business morality of the adoption by slavish
imitation of the respondent’s trade marks after the
Group’s
take-over, it was also legally in order in the absence of ‘something
more’, ie, ‘factors that may
have vitiated or tainted his right or
title to the proprietorship
thereof’.[7] The only factor
raised in this regard is the allegation that the respondents’ GAP trade
marks are well known in South Africa,
which brings me to the next issue, namely
the protection of well-known trade marks.
PROTECTION OF WELL-KNOWN TRADE
MARKS
[12] Special legislative protection is given to well-known trade
marks. There are two possible situations. The one relates to the
protection of a
well-known registered mark against dilution as contained in s 34(1)(c)
and which was the subject of the recent Laugh It Off judgments of this
court[8] and the Constitutional
Court.[9] The other, which is the one
applicable in this case, relates to the statutory protection based on art 6bis
of the Paris Convention
for the Protection of Industrial Property (1883), which
provides for the protection of well-known trade marks that have not been
registered (and if registered, have not been used and therefore otherwise
subject to expungement)[10] that
belong to ‘qualified’ enterprises. Article 6bis was first introduced
with The Hague revision (1925) and its present
form, which was adopted during
the Lisbon revision (1958), provides as
follows:[11]
‘(1)The countries of the Union undertake, ex officio if their
legislation so permits, or at the request of an interested party, to refuse or
to cancel the registration, and to prohibit
the use, of a trademark which
constitutes a reproduction, an imitation, or a translation, liable to create
confusion, of a mark considered
by the competent authority of the country of
registration or use to be well known in that country as being already the mark
of a
person entitled to the benefits of this Convention and used for identical
or similar goods. These provisions shall also apply when
the essential part of
the mark constitutes a reproduction of any such well–known mark or an
imitation liable to create confusion
therewith.
(2)A period of at least five years from the date of registration shall
be allowed for requesting the cancellation of such a mark. The
countries of the
Union may provide for a period within which the prohibition of use must be
requested.
(3)No time limit shall be fixed for requesting the cancellation or the
prohibition of the use of marks registered or used in bad
faith.’
[13] South Africa is not only party to the Paris Convention but
also to the GATT ‘Agreement on Trade-Related Aspects of Intellectual
Property Rights’ (the so-called TRIPS agreement), which requires
compliance with a number of the provisions of the Paris Convention,
including
art 6bis (art 2.1). In addition, TRIPS ‘supplements’ art 6bis:
whereas the art 6bis protection is limited
to trade marks relating to goods,
TRIPS envisages the protection of service marks (art 16.2); and while art 6bis
prohibits the use
of a well-known mark on ‘identical or similar’
goods, TRIPS (art 16.3) requires wider safeguards, namely, in relation
–
‘to goods or services which are not similar to those in respect
of which a trademark is registered, provided that use of that
trademark in
relation to those goods or services would indicate a connection between those
goods or services and the owner of the
registered trademark and provided that
the interests of the owner of the registered trademark are likely to be damaged
by such use.’
[14] In anticipation of the adoption of TRIPS, art 6bis
was introduced as part of our statutory law in terms of sections 35 and 36(2)
of
the current Act:
‘35. Protection of well-known
marks under Paris Convention.—
(1) References in this
Act to a trade mark which is entitled to protection under the Paris Convention
as a well-known trade
mark, are to a mark which is well known in the Republic as
being the mark of—
(a) a person who is a national of a convention
country; or
(b) a person who is domiciled in, or has a real and effective
industrial or commercial establishment in, a convention country,
whether or
not such person carries on business, or has any goodwill, in the
Republic.
(1A) In determining for the purposes of subsection (1)
whether a trade mark is well-known in the Republic, due regard shall
be given to
the knowledge of the trade mark in the relevant sector of the public, including
knowledge which has been obtained as
a result of the promotion of the trade
mark.[12]
(2) A
reference in this Act to the proprietor of such a mark shall be construed
accordingly.
(3) The proprietor of a trade mark which is entitled
to protection under the Paris Convention as a well-known trade mark
is entitled
to restrain the use in the Republic of a trade mark which constitutes, or the
essential part of which constitutes, a
reproduction, imitation or translation of
the well-known trade mark in relation to goods or services which are identical
or similar
to the goods or services in respect of which the trade mark is well
known and where the use is likely to cause deception or
confusion.
36. Saving of vested
rights.—(1) . . .
(2) Nothing in this Act
shall allow the proprietor of a trade mark entitled to protection of such trade
mark under the
Paris Convention as a well-known trade mark, to interfere with or
restrain the use by any person of a trade mark which constitutes,
or the
essential parts of which constitute, a reproduction, imitation or translation of
the well-known trade mark in relation to
goods or services in respect of which
that person or a predecessor in title of his has made continuous and bona fide
use of the trade
mark from a date anterior to 31 August 1991 or the date on
which the trade mark of the proprietor has become entitled, in the Republic,
to
protection under the Paris Convention, whichever is the later, or to object (on
such use being proved) to the trade mark of that
person being registered in
relation to those goods or services under section 14.’
[15] The
protection conferred on well-known trade marks by provisions such as these
differs from ordinary statutory trade mark protection
primarily because they
provide an exception to the principle of territoriality as discussed above. In
addition, they protect by way
of trade mark legislation also unregistered
marks[13] although similar
protection is available at common law under the lex Aquilia, more
particularly, under the wrong of passing off, which also protects the local
reputation of a foreign undertaking, whether or
not it trades
locally.[14]
[16] I now turn to
consider whether the respondent has made out a case for this kind of protection.
