Nino's Coffee Bar & Restaurant CC v Nino's Italian Coffee & Sandwich Bar CC and Another; Nino's Italian Coffee & Sandwich Bar CC v Nino's Coffee Bar & Restaurant Cc

• Jurisdiction: South Africa
• Citation: 1998 (3) SA 656 (C)

Nino's Coffee Bar & Restaurant CC v Nino's Italian Coffee & Sandwich Bar CC and Another;
Nino's Italian Coffee & Sandwich Bar CC v Nino's Coffee Bar & Restaurant Cc
1998 (3) SA 656 (C)

1998 (3) SA p656

Citation	1998 (3) SA 656 (C)
Case No	7405/98 & 10660/97
Court	Cape Provincial Division
Judge	Rose Innes AJ
Heard	February 18, 1998; February 19, 1998; February 23, 1998; February 24, 1998; February 25, 1998; February 26, 1998
Judgment	April 8, 1998
Counsel	P Tredoux for the applicant; LJ Morrison for the respondents

Flynote : Sleutelwoorde

Trade and competition — Competition — Passing off — Business, its goodwill and name of family business in J city sold — F Successor to seller opening similar business with similar name in C city — Purchaser carrying on franchising business using name of business purchased — Purchaser opening businesses in C city — Successor to seller applying for interdict against purchaser — Right to use name — Seller and successors precluded from right to use G name — Whether purchaser tacitly consented to subsequent unlimited use of name by seller — Purchaser not having abandoned rights with full knowledge of its rights — Seller acting unlawfully — Seller failing to establish that purchaser's conduct resulting or likely to result in harm to applicant.

Trade mark — Infringement — Defence in terms of s 34(2)(a) of Trade Marks Act 194 of 1993 that trade mark not H infringed by bona fide use by person of his own name — Use of name must be use by a person of his own name, ie full name — Use of part of name only not sufficient — Right to use such name sold to trade mark owner — Use of such name by seller not bona fide. I

Trade mark — Infringement — Defence of prior use in terms of s 36(1) of Trade Marks Act 194 of 1993 — Purpose of to prevent proprietor of trade mark from exercising his rights merely on basis of priority of registration — Section preserving whatever common-law rights antecedent to rights of registered proprietor — Defence only available if bona fide and continuous use made of trade mark from date earlier than use of the trade mark by the J

1998 (3) SA p657

proprietor or predecessor in title or from date prior to registration of the trade mark — Evidence in casu not establishing A prior use.

Headnote : Kopnota

The first respondent (as successor to one K) had in 1989 acquired the exclusive right to carry on the business and to use the name 'Nino's Coffee and Sandwich Bar' when it purchased the restaurant in Johannesburg. The restaurant had been owned by G, and his two sons, F and C, and one B assisted in running it. The applicant, a B close corporation of which F and C were the members, subsequently established a restaurant using the name 'Nino' in Cape Town. G assisted in the running of the Cape Town business. In 1995 the first respondent obtained registration of a trade mark incorporating the name 'Nino's' and later opened other restaurants in two different parts of Cape Town also using the name 'Nino's'. When the first respondent later extended operations nationally C the applicant applied in a Provincial Division for an interdict restraining the first and second respondents from utilising the name 'Nino's' in respect of a restaurant, coffee shop or similar business conducted by them within 40 kilometres of the centre of the city of Cape Town. The applicant's claim was based on the allegation that the first D respondent's operation of restaurants in Cape Town amounted to passing off and unlawful competition. The respondent had also launched an application against the applicant for an interdict restraining the applicant from infringing its trade mark by using the trade mark. In opposing the respondents' application, the applicant relied on the defences provided for in s 34(2)(a) and s 36(1) of the Trade Marks Act 194 of 1993.

Held, that the effect of the sale of the business to K had been to confer upon K the exclusive right to carry on the E business and to use the name 'Nino's Coffee and Sandwich Bar'. With its incorporation the first respondent had succeeded to this right and, through the franchise operation established by it, had continued to exercise this right. (Paragraph [37] at 668I--J.)

Held, further, that, although G could, in the absence of any contractual term restraining him from doing so, F compete with K in the restaurant field, he was precluded from continuing with the business or using the name of the business which he had sold. (Paragraph [38] at 669A--A/B.)

Held, further, that, once G had divested himself of the right to use the name 'Nino', he could not lawfully confer upon his sons, any entity controlled by them or anyone else, the right to use that name. (Paragraph [39] at 669F.)

Held, further, that it did not follow from the fact that the first respondent might tacitly have consented to the use G of the name 'Nino' in the case of the applicant's first restaurant in Cape Town that the applicant would lawfully be entitled to use that name wherever it chose in relation to other restaurants. It was neither clearly alleged nor had it been shown that the first respondent had waived its right to use the name 'Nino's Italian Coffee and Sandwich H Bar' in the Western Cape: the evidence did not establish that the first respondent, with full knowledge of its rights, had decided to abandon them. (Paragraph [41] at 670A/B--C.)

