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[2006] ZAGPHC 209
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Ussher Investment (Pty) Ltd v Elite Trade Centre and Others (6027/2005) [2006] ZAGPHC 209 (26 May 2006)
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IN THE HIGH COURT OF SOUTH AFRICA
(TRANSVAAL PROVINCIAL DIVISION)
CASE NO: 6027/2005
DATE: 26/5/2006
UNREPORTABLE
In the matter between:
Ussher Investment (PTY) LTD Applicant
and
Elite Trade Centre First Respondent
Carrim Group Second Respondent
The Minister of Safety and Security Third Respondent
Mister Movers CC Fourth Respondent
JUDGMENT
BOSIELO, J
THE FACTUAL BACKGROUND
[1.1] The applicant is the registered owner of the USSHER trade mark which is currently in existence in the Republic under trade mark no 99/06528 duly registered in the South African Register of Trade Marks under the Trade Marks Act 194 of 1993 (the Trade Marks Act). The mark registered in respect of this trade mark is “Green & Yellow” (Colour Mark) under Class 12 wheelbarrows.
[1.2] It common cause that both first and second respondents are wholesalers in the building industry, who in the course of their normal business activities offer, sell and supply wheelbarrows to the general public. It follows logically therefore that the respondents and the applicant are trade competitors in the field of manufacturing, assembling, selling and/or distributing wheelbarrows to the public in general.
[1.3] During 2004, the applicant became aware that first and second respondents were importing, assembling, distributing and/or selling wheelbarrows bearing the applicant’s trade mark to the public in general. As a result, the applicant embarked on a serious investigation of this occurrence which threatened to infringe its trade mark. In the course of its investigations, the applicant came across a number of wheelbarrows which are graphically depicted on annexures PCH4-PCH5. It is not disputed that these goods were sold and distributed to first respondent by second respondent. This fact is supported by an invoice “Annexure PCH10” attached to the papers. It was furthermore common cause that these wheelbarrows were intended to be sold and distributed to various retailers and consumers in the Republic. It is clear from annexure PCH4-PCH5 that all the wheelbarrows reflect a green pan, reinforced by a black frame complimented by a steel-hubbed rubber tyre with a yellow rim. It is not in dispute that this colour combination viz. “Green and Yellow” is the same if not confusingly and deceptively similar to the applicant’s registered trade mark.
[1.4] During 22 October 2004 and as a sequel to a formal complaint lodged by the applicant with the South African Police Services, (SAPS) in terms of section 3 of the Counterfeits Goods Act 37 of 1997, the offending goods described in para 3.1 above were seized and removed by inspectors attached to the South African Police Services (SAPS) from the premises of the first respondent. It is common cause that proper inventory reflecting all the goods which were seized was prepared and the offending goods were removed and stored at the premises of fourth respondent.
[1.5] It is furthermore common cause that the offending goods which were supplied by second respondent to first respondent were not authorised, produced, ordered or supplied by applicant and further that such goods did not emanate from the applicant or from any third party authorised by the applicant to manufacture or use any of the applicant’s USSHER trade marks. Of great importance, the applicant avers that the infringing marks, which have been applied to the offending goods are confusingly and deceptively similar to the applicant’s USSHER trade mark and/or are colourable invitations thereof. The applicant avers further that the use of the infringing marks on the offending goods makes such offending goods substantially identical copies of the applicant’s protected goods, which renders them as items calculated to be confused with or to be taken as being the applicant’s goods.
