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IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA

("THE TRIBUNAL")

CASE NUMBER:      CT010Apr2015

In the matter of:

ADDIS IP LIMITED                                                                                                 APPLICANT

ADDIS COMMUNICATION (PTY) LIMITED                                                      RESPONDENT

 

Coram: PJ Veldhuizen

Order delivered: 16 July 2015

ORDER & REASONS

1.    THE PARTIES

1.1. The Applicant is ADDIS IP LIMITED (“the Applicant”), a company incorporated and existing under the Mauritian company laws, having its principal place of business at 4^th Floor, Ebene Skies, Rue De L’institut, Ebene, Mauritius.

1.2. The Respondent is ADDIS COMMUNICATION (PTY) LIMITED, (“the Respondent”) a company incorporated and existing under the laws of the Republic of South Africa, with registration number 2013/209662/07, having its registered address at 75 Bristol Road, Parkwood, Johannesburg, Gauteng, 2198.

1.3. The Applicant has appointed USABCO INDUSTRIES (PTY) LIMITED, (“the licensee”) a company duly incorporated under the company laws of the Republic of South Africa, as its exclusive licensee in South Africa to develop, manufacture and distribute Addis goods in this region.  In addition, it is authorized to use the Addis mark on behalf of the Applicant and to protect it against infringement, dilution and damage in general.  The licensee is widely and commonly known as Addis SA and is situate at Southbell Industrial Estate, Sacks Circle, Bellville, South Africa.

2.    THE APPLICATION

2.1. This is an application brought in terms of Section 160 of the Companies Act No. 71 of 2008 (“the Act”) for an Order confirming that the name ADDIS COMMUNICATION (PTY) LIMITED does not satisfy the requirements of Section 11 of the Act and that the Respondent be directed by the Companies Tribunal (“the Tribunal”) to select a new name, as provided for in Section 160 of the Act.  As set out in paragraph 1 above, the Applicant has an interest in the name of the Respondent within the meaning of Section 160 of the Act and accordingly the Tribunal finds that the Applicant has the necessary locus standi to bring this application.

2.2. The Applicant is the proprietor of the well-known trade mark ADDIS which it has registered in South Africa in classes 21, 16, 20, 06, 07, 08, 10, 11, 17, 27, 25 and 35.  In fact, it should be noted that the Applicant has held trade marks incorporating the word ADDIS since 1935.

2.3. The founding papers in this matter were deposed to by ERROL BENJAMIN STERN, the chief executive officer of the licensee and representative of the Applicant in South Africa.  The deponent confirms that the aforementioned trade mark registrations are all valid and in force and proof was annexed to the application.  The deponent furthermore has set out incontrovertible evidence of the Applicant’s statutory and common law rights in its extremely well-known trade marks which have been utilized extensively in respect of a broad range of houseware products which are distributed and sold both through its website at www.addis.co.za and through hundreds of retail outlets nationwide.

2.4. Accordingly, I am satisfied that the Applicant should enjoy the protection of its trade mark as it has developed an asset of considerable commercial value and that any unauthorized use of this trade mark, or confusingly or deceptively similar mark, would be damaging to this asset and to the business of the Applicant.

2.5. The Applicant has filed an objection to the use of the word ADDIS by the Respondent in its company name, as prescribed by Regulation 142(1)(a) and has in support of its objection, filed the prescribed affidavit, setting out the facts on which the application is based, as required by Regulation 142(1)(b).  In support of the Applicant’s objection, the deponent to the founding affidavit refers to recent Orders by the COMMISSIONER OF THE COMPANIES AND INTELLECTUAL PROPERTY COMMISSION (CIPC) where the close corporation ADDIS RETAIL AND WHOLESALERS CC was ordered to change its name and where the COMMISSIONER OF THE COMPANIES AND INTELLECTUAL PROPERTY COMMISSION also ordered the close corporation ADDIS INVESTMENTS CC to change its name. 

