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PWC Business Trust v Commissioner of Companies and Intellectual Property Commission and Another (CT004Apr2018) [2018] COMPTRI 62 (3 August 2018)

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COMPANIES TRIBUNAL.

            CASE NUMBER: CT004APR2018

In the matter between:

PWC BUSINESS TRUST                                                                                                 Applicant

and

COMMISSIONER OF COMPANIES AND                                                First Respondent

INTELLECTUAL PROPERTY COMMISSION              

PWC HOLDINGS (PTY) LTD

(Registration:1962/004342/07)                                                          Second Respondent

DECISION

Introduction

1. This is an unopposed application in terms of which the applicant PWC Business Trust opposes the continued registration of the second respondent’s name PWC Holdings (Pty) on grounds that the second respondent’s name offends against the provisions of Section 11(2)(a), 11(2)(b) and 11(2)(c) of the Companies Act 71 of 2008 as amended (the Act). Accordingly, the applicant seeks an ancillary relief in terms of section 160 of the Act.

2. Section 11(2)(a-c) of the Act provide against unauthorised reservation and/or registration of a name which is:

2.1.       the same as the name of another company or registered  trade mark;

2.2.       confusingly similar to a company name, trade mark or mark; or

2.3.       falsely implies or suggests or would be such as would reasonably mislead a person to believe, incorrectly, that the company is part of or associated with another person or entity.

3. Section 160 of the Act empowers the Companies Tribunal(the tribunal) to adjudicate applications seeking to challenge the name registration or reservation on grounds of transgression of Section 11 of the Act and to grant the appropriate relief on good cause shown.

Parties

4. The applicant is PWC Business Trust, a juristic person with perpetual succession said to be registered as such in terms of the Laws of the State of Delaware, USA with its registered business address at 300 Madison Avenue, New York, New York 10017, United States of America. Applicant has not disclosed its registration number or reference. Based on the trade mark registration certificates issued in favour of the applicant, I assume in favour of the applicant that it is a duly registered juristic person

5. The applicant states that it was registered to act as the legal owner of the PWC and PricewaterhouseCoopers name globally, including any trade mark or domain name.

6. Save for the purpose stated in the preceding paragraph, the applicant does not trade or operate as a trading entity anywhere in the world. Consequently, it does not trade anywhere outside of the State of Delaware, USA.

7. Pursuant to the applicant’s purpose as set out above, the applicant is the registered proprietor of certain trade marks in South Africa (and in other countries where the PWC network has presence) for the acronym PWC and other trademarks.

8. The first respondent is the Commissioner of Companies and Intellectual Property Commission established in terms of Section 185 of the Companies Act of 2008 and with its principal place of business at the Dti Campus, Block F, 77 Meintjies Street, Sunnyside, Pretoria.

9. The second respondent is P W C Holdings a private company with limited liability (Registration number 1962/004342/07) with its registered business address at 58 Melville Street, Lichtenburg 2740 and the registered postal address as P.O. Box 222, Lichtenburg. It would appear that other than obtaining a disclosure printout issued by the CIPC, the applicant did not endeavour to establish the field in which the second respondent operates. Thus the nature of the business operated by the second respondent is not known.

Issue

10. The issue is whether the applicant is entitled to protection against the infringement of its PWC trade mark. It is trite law that unauthorised use of a trade mark generally constitutes infringement of statutory rights, see Section 34 of the Trade Marks Act 194 of 1993(the Trade Marks Act) as well as common law rights see Section 36 of the Trade Marks Act.

Salient Facts

11. The applicant is the registered proprietor of certain PWC trademarks registered on 3 July 1998 in classes 9,16,35,36, 41,and 42 respectively in respect of goods and services. The trade marks are registered under serial numbers 11542-11547. Applicant claims protection on the basis of substantive and significant use of the PwC trade mark as well as on the ground of proprietorship of the PWC registered trade marks.

12. The second respondent was incorporated on 9 November 1962 in terms of the Companies Act of 1961 and is in compliance with the requirements for continued registration, which include the submission of annual returns.

13. Applicant states that it became aware of the second respondent’s presence in the Companies and Intellectual Property Commission (CIPC)’s register(companies register) on 20 November 2017 and acted upon this information by registering its objection with second respondent on through a letter dated 30 November 2017. The second respondent did not respond to the demand.

14. Accepting that the incorporation of the second respondent only came to the attention of the applicant in November 2017, I conclude that the applicant acted within a reasonable time after becoming aware of the incorporation. The applicant is required to show good cause for the relief sought to be granted.