Starting at the beginning, the
introductory phrase of s 35(3), namely,
‘the proprietor of a trade mark which is entitled to protection under the
Paris Convention’
requires that, in order to be able to obtain the
protection provided for in s 35(3), the foreign owner has to be a
‘qualified’
person in terms of s 35(1). It is common cause that
since the respondent has a ‘real and effective industrial or commercial
establishment in a convention country’ (the USA is a member of the Paris
Convention and has been so declared by the President
in terms of s 63 of the
Act),[15] this requirement has been
met. Another requirement is that the claimant has to be the
‘proprietor’ of the relevant well-known
trade mark in its home
territory, something not disputed.
[17] The appellants submitted that the
respondent’s claim based on s 35(3) was flawed because the section grants
protection
to a well-known mark against unregistered marks and not
against marks registered locally. The existing registrations per
se, according to the argument, constitute an absolute bar to s 35(3) relief.
During argument we were presented with a microscopic analysis
of the term
‘trade mark’ as used by the Legislature in different sections of the
Act – does it refer to registered
or unregistered marks or both when used
in s 35 and 36(2)? I do not intend to deal with the argument in any detail
because it flounders
on a simple point. The object of introducing these
provisions onto our statute book was to comply with treaty obligations under the
Paris Convention and under
TRIPS.[16] Article 6bis explicitly
requires of countries to protect well-known marks against registered and
unregistered marks. There is no apparent reason why the Legislature would have
wished to provide otherwise. Since the term ‘trade
mark’ is
ambiguous in that it can refer to marks both registered and unregistered, the
meaning consistent with the underlying
legislative intention has to be adopted.
If one has to label this method of interpretation, it can either be an
application of the
‘soewereine’ rule of interpretation of Dr L C
Steyn,[17] namely a determination of
the intention of the Legislature, or the ‘purposive construction’ of
Lord Diplock, or even
Lord Steyn’s ‘context is everything’.
[18] The question then is whether the respondent’s GAP marks are (or
were) well known in South Africa and, if so, since when.
This raises a number of
interrelated questions which were identified during the course of E M Grosskopf
JA’s judgment in
McDonald’s.[18]
(a) The first is the identification of the sector of the population ‘interested in the goods or services to which the mark relates’.[19] The respondent’s case was that this ‘universe’ consists of individuals aged between 16 and 50 and living in an A+ income suburb, the reasoning being that such persons were likely to have travelled overseas and would have encountered the GAP marks abroad.
(b) Next is whether the mark is well known within the local jurisdiction as a trade mark belonging to an enterprise with a base in another country (although the knowledge does not have to include the fact that the country is a convention country).[20]
(c) The last issue is the determination of whether those who have the requisite knowledge represent a substantial number of the chosen universe.[21]
[19] Reverting
to issue (b), the UK hearing officer in the Swizzels Matlow Limited trade
mark application (the Polo trade
mark),[22] relying on
McDonald’s gave this useful exposition:
‘As I have
indicated above the basic purpose behind Article 6bis would appear to me to be
to protect trade marks which are well-known
in a country but are not used there.
So in the normal course of events there is a presumption that the party seeking
protection under
Article 6bis has some form of base in a foreign country and in
the normal course of events the consumer would be aware of this owing
to the
absence of the use of the trade mark in the country in which the claim is being
[asserted]. Article 6bis states “well
known in that country as being
already the mark of a person entitled to the benefits of this Convention”.
It seems to me that this must be read as requiring the trade mark to be
well-known as the trade mark of a person with a base in a
country outside the
United Kingdom i.e. that the consumer must identify some overseas base with the
trade mark.[23] It would however
be silly to expect that the consumer should also know that the country is a
signatory to the Convention.’
[20] What the respondent primarily
sought to establish was that GAP was a well-known trade mark at the time the
present proceedings
were initiated in the court below. To this end a market
survey was conducted using as a basis the said ‘universe’ of
individuals. Of these, 48 per cent recognised the GAP logo and they
overwhelmingly associated it with casual clothing. A quarter
of the universe
thought that the retail outlets were local, 11 per cent thought they were
international and the rest did not know.
As far as manufacturing origin is
concerned, 29 per cent believed GAP goods were manufactured overseas (mostly in
the USA), 12 per
cent thought they were of a local origin and 11 per cent did
not know. (The percentages are approximations.)
[21] I have serious doubts
that this evidence establishes any one of the three points mentioned. However,
since there is some evidence,
as the court below noted, which might suggest that
the GAP mark was well known to persons in the trade as that of a foreign concern
since about 1988 (although that was not the case the appellants were called to
meet) I shall assume in favour of the respondent that
its GAP marks were well
known in South Africa as at 31 August 1991. That is the date referred to in s
36(2) of the Act and was the
date on which the bill that led to the current Act
was published. It is also the earliest date on which art 6bis protection became
available. Section 36(2) by implication distinguishes between two cases: (i)
trade marks that were already well known at that date
are entitled to protection
subject to the recognition of certain prior rights; (ii) trade marks that become
well known after that
date are entitled to protection as soon as they become so
known. There is little doubt that as at 1991 the proprietor as trade mark
owner
was not making use of any of its trade marks on a ‘continuous and bona
fide’ manner as required by s 36(2) and
accordingly was not entitled to
the recognition of existing rights by virtue of this provision. Although it may
have licensed other
parties to use some of them, these licences were not
registered user agreements as was required by s 48 of the then existing Trade
Marks Act 62 of 1963, all matters to which I shall revert in another
context.
