Laugh It off Promotions CC v SAB International (Finance) BV t/a Sabmark International (Freedom of Expression Institute as Amicus Curiae)

• Jurisdiction: South Africa
• Judge: Langa DCJ, Moseneke J, Madala J, Mokgoro J, Ngcobo J, O'Regan J, Sachs J, Skweyiya J, Van der Westhuizen J and Yacoob J
• Judgment Date: 27 May 2005
• Citation: 2006 (1) SA 144 (CC)
• Docket Number: CCT 42/04
• Hearing Date: 08 March 2005
• Counsel: P Hodes SC (with A Katz and M Osborne) for the applicant. P Ginsburg SC (with R Michau and S M Lebala) for the respondents.
• Court: Constitutional Court

Moseneke J: E

Introduction

[1] This case brings to the fore the novel, and rather vexed, matter of the proper interface between the guarantee of free expression enshrined in s 16(1) [1] of the Constitution and F the protection of intellectual property rights attaching to registered trademarks as envisaged by s 34(1)(c) [2] of the Trade Marks Act 194 of 1993 (the Act) and consequently to related marketing brands. The issue confronts us in the context of an application for leave to appeal against the whole of the judgment and order of the Supreme Court of Appeal (SCA). [3] The SCA upheld the decision but G amended the final interdict granted against the applicant by the Cape High Court (High Court). [4] In its essence, the interdict prohibits the applicant from infringing specified registered trademarks of the respondent by using them without permission and in the course of trading T-shirts. H

[2] The free expression right conferred by s 16 of the Constitution is couched in the following words:

'16 Freedom of expression

(1) Everyone has the right to freedom of expression, which includes - I

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(a)

freedom of the press and other media; A

(b)

freedom to receive or impart information or ideas;

(c)

freedom of artistic creativity; and

(d)

academic freedom and freedom of scientific research.

(2) The right in ss (1) does not extend to -

(a)

propaganda for war;

(b)

incitement of imminent violence; or B

(c)

advocacy of hatred that is based on race, ethnicity, gender or religion, and that constitutes incitement to cause harm.'

[3] On the other hand, the protection of intellectual property contemplated in s 34(1)(c) takes the form of a prohibition against dilution and in particular against blurring or tarnishment of a registered trademark. The section reads as follows: C

'34 Infringement of registered trade mark

(1) The rights acquired by registration of a trade mark shall be 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 trade mark registered, if such trade mark is well known in D 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 the repute of the registered trade mark, notwithstanding the absence of confusion or deception: Provided that the provisions of this paragraph shall not apply to a trade mark referred to in s 70(2).' [5] E

Parties

[4] The applicant is Laugh It Off Promotions CC, a close corporation that occupies itself with the appropriation of brands which inhere in well-known trademarks. This it does by altering the images and words on trademarks and printing them onto T-shirts. The applicant sells the F T-shirts for profit in order to make social comment. The applicant was respondent in the interdict proceedings before the High Court and appellant in the SCA.

[5] The respondent is South African Breweries International (Finance) BV t/a Sabmark International (now known as SABMiller Finance BV) (SABMiller), a company registered in Rotterdam in the Netherlands. G The respondent is the holder and owner of the registered trademarks in issue. The respondent approached the High Court as applicant.

[6] The Freedom of Expression Institute (FXI or amicus) has been admitted as an amicus. FXI is a not for profit non-governmental organisation which pursues the H principal objects of advancing freedom of expression in South Africa and resisting censorship. FXI was admitted as amicus before the SCA.

Factual background

[7] The material facts of this case are undisputed and may be rendered briefly. Besides being a trader largely of alcoholic and also I of non-alcoholic beverages, the respondent holds, manages, maintains and

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controls the use of a range of trademarks throughout the world. With effect from 31 December 1997, the respondent A acquired ownership of three South African registered trademarks from a company known as Sabmark International Inc. They are 'Carling Black Label' trademarks in class 32. [6] Here follows a graphic representation of the trademarks and of their challenged use on the T-shirts of the applicant. B

Trade Mark No 1979/03675:

Trade Mark No 1991/09236:

Trade Mark No 1991/09237:

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Laugh It Off T-shirt: A

A domestic company known as South African Breweries Ltd (SAB) is using the trademarks, with the permission of the respondent. SAB manufactures, distributes, exports and sells alcoholic and other products, particularly beer, under the 'Carling Black Label' marks. C