[1.6] Of great significance, the applicant avers further that it has made extensive use of the trade mark “GREEN and YELLOW” on the goods themselves, as well as promotional and packaging materials, labels, booklets, brochures and various advertisements as fully set out in “Annexure PCH3”. Furthermore, the applicant disclosed figures which show that its advertising expenses have since 2000 escalated from R 1 790 023 per year to R 2 697 592 in 2003. According to applicant this aggressive marketing and advertising campaign has resulted in the sales of its products increasing from R 122 million in 2000 to R 193 million in 2003. As a logical consequence, the applicant avers that as a result of its extensive use of its trade mark, the trade mark has become distinctive of the applicant’s wheelbarrows and forms the bedrock of its commercial reputation and goodwill attached to its wheelbarrows. The applicant avers that, it invested a lot of money, time and effort over a lengthy period to build its distinctive mark and its concomitant commercial reputation and value. It is the applicant’s case that the respondents, having become aware of the distinctive quality of its trade mark which has acquired an extensive niche market, are using the applicant’s trade mark which is well-known in the special market of wheelbarrows, for the sole purpose of capitalising on the commercial value of the trade mark.
[1.7] On the other hand, although the first respondent admits having possessed approximately 205 wheelbarrows all of which were painted in the green and yellow trade mark of the applicant, it denies that it knew of the existence of such a trade mark and further that it had the intention to infringe the trade mark. In fact in its response to the applicant’s letter of demand dated 9 March 2005 “Annexure PCH10”, first respondent indicated its intention to remove the applicant’s cause of complaint, by having the offending goods re-painted any colour other than the applicant’s green and yellow. Such a step, so stated first respondent, was intended to remove any similarity between its wheelbarrows and those of the applicant. I find it necessary to state that first respondent tendered the applicant’s costs on a party and party scale. Suffice to state that this tender was not accepted by the applicant who proceeded with the present application.
[1.8] Second respondent, although admitting that it sold and supplied wheelbarrows to first respondent which were painted in the applicant’s green and yellow colours, vigorously dispute that the combination of “green and yellow colours” has any distinctive qualities. It is the second respondent’s stance that the wheelbarrows which were sold to first respondent (which have green-coloured pans and yellow wheels) are not substantially identical to the applicant’s wheelbarrows nor are they calculated to be confused with or to be taken as being the applicant’s products. Furthermore, the second respondent avers that, although the colour combination green and yellow is duly registered as the applicant’s trade mark, it is not capable, either inherently or by reason of prior use, of distinguishing wheelbarrows manufactured by applicant from other wheelbarrows in the market place. Second respondent applied, in a counter-application, on this ground alone (lack of distinctiveness) to have the applicant’s trade mark of green and yellow should be expunged from the register of trade marks. In conclusion, the second respondent asserts that by allowing applicant to enforce its trade mark of green and yellow is akin to entitling applicant to the exclusive use and sole monopoly of ordinary colours of green and yellow. According to second respondent such a practice is unfair and contrary to public policy as it is calculated to stifle if not completely destroy free and open competition in the market. Second respondent maintains that the mere colour combination of green and yellow is generic, with no distinctive quality. Furthermore second respondent denies that the colour combination “green and yellow” is recognised in the South African market place as representing or being synonymous with the applicant’s wheelbarrows. Logically, second respondent denies that the applicant’s registered mark is an asset of enormous commercial value to the applicant. However, second respondent gave an undertaking as a compromise, although not admitting that its goods are counterfeit goods, that it will desist from buying, selling and distributing wheelbarrows painted in the green and yellow colour combination in South Africa.
