Century City Apartments Property Services CC and Another v Century City Property Owners' Association

• Jurisdiction: South Africa
• Judge: Harms DP, Lewis JA, Mhlantla JA, Hurt AJA and Wallis AJA
• Judgment Date: 27 November 2009
• Citation: 2010 (3) SA 1 (SCA)
• Docket Number: 57/09
• Hearing Date: 06 November 2009
• Counsel: RW Tainton followed by S Laing (attorney) for the appellants. RWF MacWilliam SC (with I Joubert) for the respondent.
• Court: Supreme Court of Appeal

Harms, DP:

G [1] This appeal relates in the main to trademark infringement. The present respondent, Century City Property Owners' Association, a s 21 company, is the trademark owner. There are also ancillary or alternative issues, namely passing-off and the question whether the corporate name of the appellant, the alleged infringer, is undesirable in terms of the provisions of s 20 of the Close Corporations Act 69 of 1984. H The court below (Davis J) granted all the relief sought by the Association and this appeal is with its leave.

[2] Century City is a huge commercial and residential 'development' on some 300 hectares of land next to the N1, the main road leading I northwards from Cape Town. It falls within the municipality of the City of Cape Town and, more particularly, the suburb Montague Gardens. The development began in earnest in 1997 and, according to the Association's founding affidavit, it was always the intention that Century City would be one development, independently functioning and operating, providing a cross-pollination of services and industries to the J owners and tenants within Century City. The land was in due course

Harms DP

enclosed and a business park, a mid- to upper-echelon housing development A and office blocks were erected. A road, called Century City Boulevard, was constructed, which serves as the main artery to the development; and a theme park, Ratanga Junction, and the 'famous' Canal Walk Shopping Centre, were erected.

The trademark registrations B

[3] The Association, a non-profit home-owners' association, holds a number of trademarks in different classes, some consisting of the name 'Century City' and others of devices (more correctly, word-and-device marks) containing this name mark and interlocking Cs. The Association did not apply for these trademarks - they were assigned to it by the C developer of Century City. For a reason that can only be described as baffling the trademark registrations on which the Association relied in its notice of motion appear for the first time at the end of the papers whereas other registrations, on which no reliance was placed, were attached to the founding papers. D

[4] The argument in this court focused on the infringement of the mark 'Century City' registered under registration No 1997/14283 in class 42 (as it then existed) for -

'Retail, wholesale, marketing, distribution, hiring, leasing, mail order and merchandising services of all kinds; providing of food and drink E including bars, bottle stores and restaurants, snack bars, cafeterias, roadhouses, canteens, fast-food outlets; catering services, cocktail lounge services; temporary accommodation, hotels, hotel management; motels, tourists hostels, accommodation bureaux and services all for reserving accommodation at hotels, boarding houses and the like; arranging, hiring and providing facilities for expositions, exhibitions and the like; services ancillary to the aforegoing.' F

[5] The remaining name marks that were the subject of the application are these:

(a)

1997/14280 CENTURY CITY in class 35 in respect of -

'advertising and business services, including, but not restricted to G township and residential development, management services, organisation and consultation, evaluation services, import and export services, promotion, publicity, business research, planning';

(b)

1997/14281 CENTURY CITY in class 36 in respect of -

'insurance; financial affairs; monetary affairs; real estate affairs, H including property, township and residential development, real estate appraisal, estate agencies, real estate management, leasing of real estate';

(c)

1997/14282 CENTURY CITY in class 41 in respect of -

'education; providing of training; entertainment; including but not I restricted to services relating to cinemas, theme parks and casinos and the provision of facilities therefor; sporting and cultural activities; services ancillary to the aforementioned'.

[6] The device marks that were relied on in the notice of motion are all for the same device. They cover the same classes and have the same specifications as the name marks. J

Harms DP

The alleged infringing acts A

[7] The Trade Marks Act 194 of 1993 recognises three types of trademark infringement. The first is the unauthorised use in the course of trade, in relation to goods or services in respect of which the trademark is registered, of an identical mark or of a mark so nearly B resembling it as to be likely to deceive or cause confusion (s 34(1)(a)). The second is the unauthorised use of a mark, which is identical or similar to the trademark 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 trademark is registered, that in such use there exists the C likelihood of deception or confusion (s 34(1)(b)). The third, commonly referred to as dilution, does not figure in this case.