[8] The respondent and SAB tell us that the marks have become well known and are used extensively across South Africa in relation to beer sales. In fact Black Label beer has been sold in this country through a variety of trade outlets, from shebeens to D mega-wholesalers, for over 30 years. The label and get-up of the beer were selected because they have a very strong visual impact; something which, we are told, compliments the beer rather well. The product's reputation has progressed to become one of the leading beer products in the country. The volume of sales of Black Label beer for the 2000/2001 financial year is said to have exceeded 1,4 billion 340 ml bottles. E This, we are assured, translates to 350 bottles of 340 ml for every man, woman and child of all 40 million of us in this country. SAB points out that these excellent beer sales volumes are owed to the Black Label brand, whose market popularity derives from costly, concerted and pervasive advertising in the form of sport sponsorships, F television, radio, print media, coasters, posters, flags, T-shirts, billboards and advertising on taxis.

[9] At the end of November 2001, the respondent came to know that the applicant had produced and was offering for sale to the public T-shirts, which bore a print that was markedly similar, in lettering, colour scheme and background, to that of the respondent's G 'Carling Black Label' trademarks. The only real difference was in the wording. The words 'Black Label' on the respondent's registered trademarks were replaced, on the T-shirt, with 'Black Labour'; the respondent's 'Carling Beer' was substituted with 'White Guilt'; and where written 'America's lusty lively beer' and 'enjoyed by men around the world', the applicant had printed H 'Africa's lusty lively exploitation since 1652' and 'No regard given worldwide', respectively.

[10] The marketing of the T-shirts with the offending marks took the form of advertising on the Internet. The applicant's website points to two objectives of its enterprise. The one is to create a close association with well-recognised branded materials and the other I is to make fun of them. It is clear from the website that the applicant's effort was not limited to the respondent's marks. It had been marketing T-shirts using at least eleven other brands. However, no other brand holder has litigated against it on grounds similar to the present. These well-known J

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brands include Coca-Cola, Kentucky Fried Chicken, Shell, e-tv, Standard Bank, Diesel, A McDonald's, Virgin, National Lottery and Lego. Relying on legislation regulating counterfeit goods, [7] seemingly Standard Bank made an unsuccessful attempt to confiscate T-shirts produced by the applicant and carrying comment on that bank.

[11] The respondent was less than amused by the applicant's conduct. During January and again in February 2002 it dispatched B letters of demand calling on the applicant to desist from using the trademarks. The demand elicited neither compliance nor a substantive response. Litigation ensued.

In the High Court C

[12] The respondent approached the High Court for an interdict on the ground that the unauthorised use of its registered trademarks by the applicant in the course of trade offended the anti-dilution provisions of s 34(1)(c). The applicant resisted the relief sought, contending that its use of the trademarks had not infringed the section inasmuch as the likelihood of detriment to the reputation of D the marks had not been established and that, in any event, it was exercising freedom of expression entrenched in s 16(1) of the Constitution.

[13] The pith of the applicant's contention on free expression is that, properly construed, s 34(1)(c) does not oust its E constitutional right to comment on, lampoon or make fun of any trademark and its associated brand. Brands, the applicant asserts, are often put to work by powerful corporations to crowd out equally legitimate expression. They tend to stifle the open and free flow of ideas. Brand building, the applicant argues, sets out to occupy cultural space, social space and even one's own 'headspace'. Since, F in time, marketing brands graduate to cultural icons, they should not be beyond the reach of public disclaim or indeed applause. The purpose of copyright and trademark laws in an open and democratic society is not to shut out critical expression or to throttle artistic and other expressive acts in a manner that gives way to inordinate brand sway. G

[14] The sole member of the applicant, Mr Justin Bartlett Nurse, explains that he has grown to become a 'brand atheist'; he is intolerant of brand sanctity and mass-market mediocrity. That, he says, explains the applicant's election to make and sell T-shirts that display a message of 'social satire or parody'. To that end the H applicant employs what he calls 'ideological jujitsu'. The brand is pitted against its own weight and popularity. The technique entails using well-known, registered trademarks of large corporations, slightly altered but still recognisable as an adaptation of the original brand. The purpose, the...