‘… the guidance in these authorities cannot be ignored, for it transcends those eras. The message is clear [that] a person has the right to use his or her surname, against the stated limitations. I venture that same is applicable to the use of a first name, like in this matter (with TSOGO, the first name of the first respondent’s director)’. [16]

[34]     In dismissing the Applicant’s case in Tsogo Magifix, the Tribunal held that there was no likelihood of deception between the Applicant’s ‘TSOGO SUN’ business or trade mark and the First Respondent’s name. Further that the TSOGO SUN and TSOGO MAGFIX contain sufficient distinguishing material.

[35]     The Tribunal was presented with another opportunity to reflect on trade mark infringements by companies that use names of their incorporators or directors in Tsogo Sun (Pty) Limited v Tsogo Events And Trading (Pty) Limited and Another.[17] The Tribunal’s approach in this decision was totally different from that followed in Tsogo Magifix. In the former decision, the Applicant argued that the First Respondent’s name was identical to its well-known distinctive registered trade mark TSOGO. Further that the addition of the phrase ‘EVENTS AND TRADING’ to the First respondent’s name failed to distinguish the First Respondent’s name from the Applicant’s trade mark and also increased the likelihood of confusion.

[36]     In ordering the First Respondent to change its name in Tsogo Events, the Tribunal reasoned that:

‘The intellectual property owners and reputable business names must be protected from “those passing themselves or coat-tailing’ on their reputation and goodwill.” Furthermore, a determination must be made whether the proposed name may mislead the public to believe that there is a non-existent association between two companies that are in fact not associated with each other. While protecting the legitimate rights of an existing business, care must be taken not to unfairly restrict freedom of expression’.[18]

[36.1] While it is not clear whether the First Respondent’s name was derived from any of its directors names or surnames, the Tribunal directly contradicted its conclusion and reasoning in Tsogo Magifix. It stated that:

‘[i]n Tsogo Sun v Tsogo Magifix an emphasis was made on the right to use one’s name as a trading name. If this argument is to be accepted, this would result in many Macdonals in the world being able to start a burger fast food business and unfairly benefit from the goodwill of the well-known Macdonald Corporation. If that were to be allowed, would that amount to fair competition? The answer is no. The existence of the First Respondent’s name is appreciated. However, the competition between businesses must be fair and must not result in the likelihood of mistaken association, whether real or perceived. To thrive, businesses aim to distinguish themselves from other businesses. One of the ways businesses distinguish themselves is by name. They invest resources to distinguish their products or services from one down the street. If a business has invested time and resources in distinguishing itself in the market, the inappropriate mistaken association may cause injury to its business. Moreover, the reading of S 11(2) (iii) specifically protects the registered trade mark. It is submitted that the legislature foresaw a scenario where a specific name, which under normal circumstances, may be used by another by virtue of them being named as such. However, because in the business world, standing out and distinguishing one’s business from the rest determines the success and sustainability of the business, the legislature saw it prudent to protect those who have built goodwill and registered a mark by which they wish to be distinguished’.[19]

[37]     The Tribunal’s different approaches and inconsistent reasoning in disputes relating to names that are the same as those of company incorporators or directors is concerning. This makes it difficult for those who approach this Tribunal to have certainty regarding the interpretation and application of the law and the likely outcome of their cases. It does not seem like the facts of all these cases which involved the same Applicant raising the same complaint against different respondents justified different outcomes. However, without adequate guidance from Superior Courts regarding the current legal position relating to companies that registered as their names the names of its incorporators or directors, it seems like this Tribunal is likely to continue to issue inconsistent decisions on this matter depending on who is presiding over the matter. It is important however, to assess whether registering a company on one’s own name can be a defence against allegations of trade mark infringement in South Africa.

E            APPLICABLE LAW AND ANALYSIS

i)            Overview

[38]     In my view, the issue is not and cannot simply be whether on a comparison of the First Respondent’s name and the Applicant’s trade mark(s), there is a reasonable likelihood of confusion if both are to be used together in a normal and fair manner and the ordinary course of business. In this case, the First Respondent’s surname is MONDI, a factor that should not and cannot be ignored. Before addressing this issue, there is a need to first briefly summarise the law dealing with names that infringe upon registered trade marks in South Africa.

ii)          Approaching the Tribunal

[39]     In terms of section 160(1) of the Companies Act, the Applicant is entitled to apply to this Tribunal to determine whether the First Respondent’s company name or the use thereof satisfies the requirements of this Act.