2.6. Furthermore, an affidavit is filed by the Applicant’s attorney of record, ATTORNEY CHARNE LE ROUX, dealing with further authorities supporting the Applicant’s request for an Order that the Respondent select an alternative name not incorporating the word ADDIS.  These cases and others considered include:

A.   HIGH COURT AND SUPREME COURT OF APPEAL DECISIONS

2.6.1.   The Supreme Court held in the case of Capital Estates and General Agencies (Pty) Ltd and Others v Holiday Inns Inc & Others 1977 (2) 916 (A) that in order to determine whether a representation amounts to passing off, one enquires whether there is a reasonable likelihood that members of the public may be confused into believing that the business of the one is, or is connected with that of the other.  The absence of a common field of activity is a factor which one has to take into account when considering the question whether someone’s conduct is likely to lead to confusion of the kind mentioned.  However, the crucial question in every case is whether there is a reasonable likelihood of confusion and, this being so, it cannot be suggested that the absence of a common field of activity will always be sufficient to bar a party from obtaining relief.

2.6.2.   In the Hollywood Curl (Pty) Limited v Twins Products (Pty) Limited 1989 (1) SA 255 (A) decision, the Appellate Division of the Supreme Court ruled on an objection by TWINS PRODUCTS (PTY) LIMITED (“Twins”) to a company name HOLLYWOOD CURL (PTY) LIMITED (“Hollywood Curl”).  In this case, Twins marketed and distributed several products under the trade marks incorporating the word HOLLYWOOD.  Hollywood Curl subsequently marketed and distributed a product by the name of HOLLYWOOD CURL.  The court found that the evidence had established that the use of the mark HOLLYWOOD CURL by Hollywood Curl on its merchandise constituted passing off, in that there was a reasonable likelihood that ordinary members of the public might be confused or deceived into believing that such merchandise emanated from Twins.  The court based its decision on the finding that there was a likelihood that the public, familiar with the HOLLYWOOD range, would, on encountering a HOLLYWOOD CURL product in the market place, conclude that it was “another horse out of the same stable”.  In other words, the court found that the fact that Twins used its HOLLYWOOD trade mark in combination with other words rendered it plausible that it might market a new product under the name HOLLYWOOD CURL.

2.6.3.   In McDonald’s Corporation v Dax Prop CC & Another 1997 (1) SA 1 (A), in deciding what qualifies as a well-known trade mark in South Africa, the then Appellate Division of the Supreme Court held the following:

(a)          the test to prove that a trade mark is “well-known” within the meaning of Section 35 of the Trade Marks Act of 1993 is essentially the same as that in passing-off cases, namely that the mark must be known to a “substantial number of persons”;

(b)          the “universe” of relevant persons for this purpose is persons interested in the particular goods or services, and not the public at large.

2.6.4.   In the decision of the court a quo in the matter of Peregrine Group (Pty) Limited v Peregrine Holdings Limited 2000 (1) SA 187 (W), the Honourable Lazarus AJ stated that:

“For the purposes of the present matter it suffices to say that, where the names of companies are the same or substantially similar and where there is a likelihood that members of the public will be confused in their dealing with the competing parties, these are important factors which the Court will take into account when considering whether or not the name is “undesirable”.

This passage was approved by the Supreme Court of Appeal on hearing the appeal in this same matter (Peregrine Group (Pty) Limited v Peregrine Holdings Limited supra).

2.6.5.   The test for passing off, as per Harms JA in Blue Lion Manufacturing (Pty) Ltd v National Brands Limited 2001 235 (SCA), must be considered from the perspective of the average purchaser.  This average purchaser will not “necessarily have the advantage of seeing the two (marks) side by side” nor will he/she “necessarily be able to read simple words, as there are distressingly many people in South Africa who are illiterate”.

