National Brands Limited v Cape Cookies CC and another

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Ponnan JA, Gorven JA, Hughes JA, Goosen JA and Siwendu AJA
• Judgment Date: 12 June 2023
• Citation: 2023 JDR 2056 (SCA)
• Hearing Date: 17 May 2023
• Docket Number: 309/2022
• Court: Supreme Court of Appeal

Gorven JA (Ponnan, Hughes and Goosen JJA and Siwendu AJA concurring):

[1]

The first respondent, Cape Cookies CC (Cape Cookies) applied to register the trade mark SNACKCRAX by way of application no. 2013/06837 under the Trade Marks Act 194 of 1993 (the Act). Publication took place on 28 May 2014. The registration was sought in the following specification in class 30:

'Coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee; flour and preparations made from cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking-powder, salt, mustard, vinegar, sauces (condiments); spices; ice.'

It was common ground that these specifications covered savoury biscuits. The application for registration was opposed by the appellant, National Brands Limited (National Brands), on one or more of ss 10(4), 10(7), 10(12), 10(14) and 10(17) of the Act. As is customary, the Registrar of Trade Marks, who was cited as the second respondent, elected to abide the decision in both the high court and in this court.

[2]

National Brands is the proprietor in South Africa of the following registered marks:

(a)

trade mark registration no. 1951/2139 SALTICRAX in class 30 in respect of 'salt flavoured biscuits', dating back to 1 August 1951 (the SALTICRAX registration);

(b)

trade mark registration no. B1985/03525 SNACKTIME in class 30 in respect of 'flour and preparations made from cereals; bread, biscuits, cakes, pastry,

2023 JDR 2056 p4

Gorven JA (Ponnan, Hughes and Goosen JJA and Siwendu AJA concurring)

confectionery and bakery products of all kinds; yeast, baking powder', dating back to 29 October 1986 (the SNACKTIME registration);

(c)

trade mark registrations no. 2001/18858 VITASNACK and no. 2003/01759 VITASNACK WHOLEWHEAT CRISPS logo in class 30 in respect of 'coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee; flour and preparations made from cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking-powder, salt, mustard, vinegar, sauces (condiments); spices; ice' dating back to 2 November 2001 and 31 January 2003 respectively (the VITASNACK registration).

[3]

Cape Cookies' SNACKCRAX savoury biscuits have been on the market since August 2014 and are sold in competition with National Brands' SALTICRAX savoury biscuits. In addition, Cape Cookies uses the VITACRAX mark, registered in 2009, in relation to a crisp bread snack. National Brands has sought to interdict that use in the Western Cape Division of the High Court, Cape Town (the Cape litigation). The Cape litigation is still pending.

[4]

The opposition proceedings were heard in the high court by Le Roux AJ in the Gauteng Division of the High Court, Pretoria (the high court), who dismissed the opposition and ordered that the relevant trade mark application must proceed to registration and directed the Registrar of Trade Marks to register it. National Brands was ordered to pay the costs of the opposition proceedings. The high court granted leave to appeal on a limited basis but this court granted leave on the balance of the grounds of opposition.

[5]

The opposition by National Brands was based on the following provisions of s 10 of the Act:

2023 JDR 2056 p5

Gorven JA (Ponnan, Hughes and Goosen JJA and Siwendu AJA concurring)

'The following marks shall not be registered as trade marks or, if registered, shall, subject to the provisions of sections 3 and 70, be liable to be removed from the register:

. . .

(4)

a mark in relation to which the applicant for registration has no bona fide intention of using it as a trade mark, either himself or through any person permitted or to be permitted by him to use the mark as contemplated by section 38;

. . .

(7)

a mark the application for registration of which was made mala fide;

. . .

(12)

a mark which is inherently deceptive or the use of which would be likely to deceive or cause confusion, be contrary to law, be contra bonos mores, or be likely to give offence to any class of persons;

. . .

(14)

subject to the provisions of section 14, a mark which is identical to a registered trade mark belonging to a different proprietor or so similar thereto that the use thereof in relation to goods or services in respect of which it is sought to be registered and which are the same as or similar to the goods or services in respect of which such trade mark is registered, would be likely to deceive or cause confusion, unless the proprietor of such trade mark consents to the registration of such mark;

. . .

