LA Group (Pty) Ltd v Stable Brands (Pty) Ltd and Another

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Ponnan JA, Makgoka JA, Schippers JA, Plasket JA and Phatshoane AJA
• Judgment Date: 22 February 2022
• Court: Supreme Court of Appeal
• Hearing Date: 22 February 2022
• Counsel: P Ginsburg SC (with P Cirone and N Nyembe) for the appellant. LG Bowman SC (with I Joubert SC) for the first respondent.
• Docket Number: 650/2020 [2022] ZASCA 20

Ponnan JA (Plasket JA concurring):

[1] This is an appeal against a judgment of the Gauteng Division of the High Court, Pretoria (per Van der Westhuizen J), ordering the removal of 46 of the appellant's trademark registrations from the register of trademarks, in terms of ss 10(2)(a), (b) and (c), s 10(13) and ss 27(1)(a) and (b) of the Trade Marks Act 194 of 1993 (the Act). [1]

[2] The trademarks relevant to this appeal are registered across 14 classes. There are essentially three main visual and conceptual features that the trademarks embody, namely: (a) the word POLO; (b) pictorial devices of single polo players, each astride a pony engaged in play (the SINGLE POLO PLAYER devices); and (c) pictorial devices of two polo ponies, each with polo players astride them engaged in play (the DOUBLE POLO PLAYER devices). [2]

Ponnan JA (Plasket JA concurring)

[3] In May 2018 LA Group (Pty) Ltd (the appellant) launched an application seeking interdictory relief for trademark infringement against, inter alia, Stable Brands (Pty) Ltd (the respondent) in respect of the latter's use, under licence, of certain trademarks of the United States Polo Association (the USPA) (the main application). In response to the main application, the respondent instituted a counter-application for the cancellation of the 46 trademark registrations relied upon by the appellant for the relief sought in the main application.

[4] Each of the appellant's trademark registrations was attacked on at least one, and in most instances on more than one, ground. Although the appellant withdrew the main application at the commencement of the hearing on 5 November 2018, the respondent nevertheless persisted with its counter-application on the basis that all of the appellant's trademark registrations were entries wrongly made and/or wrongly remaining on the register in terms of s 24 of the Act. [3]

[5] The respondent succeeded in its counter-application, with the registrations being cancelled on various grounds, including: (i) that the marks are not capable of distinguishing (ss 10(2)(a)), are descriptive and non-distinctive (s 10(2)(b)) and have become customary in the bona fide and established practices of the trade (s 10(2)(c)); (ii) non-use for five years or longer (s 27(1)(b)); (iii) registration, without a genuine intention to use, coupled with non-use (s 27(1)(a)); and (iv) the likelihood of confusion or deception arising from the manner in which the registrations had been used (s 10(13)).

[6] As all 46 of the appellant's trademark registrations formed the subject of the s 10(13) attack, it may be convenient to commence with that ground, because, as counsel for the appellant accepted, if the High Court was correct in its conclusion on that score, then the appeal in its entirety must fail.

Ponnan JA (Plasket JA concurring)

[7] Section 10 of the Act is headed 'Unregistrable trade marks'. To the extent here relevant, it provides:

'The following marks shall not be registered as trademarks or, if registered, shall, subject to the provisions of sections 3 and 70, be liable to be removed from the register:

. . .

(2) a mark which —

(a)

is not capable of distinguishing within the meaning of section 9; or

(b)

consists exclusively of a sign or an indication which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or other characteristics of the goods or services, or the mode or time of production of the goods or of rendering of the services; or

(c)

consists exclusively of a sign or an indication which has become customary in the current language or in the bona fide and established practices of the trade;

. . .

(13) a mark which, as a result of the manner in which it has been used, would be likely to cause deception or confusion;

(14) subject to the provisions of section 14, a mark which is identical to a registered trade mark belonging to a different proprietor or so similar thereto that the use thereof in relation to goods or services in respect of which it is sought to be registered and which are the same as or similar to the goods or services in respect of which such trade mark is registered, would be likely to deceive or cause confusion, unless the proprietor of such trade mark consents to the registration of such mark;

(15) subject to the provisions of section 14 and para (16), a mark which is identical to a mark which is the subject of an earlier application by a different person, or so similar thereto that the use thereof in relation to goods or services in respect of which it is sought to be registered and which are the same as or similar to the goods or services in respect of which the mark in respect of which the earlier application is made, would be likely to deceive or cause confusion, unless the person making the earlier application consents to the registration of such mark;

. . .

