A M Moolla Group Ltd and Others v the GAP Inc and Others

• Jurisdiction: South Africa
• Judge: Harms JA, Streicher JA, Farlam JA, Cloete JA and Ponnan AJA
• Judgment Date: 30 November 2004
• Citation: 2005 (2) SA 412 (SCA)
• Docket Number: 543/2003
• Hearing Date: 23 November 2004
• Counsel: A Findlay SC and P Ginsburg SC (with O A Moosa) for the appellant. C E Puckrin SC (with R Michau) for the respondent.
• Court: Supreme Court of Appeal

Harms JA:

[1] This appeal concerns the interpretation of some provisions of the Counterfeit Goods Act 37 of 1997 (the Act). The factual background is simple. The trademark 'Gap' is registered in 110 countries in the name of one or more of the respondents (a group of affiliated companies to J

Harms JA

whom I shall refer in the singular since their individual corporate identities are not relevant). In South Africa, the A respondent holds registrations for the mark in classes 3 and 30, while the marks 'The Gap', 'The Gap (device)' and 'Gap (device)' are registered in the name of the third appellant, in class 25, in respect of clothing. In related litigation, the Transvaal Provincial Division has expunged the third appellant's trademarks and B simultaneously dismissed an application for expunging the respondent's marks. That judgment is presently on appeal and, for present purposes, it will be assumed that the registrations in the name of the third appellant are valid.

[2] The respondent sources clothing carrying the 'Gap' trademark in Lesotho, Swaziland, Zimbabwe, Mauritius and Madagascar C (countries where it holds registrations for the mark), destined for marketing in other countries where it also holds registrations. In other words, the source and destination of the goods are countries where the goods are genuine and not counterfeit (that is fraudulent imitations). The goods from Mauritius and Madagascar have to be D transhipped via South African harbours, and goods from the landlocked countries mentioned have to be transported through South Africa to a harbour. Relying on the third appellant's registered trade marks, the appellants (a group of related companies) have used, attempted to use and threatened to use the provisions of the Act to have the goods in E transit impounded by the SA Police Service or the Commissioner of Customs and Excise. To prevent further interference with these 'transhipments', the respondent sought and obtained an order from the Durban High Court (Magid J) declaring that it is not unlawful under the Act (or the Trade Marks Act 194 of 1993) for the respondent to export through or to import through (that is, tranship through) the F Republic goods bearing the 'Gap' marks in circumstances where such marks are placed on the goods outside of the Republic and where such goods are not for sale in the Republic.

[3] The appellants allege that transhipment (by which I include the transportation of goods in transit) is hit by the provisions of s 2(1)(f) of the Act, which provide that goods that are G 'counterfeit goods' may not be imported into or through or exported from or through the Republic except if so imported or exported for the private and domestic use of the importer or exporter, respectively. [1] (The exception is not applicable and

Harms JA

will be ignored in the discussion that follows.) A person who performs or engages in such an act is guilty of an offence A if certain requirements are present. [2] The respondent, on the other hand, submits that its actions are not hit by these provisions.

[4] Before entering into a detailed analysis of the relevant provisions of the Act, it is necessary to say something about its B background and genesis. Counterfeiting of trademarks has, historically and imperfectly, been dealt with by different Merchandise Marks Acts. [3] Piracy, which concerns copyright infringement committed knowingly, was criminalised by Copyright Acts and still is. [4] International concern about counterfeiting and piracy led to certain provisions in the TRIPs agreement, [5] C the preamble of which speaks of the desire of member States

'to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade'.

The agreement requires of member States to provide certain minimum D measures for the protection of intellectual property rights but leaves it to them to grant more, should they wish to do so. [6] As far as border measures are concerned, art 51 is of significance for present purposes:

'Members shall, in conformity with the provisions set out below, adopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods may take place, to lodge an application in E writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods. . . . Members may also provide for corresponding procedures concerning the suspension by the customs authorities of the release...