Impala Platinum Holdings Limited v Impala Warehousing and Logistics Africa (Proprietary) Limited

• Jurisdiction: South Africa
• Judge: LJ Van Tonder AJ
• Judgment Date: 11 December 2014
• Citation: 2015 JDR 0284 (GJ)
• Docket Number: 2013/22608
• Court: Gauteng Local Division, Johannesburg

LJ Van Tonder AJ:

A: GENERAL INTRODUCTION

[1]

Impala Platinum Holdings Limited ("Implats") applied in June 2013 in reliance on section 34 of the Trade Marks Act 194 of 1993 ("the Act") and passing-off principles for interdictory and ancillary relief against Impala Warehousing and Logistics Africa (Proprietory) Limited ("IW"). Implats thus sought to bring an end to the alleged trespassing on its commercial domain by the infringing use by IW of the trade marks ("IMPALA" and "IMPALA PLATINUM").

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[2]

In the current offensive Implats operates, in broad terms, in the field of mining, processing and marketing of platinum and related goods (essentially trading in goods). IW, in broad terms, operates in warehousing, transport and related logistics (essentially providing services).

[3]

At the heart of both trenches chosen by Implats lies the contention that the respective goods and services of the enterprises are so similar to those for which the trade marks had been registered by Implats, that the use by IW gives rise to "a likelihood of deception or confusion", constituting trade mark infringement in addition to passing-off. In broad terms Implats had to establish "a likelihood of deception or confusion" to succeed in terms of section 34(1)(b) and, in similar terms, as one of the facta probanda for relief based on passing-off. [1]

[4]

In retaliation IW counter-applied in terms of section 24 and 27 of the Act to expunge or restrict the registered trade marks of Implats in order to redefine the trade mark boundaries contended for by Implats. The essential basis for the counter-application is that the absence of bona fide intended or actual use by Implats of the trade marks justifies an expungement or limitation of the ambit of the registered trade marks.

[5]

The battle lines on these issues were drawn in the course of some 1000 pages of opposed motion, with reference to various provisions of the Act and the legal principles applicable to unlawful competition (passing-off in particular). On that platform, expert senior counsel in the field (each assisted by an able junior) argued for almost three days on various legal and factual disputes crystallised in the papers. Argument included scrimmages over admissibility of evidence, strikeouts and procedural issues in relation to disputes of fact on affidavit. Broadly, however, the main substantive issues argued were:

(i)

whether the admitted use of the Implats' "IMPALA/Impala" trade mark related to similar goods or services;

(ii)

if so, whether in such use the likelihood of deception or confusion existed;

(iii)

whether IW's conduct constituted passing-off; and

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(iv)

whether Implats' actual or intended use of the trade mark justified expungement or amendment of the registered trade marks.

[6]

This campaign over disputed trade territory has to be resolved through enforcement of the registration and limitation or de-registration (expungement) of the impugned trade marks and as possible ally the common law principles applicable to passing-off.

[7]

As already alluded to, trade mark battles resemble territorial strife. Typically the parties compete for commercial dominium in relation to their trade activities, involving in particular the origin of specific goods and sometimes services, marketed and supplied under a particular proprietary banner.

[8]

Once a trade mark owner, like Implats, perceives such competing use of similar or identical trade marks to create a "likelihood of deception or confusion" to the actual or prospective users of the products or services, legal forces are normally deployed, exemplified in this matter.

[9]

As a prologue to the campaign to determine the "likelihood of deception or confusion" it would assist to summarise the broad legal matrix relevant to the opposing contentions:

(i)

According to well-established principles, a trademark serves as a badge of origin, in the sense that it identifies and guarantees the trade origin of the goods/services to which it applies (see, for example, Verimark (Pty) Ltd v BMW AG; BMW AG v Verimark (Pty) Ltd 2007 (6) SA 263 (SCA) paras 4 – 5).