Provided that a mark shall not be refused registration by virtue of the provisions of para (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.'

[8] Section 10(13) of the Act prohibits the registration of a mark 'which, as a result of the manner it has been used, would be likely to cause deception or confusion', and, where such a mark has been registered, provides for the expungement thereof from the register.

[9] The essence of the respondent's case under s 10(13) is that the appellant has made use of its various marks, alongside the marks of the Polo/Ralph Lauren Co LP (Ralph Lauren), which are virtually identical to some of the marks of the appellant. This in circumstances where the appellant, so it seems, had entered into an agreement with Ralph Lauren

Ponnan JA (Plasket JA concurring)

pursuant to which it has allowed the registration and use by Ralph Lauren of marks (including POLO simpliciter and the POLO PONY & PLAYER device marks) in South Africa. The appellant accordingly agreed to use (and has in fact used) its marks, alongside those of Ralph Lauren, without ensuring that it distinguishes its goods from those of the latter.

[10] It would seem that when Ralph Lauren sought to enter the South African market and to register its trademarks, it encountered opposition from the appellant (or its predecessor). Ralph Lauren and the appellant (or its predecessor) then entered into litigation. In terms of a settlement agreement (which the appellant chose not to introduce into evidence), the parties appear to have agreed to a delineation of goods in respect of which each would be able to use the marks POLO, POLO PONY & PLAYER device, POLO JEANS COMPANY and POLO SPORT in South Africa.

[11] Following upon the settlement, the following statement was placed on the appellant's website (www.polo.co.za):

'Trading out of 27 Old Bond Street in London, Joffe encountered a similar brand under the trademark Ralph Lauren Polo. A dispute was resolved and the two parties signed a license agreement in 1987 clarifying the production and trade of the respective brands into agreed territories with Polo South Africa retaining the exclusive rights to Sub-Saharan Africa. The agreement allowed for the continued use of the name POLO but differentiated by Polo South Africa presenting the pony facing to the right, whereas Ralph Lauren Polo's pony faces to the left.'

[12] The statement is deliberately vague and perhaps even decidedly euphemistic. 'Polo South Africa', whomever or whatever that may be, is not identified. How long that agreement was intended to endure is not divulged — we thus simply do not even know whether the agreement is still extant. Nor are the material terms of the agreement. What is more, the distinction sought to be drawn between the right- and left-facing pony is more illusory than real. As pointed out in Royal County of Berkshire Polo Club Ltd v OHIM:

'It is true that, in the mark applied for, the polo player is facing left and holding his mallet upright, while in the earlier marks the polo player is facing right and holding his mallet ready to strike the ball. However, those slight differences are not sufficient to reduce significantly the similarity deriving from the fact that both the signs at issue display the figure of a polo player astride a galloping horse. In both cases, the general public will recognise clearly and remember the image of a mounted polo player.' [4]

[13] Going by what appeared on the appellant's website, the import of the agreement would appear to be that the appellant effectively agreed to share the South African market with Ralph Lauren (with both of them using similar or identical trademarks) and either acquiesced in or did not object to the registration of various POLO marks in the name of Ralph

Ponnan JA (Plasket JA concurring)

Lauren in class 3. [5] However, in the answering affidavit filed in the counter-application and, at odds with what is contained in the statement earlier placed on the appellant's website, Ms Rae James, the group legal advisor of the appellant, stated:

'There is no licensing or agency relationship between the [appellant] and The Polo/Lauren Company LP. The statement referring to a licensing relationship . . . is incorrect and has long been removed from the [appellant's] website. The correct position is as evidenced on the official trademarks register.'

Why it was described as such in the statement remains unexplained. The trademark register hardly assists. If not a licensing agreement, then what? Whatever the true nature of the agreement, it seems inconceivable that, if...