[40]     In terms of section 160(2) of the Companies Act, the Applicant was obliged to approach this Tribunal within three months of the delivery of the notice regarding the offensive name on good cause shown at any time after the registration of the offensive name. In this case, after discovering the registration of the First Respondent’s name, the Applicant sent two letters of demand to the First Respondent on 21 October 2021 and 18 January 2022 respectively. This application was issued with the Tribunal on 07 March 2023 and the Tribunal’s officials confirmed receipt thereof on 08 March 2023. The Application was served on the First Respondent on 09 March 2023. There is no explanation either on the initiating documents or the request for default judgment documents what happened between 19 January 2022 and 06 March 2023, a period of just over thirteen months. Most importantly, what prevented the Applicant from launching this application within three months of serving the First Respondent with the notice and receiving no response thereto. It is not clear why the Applicant had to wait for thirteen months to launch this application.

[41]     Once the application has been referred to it, the Tribunal is obliged in terms of section 160(3) of the Companies Act to decide whether the name subject to the application, registration thereof or its use satisfies the requirements of the Companies Act. The Tribunal has a discretion to make an administrative order directing among others, that a new name must be chosen and that a notice of amendment of the company’s Memorandum of Incorporation must be filed with the second respondent.

iii)        Confusingly Similar

[42]     In terms of section 11(2)(a) and (b) of the Companies Act, the name of one company must not be the same as that of another company. Such a name must also not be confusingly similar to a name, trade mark, mark, word or expression unless such companies are members of the same group of companies. Generally, there are three major statutory requirements that the Applicant must satisfy to succeed. The first requirement is that the First Respondent’s name is the same as its trade mark. The Applicant’s name is MONDI SOUTH AFRICA whereas the First Respondent’s name is MONDI LL. There are two clear similarities between the name and the trade mark. First, the word MONDI appears in both the First Respondent’s name and the Applicant’s trade mark. Second, both the Applicant’s trade mark and the First Respondent’s name contain the word MONDI.

[43]     Despite the similarities, there is a clear fundamental difference between the two, which makes them not to be the same. The word MONDI on the Applicant’s trade mark is followed by the phrase ‘South Africa’ whereas letters LL follow the word MONDI on the First Respondent’s name. The authors of Henochsberg on the Companies Act 71 of 2008 (2022) 49, correctly argue that for a name to be the same for the purposes of section (2)(a) of the Companies Act with a registered trade mark it must be identical rather than “similar to” such a trade mark. It is not clear how an ordinary consumer when viewing the First Respondent’s name would associate the products or services offered by the First Respondent to the Applicant.

[44]     The second requirement that the Applicant must satisfy is that the First Respondent’s name is confusingly similar to its trade mark and that they do not fall within the same group of companies. The word ‘similar’ in the context of section 11(2)(b) of the Companies Act entails the marked resemblance or likeness that the offending name should immediately bring to mind the well- known trade mark.[20] Further that ‘[m]ere similarity is also not sufficient, it must be confusingly so’.[21] The phrase confusingly similar can be explained as the reasonable likelihood that ordinary members of the public, or a substantial section thereof may be confused or deceived into believing that the goods of the First Respondent are the goods or merchandise of the Applicant or are connected therewith.[22] “Whether there is such a reasonable likelihood of confusion or deception is a question of fact to be determined in the light of the particular circumstances of the case.”[23]

[45]     In this case, it is difficult to see how without adequate information being placed before the Tribunal regarding the business activities of both the Applicant and the First Respondent it can be established that a substantial number of persons will probably be confused as to the origin of the First Respondent’s goods or the existence of the connection of such goods and services to the Applicant. To properly determine the matter, the Tribunal ought to have had the benefit of adequate information that would have allowed it to adequately compare the First Respondent’s name with the Applicant’s registered trade mark.

[46]     This would have allowed the Tribunal to adequately evaluate similarities and differences between the First Respondent’s name and the Applicant’s trade mark and the likely reaction of the average customer who is aware of the Applicant and its business who would be purchasing the First Respondent’s goods or utilising its services. First Respondent’s name and the Applicant’s trade mark should not only be ‘… compared side by side but consideration must be given to whether the average customer in the market place would probably be deceived or confused by their similarity’.[24] I am neither convinced that the First Respondent’s name is confusingly similar to the Applicant’s trade mark nor that the name was intended to deceive customers.