[22] That does not dispose of the matter in the respondent’s
favour. In order to be entitled to the protection granted by s
35(3), the
objectionable trade mark has to constitute ‘a reproduction, imitation or
translation of the well-known trade mark’ of a
‘qualified’ party. In other words, unless the ‘foreign’
trade mark was well known
at the time when the local enterprise reproduced,
imitated or translated it, the foreign trade mark is in the light of the
principle
of territoriality not entitled to art 6bis
protection.[24]
[23] This
conclusion conforms to the judgment in
Person’s.[25] The
facts bear a striking resemblance to the facts in this case. In 1977, X first
applied a stylized logo bearing the name PERSON'S
to clothing in his native
Japan. Two years later he formed a company, P, to market and distribute the
clothing items in retail stores
located in Japan. In 1981, one C visited one of
P’s retail stores while on a trip to Japan and purchased clothing items
bearing
the PERSON’S logo. He then developed designs for his own
PERSON’S brand sportswear line based on P’s products and
in 1982 he
began producing clothing with the PERSON’S logo. All C’s goods bore
either the mark PERSON’S or a copy
of P's globe logo and many of the
clothing styles were apparently copied directly from P’s designs. In 1983,
C filed an application
for a US trademark registration of the PERSON’S
mark. Some seven months subsequent to C’s first sales P entered the US
market. P sought the expungement of C’s registration. The matter was first
heard by a board and the judgment next quoted was
the decision on
appeal.
[24] The court said this:
‘In a well
reasoned decision the Board held for Christman on the grounds that
Person’s use of the mark in Japan could
not be used to establish priority
against a “good faith” senior user in U.S. commerce. The Board found
no evidence to
suggest that the “PERSON’S” mark had acquired
any notoriety in this country at the time of its adoption by Christman.
Therefore, appellant had no reputation or goodwill upon which Christman could
have intended to trade, rendering the unfair competition
provisions of the Paris
Convention inapplicable.’
‘In the present case, appellant Persons Co. relies on its use of the mark in Japan in an attempt to support its claim for priority in the United States. Such foreign use has no effect on U.S. commerce and cannot form the basis for a holding that appellant has priority here. The concept of territoriality is basic to trademark law; trademark rights exist in each country solely according to that country's statutory scheme. Christman was the first to use the mark in United States commerce and the first to obtain a federal registration thereon. Appellant has no basis upon which to claim priority and is the junior user under these facts.’
‘In the case at bar, appellant Person’s Co., while first to adopt the mark, was not the first user in the United States. Christman is the senior user, and we are aware of no case where a senior user has been charged with bad faith. The concept of bad faith adoption applies to remote junior users seeking concurrent use registrations; in such cases, the likelihood of customer confusion in the remote area may be presumed from proof of the junior user's knowledge. In the present case, when Christman initiated use of the mark, Person’s Co. had not yet entered U.S. commerce. The Person’s Co. had no goodwill in the United States and the “PERSON'S” mark had no reputation here. Appellant’s argument ignores the territorial nature of trademark rights.’
‘As the Board noted below,
Christman's prior use in U.S. commerce cannot be discounted solely because he
was aware of appellant’s
use of the mark in Japan. While adoption of a
mark with knowledge of a prior actual user in U.S. commerce may give rise
to cognizable equities as between the parties, no such equities may be based
upon knowledge of a similar
mark's existence or on a problematical intent to use
such a similar mark in the future. Knowledge of a
foreign use does not preclude good faith adoption and use in the United States.
While there is some case law supporting
a finding of bad faith where (1) the
foreign mark is famous here or (2) the use is a nominal one made solely to block
the prior foreign
user's planned expansion into the United States, as the Board
correctly found, neither of these circumstances is present in this
case.’
[25] To
conclude: A local mark, validly appropriated, cannot lose its value or
protection simply because someone else’s reputation
overtakes its
business.[26] Although the marks in
contention may at first blush appear to be imitations or reproductions of the
respondents’ marks, the
crucial point is that when any reproduction or
imitation took place, it was not of a ‘well-known’ mark but of a
mark
not well known within this country. As we have seen, there is and never has
been anything wrong with the reproduction or imitation
of a mark that is not
well known. Salt of the Earth was the first proprietor of these marks in South
Africa and became the proprietor
at a stage when the respondents’ marks
were not yet well known.
NON-USE
[26] The next issue concerns the question of non-use.
‘A trader
registers or acquires a trademark primarily not in order to prevent others from
using it but in order to use it himself
(although exclusivity of use is of
course a necessary corollary). Use by the proprietor is indeed a central and
essential element
of ownership [since] rights may lapse or be unenforceable in
the event of
non-use.’[27]
As mentioned,
the court below held that because of non-use of the trade marks by the
proprietor, the respondent was entitled to an
order expunging these
registrations. Section 27(1)(b) of the current Act provides as
follows:
‘27 Removal from register on ground of non-use
–
(1) Subject to the provisions of section 70 (2), a registered trade
mark may, on application to the court, or, at the option of the
applicant and
subject to the provisions of section 59 and in the prescribed manner, to the
registrar by any interested person, be
removed from the register in respect of
any of the goods or services in respect of which it is registered, on the ground
either-
(a) . . .
(b) that up to the date three months before the date
of the application, a continuous period of five years or longer has elapsed
from
the date of issue of the certificate of registration during which the trade mark
was registered and during which there was no
bona fide use thereof in relation
to those goods or services by any proprietor thereof or any person permitted to
use the trade mark
as contemplated in section 38 during the period concerned;
or
(c) . . .’
