Puma AG Rudolf Dassler Sport v Global Warming (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Ntsebeza AJ
• Court: Cape Provincial Division
• Citation: 2007 JDR 0146 (C)
• Docket Number: 1546/2002

Ntsebeza AJ:

INTRODUCTION:

[1]

On 11 October 2005, I began to hear evidence in an action brought by the Plaintiff (Puma), a German company, which manufactures clothing and footwear. The Defendant (Global Warming), amongst other things, imports and distributes footwear in South Africa in its capacity as a manufacturer, and/or wholesaler and/or retailer thereof.

[2]

The gravamen of Puma's gripe with Global Warming is that the latter, from a date unbeknown to it, has been selling footwear depicting an infringing mark that is confusingly similar to Puma's registered trade mark, being registration number 80/5551 Form Strip Device in class 25, which, it was claimed by Puma, is a mark registered "in respect of 'footwear, including sports footwear and footwear for leisure wear" and trademark registration no. 82/4607 Form Strip Device in class 25 registered in respect of "footwear of all types and descriptions including footwear for sport and footwear for leisure purposes; articles of clothing". [1] The two marks, for purposes of this trial, were referred collectively as the Plaintiff's mark. This mark, annexed to Particulars of Plaintiff's Claim as "B" is reproduced here for ease of reference and for comparative purposes. The Defendant's alleged "infringing mark", also annexed to the Particulars of Plaintiff's Claim as "C", is also herein reproduced for the same reason.

[3]

Puma's claim is that the unauthorized use by Global Warming of the infringing mark constitutes an unlawful

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infringement of its rights that flow from its registration of the mark. As such, so it was claimed, Global Warming's stated unlawful conduct was violative not only of Puma's exclusive rights flowing from its registered mark, but also if the provisions of Section 34(1)(a) of the Trademarks Act 194 of 1993 (the Act) which provides as follows:

"34 Infringement of registered trademark

(1)

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

(a)

the unauthorized use in the course of trade in relation to goods or services in respect of which the trademark is registered, of an identical mark, or of a mark so nearly resembling it as to be likely to deceive or cause confusion."

[4]

Puma therefore claimed that Global Warming's stated unlawful conduct entitles it to a reasonable royalty as provided for in Section 34(3)(d) of the Act, as and in lieu of damages. It was argued that a reasonable royalty would be 10% of gross sales of over the period during which, as the discovery process indicated, Global Warming sold products with the infringing mark, namely, from 31 July 2001 to October 2002.

[5]

I am being asked, therefore, in this action, to:

5.1

Declare that the sale of goods, depicting the infringing mark to have infringed Puma's rights flowing from its registered trademark aforementioned.

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5.2

Interdict and restrain Global Warming from infringing Puma's mark in terms of the provisions of Section 34(1)(a) of the Act insofar as Global Warming does so by using the infringing mark.

5.3

Order Global Warming to remove the infringing mark from all footwear. Where the infringing mark is inseparable or incapable of being removed from the footwear, I am asked to order that Global Warming should deliver up to Puma, in terms of Section 34(3)(b) of the Act all footwear depicting the infringing mark.

5.4

Order Global Warming to pay Puma an amount of R 283,998.00 plus interest from the date of judgment to the date of payment.

5.5

Order costs against Global Warming.

[6]

It is common cause that Global Warming is resisting the action. In essence, Global Warming denies that the alleged infringing mark is violative of Puma's mark, either as stated, or at all. It argues that its footwear bore the trade names DT New York, DTNY or Down Town New York - (which Puma's footwear does not) and that over and above these trade names, its footwear bore the device depicted in Annexure "C" to the Particulars of Plaintiff's Claim, already referred to herein. [2] Consequently, Global Warming refutes any claims by Puma of its

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alleged entitlement to royalties, as and in lieu of damages, and also resists Puma's entitlement to any of the reliefs it seeks mentioned above. [3]

[7]

Right from the start, on trial date, Exhibits "A" and "B", reproduced herein for ease of reference, were handed up. They purport to be original registration certificates, respectively - (and both signed by the Registrar of Trade Marks on 30 September 2005) - of Trade Mark 1980/05551 and Trade Mark 1982/04607. For all practical purposes, Exhibits "A" and "B" seem to have been handed in, in terms of Section 50 of the Act, as prima facie evidence of the registration of Puma's mark, copies of which had been annexed to Particulars of Puma's Claim. In any event, it had not appeared that Mr Newdigate, who appeared for Global Warming, had placed the validity of the mark's registration in issue.

