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REPUBLIC OF SOUTH AFRICA

COMPANIES TRIBUNAL

 

Case/File Number: СТ003MAR2014

 

 

In the matter between:

 

INDASA-INDUSTRIA DE ABRASIVOS, S.A.                    Applicant

 

and

 

INDASA HOLDING C M PROPRIETARY LIMITED            Respondent

(Registration Number: 2011/129938/07)

 

Presiding Member of the Tribunal: Khashane Manamela

 

 

DECISION (Reasons and Order)

 

 

[1]  The applicant, a company incorporated under the laws of Portugal, applies that the respondent, a South African company be ordered to choose another company name, as its current company name does not satisfy the provisions of the Companies Act 71 of 2008 (the Act. The applicant submits that, the respondent's current company name offends its trade marks.

 

[2]  The crux of the dispute between the parties appears to be the inclusion of the word or element "INDASA" in the respondent's name. The applicant is a proprietor of a class 3 trade marks, since December 1996.[1] The one trade mark is registered in respect of the word "INDASA" and the other is more of a mark or logo with what appears to be rhinoceros within a rectangular block, with the word "INDASA" thereunder. Both trade mark registrations were renewed in August 2006.[2]

 

[3]  There is no appearance by the respondent before this Tribunal. Therefore, the order made herein will effectively constitute a default order as contemplated in regulation 153 of the Companies Regulations, 2011. I am satisfied with the adequacy of the service upon the respondent.[3]

 

[4]  The applicant submits that the impugned name is identical or visually and phonetically identical to its trade marks. Unfortunately, this is not a test or criterion for company names in terms of the Act, and therefore any submissions

 

From the extracts from the trade mark register included in the papers, I note that this class covers goods and services like "coated abrasives on paper, cloth and vulcanized fibre... and abrasives preparations along these lines are misplaced and consequently rejected. A careful reading of the following relevant portions of section 11(2) of the Act will confirm the accuracy of my aforesaid ruling:

 

"11. Criteria for names of companies

 

(1). . .

(2) The name of a company must- (a) not be the same as –

 

(i) the name of another company, domesticated company, registered external company, close corporation or co-operative;

(ii) a name registered for the use of a person, other than the company itself or a person controlling the company, as a defensive name in terms of section 12(9), or

as a business name in terms of the Business Names Act, 1960 (Act No. 27 of

1960), unless the registered user of that defensive name or business name has executed the necessary documents to transfer the registration in favour of the

company;

(iii) a registered trade mark belonging toa person other than the company, or a mark in respect of which an application has been filed in the Republic for registration as a trade mark or a well-known trademark as contemplated in section 35 of the Trade Marks Act, 1993 (Act No. 194 of 1993), unless the registered owner of that mark has consented in writing to the use of the mark as the name of the company; or

(iv) a mark, word or expression the use of which is restricted or protected in terms

of the Merchandise Marks Act, 1941 (Act No. 17 of 1941), except to the extent permitted by or in terms of that Act;

(b) note confusingly similar to a name, trade mark, mark. word or expression contemplated in paragraph (a) unless -

(i) in the case of names referred to in paragraph (a)(i), each company bearing any such similar name is a member of the same group of companies;

(iii) in the case of a name similar to a trade mark or mark referred to in paragraph (a)(iii), the company is the registered owner of the business name, trade mark or

mark, or is authorised by the registered owner to use it; or

(iv) in the case of a name similar to a mark, word or expression referred to in paragraph (a)(iv), the use of that mark, word or expression by the company is permitted by or in terms of the Merchandise Marks Act, 1941;

(c) not falsely imply or suggest, or be such as would reasonably mislead a person to believe incorrectly, that the company-

(i) is part of,or associated with, another person or entity;

[I added the underlining]

 

[5] The applicant further relies on section 11(2)(b) of the Act on the ground that the respondent's name is confusingly similar to its trade mark. Ido not agree with this contention either. The two names by virtue of the other words or elements included in them are clearly dissimilar and are not confusingly similar or even similar. The applicant's name includes "Industrial De Abrasivos" which appears to be description of the applicant's business, even though I cannot claim to have a good understanding of the Portuguese language. On the other hand, the respondent's name include the words or elements "Holding C M " whose meaning [assuming there is any] Imust admit, Ido not comprehend.

