Esquire Electronics Ltd v Executive Video

• Jurisdiction: South Africa
• Judge: Corbett JA, Hoexter JA, Jacobs JA, Smalberger JA and Nicholas AJA
• Judgment Date: 13 March 1986
• Citation: 1986 (2) SA 576 (A)
• Hearing Date: 20 February 1986
• Court: Appellate Division

Nicholas, AJA.:

This appeal arises out of a judgment and subsequent order of DIDCOTT J sitting in the Durban and Coast Local Division of the Supreme Court. The judgment (which H concerned three similar applications which were heard together) is reported sub nom Esquire Electronics Ltd and Another v D Roopanand Bros (Pty) Ltd; Esquire Electronics and Another v Executive Video; Esquire Electronics and Another v Mehmood's Radio TV and Cassette Centre 1984 (4) SA 409 (D); 1985 RPC 83.

I The appellant (which was the first applicant in all three of the applications in the Court a quo) is Esquire Electronics Ltd, a company incorporated and having its principal place of business in Hong Kong. It manufactures, and distributes in many countries of the world, prerecorded video cassettes. Such cassettes are popularly known as "video films" (inaccurately,

J because they are recorded on magnetic tape, not film) or simply as "videos". The videos produced by Esquire Electronics

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record cinema films made in India with Indian actors and A depicting Indian ways of life. They are extremely popular in South Africa, especially in Natal.

The respondent (which was the respondent in the second of the three applications in the Court a quo) is Executive Video, a firm which carries on the business of manufacturing and dealing B in videos at 71 Victoria Street, Durban.

Esquire Electronics is the registered proprietor of three South African trade marks, all of which are registered in part A of the register of trade marks in respect of class 9 of Schedule 4 C to the Trade Mark Regulations 1971. They are:

Trade Mark 73/0190, consisting of the word, ESQUIRE, with date of registration 11 January 1973, in respect of

"Electrical apparatus and instruments (including wireless); sound recording and reproducing apparatus, instruments and mediaincluding radios, tape recorders, wire recorders, magnetic tapes, sound tapes, phonograph records, parts of and D accessories for all the aforementioned goods."

Trade Mark 80/1576, consisting of the word, ESQUIRE, and a device, with date of registration 20 March 1980, in respect of

"Sound and/or video recording media in the form of tapes and of wires, cassettes and cartridge discs for use with the aforesaid tapes; video and audio products and sound and/or video receiving and reproducing apparatus and instruments employing E laser beam techniques."

Trade Mark 80/1577, consisting of the word, ESQUIRE, and a different device, with the same date of registration as trade mark 80/1576, also in respect of

"Sound and/or video recording media in the form of tapes and of wires, cassettes and cartridge discs for use with the aforesaid tapes; video and audio products and sound and/or video F receiving and reproducing apparatus and instruments employing laser beam techniques."

The videos produced by Esquire Electronics are made in the following way. It obtains the moving pictures on 35 mm cinematographic film from Bombay. The optical images and sound track on each film are transferred to audio-visual magnetic G tape by a process known as tele-cine transfer. This recorded tape is called a first generation "U" matic master, which has a standard width of ¾ inch. It may be used to make other "U" matic masters. It cannot be used in the ordinary domestic video cassette recorder (commonly called a "VCR"). For this purpose the recording on the "U" matic master is copied onto video H cassettes containing magnetic tape with a standard width of ½ inch. These are called second generation tapes.

Second generation tapes can in turn be copied by anyone who has the use of two VCRs.

The results of such copying are called third generation tapes. Because of the ease with which copies can be made, a thriving I industry in "pirated" videos has mushroomed in South Africa.

When making the "U" matic masters Esquire Electronics causes one or more of its trade marks to be superimposed on the record of the film at various parts of the tape. In the ordinary course, the trade marks appear on second generation and subsequent generation tapes. The trade marks are usually J superimposed at places where the sound track is crucial to the

Nicholas AJA

A flow and continuity of the presentation so that any attempt by a "pirate" to edit out the trade marks will result in a serious impairment of its integrity and intelligibility.

Esquire Electronics does business by supplying "U" matic master tapes to authorized distributors, including a South African B company, Big Screen Home Video (Pty) Ltd, which was the second applicant in the relevant application. From these master tapes such distributors then manufacture second generation tapes in which they deal in the respective areas for which they are authorized.

In September 1983 it came to the notice of Esquire Electronics C and Big Screen that Executive Video was making and selling unauthorized copies of its videos of Indian films. An investigator acting on behalf of Esquire Electronics and Big Screen purchased from Executive Video a video of the film BETAAB. It was obvious that this was a direct copy of Esquire Electronic's video, for it included Esquire trade marks D (usually as part of the words "An ESQUIRE presentation") superimposed on the record at various places.

Esquire Electronics and Big Screen thereupon made an application against Executive Video, ex parte and in camera, in which, relying inter alia on trade mark infringement, they E sought orders interdicting Executive Video from using the trade mark, "ESQUIRE", on video cassettes and advertisements therefor, and from dealing in video cassettes bearing that trade mark. A rule nisi was granted. On the return day, this application and two others came before DIDCOTT J. At the request of all the parties the learned Judge agreed to limit F himself at that stage to preliminary rulings on three points. In the result he dealt with only one of the points, and concluded that Esquire Electronics had no cause of action for infringement of its trade marks. That was his ruling. (See 1984 (4) SA 409 at 415I.) Arising out of this ruling, the learned Judge at a later date granted an order dismissing the application and ordering Esquire Electronics to pay the costs.

G DIDCOTT J then granted leave to Esquire Electronics to appeal against this order, and directed that the costs of the application for leave be costs in the appeal. The parties agreed that the appeal should be limited to the issue of trade mark infringement and that the appeal would finally determine the litigation between the parties.

H So far as it is relevant to the present matter, s 44 of the Trade Marks Act...