LA Group Limited and Another v Polo Management (Pty) Ltd v B&J Meltz (Pty) Ltd and Others

• Judge: Van Rooyen, AJ
• Judgment Date: 23 February 2005
• Citation: 2005 JDR 0260 (T)
• Docket Number: 2672/2004
• Court: Transvaal Provincial Division

Van Rooyen AJ:

[1] This is an application which, in essence, concerns the question whether the applicants' trade marks (inter alia the POLO mark and a so-called polo horse device relating to the clothes industry, class 25 in the register of trade marks) have been infringed upon by the First Respondent in terms of the Trade Marks Act 1993 ("TMA") and whether the attachment of about 10 000 shirts from several shops of the First Respondent was justified in terms of the Counterfeit Goods Act 37 of 1997("CGA"). I shall refer to the two applicants as the LA Group and the First Respondent as "Meltz". The other Respondents are involved in the attachment and storing of the goods. I shall return to the role of the Minister of Trade and Industry's employees when I deal with the attachment of the alleged counterfeit goods. The Minister was the Second Respondent in this matter.

[2] Although Meltz in limine attacked the authority of the second applicant and its mandated deponent, Jonathan Ball ("Ball"), to file this application, I am satisfied that Ball was properly mandated to depose to the affidavit, although probably only on later ratification. The Second Applicant is a licensee of the First Applicant and this was supported by way of a licence agreement. The written record of the agreement was back-dated so as to prove this license. Since licensing need not be in writing to be valid, there is no reason to doubt the validity of the agreement,

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although it was conceded to have been recorded in writing so as to counter the allegations of Meltz that the Second Applicant was not a licensee.

Background

[3] On the 2nd October 2003 representatives of the LA Group made a purchase of an item of clothing at one of the shops of Meltz. This purchase resulted in an affidavit of complaint being filed by Ball on behalf of Polo Enterprises (Pty) Ltd in terms of section 3 of the CGA against Meltz.

[4] This complaint initiated search and seizure warrants that were obtained by inspectors of the Department of Trade and Industry, based on the affidavit of Ball, for the stores of Meltz.

[5] The warrants were obtained on the 15th of December 2003 and executed by Inspectors of the Second Respondent. The goods seized were then moved to the depots of the Third and Fourth Respondents. More or less 10 000 shirts were attached. They were listed in inventories; mostly in abbreviated form.

Relief sought by Applicant

[6] In January 2004 the LA Group filed this application seeking, in essence, the following remedies:

1.

That the goods seized in terms of the CGA be declared to be counterfeit goods;

2.

That Meltz be ordered to deliver up to the LA Group all such goods identical or similar to those goods referred to and which were declared counterfeit and which still remain in the possession of the First Respondent;

3.

That Meltz be interdicted and restrained from infringing the rights of the LA Group in terms of the TMA;

4.

That the First Respondent be interdicted and restrained from passing-off these products for those of the Applicants;

5.

That the First Respondent be interdicted from competing unlawfully with the Second Applicant by dealing in counterfeit goods bearing the First Applicant's

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POLO trade marks;

6.

That an enquiry be held in terms of section 34(4) of the TMA regarding a reasonable royalty, payable to the Applicants by the First Respondent, or damages that is calculated on the basis of the reasonable royalty which would have been payable by a licensee for the use of the trade marks;

7.

That the Second, Third and Fourth Respondents be directed to deliver up to the Applicants all the counterfeit goods currently retained in the counterfeit goods depots;

8.

That Meltz be ordered to disclose within seven days of the date of service of this order to the Applicants the name and physical address of the supplier of the counterfeit goods;

9.

That Meltz be ordered to pay the costs of this matter.

Counter Relief sought by Meltz

[7] Meltz answered the founding affidavit of Ball and filed a counter application seeking the following relief:

1.

That the trade mark registrations in the name of the First Applicant be removed from the Register of Trade Marks in terms of section 24(1), read with sections 10(2)(b), 10(12) and 10(13) of the TMA;

2.

Alternatively, that the trade mark registrations as set out by the First Applicant, be varied by the entry of a disclaimer reading: "Registration of this trade mark shall give no right to the exclusive use of the word "Polo", apart from the mark";

3.