Held, accordingly, that the respondents' use of the name 'Nino' was lawful and its conduct did not amount to an unlawful passing off, even though there might be some confusion between the businesses in the eyes of the public. The respondents were also not competing with the applicant unlawfully. (Paragraph [42] at 670E/F--F/G.) I Application for an interdict refused.

Held, further, as to the respondents' application for an interdict restraining the applicant's infringement of its rights under its trade mark, that in order to succeed with a defence in terms of s 34(2)(a) of the Trade Marks Act it had to be established, firstly, that the applicant was using its own name, the name of its place of business, the name of a predecessor or the predecessor's J

1998 (3) SA p658

place of business; secondly, that such use was bona fide; and, thirdly, that it was consistent with fair practice. A (Paragraph [57] at 674B/C--C.)

Held, further, that what was generally required in using one's own name was the use of the full name: the use of a surname, for example, did not suffice. In the present case the applicant was not using its full name, but only part of G's name, and was therefore not using its own name as contemplated by s 34(2)(a) of the Trade Marks Act. B (Paragraph [58] at 674D--E/F, paraphrased.)

Held, further, that the applicant had made use of the name 'Nino' in awareness that the first respondent had purchased the name 'Nino's Coffee and Sandwich Bar' and that the right to use the name vested in the first respondent, that the first respondent was the proprietor of the trade mark, that it had extended its franchise C operation to the Western Cape, that the first respondent disputed the alleged passing off, and asserted that it had the right to use the name 'Nino'. (Paragraph [60] at 674I--675B, paraphrased.)

Held, further, that such use was not bona fide use within the meaning contemplated by the section, or consistent with fair practice as contemplated in s 34(2)(a). (Paragraphs [61] and [62] at 675D--E.) D

Held, further, as to the defence based on s 36(1) of the Trade Marks Act, that the underlying purpose of the section was to prevent a trade mark proprietor from exercising his rights merely on the basis of priority of registration and to preserve whatever common-law rights there might be antecedent to the rights of the registered proprietor. (Paragraph [63] at 675H.)

Held, further, that the applicant could only rely on the section if it had made continuous and bona fide use of the E trade mark from a date earlier than the use of the trade mark by the proprietor or his predecessor in title or from a date prior to the registration of the trade mark in the name of the proprietor or his predecessor in title, whichever was the earlier. On the facts the applicant had failed to establish such prior use. (Paragraph [64] at 675I--I/J and 676B.) The respondents' application for an interdict granted. F

Cases Considered

Annotations

Reported cases

Anna Trego and William Wilson Smith v George Stratford Hunt [1896] AC 7 (HL): considered

Ashby and Another v Fernandes 1959 (3) SA 770 (W): referred to G

Baume & Co Ltd v A H Moore Ltd [1957] RPC 459: considered

Baume & Co Ltd v A H Moore Ltd [1958] RPC 226 (CA): considered

Benz et Cie (1913) 30 RPC 177: dictum at 181 applied

Blades Enterprises Ltd v Thibault et al (1975) 65 DLR (3d) 378: referred to

Borstlap v Spangenberg en Andere 1974 (3) SA 695 (A): dictum at 704F--G applied

Brian Boswell Circus (Pty) Ltd and Another v Boswell-Wilkie Circus (Pty) Ltd 1985 (4) SA 466 (A): H dictum at 478F--J applied

Burchell v Wilde [1900] 1 Ch 551 (CA): applied

Burnkloof Caterers (Pty) Ltd v Horseshoe Caterers (Green Point) (Pty) Ltd 1974 (2) SA 125 (C): considered

Capital Estate and General Agencies (Pty) Ltd and Others v Holiday Inns Inc and Others 1977 (2) SA 916 (A): applied I

Chelsea Man Menswear Ltd v Chelsea Girl Ltd and Another [1987] RPC 189 (CA): referred to

Commissioner for Inland Revenue v Muller & Co's Margarine Ltd [1901] AC 217 (HL): referred to

Glenton and Mitchell v Ceylon Tea Co 1918 WLD 118: considered J

1998 (3) SA p659

Hoechst Pharmaceuticals (Pty) Ltd v The Beauty Box (Pty) Ltd (in Liquidation) 1987 (2) SA 600 (A): A considered

J Goddard & Sons v R S Goddard and J Menz & Co 1924 TPD 290: referred to

John Craig (Pty) Ltd v Dupa Clothing Industries (Pty) Ltd 1977 (3) SA 144 (T): considered

Kellogg...