[47]     There is a general risk that those who use their names or surnames to name their companies may be unfairly prevented from trading, thereby violating their constitutional rights.[25] In Bata Ltd v Face Fashions CC, the Supreme Court of Appeal cautioned that:

‘[i]f the word “similar” is given too extensive an interpretation the section might have the effect of creating an unacceptable monopoly to the proprietor of a trade mark and thus unduly stultify freedom of trade. I doubt whether the legislature could have intended such a result’.

[26] 2001 (1) SA 844 (SCA) para 14.

[48]     The third requirement is that the name of one company should not falsely imply, suggest, or reasonably mislead a person into incorrectly believing that it is associated with another company. This requirement starts with the deliberate act required from the First Respondent or its sole director. They ought to have acted intentionally and dishonestly. There is no evidence that the First Respondent falsely implied that its goods and services are associated with the Applicant. This requirement also requires an impression to be created in the minds of customers who may be mislead without any active action by the First Respondent into believing that its goods and services are associated with the Applicant. It will be difficult to determine this without information relating to the business activities of both the First Respondent and Applicant.

[49]     Unfortunately, section 11 of the Companies Act in its entirety does not address the issue of company incorporators or directors who register companies using their names and surnames. This creates an impression that this assessment is irrelevant when a surname or name has been accepted by the Second Respondent and there is an allegation by an existing company that such a name or surname infringes its registered trade mark. This is a direct cause of inconsistent decisions by the Tribunal. Just like in Tsogo Magifix, I am not convinced that the First Respondent’s name does not satisfy the requirements of section 11(2)(a) and (b) of the Companies Act. Simply because the source of the name is known and there is no evidence that points to bad faith, deceit, intention to cause confusion and desire to unlawfully take advantage of the Applicant’s reputation and goodwill against the First Respondent.

[50]     Section 11(2)(c) of the Companies Act makes it explicitly clear that the name of one company must not falsely imply or suggest or be presented is such a way as to reasonably mislead a person to incorrectly believe that such a company is part of or associated with another company. In this case, it is clear that the First Respondent’s name was influenced by the First Respondent’s sole director. It is a pity that the First Respondent’s director chose not to participate in these proceedings. The difficulty with these cases is that established companies register trade marks in different classes which suggests that they operate in variety of industries and markets, which may not be necessarily the case. When they lodge their trade mark infringements complaints with the Tribunal they do not state exactly what their business activities are and generally rely on what is contained in all the identified classes and business activities listed therein. In the context of companies registered using the names of their directors or incorporators, the fact that most on these cases are unopposed, makes it even harder to carefully test whether as a matter of course, these names infringe upon registered trade marks as alleged.

[51]     This prevents the assessment of other factors, which may well be important such as first, whether at the time of registering companies using their names, incorporators or directors wanted to take advantage of their own family names within their respective communities or merely wanted to pass off well known trade marks. Secondly, whether directors were or ought to have been aware of registered trade marks and businesses of those who own such trade marks. Thirdly, whether they intentionally and unlawfully wanted their goods and services to be associated with those provided by companies that own registered trade marks. Fourthly, whether they indeed are competitors of owners of registered trade marks. Fifthly, whether well-known companies that own registered trade marks have presence in communities where new companies are operating with a view to determine whether potential customers of these companies are likely to associate their goods and services with well-known companies that own registered trade marks. Sixthly, whether new companies have ambitions of expanding beyond their current locations or expanding into business activities of trade marks owners.

[52]     These are considerations that can be taken for granted. However, upon serious reflection one may find that a company that is well known for hospitality business can complain about a company that bears the name of its director that specialises in plumbing, established by a person who is well known for his plumbing skills in his community who had just been advised to open a company to formalise his or her business. Surely, under such circumstances such a company should not be ordered to change its name. Unfortunately, it does not seem like the law dealing with infringement of trade marks currently allows for such assessments.

[53]     The Tribunal in Tsogo Events commented on the need to protect well-known and established companies to prevent small companies from unfairly competing with them. It used McDonald as an example. With respect, I think the broader issue relating to trade and business was missed with this analogy. While it might be true that small players may unfairly take advantage of trade marks and reputation of well-established businesses, large businesses can also unfairly suffocate small businesses which have no chance or desire to compete with them. What if a person called McDonald establishes a shoe repair business which he registers as a company using his own name in a remote area where McDonalds is unlikely to even establish an outlet? When McDonalds discovers this company, should it be allowed to object to this company’s name? I doubt whether this would be constitutionally complaint. I think context should matter in these kinds of cases.