[8] The appellant (the respondent in the court below), Century City Apartments Property Services CC, used the name 'Century City Apartments' as its 'brand' or business name. This is apparent from its D promotional material and, for instance, its entry in the telephone directory. Its internet domain name is centurycityapartments.co.za. The Association's case was that the use of the corporate name, the brand name and the domain name infringed all the mentioned name and device marks, even though it did not use any device mark or anything E approximating one.

[9] The judgment of the court below accepted the submission without distinguishing between the name marks and the device marks and without considering the nature of the appellant's services. And in spite of counsel's assumption to the contrary, the court order, for a reason not explained, incorporated only the class 42 mark of the name marks F mentioned, although it covered all the device marks.

Assessment of trademark infringement

[10] The first issue to consider is the identification of the allegedly infringing mark. It is trite law (in spite of allegations to the contrary in G the Association's affidavits and some submissions in the Association's heads of argument) that a person may use a trademark otherwise than as a badge of origin and that the appellant's use of the name Century City in a descriptive manner could not amount to infringement. See Verimark (Pty) Ltd v BMW AG; BMW AG v Verimark (Pty) Ltd 2007 (6) SA 263 (SCA); and Commercial Auto Glass (Pty) Ltd v Bayerische Motoren Werke Aktiengesellschaft AG H 2007 (6) SA 637 (SCA) ([2007] 4 All SA 1331). The appellant did use the name Century City in a descriptive manner in its advertising material but its use of the name as a brand, corporate or domain name is nothing but trademark use and the faint argument to the contrary stands, accordingly, to be rejected.

I [11] The second issue is whether the appellant's use was in the course of trade and, related to that, whether its services fell within the said classes as defined. Because the appellant acted as an accommodation agent for reserving accommodation in Century City its activities fell within class 42. They also fell within class 36 to the extent that this class covered J estate agencies, real-estate management and leasing of real estate, and

Harms DP

class 35 in relation to management services. There was no evidence that A the appellant used the mark in connection with any services covered by class 41 as defined above. There was also no evidence or argument in relation to the question whether the appellant's services were so similar to the services covered by this class that there was a likelihood of deception or confusion during use. This conclusion makes consideration of s 34(1)(b) unnecessary. B

[12] The next issue is whether the marks 'Century City' and 'Century City Apartments' are, in the wording of s 34(1)(a), 'identical'. I think not. As the European Court of Justice indicated,

'(t)he criterion of identity of the sign and the trademark must be C interpreted strictly. The very definition of identity implies that the two elements compared should be the same in all respects'.

(LTJ Diffusion SA v Sadas Vertbaudet SA [2003] ETMR 83 (European Trade Mark Reports) para 50.) This is, however, subject to the proviso that minute and wholly insignificant differences are not taken into D account (Reed Executive Plc v Reed Business Information Ltd [2004] EWCA Civ 159 ([2004] RPC 40) para 29). In other words, the de minimis principle applies.

[13] That is not the end of the inquiry because, if the appellant's brand name were to be confusingly similar to the registered mark ('be likely to E deceive or cause confusion'), it infringes. I am satisfied that the appellant's brand name, in spite of the addition of the word 'apartments', is confusingly similar to Century City. The point is well illustrated by the facts in Compass Publishing BV v Compass Logistics Ltd [2004] EWHC 520 (Ch) ([2004] RPC 41). The registered mark was the F word 'Compass' in relation, in simplified terms, to computer and computer-related services. The defendant traded in the same fields under the name Compass Logistics. After pointing out that the two marks were not identical in the light of LTJ Diffusion SA v Sadas Vertbaudet SA the court proceeded to consider whether they were confusingly similar. Laddie J said this (paras 24 - 25): G

'[24] . . . The likelihood of confusion must be appreciated globally, taking account of all relevant factors. It must be judged through the eyes of the average consumer of the goods or services in question. That customer is to be taken to be reasonably H well informed and reasonably circumspect and observant, but he may have to rely upon an imperfect picture or recollection of the marks. The court should factor in the recognition that...