2.6.6.   In Aziza (PTY) Ltd v Azisa Media CC and Another 2002 (4) SA 377 (C), Nel J quoted an article by JB Cilliers in which he confirms the undesirability of a confusingly similar company or CC name.  According to Cilliers, the following factors should be considered in assessing confusing similarity:

“the likelihood in the names being abbreviated and the form of abbreviation; evidence of actual confusion or deception; the degree of confusion and its consequences, including inconvenience caused; whether a name could or might itself mislead the public or a recognized section of the public in any particular locality, or would be likely to cause confusion in the sense that the public would think that there is some actual connection or association between the companies; whether avoidable confusion has been created by the similarity of company names, which is undesirable; the Registrar’s Directive of company names; the commercial environment in which the companies compete; the geographical environment in which the companies operate; whether the companies compete in the same market place; the importance of first impressions; the specialist nature of the companies’ goods or services and the correlative ability of the customers to differentiate; whether the market place can arguably deal with any confusion; whether the name resembles a trade mark; and the nature of the names.”

2.6.7.   It is also important to note that, in the case of New Media Publishing (Pty) Ltd v Eating Out Web Services CC [2005] ZAWCHC 20; 2005 (5) SA 388 (C), Harms J stated that:

“There is, it seems to me, an interdependence between the two legs of the inquiry: the less the similarity between the respective goods or services of the parties, the greater will be the degree of resemblance between their respective marks before it can be said that there is a likelihood of deception or confusion in the use of the allegedly offending mark, and vice versa”.

2.6.8.   In Polaris Capital (Pty) Ltd v The Registrar of Companies and Polaris Capital Management Inc (unreported judgment, Case No. 11607/2005, Cape of Good Hope Provincial division).  The learned judge, in commenting on “undesirability”, in terms of Section 45(2) of the Companies Act made the following comments:

“The requirement, ‘calculated to cause damage to the objector’, is aimed at providing statutory recognition for an owner’s legally protectable commercial interests.”

The learned judge in commenting on the issue of undesirability confirms that the purpose of the provision for undesirability is “…to expand an aggrieved party’s ability to forestall any possible future harm, by providing a statutory remedy where the issue is, not so much the protection of its legally protectable commercial interests and, where appropriate, a claim for compensation for any consequent loss, but that the use of the company name is such that it does, or might, deleteriously affect the registrar’s role in maintaining and promoting the good governance and administration of corporate entities in the interests of the general public.”

2.6.9.   The Supreme Court of Appeal on hearing the appeal in the above case (Polaris Capital (Pty) Ltd v Polaris Capital Management Inc and The Registrar of Companies 2009 ZASCA 131), stated as follows:

“A company name will be confusing when, in doing business with the company, the public or a section of the public would be confused into thinking they are doing business with another company or would be confused into thinking that the company is associated in some way with the other company”.

2.6.10.   In the case of Century City Apartments v Century City Property Owners 2009 ZASCA 157,  the court stated that if the association between the two respective names or marks causes the public to wrongly believe that the respective goods come from the same or economically linked undertakings, there is a likelihood of confusion.

2.6.11.   In Puma AG Rudolf Dassler Sport v Rampar Trading (PTY) Ltd & Others 2010 BIP 317 (SCA), Harms DP, in commenting on the test for a likelihood of confusion, stated:

“As counsel for Puma reminded us, the question of the likelihood of confusion or deception is a matter of first impression and that one should not peer too closely at the registered mark and the alleged infringement to find similarities and differences”.

2.6.12.   Malan JA, when assessing the test for passing off in the case of Adcock Ingram Intellectual Property (Pty) Ltd and Another v Cipla Medpro (Pty) Ltd and Another 2012 BIP 113 (SCA), stated:

“One must make allowance for imperfect recollection and the effect of careless pronunciation rather than comparing the two words letter by letter or syllable by syllable”.