Similarity

15. The second respondent was incorporated in 1962 in terms of the Companies Act of 1961(the 1961 Act) which was succeeded by the Companies Act of 1973(the 1973 Act). The 1973 Act was succeeded by the current Companies Act (the Act) which commenced in 2011. The relevance of the 1961 Act and 1973 Act is their provisions which correspond with the section 11(2) provisions of the Act. Such provisions are found in section 22(1) of the 1961 Act and section 41 of the 1973 Act which provide against registration of a name which is undesirable.

16. There is a plethora of jurisprudence which affirms that the meaning of “undesirable” includes confusing similarity. A comparison of the marks or the name and the mark is essential in the process of establishing whether there is a similarity and further that the similarity is likely to give rise to confusion. Confusing similarity is general tested by comparison relating to visual, aural and or conceptual factors.

17. A comparison made between the applicant’s PWC mark/trade mark and the second respondent’s name P W C does not only show a striking similarity but it also shows sameness visually, aurally and conceptually. Resultantly, I find no reason to disagree with the applicant in its motivation for a finding that the two are confusingly similar. Accordingly, without much ado, I find that the second respondent’s name and the applicant’s trade mark are confusingly similar. I will thus proceed on the basis of this finding on similarity.

Merits

18. I now turn to deal with the real issue, which is, whether the applicant has made out a case for protection of its registered PWC mark/trade mark against the registered P W C Holdings (Pty) Ltd name.

19. The applicant makes the following submissions in support of the application:

19.1.    That the CIPC must reserve each name applied for, unless it conflicts with the requirements of Section 11(2)(a)(i), (ii) and (iii) of the Companies Act;

19.2.    That Section 11 requires a comparison at the time of the reservation of the name between the register of companies and the register of trade marks to ensure that there is no duplication between those registers, of identical or similar names and trademarks.

19.3.    That where the tribunal is called upon to determine whether a company name offends against Section 11(2)(a) and (b) of the Act, it is entitled to have regard to the law of trade marks embodied in the Trade Marks Act, the Companies Act and their predecessors as well as the common law on issues of confusing similarity.

19.4.    Applicant refers me to amongst others two cases decided by the tribunal under case CT10Feb2016 and CT005Sep2016, on the meaning of confusing similarity and do agree with the adjudicating tribunal members findings in that respect.

19.5.    The applicant is prejudiced by the failure of the CIPC to require the second respondent to provide the applicant with a notice alerting it to the reservation and or registration of its name.  

20. I fully agree with submissions in 19.1-19.3 above and now turn to consider the merits of the application.

Protection of the registered trade mark

21. While I agree with the applicant’s submission regarding the requirement of the comparison between the Companies register and the trade marks register, it is significant to point out that the second respondent was incorporated in 1962 under the P W C name. The applicant’s trade mark was only registered in 1998 which is more than thirty years after the second respondent’s registered existence. In 1962, the desirability of second respondent’s name could not have been put to question in relation to applicant’s trade mark because then the trade mark was not registered in South Africa.

22. The applicant claims that it is prejudiced by the CIPC’s alleged failure to require the first respondent(the commissioner) to provide the applicant with a notice alerting it of the reservation and/or registration of the second respondent’s name. Second respondent’s incorporation was done in terms of the 1961 Act, therefor the requirements pertaining to the pre-registration, registration and post-registration of the second respondent fall under the 1961 Act regime. This Act did not provide for the furnishing of notices of reservation and/or registration except in respect of categories of registrations specified in that Act, the second respondent does not fall within the category of companies in respect of whose registration notices should be issued.

23. The Commission’s right to require an applicant for reservation and/or registration of a company to serve a copy on persons who may have an interest in the name only came into existence in 2011 when the Act came into operation. The Act does not operate retrospectively. On these facts, I find that this submission to be misplaced and should therefore be rejected. 

24. Had the search been adequately undertaken before the launch of or receipt of the PWC trade mark registration application in South Africa, be it by the registrar of trade marks or the applicant, the existence of the second respondent under the P W C name would have been picked up earlier and dealt with by interested parties. It is now twenty years that the registration of the two have co-existed, P W C in the Companies register and PWC in the Trade Marks register without any evidence of commercial inconvenience including passing off.

