"SUCCESSFUL RELIANCE ON A REGISTERED COLOUR TRADE MARK – USSHER INVENTIONS (PTY) LIMITED v SOUTH QUAY IMPORT AND EXPORT CC"
"The life of a trade mark depends upon the promptitude with which it can be vindicated." - Eloff, J, Transvaal Provincial Division.
In March of this year, the High Court (Transvaal Provincial Division) delivered an ex tempore judgment in an interesting case where Ussher Inventions (Pty) Limited relied on the legal protection offered by a registered colour trade mark.
The parties in the case were Ussher Inventions (Pty) Limited (hereinafter referred to as the Applicant) v South Quay Import and Export (hereinafter referred to as the Respondent). The Minister of Safety and Security and counterfeit goods depot "Mister Mover CC" were cited as the Second and Third Respondents respectively, both filed notices to abide by the decision of the court.
The facts of the case can be summarised as follows: the Applicant is the registered proprietor of a trade mark which specifically resided in the colour-combination of green and yellow in respect of wheelbarrows. The business of the Applicant involves the manufacture of builders’ and gardening tools, which reflect the distinctive green/yellow colour combination. It was common cause between the parties that the Applicant had promoted and advertised its distinctive green and yellow products (including its wheelbarrows) in the Republic for a number of years, and had expended some R2, 69 million on such promotion and advertising in the year 2003 alone.
During 2004, the Respondent imported, distributed and/or sold or offered for sale wheelbarrows in South Africa, which wheelbarrows exhibited the distinctive green-yellow combination. A well-known hardware store had received from the Respondent the alleged offending wheelbarrows, after same had been imported by the Respondent. After having been approached by the Applicant, however – which confronted the hardware store with allegations of trade-mark infringement and counterfeiting – the store put up no resistance in surrendering the offending goods. Accordingly, the store took no further role in the proceedings in question before the court, and the Applicant thus sought relief solely against the Respondent as the source of the infringing goods.
The Respondent conceded that the green/yellow combination of the Applicant’s products was well-recognised among persons involved in the hardware industry; that the Applicant was indeed a leading South African manufacturer of wheelbarrows and other hardware tools and that the green/yellow trade mark constituted a "focal point" of the Applicant’s goodwill and reputation in the industry. The Respondent accordingly did not dispute that the green/yellow colour combination was an extremely valuable commercial asset to the Applicant.
The Applicant sought relief in the form of interdictory relief against the Respondent based not only on the Trade Marks Act 94 of 1993 but also on the Counterfeit Goods Act 37 of 1997.
The relief sought under the Trade Marks Act, was in terms of section 34(1)(a) and (b) of the Act. Section 34(1)(a) and (b) deal with the infringement of a registered trade mark and state respectively that:
(1) The rights acquired by registration of a trade mark shall be infringed by:
(a) 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;
(b) the unauthorised use of a mark which is identical or similar to the trade mark registered, in the course of trade in relation to goods or services which are so similar to the goods or services in respect of which the trade mark is registered, that in such use there exists the likelihood of deception or confusion.
The Applicant also sought relief in terms of Section 34(4) which states:
(4) For the purposes of determining the amount of any damages or reasonable royalty to be awarded under this section, the court may direct an enquiry to be held and may prescribe such procedures for conducting such enquiry as it may deem fit.
Prinsloo, J, in the Transvaal Provincial Division, concluded that the conduct of the Respondent indeed amounted to an infringement of the Applicant’s registered trade mark. In this regard, the learned Judge agreed with the point made by the Applicant that wheelbarrows are general household items, purchased by all types of consumers. Indeed, the learned Judge commented that awareness of an item such as a wheelbarrow was not restricted to those involved in the hardware industry – and, importantly – that the possibility of deception or confusion occurring is greater among the general public at large than among "discerning customers".
The Respondent also raised a frivolous argument that it could not be held accountable or blameworthy for the trade-mark infringement alleged, owing to the fact that the Respondent had never actually taken possession of the goods (rather, the Respondent had simply imported the goods in a container, which container had gone straight to the hardware store mentioned earlier in this discussion). This argument was however, not pursued after the Honourable Court was correctly referred to case law which confirms that one who merely encourages, incites or aids and abets another to perform the actual offending act, also himself contravenes the provisions of the Act.
The Honourable Court also considered whether the conduct of the Respondent was tantamount to "passing-off". In considering same, the court took into account the decision handed down by the Cape High Court in 1957, in Stellenbosch Farmers’ Winery Limited v Stellenvale Winery (Pty) Limited (1957 4 SA 234 (C)), which decision made it clear that the question as to whether passing-off has taken place or not, depends on the likelihood – or the lack thereof – that the similarity of the alleged offending "get-up" (to the complainant’s own product) may mislead the public. In this regard, the learned Judge again made reference to what he termed the "obvious similarity" between the Applicant’s wheelbarrows and those of the Respondent and accordingly found the Respondent to be guilty of passing-off, as well as of trade-mark infringement.