[27] The application for expungement was launched
on 13 August 1999. Use of the marks during the preceding three months would not
have saved them but nothing turns on this. According to s
27(3),[28] the onus to prove that
there was ‘relevant use’ of the trade mark rests upon the
proprietor. ‘Relevant use’
in this context refers to bona fide use
by the proprietor or bona fide use by a third party ‘with the licence of
the proprietor’
(the latter is known as ‘permitted use’: s
38(1)).[29] We are accordingly
concerned with bona fide use by the proprietor or a licensee during the period
13 May 1994 to13 May 1999. In order
to qualify as bona fide use it is not
necessary that the use was continuous use (as required by s
36(2))[30] although intermittent use
may be indicative of the fact that it was not bona fide. Use prior to 13 May
1994 and post 13 May 1999
is for this part of the investigation
irrelevant.
[28] The following matters have to be considered in this context:
(a) Were the marks used during this period? (b) Were they used by
the
proprietor? (c) Was any other use permitted use? (d) Was the permitted use
controlled? (e) Was the use bona fide?
[29] It is convenient to deal with the
first two questions at the same time. The appellants concede that neither the
first GAP device
mark (TM 80/5548) nor the GAP STORES mark (89/5087) was used
during the relevant period by any party. (The concession may have extended
to
GAP KIDS but that does not matter in the scheme of things.) In addition, they
accept in spite of generalised allegations to the
contrary by Dr Vahed, that the
proprietor was at all relevant stages a dormant company and did not use any of
the marks. Yet, it
cannot be doubted that members of the Group did use the one
or the other of the remaining marks (73/1378 and 88/4994) during this
period.
There is evidence to this effect not only from Dr Vahed but also, for instance,
from a wholesaler (Mr Shapiro) who purchased
GAP clothing from the Group and
distributed it, all of which was not disputed. Which one of the two marks was
used though is unclear.
As Daniels J correctly pointed out, Dr Vahed
‘indiscriminately uses the plural and singular when referring to the
various marks. . . . No distinction is drawn between the
marks. He goes so far
as to refer to “the Gap and related” marks, and elsewhere the
expression “the various marks”
was used.’
For instance the
sales figures provided relate to sales ‘under the various GAP trade
marks’ although, as mentioned, it
is conceded that the statement is
incorrect, at least as far as the first device mark is concerned. However, a
number of labels,
which allegedly had been used, were produced and they show use
of the second device mark and of the word GAP.
[30] Even though the
appellants’ evidence on this aspect of the case is unsatisfactory, that is
not fatal to their case. The
general rule that a mark must be used in the form
in which it is registered[31] does
not necessarily apply to associated marks. Section 31(1)
provides:
‘When under the provisions of this Act use of a registered
trade mark is required to be proved for any purpose, the registrar
or the court,
as the case may be, may, if and so far as he or it deems fit, accept proof of
the use of an associated registered trade
mark or of the trade mark with
additions or alterations not substantially affecting its identity, as equivalent
to proof of the use
required to be proved.’
The provision applies
because the original THE GAP word mark and the two device marks (one consisting
of the word GAP and the other
of the words THE GAP) are associated marks. In
addition, according to the sub-section, use of the word GAP on its own can be
equivalent
to use of THE GAP because the difference between them cannot affect
the registered mark’s identity. Also, use of the name THE
GAP in any
stylised form amounts to use of THE GAP (73/1378) because that registration is
not restricted to those words in any particular
colour, style, manner or
font.
[31] Having found that at least one of the associated marks was used by
members of the Group, and in the absence of any reason not
to exercise the
discretion contained in s 31(1) in favour of the proprietor, the next question
to consider is whether such use was
with its ‘licence’. Dr
Vahed’s evidence in this regard is not only vague to such an extent that
it smacks of evasiveness,
but it is also contradictory. The problem lies in the
loose structure of the Group, which consists of companies and partnerships
with
an overlap of shareholders and directors. The Group, it appears, tends to ignore
corporate identities and moved enterprises
between companies. For instance, at
times the fourth appellant itself conducted business and at other times a
business under its
name appeared to be an operating division of the second
appellant.[32] In line with this
approach, Dr Vahed said that when the Group obtained control of the proprietor
it (the Group) ‘acquired’
the GAP trade marks. These were dealt with
as Group property, any member using them whenever it suited it. If then, in a
200 page
affidavit, Dr Vahed dealt with the issue of licensing in a single
phrase, saying that the use by the members of the Group since 1983
was
‘with the licence’ of the proprietor, one has to conclude that this
was no more than a mere allegation and did not
amount to factual evidence.
Affidavits in application proceedings must do more than make bald allegations;
they must in addition
provide the facts that support the allegations. If the
licence had been in terms of a written agreement, one would have expected
some
particularity and perhaps even the production of a copy; if oral, one would have
expected some indication of between whom, when
and where; if tacit, an
allegation to that effect with the facts that gave rise to the tacit agreement
would not have been out of
place. In any event, the grant of a licence to the
Group is not only improbable but also incompatible with the perception that
existed
within the Group that the trade marks belonged to the Group.
[32] There is more. User agreements in the names of the first and second
appellants were registered on 21 January 1999 and, consequently,
use by either
of them during the period 21 January to 13 May 1999 would have amounted to
permitted use. Although we were told that
the Group had sales of GAP clothing to
the tune of R8m for the 1999 year, we were not informed whether these sales were
by the first
and second appellants or by other members of the Group. In fact,
there is evidence of the existence of a company in the Group with
the name The
Gap Clothing Manufacturers (Pty) Ltd, which, according to advertisements, may
have been the user of the trade marks.
[33] The mystery deepens if regard is
had to the first appellant’s annual report for the year 1998. It starts
off with an allegation
that the GAP trade marks are its registered brands but
then, under the heading ‘Gap, Gapstar and Gapkids’, the statement
is
made that
‘the Sterling division intends launching a high class range
of men’s and ladies casualwear/sportswear during the 1999
summer season
and has concluded a User Agreement with the registered owner to market these
products under a separate division called
Gap Clothing
Manufacturers.’
