Dart Industries Inc and Another v Botle Buhle Brands (Pty) Ltd and Another

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa

Dart Industries Inc and Another v Botle Buhle Brands (Pty) Ltd and Another
2023 (4) SA 48 (SCA)

2023 (4) SA p48

Citation	2023 (4) SA 48 (SCA)
Case No	636/2021; [2022] ZASCA 170
Court	Supreme Court of Appeal
Judge	Dambuza JA, Makgoka JA, Gorven JA, Goosen AJA and Masipa AJA
Heard	December 1, 2022
Judgment	December 1, 2022
Counsel	P Ginsburg SC (with LG Kilmartin) for the appellants.; G Marriot for the first respondent.

Flynote : Sleutelwoorde

Competition — Unlawful competition — Passing-off — Likelihood of confusion — Similarity in general get-up of products compounded by similarity of online marketing strategy — Potential customers would see products next to each other and conclude they were of same provenance, enabling newcomer to trade on original vendor's reputation — Damage to original vendor inevitable — Passing-off established.

Intellectual property — Trademark — Distinctiveness — Acquired distinctiveness — Three main tests having emerged: recognition-association (low barrier); perception (medium barrier); and reliance (high barrier) — Local and foreign authorities discussed.

Intellectual property — Trademark — Distinctiveness — Shape or container mark — Public perception crucial to determine inherent distinctiveness — Container shape not usually perceived as source indicator — Must depart significantly from norm or custom of sector — Contested water-bottle mark (i) not differing sufficiently from norm or custom of sector for inherent distinctiveness; and (ii) failing even low-threshold recognition-and-association test for acquired distinctiveness — High Court's cancellation of mark in order.

Headnote : Kopnota

This was a trademark and passing-off dispute about the similarity between the parties' hourglass-shaped plastic water bottles. The appellants (collectively, Tupperware) were part of the Tupperware group of companies. The first appellant was the registered owner of the ECO BOTTLE shape/container mark in South Africa. When the first respondent (Buhle) started selling a similar bottle, Tupperware asked the High Court for an order restraining Buhle's alleged infringement and passing-off. In response, Buhle asked for the cancellation of the ECO BOTTLE mark on the ground that it was not capable of distinguishing Tupperware goods from those of other traders as intended in s 10(2)(a) of the Trade Marks Act 194 of 1993. Tupperware in turn contended that its Eco bottle's shape departed 'significantly' from the shape of other water bottles in the market and that the hourglass shape was unique in the South African market when it introduced the Eco 10 bottle in 2011. Both bottles were sold online, often by the same marketers.

The High Court, invoking s 9(2) of the Act, found that the mark was neither inherently distinctive nor had it acquired it by use to date. Consequently, it dismissed Tupperware's application and granted Buhle's counter-application for cancellation. The High Court ruled that although the bottles were virtually identical, there was no passing-off because Tupperware's direct selling strategy (via salespersons performing home demonstrations at 'Tupperware parties') meant that customers would know the Eco bottle was a Tupperware product, minimising the likelihood of confusion.

In an appeal to the Supreme Court of Appeal, the SCA dealt first with the issue whether the Eco bottle shape mark had to be cancelled under s 10(2)(a) for being incapable of distinguishing within the meaning of s 9(2). The SCA

2023 (4) SA p49

pointed out that, for a shape mark to be inherently distinctive, public perception was crucial: it was only when the public relied on the distinctiveness of a shape as an indicator of the source of goods that it fulfilled a trademark function. To do so, containers, which were generally perceived to be utilitarian, had to differ significantly from the norm or customs of the sector, and even that might not be enough since a fancy container might be perceived to be just another vessel and not a badge of origin. The SCA concluded that the High Court's finding that the Eco bottle did not have an inherently distinctive character was correct: the average consumer would see it as nothing more than a fancy water bottle and would not distinguish it from other water bottles in the trademark sense. (See [12] – [19].)

As to the acquisition of distinctiveness through prior use, the question was how an inherently non-distinctive shape mark acquired sufficient distinctiveness to function as a trademark. Three tests were used by local and international courts, being (from loosest to strictest) the 'recognition-association' test (consumers recognised the mark and associated it with the trademark claimant's goods); the 'perception' test (consumers perceived that goods designated by the mark had a particular source); and the 'reliance' test (consumers relied on the mark as an indicator of the source of the goods). (See [20] – [30].)

In the case of the Eco bottle, its apparent popularity was likely more due to its being part of the Tupperware range of goods than its shape. Where a mark was used in conjunction with another mark (the TUPPERWARE mark was embossed on the side of the bottle), establishing acquired distinctiveness was more difficult. But the fact that Tupperware embossed its logo on the Eco bottle meant that it recognised that consumers either did not rely on the shape in a trademark sense or did not trust it to identify the trade source. In the end, the shape of the Eco bottle as a trademark faltered even in the low-threshold recognition and association test. As to the reliance test, there was no evidence that purchasers of the Eco bottle relied on its shape to confirm its origin or authenticity. The SCA concluded that Tupperware's Eco bottle was not distinctive, and the High Court correctly cancelled it. (See [31] – [35].)

