Berman Brothers (Pty) Ltd v Sodastream Ltd and Another

• Jurisdiction: South Africa
• Judge: Corbett JA, Hoexter JA, Botha JA, Nicholas AJA and Nestadt AJA
• Judgment Date: 24 March 1986
• Citation: 1986 (3) SA 209 (A)
• Hearing Date: 17 February 1986
• Court: Appellate Division

Corbett JA:

This appeal concerns an action for the infringement of certain trade marks and for relief under the Merchandise Marks Act 17 of 1941. The action was instituted in the Transvaal Provincial Division by first and second respondents, H as co-plaintiffs, against appellant, as defendant. After the close of pleadings it was agreed by the parties at a pre-trial conference that the action should proceed on the basis of a special case stated in terms of Rule 33 of the Uniform Rules of Court. A statement setting forth the agreed facts and the legal contentions of the parties (which I shall call the "stated I case") was prepared and the Court a quo, presided over by O'DONOVAN J, was asked to adjudicate thereon. After hearing the parties O'DONOVAN J concluded that certain admitted conduct on the part of the appellant constituted an infringement of one of first respondent's registered trade marks and also contravened certain provisions of the Merchandise Marks Act, and he granted an interdict with costs and certain ancillary relief. I shall deal with the terms of the order in more detail later. The J judgment of the Court a quo has been reported: see Sodastream Ltd and Another v Berman Brothers (Pty) Ltd

Corbett JA

A 1984 (4) SA 425 (T).

With the leave of the Court a quo appellant appeals to this Court against the whole of the judgment and order of the Court a quo, save in two minor respects; and, similarly with the leave of the Court a quo, respondents have cross-appealed against portions of the judgment and the order of the Court a B quo. I shall later indicate the portions of the judgment and order covered by the appeal and cross-appeal respectively.

The facts and contentions

The facts revealed by the stated case are as follows. The first respondent, Sodastream Ltd, is a British company with its factory and principal place of business in Peterborough, C England. In certain countries in Southern Africa, including the Republic of South Africa, first respondent markets its products through second respondent in terms of a distributorship agreement which appoints second respondent "the exclusive distributor" of first respondent's products in these countries (termed "the territory" in the agreement).

First respondent is the proprietor of a number of South African D trade marks registered in terms of the Trade Marks Act 62 of 1963, including:

(a)

trade mark No 78/4435 for the mark "Sodastream" registered in class 1 of schedule IV to the Trade Marks Regulations in respect of "chemical substances and chemical preparations for use in manufacture, and E gases for use in manufacture and dispensing of beverages" (to be referred to as "the gas mark"); and

(b)

trade mark No 78/4436 for the mark "Sodastream" registered in class 6 of schedule IV to the regulations in respect of "containers made wholly or principally of common metal and their alloys; and parts and fittings therefor" (to be referred to as F "the cylinder mark").

Under the distributorship agreement second respondent is given the "sole right" to purchase what are termed "the products" from first respondent for re-sale in the territory. The products are defined in a schedule to the agreement as meaning the following components:

'1.

Sodastream domestic carbonating machines manufactured or sold by the company to the specifications (if any) required G in the territory ('the Sodastream machines').

2.

Cylinders chargeable with carbon dioxide for use with the Sodastream machine manufactured or sold by the company to the specifications (if any) required in the territory ('the Sodastream cylinders').

3.

Concentrated flavour syrups for use with the Sodastream or other machines manufactured or sold by the company to the specifications (if any) required in the territory ('the H Sodastream flavours').

4.

Accessories manufactured or sold by the company for use with the Sodastream machine ('the Sodastream accessories').'

In addition the agreement grants second respondent "the exclusive right" to sell in the territory under, inter alia, the "Sodastream" trade marks the following items not purchased I from first respondent:

(a)

concentrated flavour syrups for use with Sodastream and other machines;

(b)

carbon dioxide gas rechargeable into cylinders for use with Sodastream machines;

(c)

accessories for use with Sodastream machines.