25.  Upon the repeal of the 1961 Act, the 1973 Act guaranteed the protection of rights held by the existing companies at the time of repeal. This protection is found in Section 2(4) of the 1973 Act  which provides:

Nothing in this Act contained shall affect any right or privilege acquired or liability incurred by the existing company or external company, whether by agreement or otherwise, before the commencement of the Act …” Thus, the second respondent’s rights arising from the registration continue to be protected beyond the repeal of the 1961 Act and its successors.

26. If In considering the case on the basis of competing rights based on registration, I am inclined to rely on the maxim qui prior est tempore potior est jure which means, “he has the better title who was first in point of time.” I make reference to this expression well alive to the following dictum of J Willis in the Ingledew Norman v Theodosiou Dimetrys & another WLD 97/33333 (15 June 2016) case referring to Wahloo Sand BK v Trustees, Hambly Parker Trust 2002(2) with approval at paragraph 61 where he states that “It is important to note that qui prior est tempore potior est jure has frequently been referred to as a maxim. In other words, it is short, pithy statement expressing a general truth rather than a rule of law.” This expression is apposite in the present case especially regard being had to the fact that protection based on registration only becomes available at the earliest, upon receipt of the trade mark registration application.

27. In the event of a competition for proprietary rights by applicants who have lodged the same or similar trade mark for registration, the general rule is to allow the application prior in point of time of filing to prevail and be entitled to proceed to registration. It is in the spirit of this practice in the trade mark registration environment that I comfortably refer to the qui prior est tempore potior est jure maxim in order to rank the applicant’s proprietary rights in respect of the registered trade marks against the second respondent’s proprietary rights in respect of its registered name. The applicant’s trade mark was registered in 1998 while the second respondent’s name was registered in 1962. Based on the above, I find it unavoidable to accordingly reject the applicant’s claim to protection against the infringement of statutory rights.

Protection of common law rights

28. In the claim based on the common law, it is essential for the applicant to prove that the use and well-knowingness of the mark sought to be protected by was already established by 1962, being the year in which the second respondent was incorporated. See Etraction (Pty) Ltd v Tyrecor (Pty) Ltd (20185/2014) 2015 ZASCA 78 (28 May 2015) at paragraph 16 which reads: “The clear purpose of s 36(1) is to protect common law rights arising from continuous and bona fide use of an unregistered trade mark prior to either the use or registration of the mark in issue. Consistent with that purpose, any person entitled to bring a passing off action based on the reputation they had acquired from the use of the unregistered mark would be entitled to invoke s 36(1) against a claim for infringement by the proprietor of a registered mark.”

29. The applicant has not been open with the tribunal with regard to the existence of the common law right to protection in that no evidence has been offered regarding the question when the applicant commenced use of the PWC mark in and outside South Africa. This information would assist to establish whether by November 1962, the applicant had begun to enjoy the requisite repute in terms of which the second respondent’s name registration can be validly be attacked.

30. In support of the application, the applicant only makes the following bald statements in its founding affidavit:

30.1.     in paragraph 18 thereof: “As a result of the Applicant’s substantive and significant use of the PwC trade mark across the world, and particularly in South Africa, this particular combination of letters has become a household brand in the financial, auditing, forensic and accounting, consulting and advisory industries and therefore qualifies as a well-known trade mark . . .”

30.2.    In paragraph 21 thereof: “The applicant submits that it is expended substantial amounts of money in promoting its company and building its brand”.

31. The applicant’s evidence quoted above amount to conclusions, the basis of which have not been disclosed to me. Applicant has shied away from presenting facts from which I can be able to conclude whether the applicant had used the mark substantially and indeed become well known through use of the mark prior to the second respondent’s registration. Instead, the applicant’s claim for protection of the unregistered mark is based on a vague generalisation. For the applicant to succeed on this claim, it must present sufficient facts showing sufficient use and reputation which precedes November 1962. Etraction (Pty) Ltd v Tyrecor (Pty) Ltd (20185/2014) 2015 ZASCA 78 (28 May 2015) at paragraph 20 which reads “The usual way in which to discharge the onus of proving such a reputation is by way of proof of actual sales and advertising to establish the requisite reputation.”

Conclusion

32. Having considered the papers in support of the application and the applicable law, my finding is that the applicant has failed to show the existence of goodwill prior incorporation of the second respondent and that, that goodwill is at risk of being injured because of the use of by the second respondent, therefore the application falls to be dismissed.

Order

Accordingly, the following order is made:

(a)  The application is dismissed;

(b)  The tribunal is ordered to serve this decision on all parties to this application



Dated at Pretoria on this the 3rd day of August in the year 2018

 

 

______________________________

Ms M. Ramagaga

Member of the Companies Tribunal