NATURE OF RELIEF SOUGHT
[2.1] The applicant approached this court for the following relief:
[2.1.1] that the goods confiscated on 22 October 2004 in terms of the Counterfeits Goods Act of 1997 from the first respondent’s premises and which were supplied by second respondent be declared to be counterfeit goods within the meaning of the Counterfeit Act;
[2.1.2] that the goods offered for sale by first and second respondents which bear the trade marks which are similar or deceptively or confusingly similar to the applicant’s registered trade mark no 1999/06528 be declared counterfeit goods within the meaning of the Counterfeit Goods Act;
[2.1.3] that first and second respondents be ordered to deliver up to the applicant all such goods identical or similar to the goods which bear the applicant’s USSHER trade mark, which still remain in its possession or under its control, failing which the Sheriff of the above Honourable Court be authorised and directed to attach the goods and hand them over to the applicant forthwith;
[2.1.4] that first and second respondents be interdicted and restrained from infringing the applicant’s rights flowing from the registration of its USSHER trade mark by using, in relation to the same goods (wheelbarrows) in respect of which the applicant’s aforesaid trade mark is registered or similar goods, the identical mark or any marks so similar thereto as to be likely to deceive or cause confusion, or from aiding or abetting any other person to do so;
[2.1.5] interdicting and restraining first and second respondent from passing-off their products as those of the applicant or as being associated with those of the applicant by manufacturing, and/or importing, selling or disposing of the product using the USSHER trade mark or marks confusingly similar thereto as are to be likely to deceive or cause confusion;
[2.1.6] that first and second respondents are interdicted from passing-off their wheelbarrows as those of the applicant’s GREEN AND YELLOW wheelbarrow as depicted on annexure “PCH3”, by using, in the course of trade, the GREEN AND YELLOW get-up as depicted in annexures “PCH4” and “PCH5”, without clearly distinguishing the said wheelbarrows as their own;
[2.1.7] that the first and second respondents be interdicted and restrained from dealing in counterfeits goods bearing the Ussher trade mark of the applicant and/or marks that are colourable imitations thereof;
[2.1.8] that an enquiry be held in terms of section 34(4) of the Trade Mark Act 194 of 1993 as to the reasonable royalty or damages payable by the first and second respondents to be calculated on the basis of the reasonable royalty which would have been payable by a licence for the use of the Ussher trade mark or mark so nearly resembling it, subject to such procedures for conducting such enquiry as the court may deem it;
[2.1.9] that first and second respondents shall disclose in terms of section 10(1) of the Act, within 7 (seven) days of the date of service of this order, in writing, to the applicant the name and physical address of the supplier of the counterfeits goods;
[2.1.10] that first and second respondents be ordered to pay the costs of this matter, jointly and severally, such costs to include the costs incurred by the applicants in removing and storing the counterfeit goods;
[2.2] As I have already stated in para 1.9 (supra), in addition to opposing the application on the merits, the second respondent filed a counter-application for the expungement of the trade mark “GREEN AND YELLOW” from the register of trade mark.
[2.3] Although first respondent persisted in his tender to repaint the offending goods in a different colour, it vehemently opposed any award of costs to applicant which were incurred after its written tender of 9 March 2005 as per annexure “201”.
[3.1] LEGAL SUBMISSIONS
[3.1] In essence, the basic foundation of the applicant’s case as lucidly and skilfully set out by Mr Morley SC, is that the applicant, being the registered proprietor of the trade mark “GREEN AND YELLOW” trade mark no 99.06528, is entitled to be protected against any unlawful and unauthorised infringement of the trade mark. He submitted, based on the respondents’ admissions, that the wheel-barrows which were seized from first respondent by SAPS on 22 October 2005 were painted in the green and yellow colour combination, that the goods are colourable imitations of the applicant’s protected goods in terms of the Counterfeit Act and further that they were calculated to be confused with or to be taken as being the protected goods of the applicants or manufactured, produced or made under its licence or authority. Furthermore, Mr Morley argued that the conduct of the respondents amounts to a contravention of section 34(1)(a) of the Trade Marks Act. In conclusion, Mr Morley argued with vigour that it is clear from the colour combination reflected on Annexures PCH4/28 and PCH4/29, being the offending goods, that their green and yellow colour combination is so strikingly similar to the registered USSHER mark as to be likely to deceive or cause confusion in the minds of a substantial number of ordinary purchasers as opposed to an astute or discerning buyers of wheelbarrows.
[3.2] Concerning the distinctive character of the registered mark, Mr Morley argued that, the registered mark enjoys an inherently distinctive character. In the alternative, he submitted that through extensive use of the trade mark “GREEN AND YELLOW” over a period of time, the registered mark has acquired a distinctive character which must enjoy the full protection of the law. He submitted further that in real life, it is the distinctive character of the green and yellow colour combination which will remain imprinted and engraved in the mind of the consumer and that any variation of the combination of colours, will not be sufficient to avoid a likely deception or confusion, particularly when one bears in mind that ordinary purchasers do not rely so much on a photographic memory but imperfect general impressions which, in many instances, are compounded by imperfect human recollection.
