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IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA

“The Tribunal”

                                                                        Case Number: CT 014DEC2017

In the matter between:

AMKA PRODUCTS (PTY) LTD                                                                             Applicant

AND

CLERE BEAUTY SPA (PTY) LTD                                                              1^ST Respondent

(Registration Number: 2016/115262/07)

COMMISSIONER OF COMPANIES                                                           2^ND Respondent

DECISION

INTRODUCTION:

[1] The applicant is AMKA Products (Pty) Ltd, a private company incorporated under the Company Laws of the Republic of South Africa, having its principal place of business at 14 Ellman Street, Sunderland Ridge, Pretoria, Gauteng.

[2] The 1^st respondent is Clere Beauty Spa (Pty) Ltd, a company registered with the Companies and Intellectual Property Commission, with its registered business at 2261 Angola Street, Cosmo City Ext 2, Gauteng, with registration number 2016/115262/07.

[3] The 2^nd respondent is the Commissioner of Companies, as appointed in terms of S189 of the Companies Act. The 2^nd respondent is cited in its official capacity as the person responsible for the function of the Commission on Companies and Intellectual Property registrations.

[4] The applicant submits that it became aware of the registration of the first respondent in October 2016, and immediately commenced the process of contacting the first respondent with the intention to resolve the matter amicably. The applicant was unsuccessful in its attempt to resolve the matter and on 18 December 2017 filed a formal name objection dispute with the Companies Tribunal, which objection was successfully served on the first respondent on 22 January 2018, after a failed attempt to serve on 19 December 2017.

[5] In terms of regulation 143, the first respondent had until 19 February 2019 to file and serve its answer to the applicant’s application. The applicant did not respond to the applicant’s application, nor did it file any answer with the Tribunal.

[6] The applicant has filed this application in terms of S160  of the Companies Act (the Act), for a determination that the first respondent’s company name CLERE BEAUTY SPA (Pty) Ltd offends against the provisions of S.11 of the Act, particularly  S.11(2)(b) and (c) of the Act. The applicant further prays for a default order:

1. ordering the first respondent to change its name to one which does not incorporate and is not confusingly similar and/ or deceptively similar to the applicant’s CLERE trademark;

2. ordering the first respondent to pay costs of these proceedings;

3. in the event that the first respondent fails to comply with the order set out in paragraph 1 above within three (3) months, that the second respondent is directed in term so S.160(3)(b), read with S.14(2)(b)(i) of the Act, to record the first respondent’s registration number followed by (Pty) Ltd as the first respondent’s interim company name on the companies register; and

4. grant further and/or alternative relief to the applicant.

Submissions by Applicant

[7] Applicant deposed to an affidavit as required by Regulation 142(2), and provided background to the AMKA business. The business was founded by the Kalla family in Gauteng in the 1950’s. From a small trade operation, the applicant’s business grew exponentially and today it is one of the largest manufacturers and distributors of health, beauty and home care products in South Africa and in more than 35 countries throughout the African continent. The applicant employs more than 1500 employees and four manufacturing plants and is rated as one of the top 10 empowerment companies in South Africa.

[8] Some of the goods sold by the applicant are well-known and are household brands, including, CLERE, CLERE GLYCERINE, CLERE ACTIV, CLERE BODY, etc. It is a brand trusted by consumers and is identified and associated with the applicant and its business. The applicant’s CLERE beauty products are very popular in the trade and the applicant has acquired a substantial goodwill and reputation.

[9] The applicant is the proprietor of trade mark registrations, including 1965/0332 CLERE in class 3 in relation to “face creams, shampoos and lotions” dated 17 August 1965 and other CLERE trademarks for various products registered in subsequent years.

[10] The applicant made concerted efforts to locate first respondent and the director of first respondent over a period of time, to give the first respondent an opportunity to resolve the matter amicably, however, the first respondent’s failure to respond left the applicant with no option but to bring these proceedings.

[11] The applicant submits that the first respondent is not associated with its business and that there are good grounds for alleging that the first respondent’s name offends against the provisions of S.11 (2) of the Act.

[12] The applicant submits further that on comparison of its trademark CLERE and the mark CLERE prominently featured in the first respondent’s name, CLERE BEAUTY SPA, the marks are visually and phonetically identical. The reference to “BEAUTY SPA” incorporated in the name of first respondent is descriptive of the industry concern and is in direct conflict with the business interests of the applicant, who has for decades used and continues to use its trade mark CLERE in the beauty care industry.

[13] Applicant further submits that the applicant does not have any control over the quality of the products or services provided by the first respondent and any negative attributes relating to first respondent’s goods or services, or any adverse publicity which may arise, would be detrimental to the long standing good name and reputation of the applicant’s business under the CLERE brand.

[14] Applicant submits that in view of the substantial rights and reputation that the applicant enjoys in the mark CLERE, the use of the first respondent’s name in the trade is likely to deceive and cause confusion amongst members of the public, who are likely to believe that there is a connection between first respondent and the applicant, in particular, members of the public are likely to believe that the first respondent is authorised to use the applicant’s CLERE trade mark for the purpose of selling goods or rendering services on behalf of applicant.

[15] it is submitted further by applicant that first respondent’s name is contrary to the provisions of S.11(2)(c) of the Act because it falsely implies or suggests, or is otherwise reasonably likely to mislead a person to believe, incorrectly, that the first respondent is the applicant or is associated with it.