In pursuance of the distributorship agreement first and second respondents also entered into a user agreement granting second J respondent the

Corbett JA

A right to use in the Republic of South Africa for the duration of the distributorship agreement certain trade marks of which first respondent was the proprietor, including the gas mark and the cylinder mark. It was the desire and intention of the parties that second respondent be entered as a registered user B of the marks in terms of s 48 of the Trade Marks Act. And this was evidently done.

In terms of the distributorship agreement and the registered user agreement the second respondent has, in the Republic of South Africa and more particularly in the Transvaal Province, traded in products under the aforementioned trade marks and C will continue to do so in the future. Both respondents have derived income through the course of such trade and will continue to do so. Details of these trading activities are given in para 7 of the stated case which reads as follows (first and second respondents being referred to as first and second plaintiffs):

'7 (a)

In particular, the second plaintiff has from time to time filled cylinders bearing the word 'Sodastream' D with carbon dioxide gas for use in the manufacture of beverages such as soda water or flavoured soft drinks or mixers based on soda water. Such gas is hereinafter referred to as 'gas'. The gas used by the second plaintiff for this purpose has not been manufactured or produced by either of the plaintiffs but has been selectively purchased by the second plaintiff from different sources, and inspected and decanted by the second plaintiff, and the second plaintiff assumes responsibility for the good quality of this gas. The E second plaintiff has further sold such cylinders containing gas to members of the trade or exchanged them (with a cash adjustment for empty cylinders), the price of such cylinders or such cash difference being charged to the members of the trade; members of the trade have in turn sold or exchanged such cylinders to members of the public, the price of such cylinders or the cash adjustment being charged to the members of F the public (the retail price of such cylinders being in the order of R18 whilst the retail price of the gas therein being in the order of R1,50). The second plaintiff has thereafter accepted the return of such cylinders from its customers, has refilled them with gas, and has then resold them to its customers or re-exchanged them. Photographs of such a cylinder bearing a label applied by the second plaintiff are attached hereto as annexures E1 and E2, and samples of such cylinders will be handed in at the hearing of G this matter marked exhs I and II. Exhibit I is a cylinder without the particular wording 'guaranteed filled by authorised Sodastream distributor' referred to in subpara 7 (d) infra, and exh II is a cylinder with this wording marked on it. These cylinders were originally made by or to the order of the first plaintiff in Europe and sold by the first plaintiff to the second plaintiff in South Africa for resale or exchange containing gas.

(b)

The gas-containing cylinders sold or resold or H exchanged by the first and second plaintiffs in the Republic of South Africa have in all cases carried a firmly applied gummed label bearing the word 'Sodastream'. These labels have varied over the course of time and copies of the labels used up to the present are set out in annexures F1 to F6 respectively.

(c)

The gas-containing cylinders sold or resold or exchanged by the first and second plaintiffs in the I Republic of South Africa have in all cases been stamped with the word 'Sodastream'.This marking has appeared on a valve at the head of the cylinder, in conjunction with other stamped markings. Such markings are set out by way of example in annexure G together with a correct explanation (not present on the cylinders themselves) of the significance thereof.

(d)

Some of the gas-containing cylinders sold or resold or exchanged by the first and second plaintiffs in the Republic of South Africa have been further stamped J with the wording 'guaranteed filled by authorised Sodastream distributor'.

Corbett JA

(e)

In filling cylinders as described in subpara (a) A above, the second plaintiff has acted in accordance with quality control procedures laid down by the first plaintiff. These procedures include provision for the use of the gas of food quality, and for the checking and when necessary the repair of the cylinders, using spare parts supplied by the first plaintiff. These procedures are intended to ensure that the cylinders to which they have been applied are mechanically sound and safe for the public to handle, and that the gas they contain is of an acceptable quality and quantity. B

(f)

The word 'Sodastream' as used on the cylinders when sold or exchanged by either of the plaintiffs as set forth above in this paragraph is a trade mark as defined in the Trade Marks Act 62 of 1963 and as registered under either or both of the trade marks Nos 78/4435 and 78/4436.'

I shall make reference later to the content of the gummed C labels, annexures F1 to F6, mentioned above.

The gravamen of respondents' complaint concerning the conduct of appellant is contained in para 8 of the stated case, which reads (appellant being referred to as defendant):

'8 (a)

Subsequent to the registration...