[3.3] On the other hand, Mr Cassim SC for the respondents argued, with admirable skill and zeal that there is no special or distinctive character inherent in the registered mark “GREEN AND YELLOW’. He argued further that this is the most plausible reason why the applicant deemed it necessary and expedient to embark on an extensive marketing and advertising campaigns, accompanied by astronomical costs. According to Mr Cassim this was necessary to promote this registered mark so as to make it distinctive. In addition, Mr Cassim argued that the colours GREEN AND YELLOW are ordinary, generic and common place colours that it would be unfair, unjustified and against public policy to allow a person to claim sole monopoly to the exclusive use of such colours. In the words of Mr Cassim, such a practice is monopolistic and will have the effect of stifling competition in the market, thus denying the consumers the benefit of competitive prices. Concerning the likelihood of deception or confusion in the minds of the notional ordinary and reasonable purchaser caused by the use of the same colour combination on wheelbarrows, Mr Cassim contended that the respondent’s wheelbarrows are clearly distinguishable from those of the applicants as the applicant’s wheelbarrows have the name LASHER emblazoned on them. By logical conclusion, Mr Cassim submitted that there is no likelihood of deception or confusion. As a consequence, Mr Cassim urged me to issue an order for the expungement of the registered mark “GREEN AND YELLOW” trade mark no 99/06528 due to its lack of inherent distinctiveness.
[4] CONCLUSION
[4.1] It is common cause that applicant is the registered owner of trade mark “GREEN AND YELLOW” trade mark no 99/06528, which pertains to class 12 wheelbarrows. It is furthermore common cause that during 2004, the second respondent sold and supplied to first respondent a substantial number of wheelbarrows painted in a green and yellow colour combination. What is of special importance is that at least since 2000 the applicant has been manufacturing, distributing and offering for sale wheelbarrows painted in the colour combination green and yellow. It is clear from the applicant’s affidavit that the sale of the applicant’s wheelbarrows painted in the registered mark “GREEN AND YELLOW” has increased phenomenally over a period of four years to reach a peak of the R 4 million income per year. What is furthermore crystal clear is that the applicant has embarked on extensive and aggressive marketing and advertising campaigns to market its products (wheelbarrows) bearing its registered trade mark “GREEN AND YELLOW”. It is the applicant’s case that during 2003, it spent R 2 697 592 to fund its various marketing and advertising campaigns of its wheelbarrows bearing its registered mark, “green and yellow”. For its protection the applicant relied heavily on section 34(1)(a) of the Trade Mark Act which provides that
“34(1) The rights applied by registration of a trade mark shall be 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…”
Concerning the importance and rationale of section 34(1)(a), I find it apposite to refer to the case of Laugh It Off Promotions CC v SAB International (Finance) BV 2006(1) SA 144 (CC) at page 161 para 37 where the learned Moseneke J (as he then was) stated the following:
“[37] It is now expedient to ascertain the purpose of the section. The rationale for the protection of well-known marks envisaged in the section appears in the following observations by Rutherford.
“The preservation of the reputation and unique identity of the trade mark and the selling power which it evokes is of vital importance to the trade mark proprietor in order to protect and retain his goodwill….. The proprietor of the trade mark usually expends vast sums of money through advertising in order to build up the reputation and selling power or advertising value of his trade mark. The growth of his business is dependent upon the growth of the meaning and importance of his trade mark. It is therefore only fair that he should be entitled to protect this valuable asset against misappropriation…..”
To my mind, there is no reason in law why the applicant cannot rely on the protection afforded by the Trade Mark Act against any threat of misappropriation of his valuable asset.