[54]     I agree with the approach followed by this Tribunal in Tsogo Magifix as informed by Superior Courts precedents in Boswell Circus and Policansky cases. People who wish to start businesses using their own names should be allowed to do so provided they are not dishonest or use their names to take unfair advantage of the reputation and goodwill of companies that own registered trade marks.

[55]     The Applicant also relied on Ninos Coffee Bar & Restaurant CC v Ninos Italian Coffee & Sandwich Bar CC and another.[27] In this case, the parties were involved in the restaurant and coffee bar businesses. The two companies were direct competitors. The Applicant accused the Respondent of unlawfully passing off on its business. This case is clearly distinguishable from the current case where there is no allegation or even proof of unlawful competition in the form of passing off. Reliance on this case seems to be misplaced.

[56]     This case is about the alleged infringement of the Applicant’s trade mark. In terms of section 34(1) (a) of the Trade Marks Act,[28] the rights acquired through the registration of a registered trade mark are infringed by:

‘The unauthorised use in the course of trade in relation to goods or services in respect of which the trade mark is registered, of an identical mark or of a mark, so nearly resembling it as to be likely to deceive or cause confusion’.

[57]     The Appellate Division (as it then was) in Plascon-Evans Ltd v Van Riebeeck Paints (Pty) Ltd,[29] held that:

‘in an infringement action the onus is on the plaintiff to show the probability or likelihood of deception or confusion. It is not incumbent upon the plaintiff to show that every person interested or concerned (usually as customer) in the class of goods for which his trade mark has been registered would probably be deceived or confused. It is sufficient if the probabilities establish that a substantial number of such persons will be deceived or confused. The concept of deception or confusion is not limited to inducing in the minds of interested persons the erroneous belief or impression that the goods in relation to which the defendant's mark is used are the goods of the proprietor of the registered mark, i.e. the plaintiff, or that there is a material connection between the defendant's goods and the proprietor of the registered mark; it is enough for the plaintiff to show that a substantial number of persons will probably be confused as to the origin of the goods or the existence or non- existence of such a connection’.

[58]     The Applicant relies heavily on the concept of the likelihood of confusion. An argument for deception was not made and there is no evidence to suggest that the First Respondent intended to deceive anyone into thinking that its services and products are associated with those of the Applicant. It is difficult to adequately assess the issue of confusion when business activities of the parties are not sufficiently placed before the Tribunal. The only thing that has been placed before the Tribunal is different classes where the Applicant registered its Trade Marks. Each class has several items and it is not clear as to what are the exact business activities of the Applicant under such classes.

iv)        Own name

[59]     The silence of the Companies Act on incorporators and directors registering companies using their own names or surnames does not appear to be the end of the inquiry. However the Tribunal, without referring to any provision in Companies Regulations, 2011, in Tsogo Magifix incorrectly in my view held that:

‘The applicant further contends for a case premised on the provisions of the trade marks legislation. It is asserted that the first respondent or the use of the first respondent’s name amounts to trade mark infringement is terms of section 34(1)(a) of the Trade Marks Act. I consider it trite by now that this Tribunal does not determine company names on any other basis than the provisions of the Companies Act, as complemented by the Companies Regulations, 2011. Therefore, reliance on the Trade Marks Act by the applicant is erroneous’.[30]

[60]     The Tribunal is not established in terms of the Regulations but the Companies Act. In terms of section 180(3) of the Companies Act, ‘[a]t the conclusion of adjudication proceedings, the presiding member must issue a decision together with written reasons for the decision’. When compiling reasons, it cannot be that the Tribunal member is restricted to the provisions of the Companies Act in a Constitutional democracy such as South Africa. It is important to have regard to the Constitution of the Republic of South Africa, 1996 and all the relevant laws that would assist is reaching a just decision.

[61]     Section 195(1) of the Companies Act empowers the Tribunal or its presiding member to adjudicate any application brought to the Tribunal in terms of the Companies Act and make any order provided for in the Companies Act. This provision does not prevent members of the Tribunal from having regard to other relevant legislation when adjudicating disputes brought to it. What is ultimately required is that the order granted by the Tribunal must be granted within the confines of the powers provided to the Tribunal by the Companies Act.

