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

• Jurisdiction: South Africa
• Citation: 2006 (1) SA 144 (CC)

Laugh It off Promotions CC v SAB International (Finance) BV t/a Sabmark International (Freedom of Expression Institute as Amicus Curiae)
2006 (1) SA 144 (CC)

2006 (1) SA p144

Citation	2006 (1) SA 144 (CC)
Case No	CCT 42/04
Court	Constitutional Court
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
Heard	March 8, 2005
Judgment	May 27, 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.

Flynote : Sleutelwoorde H

Constitutional law — Human rights — Right to freedom of expression — Ambit and purpose of right I discussed against background of anti-dilution protection afforded to well-known registered trade marks under s 34(1)(c) of the Trade Marks Act 194 of 1993 — Anti-dilution prohibition in s 34(1)(c) limiting constitutional right to freedom of expression and to be construed in way most compatible with Constitution — Party seeking to J

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oust expressive conduct by relying on s 34(1)(c) having to establish on facts A likelihood of substantial economic detriment to its mark — Constitution, s 16.

Constitutional law — Human rights — Right to freedom of expression — Ambit of — Mere fact that expressive act uncomfortable, morally reprobate or unsavoury in eyes of some people irrelevant — Constitution, s 16.

Intellectual property — Trademark — Infringement — Trade Marks Act 194 of 1993, s 34(1)(c) — Whether B use of mark detrimental to distinctive character of mark — 'Unfair advantage' or 'unfair detriment' required — Anti-dilution protection afforded by s 34(1)(c) construed against background of constitutional right to freedom of expression — Detriment relied upon to be substantial — Use amounting to taking fair advantage of mark or that fails to threaten substantial harm to repute of mark not C prohibited by s 34(1)(c) — Fairness to be assessed in light of circumstances — Interests of owner of mark to be weighed up against constitutional right of user without permission to freedom of expression — Party seeking to oust expressive conduct by relying on s 34(1)(c) having to establish on facts likelihood of substantial economic detriment to its D mark.

Headnote : Kopnota

The respondents had in 2002 approached the Cape High Court for an interdict based on s 34(1)(c) of the Trade Marks Act 194 of 1993 restraining the appellant close corporation from marketing T-shirts which, according to the respondents, infringed some of their trademarks. They argued that the offending use of the marks E consisted in a caricature of the neck and body labels of beer bottles of their 'Carling Black Label' brand. They contended that the applicant's sale of T-shirts bearing this caricature was detrimental to the reputation of their marks and thus in contravention of s 34(1)(c). The applicant had appropriated the general layout and colours of the respondents' registered 'Carling Black Label' mark, but substituted the words 'Black Label' with 'Black F Labour', and the words 'Carling Beer' with 'White Guilt'. In the laudatory part of the label the phrases 'America's lusty, lively beer' and 'Enjoyed by men around the world' were replaced by 'Africa's lusty, lively exploitation since 1652' and 'No regard given worldwide'. The respondents claimed that their 'Carling Black Label' marks had become well known across South Africa over the preceding 30 years and that they were accordingly entitled to the G anti-dilution provisions of s 34(1)(c). The applicant argued that its object was not just to sell T-shirts, but also to provide social commentary by lampooning well-recognised brands, pitting them against their own weight and popularity.

The High Court held that the message on the T-shirts carried a likelihood of material detriment to the distinctive character or repute of the respondents' marks and manifested an intention to be H hurtful or harmful to the respondents, and granted the restraint order sought. The applicant, aggrieved by the decision, appealed to the Supreme Court of Appeal. It denied that the use of the mark was detrimental to the distinctive character of the respondent's mark and contended that the granting of the interdict had infringed its right to freedom of expression. It further alleged that the message on I the T-shirts was a parody of the respondent's marks and, as such, entitled to protection under the head of freedom of expression.

In an appeal by the applicant to the Supreme Court of Appeal the Court agreed that the message was materially detrimental to the repute of the respondent's trademarks. It further held that parody was not per se a defence against trademark infringement in terms of s 34(1)(c), but only a factor to be J

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considered in determining whether a defendant's use of a mark contrary to the A provisions of that section was constitutionally protected; that the applicant's reliance on parody as a defence was misconceived since it was using the reputation of the respondent's well-known trademark, established at considerable expense over a lengthy period of time, in the course of trade in relation to goods to the detriment of the repute of the mark without any justification; that this use and detriment was unfair and constituted an infringement of the provision; and that B applicant's reliance on the freedom of expression as entrenched in s 16 of the Constitution of the Republic of South Africa, 1996, was misplaced because it had abused that freedom. The appeal was accordingly dismissed. The applicant then approached the Constitutional Court seeking leave to appeal against the judgment of the SCA. The Constitutional Court granted the leave prayed for and proceeded to deal C with the appeal.

Section 34(1)(c) of the Trade Marks Act 194 of 1993 provided that: '(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 the Republic and the use of the said mark would be likely D 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).'

Held, that the anti-dilution protection afforded by s 34(1)(c) served to preserve trade and commercial interests of owners of well-renowned trade marks, and did so by E prohibiting use that, while not confusing or deceptive, materially undermined the repute of such marks. More than safeguarding the product's 'badge of origin' s 34(1)(c) strove to protect the unique identity and reputation of a registered trade mark, both of which attributes underpinned the economic value residing in the mark's advertising prowess or selling power. The mark sold the goods and its positive image had to be safeguarded. (Paragraph [40] at 163B - D/E.) F

Held, further, that dilution could take two forms: blurring (the reduction or weakening of the distinctive character of the brand) or tarnishment (the creation of unfavourable associations between a well-known mark and the mark of an unauthorised user). In the case of tarnishment, the object of protection was the repute of the brand. (Paragraph [41] at 164A - C.) G

Held, further, that the two-stage approach of the SCA in deciding the merits of the infringement claim in the present case (by deciding first whether infringement had occurred, then whether the right to freedom of expression afforded justification for the infringement) was flawed because it had precluded the SCA from properly taking into account the free expression guarantee claimed by the alleged infringer. The SCA had been constitutionally obliged to balance H out the interests of the respondent as owner of the marks against the claim of free expression for the very purpose of determining what was unfair and materially harmful to the marks. (Paragraphs [43] - [44] at 164F - 165D/E.)

Held, further, that the anti-dilution prohibition contained in s 34(1)(c), by seeking to oust certain expressive conduct in respect of well-known marks, limited the right to free I expression embodied in at least s 16(1)(a) - (c) of the Constitution. This required a construction of s 34(1)(c) most compatible with the right to free expression, in other words the anti-dilution provision had to be given the meaning that was least destructive of free expression rights. (Paragraph [48] at 167C - E.)

Held, further, that s 34(1)(c) had its own internal limitations: the infringement J

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occurred only if 'unfair advantage' or 'unfair detriment' was shown, and the detriment relied A upon could not be flimsy or negligible but had to be substantial in the sense that it was likely to cause substantial harm to the uniqueness and repute of the marks. To determine fairness the interests of the owner of the mark had to be balanced against the claim of free expression of a user without permission. To succeed the owner of the mark bore the onus to demonstrate the likelihood of substantial harm or detriment which, when viewed in the light of the B context of the case, amounted to unfairness. (Paragraphs [49] - [50] at 167F/G - 168C.)

Held, further, that even if the meaning the SCA had attached to the impugned publication of the T-shirts were accepted, that constituted unconvincing evidence of substantial economic harm to the respondents' marks. There was much to be said for the contention that in a tarnishment claim the probability of material detriment to C the mark had to be restricted to economic and trade harm...