[4.2] In my view, the proven facts establish clearly that the respondents offered for sale or possessed for trade purposes, wheelbarrows which reflect a mark so nearly resembling the applicant’s USSHER trade mark which is likely to deceive or cause confusion in the minds of ordinary and reasonable purchasers of wheelbarrows. It is important to bear in mind in this respect that, in normal and everyday life experiences, consumers do not have the benefit of observing and comparing the wheelbarrows of the applicant and those of respondent standing side by side on the same shop-floor. More often than not an ordinary and reasonable purchaser relies on the overall and general impression which a particular product has made on his/her mind and his/her recollection of the product at the material time of the purchase. To a large extent, this process is largely influenced by the distinctive and dominant characteristic of the items in issue, which in this case would undoubtedly be the green and yellow colour combination. In my view, it is therefore imperative that due cognisance be taken of the fact that most of the times, the consumer relies on his/her imperfect perception accompanied by imperfect memory of the dominant characteristic of the item to be purchased. It is precisely against this backdrop that the danger of confusion and deception looms large, particularly where the products are deceptively or confusingly similar, as clearly shown by a comparison of the applicant’s wheelbarrows as depicted on “Annexure PCH 3” and the respondents’ wheelbarrows as they appear on “Annexures PCH4-PCH5” To my mind, the untrained eye of an ordinary as opposed to astute buyer, is likely to confuse the wheelbarrows of the respondents, which are clothed in the colour combination “green and yellow” as those of the applicant as they are deceptively and confusingly similar to those of the applicants. It follows logically that the respondents are guilty of having unlawfully infringed the applicants trade mark number 99/06528. I found ample authority for my finding in the dictum of Corbett JA, as he then was, in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) at 64O G-I where the learned judge stated:
“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, ie 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.”
[4.3] As I have alluded to above, it is not in dispute that second respondent, received the wheelbarrows for purpose of offering them for sale to the general public. What is of crucial significance is that it is common cause that these wheelbarrows were painted in exactly the same colour combination as the applicant’s registered mark “GREEN AND YELLOW”. According to the version of one William Walker Vergottini, who avers that he has been trading in the applicant’s wheelbarrows since 2002, the green and yellow wheelbarrows have been marketed as the applicant’s product. He furthermore averred that the most distinctive or recognizable feature of the applicant’s wheelbarrows is the distinctive colour combination of “green and yellow”. Of great importance, Vergottini asserted clearly that people in the market (consumers) have come to recognize wheelbarrows bearing the colour combination “green and yellow” as the applicant’s products, which are well-known for superior quality. He concluded by stating that the applicant’s name and reputation stands to be seriously and adversely affected if another trade competitor was allowed to distribute or deal in wheelbarrows of a poor quality which are painted green and yellow, as this would clearly amount to an imitation of the applicant’s wheelbarrows. It suffices to state that similar views were expressed by one Robert William Lawton, who has also been extensively involved in the manufacture and tool industry in South Africa for the past 37 years.
[4.4] In determining the vexed question whether the respondents’ action which is described above amount to passing-off, I found useful guidelines in the case of Capital Estate & General Agencies (Pty) Ltd & Others v Holiday Inns & Others 1977(2) SA 916 (A) at 929 C where the learned Rabie JA (as he then was) enunciated the test as follows:
“…… The wrong known as passing off consists of a representation by one person that his business (or merchandise, as the case may be, is that of another, or that it is associated with that of another and in order to determine whether the representation amounts to passing-off, one enquires whether there is a reasonable likelihood that the members of the public may be confused into believing that the business of the one is or is connected with, that of another.”
See also Premier Trading Company (Pty) Ltd v Sportopia (Pty) Ltd 2000(3) SA 259 (SCA) at 266 H – 267 E.