[62]     When dealing with name disputes in the context of infringement of trade marks, the Tribunal is entitled to have regard to the provisions of the Trade Marks Act. This Act is directly referred to in section 11 of the Companies Act. There is no basis upon which to ignore the relevant provisions of the Trade Marks Act when they are clearly necessary and relevant. Section 34(2)(a) of the Trade Marks Act deals with names and surnames used for the purposes of registering companies. It provides that:

‘[a] registered trade mark is not infringed by any bona fide use by a person of his own name, the name of his place of business, the name of any of his predecessors in business, or the name of any such predecessor’s place of business; Provided that paragraph (a) shall not apply to the name of any juristic person whose name was registered after the date of registration of the trade mark: Provided further that the use contemplated in paragraph (a), (b) or (c) is consistent with fair practice’.

[63]     There are two important issues that arise from section 34(2)(a) of the Trade Marks Act. The first issue is that a person who establishes a company can use his own name as the name of the company even if that name may be the same as a registered trade mark. Provided such a name is used in good faith. In Ninos Coffee Bar & Restaurant CC v Ninos Italian Coffee & Sandwich Bar CC and another, the court quoted Baume & Co Ltd v AH Moore Ltd,[31] it was held that ‘[b]ona fide use in section 34(2)(a) means “… the honest use by the person of his own name without any intention to make use of the goodwill which has been acquired by another trader”’. Even in this context, this case does not come to the assistance of the Applicant because there is no allegation let alone evidence that seek to demonstrate that the First Respondent has been dishonest in the use of its name such that it takes unfair advantage of the Applicant’s goodwill. Without referring to any South African authority, the court said that this section requires the use of full names and that the surname does not suffice. [32] There was no South African authority for this proposition and its correctness is doubtful. If I am right that section 34(2)(a) of the Trade Marks Act is applicable, the Applicant’s complaint should be dismissed on this point.

[64]     The second issue addressed by section 34(2)(a) of the Trade Marks Act is that the defence of registering companies using the incorporators and directors names and surnames when complaints of trade mark infringements are raised is not available to those who registered companies after the date of registration of trade marks alleged to have been infringed.[33] While the rationale for this provision is certainly not clear and might well not be constitutionally complaint, this appears to be the end of the inquiry. First Respondent was registered in 2021. At the time of the First Respondent’s registration, the Applicant had already registered its trade marks.

[65]     If the First Respondent’s company was registered after the Applicant’s trade mark was registered, then the Applicant ought to succeed on this ground. It appears that this is notwithstanding, the fact that any wrong doing or unlawful intentions have been proven against the First Respondent or that its Director. Also that when forwarding a name to the Second Respondent may have not been aware of the existence of the Applicant. Unfortunately, the Tribunal is bound by this provision and this is the basis upon which these cases should be decided by the Tribunal, until either the legislature or Superior Courts have pronounced otherwise.

F            CONCLUSION

[66]     While it is somewhat concerning, it appears that where incorporators or directors of companies registered companies under their own names and or surnames which attracted complaints of trademark infringements, the Tribunal should dispose of such complaints in terms of section 34(2)(a) of the Trade Marks Act. If these companies were registered before trade marks were registered, it is important to adequately assess the bona fide of incorporators or directors. In this matter, this provision dictates that the Applicant should succeed simply because its trade marks were registered before the registration of the First Respondent.

[67]     If indeed section 34(2)(a) of the Trade Marks Act is dispositive of these kinds of cases, it is important that when companies wish to challenge the registration of other companies that bear the names of their incorporators or directors on the basis that they infringe upon their registered trade mark, they provide the Tribunal with date upon which such trade marks were registered.

ORDER

[68]     I make the following order:

[68.1] The First Respondent is ordered in terms of section 160(3)(b)(ii) of the Companies Act to initiate a process that will lead to the change in its name to one that does not incorporate the word ‘MONDI’.

[68.2] The First Respondent is ordered to change its name within ninety (90) calendar days of the date of receipt of this order by filing a notice of amendment of its Memorandum of Incorporation.

[68.3] Should the First Respondent fail to initiate a process of changing its name as ordered in paragraph 32, the Second Respondent is directed to change the First Respondent’s name to its registration number.

[68.4] The Registrar of this Tribunal is ordered to serve on the First and Second respondents this order and its reasons.

[68.5] There is no order as to costs since the matter was not opposed.

Professor Marumoagae