The problems with this statement are manifold. It was
not confirmed under oath. There is no evidence that the intention to produce
the
goods came to fruition. According to the trade mark registry the user agreement
was between the first appellant and the proprietor
whereas if this statement is
to be taken at face value it means that it was between the first appellant and
one of its divisions.
To complicate matters, during 1999 a company called
Sterling Clothing (Pty) Ltd was joined as an applicant in proceedings launched
by the Group to interdict the infringement of the GAP trade marks, presumably
because it was a registered user (only proprietors
and registered users have
legal standing to enforce registered trade mark rights), something not explained
in the papers.
[34] Similar problems are encountered with the unsubstantiated
allegation by Dr Vahed that at a time when the first appellant sought
listing on
the Johannesburg Stock Exchange, during 1997, licence agreements were entered
into with both the first and second appellants.
However, the pre-listing
statement made no reference to these agreements. On the assumption that the
pre-listing statement contained
a frank disclosure of the state of the first
appellant’s business the omission was left unexplained. But again, there
is no
evidence that since the conclusion of the licence agreements either of
these licensees had used the GAP trade marks. Taking into
account all these
facts I have to conclude that the appellant failed to discharge its
onus.
[35] The respondent raised the issue of lack of quality control as an
independent factor under s 27(1). The submission was that unless
a licence
agreement provides for quality control by or on behalf of the trade mark owner,
use by a licensee cannot qualify as permitted
use. While the appellants agreed
with the legal proposition they submitted that the issue was not properly raised
by the respondent
in the founding affidavit and that there is in any event
sufficient evidence on record to gainsay the allegation. I may interpose
to note
that both parties have dealt with the matter in bald terms and that if quality
control were essential to prove permitted
use, it would have been for the trade
mark proprietor to have raised the issue in discharge of its overall
onus.
[36] Daniels J accepted the correctness of the contention that some
form of quality control was required
‘since the licensor must have
regard to the provisions of s 10(1) and (2)(a) of the Act which require that
whatever use is made
of a mark it should still remain “capable of
distinguishing”. Use, which results in a loss of distinctiveness, cannot
qualify as bona fide use. It is for that reason that cogent evidence of quality
control is required.’
[37] To assess the cogency of the contention it
is necessary to have regard to some basic principles and to the history of trade
marks,
much of which was dealt with by the House of Lords in a judgment not
brought to the attention of Daniels J, namely,
Scandecor.[33] The judgment
is relevant not only for its persuasive reasoning but also because the history
of our trade mark law mirrors the developments
in the United Kingdom in most
respects. For instance, the repealed 1963 Act (s 48(2)) provided that use by a
licensee could only
qualify as permitted use if it were in terms of a registered
user agreement.[34] The same was the
position under the 1938 UK Trade Marks Act. And, as mentioned, the current s 27
(as did the UK Trade Marks Act of
1994) abolished this requirement by providing
that use by any licensee is permitted use.
[38] In principle, there does not
appear to be any reason at present to require quality control by or on behalf of
the proprietor
as a requirement for permitted use. As Lord Nicholls explained in
Scandecor:[35]
‘A
trade mark is a badge of origin or source. The function of a trade mark is to
distinguish goods having one business source
from goods having a different
business source. It must be “distinctive”. That is to say, it must
be recognisable by a
buyer of goods to which it has been affixed as indicating
that they are of the same origin as other goods which bear the mark and
whose
quality has engendered goodwill: see GE Trade Mark [1973] RPC 297, 325,
per Lord Diplock.’
This exposition accords with the position in our
law.[36] Further, he
said:[37]
‘Although the use
of trade marks is founded on customers’ concern about the quality of goods
on offer, a trade mark does
not itself amount to a representation of quality.
Rather it indicates that the goods are of the standard which the proprietor is
content to distribute “under his banner”: see Laddie J, in Glaxo
Group v Dowelhurst Ltd [2000] FSR 529, 540-541. . . . Thus, in relying on a
trade mark consumers rely, not on any legal guarantee of quality, but on the
proprietor of
a trade mark having an economic interest in maintaining the value
of his mark. It is normally contrary to a proprietor’s self-interest
to
allow the quality of the goods sold under his banner to
decline.’
[39] Put differently, although in the ordinary course of
events a trade mark owner would wish to ensure the consistency of the quality
of
the goods or services marketed under its mark, nothing prevents the owner from
providing under one mark goods or services of differing,
inconsistent or poor
quality. The customer has in the event of the purchase of a substandard product
or the provision of substandard
services no redress based on trade mark
principles. Market forces may eventually exact their toll. All a trade mark
does, in the
words of Laddie J in
Glaxo,[38] is to identify the
enterprise that is responsible for the quality of the goods or services. Again
Lord Nicholls:[39]
‘This
approach accords with business reality and customers' everyday expectations.
Customers realise there is always the prospect
that, unbeknown to them, the
management of a business may change. To confine the use of a trade mark to the
original owner of a business
would be to give the concept of a business origin
or business source an unrealistically narrow and impractical meaning. Of course,
the new management, the new owners, may not adhere to the same standards as the
original owner. But the risk of an unannounced change
of standards is ever
present, even when there has been no change in management. An owner may always
decide to change his quality
standards. As already noted, customers rely on it
being in the owner’s self-interest to maintain the value of his mark. The
self-interest of the owner of a trade mark in maintaining its value applies as
much to a purchaser of the mark as it does to the
original
owner.’