Furthermore, I found the following dictum by Van Zyl J in the unreported judgement of Weber-Stephen Products Co. v Alrite Engineering (Pty) Ltd (Case no 5757/87) at page 8 to be both instructive and illuminating where he stated that:
“….. the applicant must prove that the respondent “has used or is using, in connection with his own goods a name mark, sign or get-up which has become distinctive” and that the feature or features on which the applicant relies “ has acquired a meaning or significance so that it indicates a single source of goods of which that feature is used”
See also Adcock-Ingram Products Ltd v Beccam SA (Pty) Ltd 1977 (4) SA 434 (W) at 436 H – 437 A.
[4.5] It is clear from the proven evidence, in particular, the evidence of both Vergotthini and Lawton that, the applicant has through extensive use of its trade mark acquired enormous reputation in the market relating to its green and yellow wheelbarrows, particularly as they are known to be of a high standard and good quality. Significantly, both of them confirm that the mark green and yellow is widely and popularly known as being the distinctive mark of the applicant’s product. Stripped of any niceties, the kernel of the evidence of Vergottini and Lawton is that the applicant, through the extensive use of its trade mark has developed a niche market, particularly in the wheelbarrow category. Of even great significance, is that both Vergotini and Lawton expressed the clear view that any unauthorised use of the applicant’s mark by another trade competitor for similar goods (wheelbarrows), particularly if they are of an inferior quality, will materially undermine the applicant’s trade mark and have a serious and adverse effect on its commercial reputation. Based on the aforegoing, I have no hesitation in finding that the actions of the respondents amount to passing-off of their wheelbarrows, discreetly disguised or clothed in the applicant’s “green and yellow” mark or “get-up”, as those of the applicant. I am particularly fortified in my view by the fact that it is common cause that the respondents’ wheelbarrows, which are painted in green and yellow have no other features or mark to distinguish them from the applicant’s wheelbarrows, which are painted in the same colour combination, GREEN AND YELLOW. I found the dictum by Corbett JA, as he then was, in Plascon-Evans (supra) at p 642 E-F to be illuminating where he stated that:
“As I have emphasised, however, the comparison must not be confined to a viewing of the marks side by side. I must notionally transport myself to the market place (see the remarks of Colman J in Laboratoire Lacharte SA v Armour-Dial Incoprtarted 1976 (2) SA 744 (T) at 746 D and consider whether the average customer is likely to be deceived or confused. And here I must take into account relevant surrounding circumstances, such as the way in which the goods to which the marks are applied are marketed, the types of customer who would be likely to purchase the goods, matter of common knowledge in the trade and the knowledge which such purchasers would have of the goods in question and the marks applied to them.”
[4.6] It should be clear from the aforegoing exposition of the facts that for at least four years, the applicant, in addition to having the mark “GREEN AND YELLOW” registered as a trade mark, was the only one in the industry, using this colour combination for its wheelbarrows. It is worth recalling that the respondents conceded that the infringing goods which were confiscated by the SAPS from first respondent were painted in exactly the same colour combination as the applicant’s registered mark. It is not in dispute that the applicant is the owner of the registered mark. I have already found that by using the applicant’s mark on its wheelbarrows, the respondents have unlawfully infringed the applicant’s trade mark, which gives the applicant the intellectual property rights in respect of the registered mark. See Section 1(i)(ix) of the Counterfeit Goods Act. It follows logically that the applicant’s green and yellow wheelbarrows qualify to be defined as protected goods as they clearly meet the definitional requirements of protected goods in terms of section 1(i)(xvi)(a) and (b) read with section 1((i)(iv)(a) and (b) of the Counterfeit Goods Act which provide that counterfeiting
“(a) means without the authority of the owner of any intellectual property right subsisting in the Republic in respect of protected goods, the manufacturing, procuring or making, whether in the Republic or elsewhere, of any goods whereby those protected goods are initiated in such manner and to such a degree that those other goods are substantially identical copies of the protected goods;
(b) means, without the authority of the owner of any intellectual property right subsisting in the Republic in respect of protected goods, manufacturing, procuring or making, or applying to goods whether in the Republic or elsewhere, the subject matter of that intellectual property right, or a colourable imitation thereof so that the other goods are calculated to be confused with or to be taken as being the protected goods of the said owner or any goods, manufactured, produced or made under his or her licence.”