 

[6] However, there is a further ground upon which the application is pivoted. The applicant also prays that, the respondent's name is in transgression of section 11(2)(c) of the Act. It is contended that, with the prominent feature of the respondent's name being the word "DANSA" there is a probability that, the two entities may falsely or incorrectly be associated with each other. The rest of the words in the respondent's name do not really distinguish the respondent's name from the applicant's trade marks, it is also submitted. I agree.

 

[7]  Analysed from the angle of section 11(2)(c)(i) of the Act, there is a strong probability of the likelihood of an incorrect association between the two [the respondent's name and the applicant's trade marks]. This statutory provision appears to be equivalent to the common law delict of passing-off. Passing-off is a species of the broader delict of unlawful competition[4]. In Alliance Property Group v Alliance Group (252/10)2011] ZASCA 14 (14 March 2011) the court took the opportunity to re-set the elements of passing-off as follows:

 

"Passing-off is a wrong consisting of a false representation made by one trader (the defendant) to members of the purchasing public that the enterprise, goods or services of a rival trader (the plaintiff) either belong to him (the defendant) or are connected, in the course of trade, with his own enterprise, goods or services.... The defendant's representation is a misrepresentation if it is likely to deceive or confuse a substantial number of members of the public as to the source or origin of his product [being enterprise, goods or services]. Passing-off, to be actionable, erodes the plaintiff's goodwill. Goodwill is the product of a cumulation of factors, the most important of which, in the context of passing-off, is the plaintiff's reputation. Reputation is the opinion which the relevant section of the community holds of the plaintiff or his product. If favourable, it would dispose potential customers to patronise the plaintiff or his product and, if unfavourable, it would tend to discourage them from doing so. The plaintiff's reputation may be associated with the symbol under which his product is marketed. The symbol renders the product distinctive of the plaintiff or his product. A false representation by the defendant about the symbol used by the plaintiff may encourage or induce potential customers of the plaintiff, believing that they were patronising him, into patronising the defendant."

[ added underlining for selective emphasis]

 

[8]  For a successful claim based on passing off, a litigant must prove misrepresentation; reputation or goodwill; that the infringing party's trade name was calculated or likely to deceive or confuse the ordinary customer and thus to deceive or cause confusion, and a common field of activity. However, a common field of business activity is not essential[5]. On the other hand, section 11(2)(c)(i) of the Act, only requires an applicant to prove that the impugned name, either falsely implies or suggests, or is such as would reasonably mislead a person to incorrectly believe that, the applicant is part of or associated with the respondent. In other words, there is an implication or suggestion of a link or association between the two organisations or satisfactory evidence to the effect that, members of the public would be misled into incorrectly believing the existence of a link between the contending parties. A relevant member of the public is the one meeting the test of a reasonable person.[6]

 

[9] Based on the above, I find that the use and registration of the respondent's name or the inclusion of the word or element "INDASA" does not satisfy the requirements of the Act as it .". falsely imply or suggest, or be such as would reasonably mislead a person to believe incorrectly, that the company [being the respondent] .is part of, or associated with, any other person or entity [being the applicant]" as envisaged in section 11(2)(c)(i) of the Act.

 

[10] I therefore proceed to make an order in the following terms:

a)   the respondent's registered company name "INDASA HOLDING C M " does not satisfy the requirements of the Companies Act 71 of 2008;

b)   the respondent is directed to choose and register another company name, which company name should satisfy the requirements of the Companies Act 71 of 2008;

c)   the respondent should complete the activities ordered in b) above within four (04) months of service of this order upon the respondent in terms of regulation 153(3) of the Companies Regulations, 2011;

d)   the respondent is, and be exempted from paying the fees prescribed for amendment of its company name occasioned by this order, and

e)   there will be no order as to costs.

 

 

Khashane Manamela

Member, Companies Tribunal

02^nd July 2014

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