(17)

a mark which is identical or similar to a trade mark which is already registered and which is well-known in the Republic, if the use of the mark sought to be registered 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 deception or confusion . . .'.

[6]

It is as well to reiterate that, historically and primarily, a trade mark functions as a badge of origin of the goods offered. [1] This originates from the definition of

2023 JDR 2056 p6

Gorven JA (Ponnan, Hughes and Goosen JJA and Siwendu AJA concurring)

'trade mark' in the Act. [2] It reassures persons seeing the mark that the proprietor is the source of those goods. A registered trade mark constitutes a monopoly. That being the case, it must not be interpreted in such a way as to impermissibly widen its scope. On the other hand, the registration stage is aimed at ensuring the sanctity of the Trade Mark Register, which should contain only distinctive marks. [3] It is also worth noting that only one ground of opposition need succeed for registration to be prohibited and the application dismissed. There is an overall onus on the applicant for registration to satisfy the court that there is no bar to registration under the Act.

[7]

I turn to the objection under s 10(17) of the Act which precludes registration of:

'a mark which is identical or similar to a trade mark which is already registered and which is well-known in the Republic, if the use of the mark sought to be registered 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 deception or confusion . . .'.

Section 10(17) was introduced in 1997 along with s 34(1)(c) of the Act, which is the equivalent section dealing with infringement, and provides:

'(1)

The rights acquired by registration of a trade mark shall be infringed by –

. . .

(c)

the unauthorized 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 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 . . .'.

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Gorven JA (Ponnan, Hughes and Goosen JJA and Siwendu AJA concurring)

These are known as the 'anti-dilution' provisions.

[8]

We were not referred to any authority, which has dealt with the provisions of s 10(17) of the Act. Nor have I found any. There are a number of cases dealing with s 34(1)(c). These afford some guidance as far as the applicable principles are concerned but cannot be applied without more, because the provisions are not entirely on all fours and since they relate to infringement whereas s 10(17) relates to the registration stage. What is more, the incidence of the onus in respect of each differs.

[9]

In Laugh It Off Promotions CC v South African Breweries International (Finance) BV t/a SabMark International (Laugh It Off SCA), Harms JA listed the requirements for proceedings under s 34(1)(c):

'In order to establish infringement, the owner of the trademark must establish:

(a)

the unauthorised use by the defendant of a mark

(b)

in the course of trade

(c)

in relation to any goods or services

(d)

the mark must be identical or similar to a registered trademark

(e)

the trademark must be well known in the Republic, and

(f)

the use of the defendant's mark would be likely to take unfair advantage of, or be detrimental to, the distinctive character or the repute of the registered trademark.' [4]

Of these, the first three are not in dispute.

2023 JDR 2056 p8

Gorven JA (Ponnan, Hughes and Goosen JJA and Siwendu AJA concurring)

[10]

I will turn to item (d) presently. In support of its contention that item (e) was satisfied, National Brands made the point that, for a period of 58 years, it was the only proprietor of a mark which included the expression 'CRAX' in any guise or form in class 30. At the time of the application by Cape Cookies for the registration of SNACKCRAX, there were three such marks appearing in the Trade Marks Register: SALTICRAX, Cape Cookies' VITACRAX and trade mark registration no. 2009/24890, ETI CRAX, in the name of a third party who, when requested by National Brands to cancel the registration, did so. Cape Cookies were also requested to cancel the VITACRAX mark and refused, leading to the Cape litigation.

[11]

National Brands gave detailed, unchallenged, evidence of the reputation and goodwill of the SALTICRAX brand. It is sold through more than 2095 retail stores in South Africa. It is also sold at over 270 convenience stores located at the major South African fuel stations. It is sold in at least ten countries in Africa as well as in the United Kingdom, the United States of America and Australia. Through its Snackworks division, National Brands held a total of 66.7 percent of the savoury biscuit market in 2012, with SALTICRAX biscuits alone accounting for 14.8 percent. In 2013, the percentages were 66.2 and 14.9 and in 2014, they were 66.9 and 13.7 respectively...