2.6.13.   In Mettenheimer v Zonquasdrif Vineyards CC & Others 2014 (2) SA 204 (SCA), Brand JA, in determining what should be considered when assessing a likelihood of confusion in a trade mark infringement case where the respective marks were identical, confirmed that

a)           the use of respective goods

b)           the users of the respected goods

c)            the physical nature of the goods; and

d)           the respective trade channels through which the goods reach the market

are all applicable considerations, but that “it is clear that the list of proposed considerations was never intended to be exhaustive”.

B.   DECISIONS OF THE COMPANIES TRIBUNAL

2.6.14.   In the case of DANJAQ, LLC and BOND 007 (PTY) LTD (Decision of the Companies Tribunal, Case No. CTR 023/05/2013), the Companies Tribunal investigated whether the name BOND 007 (PTY) LTD was confusingly similar to the Applicant’s trade marks in respect of the popular film and literary character, James Bond.  The Tribunal rejected the Respondent’s submissions that the fame of the character negated a risk of confusion and instead accepted the Applicant’s submission that use in this manner would lead to the mark losing its distinctiveness and source of origin, which the Applicant was entitled to protect.  The Tribunal found that, whilst the Applicant did not have a registration for the trade mark BOND 007 specifically, the two words used in conjunction with each other would lead a person to believe that the Respondent company was associated with the Applicant and ruled that the Respondent’s name did not satisfy the requirements of Section 11(2)(b)(iii) and Section 11(2)(c)(i) pf the Companies Act 71 of 2008.

C.   FOREIGN CASE LAW:

2.6.15.   In the case of Ewing (t/a The Buttercup Dairy Co. v Buttercup Margarine Co-operation Limited 1917 (34) R

“He (the Plaintiff) has proved that the Defendants have adopted such a name as may lead people who have dealings with the Plaintiff to believe that the Defendant’s business is a branch of or is associated with the Plaintiff’s business.  To induce a belief that my business is a branch of another man’s business may do that other man damage in all kinds of ways.  The quality of the goods I sell, the kind of business I do, the credit or otherwise which I might enjoy – all those things may immensely injure the other man who is assumed wrongly to be associated with me.  It is just that kind of injury that the Defendants have shown here is likely to occasion”.

3.    PROCEDURAL ASPECTS

3.1. The Applicant has, in my view, complied with all aspects related to the service of the application on the Respondent and the filing with the Tribunal.

3.2. In terms of Regulation 153(1) read with Regulation 143(1), the Respondent had twenty (20) days to respond to the application, failing which the Applicant would be entitled to apply for a Default Order, as applied for.

3.3. No response has been received from the Respondent and the Applicant accordingly applies to the Tribunal in terms of Regulation 153(2) that the Tribunal make a Default Order in terms of Regulation 153(1).

4.    THE RELIEF SOUGHT

The Applicant seeks an Order directing that the Respondent select an alternative name which does not consist of, or incorporate, any word confusingly or deceptively similar to the Applicant’s registered trade marks, or any other mark which is confusingly and/or deceptively similar to the Applicant’s registered trade mark.

5.    THE LAW

5.1. The regulation of disputes concerning the reservation or registration of company names and the jurisdiction of the Tribunal is set out in Section 160 of the Act:

(1) –

A person to whom a notice is delivered in terms of this Act with respect to an application for a reservation of a name, registration of a defensive name, application to transfer the reservation of a name or the registration of a defensive name, or the registration of a company's name, or any other person with an interest in the name of a company, may apply to the Companies Tribunal in the prescribed manner and form for the determination whether the name, or the reservation, registration or use of the name, or the transfer of any such reservation or registration of a name, satisfies the requirements of this Act.

(2) – 

An application in terms of subsection (1) may be made –

(a) within three months after the date of a notice contemplated in subsection (1); or

(b) on good cause shown at any time after the date of the reservation or registration of the name that is the subject of the application, in any other case.