[4.7] In the circumstances, I am constrained to find, as I hereby do, that the respondents’ wheelbarrows which are painted in the colour combination “green and yellow” and which are therefore, substantially identical copies of the applicant’s wheelbarrows, are counterfeit goods within the meaning of counterfeit goods as defined in Section 1(i)(v) of the Counterfeit Goods Act. I furthermore find that on the facts of this case, the respondents’ wheelbarrows are calculated or likely to be confused with or taken as the applicant’s wheelbarrows by a substantial number of consumers as they are confusingly similar to the applicant’s wheelbarrows and therefore qualify to be classified as colourable imitations of the applicant’s registered trade mark.
[4.8] Concerning the respondents’ application to have the applicant’s trade mark under 1999/06528 expunged from the register of trade marks, the applicant’s main submission is that the mark was wrongly registered and further that it offends against the provision of section 10(2)(a) of the Trade Marks Act in that it is a mark which “is not capable of distinguishing within the meaning of section 9” of the Act. The section of the Trade Mark Act which is relevant to the determination of this issue is section 9 which provides that
“9 Registrable Trade Marks-
(1) In order to be registrable, a trade mark shall be capable of distinguishing the goods or services of a person in respect of which it is registered or proposed to be registered from the goods or services of another person either generally or, where the trade mark is registered or proposed to be registered, subject to limitations in relation to use within those limitations.
(2) A mark shall be considered to be capable of distinguishing within the meaning of subsection (1) if, at the date of application for registration, it is inherently capable of so distinguishing or it is capable of distinguishing by reason of prior use thereof.”
However this section is subject to an important proviso to the effect that:
“Provided that a mark shall not be refused registration by virtue of the provisions of paragraph 2 or, if registered, shall not be liable to be removed from the register by virtue of the said provisions if at the date of the application for registration or at the date of an application for removal from the register, as the case may be, it has in fact become capable of distinguishing within the meaning of Section 9 as a result of use made of the mark.”
[4.9] The evidence which is relevant to resolve this polemic is that of Vergottini and Lawton. I have already alluded to the fact that both Vergottini and Lawton asserted that they have been intimately involved with the applicant’s goods, including the green and yellow wheelbarrows for some time. Due to their exposure to the market, they both assert that they have acquired experience and knowledge in the industry concerning the brands, trading styles, quality and “get-up” of the applicant’s products and other products in the market. Both of them stated unequivocally that, through extensive use over the years, the applicant’s “green and yellow” trade mark has acquired a distinctive characteristic. They furthermore aver that “the colour combination green and yellow” has become synonymous with the applicant’s products and is used and known in the market to distinguish applicant’s products from other products. In essence, it is clear that the applicant’s trade mark of green and yellow is inherently capable of distinguishing the applicant’s products from other products. Furthermore according to Vergottini and Lawson, the applicant’s trade mark possesses huge commercial value for the applicant. In my view, the applicant has the right to protect this valuable asset. As the learned Moseneke J as he then was, held in the Laugh It off case (supra) at 162 G with reference to Rutherford’s work entitled ‘Misappropriation of the advertising value of trade marks, marks trade names and service marks’.
“It has been argued that the protection of trade marks against dilution amounts to the creation of a monopoly in the trade mark. However, this argument ignores the nature of the subject matter which is protected. It is not the mark per se which is protected but the advertising value or selling power of the trade mark which may be the result of inherent uniqueness, but is usually the result of an extensive advertising effort.”
[4.10] It follows logically, in my view, that the respondents’ submission in this regard have been exposed to be devoid of any substance or merit. It is important to take note of the fact that despite the patent significance and materiality of the assertions made by Vergottini and Lawton, the respondents elected not to respond to them in any manner whatsoever. Consequently, I have no reason to reject their evidence which remains uncontroverted and which is not inherently improbable. I find it necessary to reiterate that the respondents bear the onus of proof albeit on a balance of probabilities to prove that the applicant’s mark was wrongly registered. Based on the aforegoing exposition, I find that the respondent failed to discharge their onus.