The issue of counterfeiting allegedly perpetrated by the Respondent in terms of the Counterfeit Goods Act 37 of 1997 (the "CGA") revolved around the definition of the term "protected goods", as defined in the Act. The Applicant had requested the court to declare the infringing wheelbarrows to be "counterfeit goods" within the meaning of the Counterfeit Goods Act. In terms of section 1(1)(xvi) of this Act, goods that are protected by the CGA are termed "protected goods" and defined as follows:
(a) Goods featuring, bearing, embodying or incorporating the subject matter of an intellectual property right with the authority of the owner of that intellectual property right, or goods to which that subject matter has been applied by that owner with his or her authority;
(b) Any particular class or kind or goods which, in law, may feature, bear, embody or incorporate the subject matter of an intellectual property right only with the authority of the owner of that intellectual property right, or to which that subject matter may in law be applied, only by that owner or with his or her authority, but which has not yet been manufactured, produced or made, or to which that subject matter has not yet been applied, with the authority of or by that owner (whichever is applicable).
The Applicant’s submission that wheelbarrows featuring, bearing, embodying or incorporating the subject matter of the Applicant’s registered trade mark (namely the colours green/yellow), constitute, by definition, "protected goods" as defined above was thus upheld by the court.
The learned Judge also concluded that (supplementary to his finding that the wheelbarrows constitute "protected goods" in terms of the CGA) the manufacture, production or making – in South Africa or elsewhere – of wheelbarrows which are imitations of those of the Applicant – to the degree that such wheelbarrows are substantially identical to those of the Applicant – constituted an "act of counterfeiting" by the Respondent. In addition, the use of the colours and yellow by the Respondent created so much of a colourable imitation of the Applicant’s own colour trade mark, as to be likely to confuse or deceive members of the public as to their origin. The wheelbarrows in question were declared to be "counterfeit goods".
In their prayers before the court, the Applicant further asked for the Respondent to be interdicted and restrained from infringing the Applicant’s registered rights in the future; from passing-off its products as those of the Applicant (and thereby trading on the Applicant’s good name and reputation in the industry) and from any further dealings in the counterfeit goods concerned. The court held that all of the requirements for the attainment of such interdictory relief had been proven and substantiated.
The Respondent, during the course of the hearing, also raised various constitutional points. Counsel for the Respondent attempted to rely on the, by now well-publicised, case of Laugh-It-Off Promotions CC v SAB International (2006 1 SA 144 (CC)), decided by the Constitutional Court. The learned Judge dismissed this line of argument, stating that the Laugh-It-Off case was based on the premise of section 34(1)(c) of the Trade Marks Act 94 of 1993, while this sub-section had not been relied on at all in casu. Prinsloo, J held that the decision – in which it was held that the right to freedom of expression (contained in section 16 of the Bill of Rights) should take precedence over trade-mark protection – constituted a "far cry" from the case at hand, where the Applicant relied firmly on the provisions of section 34(1)(a) and (b) and – as already stated – the Applicant had made out a clear case for relief based on these two sub-sections.
The Respondent had further attempted to rely on section 22 of the Bill of Rights of the Constitution (encapsulating the right to freedom of trade), as well as on the general limitation clause found in section 36 of the Constitution, alleging that the Applicant had failed to discharge the onus of proving that the limitation on the Respondent’s section-22 right was justified. The learned Judge came firmly to the conclusion that what he deemed to be the "constitutional argument" could hold no sway in the case at hand. Even if – as is required by our Constitution – a "balancing of rights" test were to be performed in casu, so stated the learned Judge, the Applicant’s rights in its property and trade mark would certainly prevail. Indeed, the "constitutional arguments" raised appear to be indicative of "straw-clutching" on the part of the Respondent, in the face of what clearly seemed to be an overwhelming case against it.
The learned Judge took into account the fact that the Respondent had indeed acknowledged wrong-doing on its part in this matter, following a letter of demand having been sent to it by the Applicant’s attorneys, prior to the institution of court action. The initial settlement process failed to produce a solution, thus necessitating the court process. Although the Respondent argued before the court that this acknowledgment or recognition of wrong-doing on its part towards the Applicant formed part – as it did – of settlement discussions and was thus privileged, the learned Judge Prinsloo further made reference to a letter written by the Respondent’s Attorneys to the hardware store which had received the offending wheelbarrows, in which letter wrong-doing on the Respondent’s part was again acknowledged. This letter, not forming any part of settlement talks or negotiations, was clearly admissible according to the court and the learned Judge saw it as a significant concession on the part of the Respondent.
Yet another interesting aspect of the judgment was the reference made by Prinsloo, J to a decision handed down by the Honourable Judge Moshidi - in the same court – in the case of Ussher Inventions (Pty) Limited v Laduma Hardware, an unreported decision given at the end of January 2006. The court in the matter at hand noted that the Laduma Hardware matter had involved the same Applicant; the same type of dispute; the same offending green and yellow wheelbarrows and the same remedies had been sought by the Applicant. The court further considered that the learned Judge Moshidi in that case had granted all relief sought by the Applicant, and – in view of the existence and impact of the doctrine of judicial precedent – the learned Judge Prinsloo admitted that he would be obliged to make a finding that the decision handed down in Laduma Hardware was clearly wrong before he would be able to deviate from the principles of that decision.
In conclusion, this appears to be a clear-cut case of trade-mark-infringement, counterfeiting and passing-off, and it is clear to one reading the judgment handed down by the court that the court had little trouble in finding in favour of the Applicant. Reinforcing this, Counsel for the Respondent immediately sought leave to appeal against this judgment, which leave was dismissed by the learned Judge in the court a quo, Prinsloo, J having reached the conclusion that there was no reasonable prospect of another court coming to a different decision. The decision represents a success for intellectual property-right protection in South Africa, the maxim of the Honourable Eloff, J - referred to at the start of this discussion – having been well-upheld.