Application of the Law

[16] This is an application in terms of S.160 read with S.11 (2) of the Companies Act. The applicant seeks relief in terms of S. 160 (1) of the Act, which provides for specific remedies available in instances where the Tribunal has determined that an application complies with the requirements of S.11. It states:

“ A person to whom a notice is delivered in terms of this Act with respect to an application for 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 a 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 (s11).”

[17] Section 160 (2)(b) which is relevant to this case, provides that an application in terms of subsection 1 above, may be made on good cause shown at any time after the date of reservation or registration of the name that is the subject of the application, in any other case.

[18] Section 160(3) provides for the powers of the tribunal where subsections (1) and (2) have been satisfied. It provides as follows:

“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 (s.11); and

(b)May make an administrative order directing-

(i)       The Commission to-

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

(ii) a company to choose a new name, and file a notice of 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.”

[19] The tribunal is therefore tasked with considering this application and satisfying itself that it complies with the requirements of s. 11 (2) which provides:

“The name of a company must-

(a)Not be the same as-

(iii) A registered trademark belonging to a 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 trade mark 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.”

(b)Not be confusingly similar to a name, trade mark, word or expression contemplated in paragraph (a) unless-

(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.”

(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.”

Evaluation

[20] The tribunal will firstly address the issue whether good cause has been established as required by S.160 (2) (b). The applicant has advised that it became aware of the first respondent’s name during 2016, whereafter; applicant made attempts to obtain further details of the applicant and attempted to contact the first respondent over a period of time in order to try and resolve this issue amicably. When applicant’s attempts to resolve the matter directly with the first respondent failed, applicant thereafter started the process of these proceedings in order obtain an order from the Tribunal against first respondent. The Tribunal is therefore satisfied that good cause has been shown and that the substance of the application can forthwith be addressed.

[21] Section 11 lists the criteria applicable for company names. On assessment of applicant’s trade mark CLERE and that of first respondent CLERE BEAUTY SPA, one can easily identify the similarity in the names. On comparison of applicant’s trademark CLERE and the mark CLERE prominently featured in the first respondent’s name, CLERE BEAUTY SPA, the marks are visually and phonetically identical. The reference to “BEAUTY SPA” incorporated in the name of first respondent is descriptive of the industry concerned. As outlined in the trade mark registration for the CLERE brand, it would seem that the goods and services offered by the beauty spa are in direct conflict with the business interests of the applicant.

[22] The applicant has valid concerns regarding the risk of the name CLERE BEAUTY SPA misleading loyal customers of the CLERE brand into believing that first respondent is associated or connected with the applicant. In Azisa Pty) Ltd v Azisa Media CC [2002] 2 All SA 488 (C) at 500, the court held that a company name may be deemed undesirable in circumstances where it is likely to mislead or deceive the public, or is the same or similar to that of another and as a result is likely to lead to confusion amongst members of the public.

[23] I accept the applicant’s submission that any negative attributes relating to first respondent’s goods or services, or any adverse publicity which may arise, would be detrimental to the long standing good name and reputation of the applicant’s business under the CLERE brand. Applicant has established that CLERE is a well- established, widely advertised brand in the beauty care industry in South Africa and in the African continent, among over 35 countries.

[24] There is a serious risk of confusion of the public, which causes the undesirability of the name CLERE BEAUTY SPA. In New Media Publishing (Pty) Ltd v Eating out Web Services CC [2005] ZAWCHC 20; 2005 (5) SA 388 (C) at 394, relating to the Trade Marks Act on name similarities, the court held:

“there is, it seems to me, an interdependence between 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 required between the respective marks before it can be said that there is a likelihood of deception or confusion in the use of the allegedly offending mark”. In applying the court’s principle to this case, both applicants’ trade mark CLERE and first respondent’s “CLERE” in CLERE BEAUTY SPA being phonetically and identically similar, and both parties also provide similar goods and services and operate within the same industry, as the applicant manufactures and sells beauty care products and first respondent is in the beauty industry. This poses greater risk of confusion and an assumption that the two are related or associated.

[25] There is an overwhelming resemblance between the trade mark CLERE and the name CLERE BEAUTY SPA and CLERE is the dominant feature in both names and is the main idea or impression left in the mind of the customer.

FINDINGS

[26] The name CLERE BEAUTY SPA is confusingly similar to the trade mark CLERE and there is a reasonable likelihood of confusion amongst members of the public.

[27] The name CLERE BEAUTY SPA does not satisfy the requirements of S. 11(2) (b) and (c) of the Act.

ORDER:

It is therefore ordered that:

1. the first respondent to change its name to one which does not incorporate and is not confusingly similar and/ or deceptively similar to the applicant’s CLERE trademark and to file  Notice of Amendment of its Memorandum of Incorporation;

2. in the event that the first respondent fails to comply with the order set out in paragraph 1 above within three (3) months, that the second respondent is directed in terms of S.160(3)(b), read with S.14(2)(b)(i) of the Act, to record the first respondent’s registration number followed by (Pty) Ltd as the first respondent’s interim company name on the companies register; and

3. the first respondent is exempted from paying costs of this application.

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B. Zulu

26 April 2018

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