[4.11] Mr Cassim argued that first respondent should be treated differently to second respondent in that first respondent had made a firm offer to the applicant to desist from any conduct or action which could amount to an infringement of the applicant’s registered trade mark as per “Annexure Z 01”. It is abundantly clear from the fist respondent’s letter dated 9 March 2005 that first respondent offered to repaint the offending goods in any other colour which is different to the green and yellow colour combination to avoid any possibility of its products being confused with those of the applicant. I find it necessary to state that first respondent also offered to pay the applicant’s costs up to that stage on a party and party basis. It suffices to state that nothing came out of this undertaking as first respondent refused to accept the applicant’s counter-proposals which were contained in a letter dated 16 March 2005 attached to the papers as “Annexure Z02”. Mr Cassim argued that I should find that the decision by the applicant to proceed with the application against first respondent is unreasonable if not malicious and that applicant should be ordered to pay first respondent’s costs on a punitive scale.
[4.12] It is clear from “Annexure Z01” that the first respondent’s tender falls far short of what applicant demanded in terms of “Annexure Z0 2”. Given the facts of this matter, I am unable to say that the applicant’s counter-proposals contained in “Annexure Z 02” were either excessive or cumbersome. If the first respondent was genuine in its tender contained in “Annexure Z01”, I find it difficult to understand why it failed to accept the conditions in Z02. Instead first respondent elected to join forces with second respondent to oppose this application to the bitter end. As the learned Marais JA aptly remarked in Williams v Harris 1998(3) SA 970 (SCA) at page 973 D
“Who chooses to ride a tiger will find it difficult to dismount it unscathed.”
As the respondents decided to lock horns with the applicant in this bitterly fought legal battle, they must be willing to bear the consequences. Faced with no reaction from both respondents, I am of the firm view that applicant was entitled to approach the court to have its trade mark protected and enforced. In all fairness, the applicant could not be expected to take a supine attitude faced with the respondents’ conduct which undermined and diluted its registered mark. In this respect, I found the dictum by Moseneke J (as he then was) in the Laugh It off case (supra) at p162 para 39 to be both illuminating and dispositive of this matter where the learned Judge clearly stated:
“[39] Courts in the UK and Europe have considered the purpose of similar anti-blurring protections in their jurisdictions. For instance in Premier Brands UK Ltd v Typhoon Europe Ltd the following was said of the provisions of section 10(3) of the UK Act:
“(T)he owner of…. a distinctive mark has a legitimate interest in continuing to maintain the position of exclusivity he acquired through large expenditures of time and money and that everything which could impair the originality and distinctive character of his distinctive mark, as well as the advertising effectiveness derived from its uniqueness, is to be avoided….. Its basic purpose is not to prevent any form of confusion but to protect an acquired asset.”
[4.12] Having given this matter the best consideration possible and for the aforegoing reasons, I am satisfied that the applicant is entitled to all the protection to which it is entitled in law as the lawful proprietor of the registered trade mark GREEN AND YELLOW NUMBER 1999/06528. In the result, I make an order in favour of the applicant in terms of and incorporating prayers 1, 2, 3, 4, 5A, 7, 8, 9, 10 and 11 as they appear from the applicant’s notice of motion.
L.O. BOSIELO
JUDGE IN THE HIGH COURT
FOR THE APPLICANT: ADV. G. E. MORLEY SC.
INSTRUCTED BY: MESSRS BOWMAN GILFILLAN INC
FOR THE RESPONDENT: ADV. N. CASSIM SC.
INSTRUCTED BY: MESSRS A. W. JAFFER-ATTORNEYS
DATE OF JUDGMENT: 26/5/2006
HEARD ON: 16 SEPTEMBER 2005