Laugh IT off Promotions CC v South African Breweries International (Finance) Bv t/a Sabmark International

• Jurisdiction: South Africa
• Judge: Harms JA, Streicher JA, Navsa JA, Mthiyane JA and Comrie JA
• Judgment Date: 16 September 2004
• Citation: 2005 (2) SA 46 (SCA)
• Docket Number: 242/2003
• Hearing Date: 30 August 2004
• Counsel: P Hodes SC (with A R Sholto-Douglas) for the appellant. P Ginsburg SC (with R Michau) for the respondent. G J Marcus SC (with A D Stein) for the amicus curiae.
• Court: Supreme Court of Appeal

Harms JA: I

Introduction

[1] This appeal relates to trademark infringement and more particularly infringement by way of dilution through tarnishment. Section 34(1)(c) J

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of the Trade Marks Act 194 of 1993 provides the statutory basis for such a claim by stating that the rights A acquired by registration of a trademark are infringed by -

'(c) the unauthorised use in the course of trade in relation to any goods or services of a mark which is identical or similar to a trademark registered, if such trademark is well known in the Republic and the use of the said mark would be likely to take unfair advantage of, or be detrimental to, the distinctive character or B the repute of the registered trademark, notwithstanding the absence of confusion or deception: Provided that the provisions of this paragraph shall not apply to a trademark referred to in s 70(2).' [1]

The related question is whether or not, on the facts of this case, a finding of infringement would impinge on the appellant's entrenched freedom of expression, which is contained in s 16(1) of the C Constitution, and which includes:

'(a)

freedom of the press and other media;

(b)

freedom to receive or impart information or ideas;

(c)

freedom of artistic creativity; and D

(d)

academic freedom and freedom of scientific research.' [2]

[2] The trademark owner (Sabmark) - the respondent in this Court - is a Dutch company which forms part of the SAB group of companies. It holds the trade marks of the group. A local member of the group is The South African Breweries Ltd. It produces and sells beer and uses a series of Carling Black E Label trade marks under licence from Sabmark. [3] It is common cause that the name mark 'Carling Black Label' [4] has not been infringed and the case concerns two marks which consist of a representation of Black Label stickers on the neck and body of a beer bottle. [5] The discussion will be limited to one of these because it is not in dispute that what applies to the one F applies to the other.

[3] The label (see the annexure to the judgment) on the neck contains the words 'Carling' and 'enjoyed by men around the world', all in black uppercase type on a red background between two golden lines. The sticker for the body of the bottle is much larger and is oblong. The background is red. There are also two gold lines, the upper G one containing the phrase 'America's lusty, lively beer' and the lower one 'Brewed in South Africa', all in black upper case. In a parallelogram with a black background the words 'Carling Black Label Beer' appear - 'Carling' and 'beer' in red typeface and 'Black Label' in white script. H

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[4] The appellant is a close corporation and the alter ego of Mr J B Nurse. He graduated in journalism and politics at Rhodes University A and holds a postgraduate diploma in enterprise management. He has a special interest in the effect of trademarks and branding on society. The appellant, he says, is the result of the thought, research and input of a collective of graduates and students from Rhodes. 'They' are 'conscientious objectors to niche-market selfhood and mass-market B mediocrity' who 'grew up to be brand atheists'. In order to bring this point home, the appellant markets clothing - mainly, it would seem, T-shirts - using well-known logos and trade marks 'back on' themselves. Nurse calls it 'ideological jujitsu' in which the weight of a brand is used against itself. C

[5] In relation to the Black Label neck and body mark, the jujitsu grip consists of what may be characterised as a caricature of the said trade mark used on T-shirts shown as an annexure. It employs the general lay-out and colours of the registered mark. However, the message is different. The words 'Black Label' were replaced with 'Black Labour' and 'Carling Beer' with 'White Guilt'. The D laudatory part on the label was replaced by 'Africa's lusty, lively exploitation since 1652' and 'No regard given worldwide'.