[8]

By agreement, the parties also proceeded on the basis of an amended summons which cleared the air as to whether or not Puma would also rely on passing off as a cause of action. It was therefore common cause at the commencement of trial that Puma would no longer rely on passing off. Its case would be based on the alleged infringed trademark (number 80/5551 and number 82/4607 collectively). In that form, reliance would be placed on the correct application, to the facts of the case, of the jurisprudence developed over time with respect to the reach of section 34(1)(a) of the Act.

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EVIDENCE LED:

[9]

Mr Michau, Counsel for the Plaintiff, first led the evidence of Puma's Managing Director in its South African subsidiaries, Puma Sports Distributors (Pty) Ltd and Puma Sports SA (Pty) Ltd, Mr Ronald Alexander Rink. He has had a long association with Puma, dating back to the eighties, having served the organization in various capacities in Canada, Austria and eventually, in late 2001, as MD of Puma Sports Distributors (Pty) Ltd as aforementioned. He had, even as MD in South Africa, kept close liaisons with Puma, having visited their offices more than 30 times for business meetings, strategic planning sessions and the like.

[10]

During his testimony, he identified Exhibits "A" and "B" as Puma's trademarks. He testified that the two marks are applied to the side of the shoe by adhesive strip, and in some cases, by perforations. There is also a leaping cat logo, and the word "Puma" on the side of the shoes. Testifying about the extent of Plaintiff's business, Mr Rink told me that in South Africa, Puma was considered one of the top three companies in the branded athletic footwear companies, with Nike and Addidas as the other market leaders in this regard. To a direct question from me, Mr Rink could not warrant which of the three was the leader in the market. The mark was exclusively promoted through the use of the form strip via media adverts and sponsorships of material and club teams, as well as of individuals in various disciplines, and of high profile personalities. In South Africa, for example, they had sponsored football teams like Kaizer Chiefs, Mamelodi Sundowns, Ajax Cape Town, Cosmos, and so on. Internationally, Puma sponsored Italy, Poland,

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Senegal, Switzerland, to mention but a few. Sponsored teams were obligated to wear the products, the contract stipulating a minimum of 70% of the team being so obligated. In some instances, all the team members would be contractually bound to wear the footwear.

[11]

In his experience, national and international television channels carried their products. In his testimony, Mr Rink gave a wide range of sports codes associated with Puma, as well as the principal actors in those codes that enhanced the visibility of their mark worldwide, thus making it popular. In cricket, Makhaya Ntini was identified as a celebrity. [4] In rugby, players like Schalk Burger and Percy Montgomery got mentioned, and in tennis, Serena Williams, [5] got special mention. In athletics, the Comrades Marathon Bruce Fordyce got mention, and even in the music industry, Mr Rink insisted their mark got promoted through usage by Western Cape rap groups like Black Noise.

In short, Puma's mark was there in the open market, wherever one went, on television, radio, the print media and other various media forms.

[12]

Mr Rink testified that Puma, in using the phrase "life-style footwear" in promoting their products, was deliberately promoting their footwear not just as "sports" footwear, but as casual footwear as well. Exhibits "B" and "C", for example, he testified, would count as casual footwear. This shoe was worn by people from all

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walks of life - easily available at fashion boutiques, from informal retail street vendors and in flea markets, with the price ranging from the insignificant to something pricy. In his experience, people recognized shoes more by this trademark rather than through word of mouth. Inasmuch as athletic parlance identified Nike's "tick", the "form strip" was what Puma was known by. This "form strip" was clearly depicted, Rink testified, in various products, in sales catalogues with shoes depicting the mark. Reference, throughout the testimony, was made to voluminous exhibited photographs in support of the contentions made by Mr Rink.

[13]

Mr Rink referred to a licensing agreement between Puma and the South African subsidiary I referred to earlier, Puma Sports SA (Pty) Ltd (Puma SA), signed by Mr Rink, which granted Puma SA, rights to manufacture and sell its licensed products, inter alia. In consideration of the rights granted, Puma SA had undertaken to pay royalties to Puma at an agreed rate.

[14]

Article IX of this License Agreement reads as follows:

"ARTICLES...