(3) –

 After considering an application made in terms of subsection (1), and any submissions by the Applicant and any other person with an interest in the name or proposed name that is the subject of the application, the Companies Tribunal –

(a) must make a determination whether that name, or the reservation, registration or use of the name, or the transfer of the reservation or registration of the name, satisfies the requirements of this Act; and

(b) may make an administrative order directing –

(i) the Commission to –

(aa) reserve a contested name, or register a particular defensive name that had been contested, for the applicant;

(bb) register a name or amended the name that had been contested as the name of the company;

(cc) cancel the reservation of a name, or the registration of a defensive name; or

(dd) transfer, or cancel the transfer of, the reservation of a name, or the registration of a defensive name; or

(ii) a company to choose a new name, and to file a notice of an amendment to its Memorandum of Incorporation, within a period and on any conditions that the Tribunal considers just, equitable and expedient in the circumstances, including a condition exempting the company from the requirement to pay the prescribed fee for filing the Notice of Amendment contemplated in this paragraph.

(4) –

within 20 business days after receiving a notice or decision issued by the Companies Tribunal in terms of this section, an incorporator of a company, a company, a person who received a notice in terms of section 12(3) or 14(3), an applicant under subsection (1) and any other person with an interest in the name or proposed name that is the subject of the application, as the case may be, may apply to court to review the notice or decision.

5.2. The restrictive criteria for the names that may be chosen by a company is set out in Section 11 (2) of the Act:

(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 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 trademark belonging to a person other than the company, where mark in respect of which an application has been filed in the Republic for registration as a trademark or a well-known trademark is contemplated in section 35 of the Trade Marks Act, 1993 (Act 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 use of which is restricted or protected in terms of the Merchandise Marks Act, 1941 (Act 17 of 1941), except to the extent permitted by and were in terms of that Act;

(b) not to be 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 parapraph (a)(i), each company bearing any such similar name is a member of the same group of companies;

(ii) in the case of the company name similar to a defensive name or to a business name referred to in paragraph (a)(ii), the company, or person who controls the company, is the registered owner of that defensive name or business name;

(iii) in the case of a name similar to a trademark or mark referred to in paragraph (a)(iii), the company is the registered owner of the business name, trademark, will 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 market, world expression by the company is permitted by and in terms of the Merchandiser 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, any other person or entity;

(ii) is an organ of state or a court, or is operated, sponsored, supported or endorsed by the State any organ of state or a court;

(iii) is owned, managed or conducted by a person or persons having any particular educational designation or who is a regulated person or entity;

(iv) it is owned, operated, sponsored, supported or endorsed by, or enjoys the patronage of, any –

(aa) foreign state, head of state, head of government , government or the administration or any department of such a government ordered ministration; or

(bb) international organisation; and

(d) not include any word, expression or symbol that, in isolation or in context within the rest of the name, may reasonably be considered to constitute –

(i) the propaganda for war;

(ii) incitement of imminent violence; or

(iii) advocacy of hatred based on race, ethnicity, gender or religion, or incitement to cause harm.

6.    THE APPLICATION OF THE LAW TO THE FACTS

6.1. The crisp question is for the Tribunal to determine whether the use of the word ADDIS in the company name of the Respondent amounts to a contravention of Section 11 of the Companies Act.  The Tribunal considered the cases referred to by the attorney for the Applicant as well as the CEO of its duly authorized licensee in South Africa and could not fault the reasoning behind the requested Order. 

6.2. In the premises, the Tribunal considers the Applicant entitled to its requested order. 

7.    ORDER

7.1. The application that the Respondent is directed to select an alternative name which does not consist of or incorporate any word confusingly or deceptively similar to the Applicant’s registered trade marks, or any other mark which is confusingly and/or deceptively similar to the Applicant’s registered trade marks IS GRANTED with costs;

7.2. The Respondent is directed to attend to the selection of an alternative company name by 23 September 2015;

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PJ VELDHUIZEN

MEMBER OF THE COMPANIES TRIBUNAL

CAPE TOWN

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