(ii)

The underlying legal principles applicable to this type of commercial conflict seek to strike a balance between two extremes: (i) sanctity of the registered boundaries of the trade origin of goods/services (as a valuable means of trade success) as an instigator for economic enterprise and entrepreneurship versus (ii) unjustified monopoly over goods/services in the form of anti-competitive preclusion through trade mark registration which stifles commercial endeavour. (See below references to Foschini Retail Group (Pty) Ltd v Coetzee, par [24] of the unreported judgment)

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(iii)

Those who wish to compete in commerce are entitled to challenge the mere annexation or the passive occupation of idle commercial territory under the banner of trade mark registration.

(iv)

If a trade mark is registered in a particular class of goods or services, but not used or intended to be used, such a squatter may be evicted through the mechanisms of the Act for the benefit of actual use by others, alternatively the claimed territory may be reduced to depict actual use – so as not to preclude justified use by others.

(v)

The legitimate purpose of a trade mark [2] is to be used bona fide in the course of trade [3] as symbol and sign of trade origin [4] (in relation to [5] and to distinguish goods or services from "similar" [6] goods or services used by others) [7] , but not to prevent or inhibit competition. [8]

(vi)

Statute (on Provincial level since 1877 and National level since 1916) and common law, through the principles of Roman-Dutch law on passing-off and unlawful competition govern this field. [9]

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(vii)

Statute facilitates the registration and enforcement of existing rights in a unique manner, which expanded common law principles substantially. The Act is largely based on United Kingdom and European Community legislation [10] subject to relevant constitutional context. [11]

(viii)

In essence the legislation aims to administer trade mark registration to facilitate inexpensive prima facie proof of use and reputation acquired through such use. Without registration, no infringement proceeding can be brought.

(ix)

Section 11(1) provides that trade mark registration has to happen with reference to the 45 classes of goods and services defined in Schedule 3 to the Trade Mark Act (also known as the Nice Classification [12]).

(x)

Since 1971 trade marks can, in addition to goods, also be registered in respect of services. A cyber search on relevant jurisprudence indicate that even with the facility of a legislative straight-jacket, trade mark disputes continue to thrive in a world of its own. [13]

(xi)

There must be a connection in the course of trade between the goods and services and the registered proprietor of the mark, i.e. only goods and services in the course of trade, not philanthropic, charitable or non-commercial purposes. [14]

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In the same context, in determining "genuine use" it cannot be "just internal use by the undertaking concerned" [15] .

(xii)

Counsel for both parties were asked during argument to consider the relevance of the as yet unreported judgement in Foschini Retail Group (Pty) Ltd v Coetzee (A1/11) [2013] NGHC (18 January 2013), paragraphs [21] – [27]. The judgment emphasised direction towards limiting the specification of goods or services in relation to actual use based on a "marked trend to limit anti-competitive practices"; the effect of electing not to register in a particular class; the importance of classification system as the starting point to the assessment of similarity and the effect of goods/services being in different classes. The conclusion was reached that based on the principles in the judgment, in the context of the words "similar to the goods or services" in section 10(14) a court "can not lightly find similarity". The Full Bench held per A A LOUW J as follows:

"[27] The trade mark classification system has been put into place so as to permit similar (or even identical) trade marks to exist and be used in relation to different goods/services by different proprietors. This is because there is simply no danger of consumers being deceived as to the origin of these goods and there should therefore be no bar to different proprietors adopting the same mark for use in relation to goods which are not similar. By way of illustrative example, consumers are very unlikely to be confused into thinking that COBRA floor polish, COBRA golf clubs, COBRA taps and COBRA motor cars all originate from the same source. Similarly, POLO clothing and POLO vehicles obviously do not originate from the same source either. The starting point for an assessment of similarity must therefore be with reference to the classification system itself. The fact that the goods/services are in different classes would indicate, at least prima facie, that the goods and services are not similar. (emphasis added)"

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(xiii)

In the context of expungement issues the Full Bench quoted with approval the following extract:

"[26] In Webster and Page the following is said:

"The general tenor of the 1993 Act is in the direction of limiting specifications to goods or services in relation to which the applicant actually proposes to use his mark. This appears in particular from provisions of section 27(1)(a) which provides for a partial expungement in cases where the applicant did not have a bona fide intention to use the mark in relation to all the goods or services contained in his specification and the introduction of provisions...