[40] Although Scandecor was concerned with an exclusive
licence, its conclusion that the current UK Act countenances bare licensing, ie,
licensing without
quality control, applies in my view to all licences under our
current Act. As Lord Nicholls explained:
‘Customers are well used to
the practice of licensing of trade marks. When they see goods to which a mark
has been affixed,
they understand that the goods have been produced either by
the owner of the mark or by someone else acting with his
consent.’[40]
‘For
their quality assurance customers rely on the self-interest of the owner. They
assume that if a licence has been granted
the owner can be expected to have
chosen a suitable licensee and imposed suitable terms. They also assume that
during the currency
of any licence the licensee, as well as the owner, is likely
to have an interest in maintaining the value of the brand name. Customers
are
not to be taken to rely on the protection supposedly afforded by a legal
requirement that the proprietor must always retain and
exercise an inherently
imprecise degree of control over the licensee’s
activities.’[41]
[41] To
revert to Daniels J’s ratio, namely that bare licences may lead to loss of
distinctiveness of a trade mark, the answer
appears to me to be factual: did the
grant or exercise of a bare licence in the circumstances of a particular case
cause a loss of
distinctiveness? If the answer is in the affirmative, the
appropriate remedy would be an application for the expungement of the mark
on
that ground. In this case there was no evidence of loss of distinctiveness
because of the grant of bare licences (although there
is reason to believe that
there was such a loss) and consequently the objection of non-use could not have
been upheld on this ground.
[42] That brings me to the last question relating
to this issue: did such use as there was amount to bona fide use? The concept of
bona fide use has been the subject of a number of judgments, also of this
court,[42] and the area need not be
traversed again. For present purposes it suffices to say that ‘bona fide
user’
‘means a user by the proprietor of his registered trade
mark in connection with the particular goods in respect of which it
is
registered with the object or intention primarily of protecting, facilitating,
and furthering his trading in such goods, and not
for some other, ulterior
object.’[43]
This test is
similar to that proposed in an opinion by the Advocate General in the European
Court of Justice in the Ansul
case:[44]
‘When
assessing whether use of the trade mark is genuine, regard must be had to all
the facts and circumstances relevant to
establishing whether the commercial
exploitation of the mark is real, particularly whether such use is viewed as
warranted in the
economic sector concerned to maintain or create a share in the
market for the goods or services protected by the mark, the nature
of those
goods or services, the characteristics of the market and the scale and frequency
of use of the mark.’
[43] The essence of the respondent’s
complaint was that the appellants were prepared to assign the marks to the
respondent at
a price bordering on the ridiculous and that they used implied
political threats during the negotiations. This, according to the
submission,
amounted to ‘trafficking’ and that the only reason for the extensive
use by the Group of the marks was to
coerce the respondent into paying
exorbitant sums for them.
[44] There is no merit in the submission.
‘Trafficking’ is an emotive term which appeared in the repealed Act
but is not
in the current Act. The issue is simply whether or not the
Group’s use amounted to real commercial exploitation of the marks
in
relation to goods or services in the trade mark sense. Exploiting marks in order
to increase their value to be able to sell them
at a higher price does not
amount to an improper or mala fide commercial exploitation. The point can
be illustrated with reference to a short dictum of Jacob
J[45] in a case where the
registration of a trade mark was opposed on the ground of bad
faith:
‘I need say little about this allegation
– it was based on a suggestion that somehow a patent monopoly was being
extended
[by the registration of a trade mark]. That is miles from bad
faith.’
[45] To conclude on the subject of non-use: the objection was
correctly upheld on the ground that the proprietor had failed to prove
use by
itself or permitted use during the period concerned.
THE
CROSS-APPEAL
[46] The respondent also sought expungement of the
registrations under s 10(3) of the Act. This provides that ‘a mark in
relation
to which the applicant for registration has no bona fide claim
to proprietorship,’ if registered, ‘shall, subject to the provisions
of sections 3 and 70, be liable to be removed
from the register’. The
court below, as mentioned, expunged all the registrations on the ground of
non-use but dismissed this
claim which sought the same relief, albeit under
another section of the Act. A cross-appeal may, consequently, have been
unnecessary
because the respondent could have defended the expungement by
relying on s 10(3),[46] but since
little depends on this procedural aspect I need not consider it any
further.[47]
[47] The
respondent’s argument under s 10(3) was straightforward. The proprietor,
since becoming part of the Group, has been
a dormant company. It did not
manufacture or sell any clothing. All it did was to hold and register trade
marks. For instance, it
applied for GAP STORES at the behest of OK Bazaars
(1929) Ltd and entered into a registered user agreement with it. The other trade
marks were not used or intended to be used by the proprietor. Section 20(1) of
the repealed 1963 Act provided that ‘any person
claiming to be the
proprietor of a trade mark used or proposed to be used by him’ was
entitled to apply for registration. There were two exceptions. The first, which
did not apply, related to the case where
someone intended to constitute a body
corporate and assign the mark to that body for its use. The second was where the
application
for registration was accompanied by an application for the
registration of someone as a registered user. This exception could have
applied
in the OK Bazaars case, but according to the trade mark registry the user
agreement was never filed, and the appellants never
disclosed the date of the
agreement, nor did they allege that it had been filed simultaneously with the
application for registration.
[48] The respondent thus had a prima facie case
for expungement on this additional
ground.[48] The reason the court
below dismissed the claim was based on the introductory proviso to s 10 of the
current Act, which made s 10(3)
– and all of s 10 – subject to s 70.