As to passing-off, the SCA reasoned that while the High Court's findings, that Tupperware had shown (i) that it had acquired goodwill deriving from the reputation it had built in respect of its Eco bottle since 2011 and (ii) that its get-up as a whole was distinctive of Tupperware's goods, were correct, it was wrong on (iii), the likelihood of confusion. While Tupperware-party attendees would indeed know that the Eco bottle was a Tupperware product, Buhle's had, by its adoption of Tupperware's online marketing strategy, associated its product in every respect with Tupperware's, enabling it to benefit from the reputation of the Eco bottle, with inevitable damage to Tupperware. In the result, Tupperware's passing-off application should have succeeded. (See [36] – [52].)

In the result, Tupperware would lose the trademark appeal, but win the passing-off appeal. So ordered.

Cases cited

Southern Africa

Adidas AG and Another v Pepkor Retail Ltd [2013] ZASCA 3: referred to

AM Moolla Group Ltd and Others v Gap Inc and Others 2005 (6) SA 568 (SCA) ([2005] 4 All SA 245; [2005] ZASCA 72): dictum in para [38] applied

Beecham Group plc and Another v Triomed (Pty) Ltd 2003 (3) SA 639 (SCA) ([2002] 4 All SA 193; [2002] ZASCA 109): applied

2023 (4) SA p50

Brian Boswell Circus (Pty) Ltd and Another v Boswell-Wilkie Circus (Pty) Ltd 1985 (4) SA 466 (A): dictum at 479D applied

Capital Estate and General Agencies (Pty) Ltd and Others v Holiday Inns Inc and Others 1977 (2) SA 916 (A): dictum at 929C – E applied

Caterham Car Sales and Coachworks Ltd v Birkin Cars (Pty) Ltd and Another 1998 (3) SA 938 (SCA) ([1998] 3 All SA 175; [1998] ZASCA 44): dicta in paras [21] – [22] applied

Die Bergkelder Bpk v Vredendal Koöp Wynmakery and Others 2006 (4) SA 275 (SCA) ([2006] 4 All SA 215; [2006] ZASCA 5): applied

Hoechst Pharmaceuticals (Pty) Ltd v The Beauty Box (Pty) Ltd (in Liquidation) and Another 1987 (2) SA 600 (A): dictum at 613F applied

Hollywood Curl (Pty) Ltd and Another v Twins Products (Pty) Ltd (1) 1989 (1) SA 236 (A): dictum at 249J applied

Pasquali Cigarette Co Ltd v Diaconicolas & Capsopolus 1905 TS 472: dictum at 479 applied

Pioneer Foods (Pty) Ltd v Bothaville Milling (Pty) Ltd [2014] 2 All SA 282 (SCA) ([2014] ZASCA 6): referred to

Société des Produits Nestlé SA v International Foodstuffs Co and Others [2015] 1 All SA 492 (SCA) ([2014] ZASCA 187): referred to

Weber-Stephen Products Co v Alrite Engineering (Pty) Ltd and Others 1992 (2) SA 489 (A): compared

Williams t/a Jenifer Williams & Associates and Another v Life Line Southern Transvaal 1996 (3) SA 408 (A) ([1996] ZASCA 46): dictum at 418F – H applied.

England

Bongrain SA's Trade Mark Application [2005] RPC 14: approved

London Taxi Corporation Ltd (t/a the London Taxi Company) v Frazer-Nash Research Ltd and Another [2017] EWCA Civ 1729: referred to

Reckitt & Colman Products Ltd v Borden Inc and Others [1990] RPC 341 (HL): referred to

Scandecor Developments AB v Scandecor Marketing AV and Others [2001] UKHL 21 ([2002] FSR 122): referred to

Schweppes Ltd v Gibbens (1905) 22 RPC 601 (HL): referred to

Société des Produits Nestlé SA v Cadbury UK Ltd [2014] EWHC 16 (Ch): referred to

Socie te des Produits Nestle SA v Cadbury UK Ltd [2015] ETMR 50: referred to

Société des Produits Nestlé SA v Cadbury UK Ltd [2017] EWCA Civ 358: referred to.

European Union

Socie te des Produits Nestle SA v Cadbury UK Ltd Case C-215/14 [2015] ETMR 50: referred to.

Singapore

Société des Produits Nestlé SA v Petra Foods Ltd [2016] SGCA 64: referred to.

Legislation cited

The Trade Marks Act 194 of 1993, s 9(2) and s 10(3): see Juta's Statutes of South Africa 2021/22 vol 2 at 2-192.

Case Information

P Ginsburg SC (with LG Kilmartin) for the appellants.

G Marriot for the first respondent.

2023 (4) SA p51

Order

1.

The appeal against the order of the High Court upholding the first respondent's counterclaim is dismissed with no order as to costs.

2.

The appeal against the order of the High Court...