Further alternatively to the above, that the specification of goods for the trade mark registrations as set out by the First Applicant be amended by the exclusion from them of "POLO shirts or POLO neck garments";

4.

That the search and seizure warrants be declared to have been issued wrongfully;

5.

That the search and seizure warrants be set aside;

6.

That the detention, seizure and removal of the goods listed in the inventories be declared wrongful;

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7.

That the seized goods be declared not to be counterfeit;

8.

That the seized goods be delivered by the Second Respondent to the First Respondent;

9.

That the Court order that the Applicants pay damages in an amount determined by the Court to the First Respondent and pay the First Respondent's costs in terms of section 10(1)(c) and/or section 17(1) of the CGA.

Approach to the Issues

[8] By dealing with the question whether the attachment in terms of the CGA was legally justifiable, the main issues in the application and counter-application may appropriately be dealt with: (1) do the trade marks validly exist in the light of the argument that they should be expunged or amended? (2) if the latter application is dismissed, were the marks infringed upon? (3) even if they were infringed upon, was the attachment justified in terms of the CGA? (4) lastly, what are the remedies?

Should the trade marks of the applicant be expunged or amended?

[9] Meltz seeks to expunge the trade marks relied upon by the LA Group (in addition to other trade marks in other classes, the relevance of which will be dealt with below) in terms of the provisions of section 24( 1) of the TMA, as read with the provisions of sections 10(2)(b), 10(12) and 10(13) of the TMA, alternatively he seeks an endorsement against these trade marks in the following terms: "Registration of this trade mark shall give no right to the exclusive use of the word "Polo", apart from the mark".

[10] Section 24(1) of the TMA empowers an "interested person" to apply for the amendment of the trade marks register against an entry wrongly made and/or

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wrongly remaining on the register. Sect 10(2)(b) provides that a trade mark shall not be registered or, if registered, is liable to be removed from the register, if it is

'a mark which 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".

Section 10(12) provides that a mark shall not be registered or would be liable to be removed from the register if it is a mark

"which is inherently deceptive or the use of which would be likely to deceive or cause confusion, be contrary to law, be contra bona mores, or be likely to give offence to any class of persons".

Section 10(13) provides that a mark may be removed if

"the manner in which it has been used, would be likely to cause deception or confusion."

[11] Apart from attacking the trade marks relied upon by the LA Group in the main application, Meltz also attacks a number of other trade marks registered in classes 9, 14, 16, 24, 25, 26, 28, 34 and 42 of the register. A person is only entitled to rely on the provisions of section 24(1) of the TMA if he or she is an "interested person". It was argued by Mr Michau that Meltz had not shown that he is an interested person in regard to the marks other than those in class 25. In Danco Clothing v Nu-Care Marketing Sales and Promotions 1991 (4) SA 850 (A) Nienaber JA held that in spite of the general interest which the public has in a correct register, this will not be sufficient to make a member of the public a "person aggrieved" in terms of the Trade Marks Act 1963. The applicant will have to be a trade rival or a potential trade rival in the sense of "having at the time of registration some definite and present intention to deal in certain goods or descriptions of goods, and not a mere

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general intention of extending his business at some future time to anything which he may think desirable"

(J Batt & Company [1898] 15 RPC 534 (CA) at 538, quoted with approval in Ritz Hotel Ltd v Charles of the Ritz Ltd and Another 1988 (3) SA 290 (A) at 308A and also in the Danco case by Nienaber JA at 855F)

Nienaber JA goes on to say at 855H-I that the applicant must establish this as a reasonable possibility and need not do so on a preponderance of probabilities. This means that the onus to prove locus standi will be less of a burden to an applicant than the onus to prove his case on the merits: "For it is better to hear a man with a bad case than to silence someone with a good case." There is no reason why what was held to be relevant in regard to the determination of who an "aggrieved" person in terms of the 1963 Act is, should not also be applicable to an "interested person" in terms of the TMA. In the CGA the term is expressly limited in section 3 and I will get back to this aspect when dealing with the complaint filed in terms of the CGA.

Meltz as the respondent in this matter has an...