In so far as it is relevant, s 70 states that
‘the validity of the
original entry of a trade mark on the register of trade marks existing at the
commencement of this Act
[1 May 1995] shall be determined in accordance with the
laws in force at the date of such entry.’
The appellants relied on s 42
of the 1963 Act,[49] which provided
that in all proceedings
‘relating to a trade mark registered in part A
of the register . . . the original registration of the trade mark in part A of
the register shall, after the expiration of seven years from the date of that
registration, be taken to be valid in all respects,
unless –
(a) that registration was obtained by fraud; or
(b) the trade mark offends against the provisions of either section sixteen or section forty-one.’
(The exceptions are
inapplicable.)
[49] We have to assume that these marks were registered in
class A because, in spite of no evidence to that effect in a record of
2500
pages, the respondent did not suggest otherwise. For purposes of s 42, the date
of registration is, once a trade mark is registered,
deemed to be the date of
application.[50] That disposes of
the present attack on the 1973 and 1980 marks. The position in relation to the
1988 and 1989 marks is, however,
factually different. When the 1993 Act came
into force, they had not been on the register for seven years, although, in one
instance,
the ‘prescription period’ was missed by less than two
months.
[50] The current Act does not retain the prescriptive period in
relation to ‘old’ registrations nor does it provide for
the
completion of prescription after its date. All that it provides is that the
original registration of an old mark may only be
attacked under the provisions
of the repealed Act, in other words, the provisions of s 9 and 10 of the new Act
do not apply. After
seven years under the old Act a registration became immune
to any attack based on its original registration. That could only have
applied
to marks that had been on the register for seven years when the new Act came
into operation. Since this is not the situation
the cross-appeal has to be
upheld to the extent indicated.
CONCLUSION
[51] The outcome of the
foregoing is that the appeal succeeds in relation to the s 35(3) interdict but
stands to be dismissed on the
expungement claim based on s 27(1)(b). Because of
the expungement, the proprietor’s attempt to interdict the respondent from
infringing its registered trade marks falls away. In addition, the cross-appeal
succeeds. For the sake of clarity I intend to redraft
the order of the court
below bearing in mind our conclusions. I am conscious of the fact that the
result may satisfy neither party
because their respective ability to prevent the
other from using GAP marks in this country hangs in the air and further
litigation
may be on the cards.
ORDER
[52] The following order is
made:
1. The appeal against para 3 of the order of the court (the s 35(3) interdict) below is upheld with costs, including the costs of two counsel.
2. The appeal is otherwise dismissed.
3. The cross-appeal is allowed with costs, including the costs of two counsel.
4. The order of the court below is replaced with the following order:
(a) The following registered trade marks are expunged from the register and the Registrar is ordered to effect the necessary rectification: TM 73/1378, TM 80/5548, TM 88/4994, TM 88/8783 and TM 89/5087. (b) The respondents are ordered to pay the costs of the application, including the costs of two counsel. (c) The counter-application is dismissed with costs. (d) The costs relating to the application to strike out are costs in the application.
_____________________
L
T C HARMS
JUDGE OF APPEAL
AGREE:
STREICHER JA
BRAND JA
LEWIS JA
PONNAN
JA
[1] AM Moolla Group Ltd &
others v The Gap Inc & others [2005] 3 All SA 101
(SCA).
[2] Victoria’s
Secrets Inc v Edgars Stores Ltd 1994 (3) SA 739
(A).
[3] This is a reference to the
‘Honourable W G Trollip, a distinguished member of this Court between 1969
and 1982, in the written
statement which was attached to the
“Determination” under s 17(3) of the Act which he made as hearing
officer appointed
under s 6(2A) of the Act in the contested matter of
Moorgate Tobacco Co Ltd v Philip Morris Incorporated, and which was
delivered on 21 May
1986.’
[4] P Lorillard Co
v Rembrandt Tobacco Co (Overseas) Ltd 1967 (4) SA 353
(T).
[5] Re Impex Electrical
Ltd's Trade Marks; Impex Electrical Ltd v Weinbaum (1927) 44 RPC 405 (Ch);
The Seven Up Company v OT Ltd [1947] HCA 59; (1947) 75 CLR 203; Aston v Harlee
Manufacturing Co (1960) 103 CLR
391.
[6] Barcelona.com v
Excelentisimo Ayuntamiento De Barcelona 189 F Supp 2d 367 (ED Va
2002).
[7] Victoria’s
Secrets Inc v Edgars Stores Ltd 1994 (3) SA 739
(A).
[8] Laugh It Off Promotions
CC v SA Breweries International (Finance) BV t/a Sabmark International 2005
(2) SA 46 (SCA), [2004]
4 All SA 151 (SCA).
[9]
Laugh It Off Promotions CC v SA Breweries International (Finance) BV t/a
Sabmark International 2005 (5) BCLR 743
(CC).
[10] McDonald’s
Corporation v Joburgers Drive-In Restaurant (Pty) Ltd & another 1997 (1)
SA 1 (A).
[11] For the history of
the provision: Frederick W Mostert Famous and Well-known Marks 2ed ch
3.
[12] Inserted in order to
comply with another TRIPS requirement (art 16.2). It seems though that the
Legislature has not complied with
its art 16.3
obligation.
[13] Wang Yan Fsng
‘The protection of the well-known trademark’ published on the
internet:
www.chinaiprlaw.com/english/forum/forum21.htm.