The litigation

[6] In the Court below the trademark owner applied for an interdict E based on s 34(1)(c). Initially the appellant raised the constitutionality of the provision but later abandoned it. (As will appear later, anti-dilution provisions are common in major democracies that hold freedom of expression in high regard.) Cleaver J found against the appellant. He apparently accepted the submission that the message conveyed by the T-shirts was that SAB has in the past exploited F and continues to exploit black labour and is guilty of racial discrimination and that the words conjure up this country's racist past by falsely attributing to SAB the lusty and lively exploitation of black labour since 1652, the year during which the Dutch settled in the Cape. This message, he held, established that the appellant's use of G its caricature of the Black Label trade mark would be likely to take unfair advantage of or be detrimental to the distinctive character or repute of the trade marks in question. Freedom of expression, the learned Judge held, did not justify the actions of the appellant because the appellant deliberately exploited the marks for commercial H gain (it is an admitted fact that it will not be able to sell its T-shirts without using caricatures of well-known marks) and its lampooning or parodying was not a harmless clean pun which merely parodies or pokes fun but bordered on hate speech. He accordingly held that the appellant's conduct was covered by s 34(1)(c) and issued an interdict. (I shall revert to its terms in due course.) I

[7] Cleaver J granted the necessary leave to appeal to this Court. We granted the Freedom of Expression Institute (FXI) leave to intervene as amicus curiae and it was duly represented by counsel. As will become apparent, the issues before us on appeal were limited. In particular, it should be noted, the constitutionality of s 34(1)(c) was accepted by all. J

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The approach to trademark infringement A

[8] Concern is expressed from time to time about the pervasiveness of trademarks, the fact that trademark owners tend to be voracious and that trademark protection is not always kept within its legitimate bounds. Nurse, in his affidavit, raises this as a justification for attacking well-known marks. He says, for instance, that 'they' B (presumably he and his colleagues) are doing their bit to promote freedom of expression in a world where commercial expression and debate is being crowded out in the name of the protection of a brand. He also believes that brands tend to control ideas and concepts. Some of this, but not all, is hyperbole. [6]

[9] Professor David Vaver, for one, has pointed out that intellectual property cannot be treated as an absolute value. Its value C should be weighed up against a range of values of at least equal importance such as the 'right of people to imitate others, to work, compete, talk, and write freely, and to nurture common cultures'. [7] This Court, too, on occasion D emphasised that intellectual property rights should be confined within their legitimate boundaries. [8] If so confined, the concerns expressed can be accommodated considerably.

[10] On the other hand, and in spite of some judicial resistance in certain quarters, [9] trademarks are property, albeit intangible or incorporeal. The fact that property is E intangible does not make it of a lower order. [10] Our law has always recognised incorporeals as a class of things in spite of theoretical objections thereto. [11] Also, simply because, as the appellant has it, trademark protection and branding are the result and part of a 'capitalistic' economy does not mean that trade marks may be disregarded by those who do not believe in such an economy. F

[11] But then again, intellectual property rights have no special status. The Constitution of the Republic of South Africa Act 108 of 1996 (the Constitution) does not accord them special protection and they are not immune to constitutional challenge. Even if G constitutional, their enforcement must be constitutionally justifiable. [12] The problem, as will appear

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later, is that the question of how far guarantees of freedom of the media and expression affect intellectual property rights, is, A except for the USA, somewhat virgin territory. [13]

Anti-dilution and trademark infringement

[12] In Beecham Group plc v Triomed (Pty) Ltd [14] we pointed out that the B function of a trademark, in terms of the definition in the Act, is to indicate the origin of the goods or services. In a footnote we quoted the European Court of Justice where it held that the essential function of the trade mark is to guarantee the identity of the origin of the marked product to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the product or service from others which have another origin. [15] C

[13] Beecham also pointed out that the protection granted to a trademark by s 34(1) and its secondary commercial functions extend beyond the 'badge of origin' concept. Section 34(1)(c) in particular is not concerned with either origin or confusion. It protects the economic value of a trade mark, more D particularly its reputation and its advertising value or selling power. [16] As summed up by Tony Martino: [17]

'A trademark is a ''creative 'silent salesman''' stimulating sales by creating goodwill and assuring buyers that all goods bearing the same mark have the same quality. ''The mark E actually sells the goods''; the more distinctive the mark, the greater its selling power.' [18]

[14] The anti-dilution doctrine can be traced to German jurisprudence but was first formulated with a measure of precision by Frank I Scheckter. [19] What Scheckter principally had in mind was dilution by means of blurring of...