[14]
Caterham Car Sales v Birkin Cars (Pty) Ltd [1998] ZASCA 44; 1998 (3) SA 938 (SCA). The
same approach has been adopted in a number of other jurisdictions: New Zealand:
Dominion Rent-A-Car Ltd v Budget Rent-A-Car Systems [1987] 2 NZLR 395;
Canada: Orkin Exterminating Co Inc v Pestco of Canada 80 CPR (2d) 153, 11
D.L.R. (4th) 8; India: Calvin Klein International v Apparel Syndicate
[1995] RPC 515 (HC); Australia: Conagra Inc v McCain Foods (Aust) Pty Ltd
[1992] FCA 159; 23 IPR 193, [1992] 106 ALR
465.
[15] Government
Notice 1559 of 1996 reproduced in Webster and Page South African Law of Trade
Marks 4ed App 7-3.
[16]
McDonald’s Corporation v Joburgers Drive-In Restaurant (Pty) Ltd &
another [1996] ZASCA 82; 1997 (1) SA 1 (A) 19E-H.
[17] Die Uitleg van Wette
5ed p 2.
[18] See further in
general Frederick W Mostert Famous and Well-known Marks 2ed.
[19] At 20F. The ‘Joint
Recommendation Concerning Provisions on the Protection of Well-Known Marks
adopted by the Assembly of the Paris Union for the Protection of
Industrial Property and the General Assembly of the World Intellectual Property
Organization (WIPO)’ (1999) recommended that
‘Relevant sectors
of the public shall include, but shall not necessarily be limited to:
(i)
actual and/or potential consumers of the type of goods and/or services to which
the mark applies;
(ii) persons involved in channels of distribution of the
type of goods and/or services to which the mark applies;
(iii) business
circles dealing with the type of goods and/or services to which the mark
applies.’
[20] At
15A-E.
[21] At
20H-21D.
[22] Mr M Knight,
delivered on 22 October 2002 in the UK Trade Mark Office. Available at
www.patent.gov.uk/tm/legal/decisions/.
[23]
Emphasis added.
[24] Cf Jeremy
Philips Trade Mark Law A Practical Anatomy (2003) p
452.
[25] Person’s Co
Ltd v Christman 900 F.2d 1565 (Fed. Cir. 1990). a judgment of the United
States Court of Appeals for the Federal Circuit, quoted with approval in
Barcelona.com to which reference has been made above. It should be borne
in mind that the provisions of art 6bis apparently do not form part of
US
statutory law and may not be directly enforced but are considered as part of
unfair competition.
[26] Cf
Caterham Car Sales v Birkin Cars (Pty) Ltd [1998] ZASCA 44; 1998 (3) SA 938 (SCA) para
[22].
[27] The Advocate General,
FG Jacobs, in Hölterhoff v Freiesleben (ECJ) (Case C-2/00). The
judgments of the European Court of Justice are available at
www.curia.eu.int.
[28] S 27(3)
reads:
‘(3) In the case of an application in terms of paragraph (a) or
(b) of subsection (1) the onus of proving, if alleged, that
there has been
relevant use of the trade mark shall rest upon the proprietor
thereof.’
[29] S 38(1) and
(2) provide:
‘(1) Where a registered trade mark is used by a person
other than the proprietor thereof with the licence of the proprietor,
such use
shall be deemed to be permitted use for the purposes of subsection (2).
(2)
The permitted use of a trade mark referred to in subsection (1) shall be deemed
to be use by the proprietor and shall not be
deemed to be use by a person other
than the proprietor for the purposes of section 27 or for any other purpose for
which such use
is material under this Act or at common
law.’
[30] Cf Jeremy
Philips Trade Mark Law A Practical Anatomy (2003) p
440.
[31] Jeremy Philips Trade
Mark Law A Practical Anatomy (2003) p
442.
[32] To add to the
confusion, in a valuation report of the trade mark by the Group’s
chartered accountant, the statement is made
that the Kingsgate name of Kingsgate
Clothing (Pty) Ltd – a name different from that of the fourth appellant,
Kingsgate Clothing
Manufacturers (Pty) Ltd – is ‘synonymous with the
AM Moolla Group’, whatever that may
mean.
[33]
Scandecor Developments AB v Scandecor Marketing AV &
Others [2001] UKHL 21, [2002] FSR 122
(HL).
[34] Sport Shoe (Pty)
Ltd v Pep Stores SA (Pty) Ltd 1990 (1) SA 722
(A)
[35] At para
16.
[36] Beecham Group plc
& another v Triomed (Pty) Ltd 2003 (3) SA 639
(SCA).
[37] At para
19.
[38] Glaxo Group v
Dowelhurst Ltd [2000] FSR
529.
[39] At para
22.
[40] At para
38.
[41] At para
39.
[42] The authorities have
been collected in Arjo Wiggins Ltd v Idem (Pty) Ltd & another 2002
(1) SA 591 (SCA) para 6.
[43]
Gulf Oil Corporation v Rembrandt Fabrikante en Handelaars (Edms) Bpk 1963
(2) SA 10 (T) 27G-H.
[44]
Ansul BV v Ajax Brandbeveiliging BV Case C-40/01, quoted by Jeremy
Philips Trade Mark Law A Practical Anatomy (2003) p
440.
[45] Nestle SA v Unilever
Plc [2002] EWHC 2709
(Ch).
[46] Cirota &
another v Law Society, Transvaal 1979 (1) SA 172 (A)
187-188.
[47] As will appear
later, the respondent is successful and is entitled to some or other favourable
costs order.
[48] Valentino
Globe BV v Phillips & another 1998 (3) SA 775
(SCA).
[49] Discussed in another
context in Luster Products Inc v Magic Style Sales CC 1997 (3) SA 13
(A).
[50] Mars Inc v Cadbury
(Swaziland) Pty Ltd & another [2000] ZASCA 125; 2000 (4) SA 1010 (SCA) para [11]-[14].