Sportshoe (Pty) Ltd v Pep Stores (SA) (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Corbett CJ, Nestadt JA, Milne JA, Eksteen JA and Nicholas AJA
• Judgment Date: 15 November 1989
• Hearing Date: 11 September 1989
• Court: Appellate Division

Sportshoe (Pty) Ltd v Pep Stores (SA) (Pty) Ltd
1990 (1) SA 722 (A)

1990 (1) SA p722

Citation	1990 (1) SA 722 (A)
Court	Appellate Division
Judge	Corbett CJ, Nestadt JA, Milne JA, Eksteen JA and Nicholas AJA
Heard	September 11, 1989
Judgment	November 15, 1989

Flynote : Sleutelwoorde B

Trade and trade mark — Trade mark — Expungement of — From register in terms of s 33 of Trade Marks Act 62 of 1963 — Grounds for — Application against proprietor of trade mark — Term 'Grand Prix' being C adapted to distinguish — Use as label on clothing unusual and contrived — Not laudatory because no justification for finding that members of public understood as indication of good quality — Term not embarrassing other traders or limiting right in choosing words to describe goods — Term not in common use in field of footwear — Onus on appellant to D establish loss of distinctiveness not discharged — No evidence of confusion or deception resulting from user by party other than registered proprietor — Licensing permitted where trade connection ensuring mark retains distinctiveness — Quality control and relationship between registered proprietor of trademark (as holding company) and user thereof indicative of such trade connection.

E Trade and trade mark — Trade mark — Infringement — Section 44(1) of Trade Marks Act 62 of 1963 — Interdict sought to prevent infringement — Passing off — No confusion or deception concerning products — Products not competing with one another in market place — One being confined to speciality sports shops — One product regarded as up-market F and expensive because of design and structure whereas other lightweight — Differences in prices and outlets through which available tending to show products not attracting same or similar custom — Prominence of other trade marks on one product showing substantial differences in products which average buyer would observe — Application for interdict G refused.

Headnote : Kopnota

Respondent, operating a country-wide chain of retail stores, sold a sports shoe bearing the name 'Grand Prix', words registered as a trade mark in terms of the Trade Marks Act 62 of 1963, the mark having been registered first on 14 August 1967 and later assigned to respondent with H effect from 14 April 1986. Respondent brought an application in a Provincial Division for an order restraining the appellant from infringing respondent's rights as proprietor of the mark, the application being based on the fact that appellant was manufacturing a tennis shoe on which the word 'Grandprix' appeared. The appellant resisted the application in the Court a quo and also brought a counter-application for the expungement of the mark, 'Grand Prix', from the register. The Court a quo granted the application and dismissed the counter-application. With the leave of the Court a quo appellant came I before the Appellate Division.

The Court dealt firstly with the counter-application for expungement brought under s 33 of Act 62 of 1963 on the grounds that the registration of the trade mark in respondent's name was (a) made without sufficient cause because (i) it was not distinctive and (ii) was laudatory, alternatively, (b) was an entry wrongly remaining on the register because (i) it was generally required for use in the trade and J (ii) had lost any distinctiveness it may have had.

1990 (1) SA p723

A Held, that, with regard to (a) (i), the Court was satisfied that the term 'Grand Prix', when originally registered, was adapted to distinguish, being suitable or fitted for the purpose of distinguishing, at least in the sense of being potentially distinctive, and on any of the meanings ascribed to 'Grand Prix' the use of the term as a label on clothing and, in particular, footwear was unusual and contrived.

Held, further, that, with regard to (a) (ii), the implication that, when applied to goods, Grand Prix was an indication of good quality was a B tenuous and obscure meaning and there was no justification for finding that members of the public understood it in that way.

Held, further, that, with regard to (b) (i), the allegation, in this instance, that the name 'Grand Prix' was reasonably required for use in the trade was unsubstantiated and there was no evidence that the words 'Grand Prix' as a trade mark embarrassed other traders or limited their right in choosing words to describe their goods: the term could not be C said to be in common use in the field of footwear.

Held, further, with regard to (b) (ii), that s 61 of the Act had the effect of casting the onus on the appellant to prove the invalidity of the mark, and it could not be inferred merely from the fact that the respondent was using the term as a licensee: a prima facie case of deception and consequential loss of distinctiveness had to be established and the appellant had failed to do this as it had furnished D no detail of the nature and extent of control by Pepkor, nor information as to Pepkor's activities or by whom or where the shoes were manufactured and had furthermore not adduced any evidence to contradict the respondent's denial that its user resulted in any confusion or deception and further the respective licencing of Grand Prix by Shoe Corporation and Pepkor to Pep had not invalidated the mark.

Held, further, that such licensing of a trade mark, as had occurred in this instance, was permitted provided a link was maintained in the form E of a trade connection between the proprietor and the goods, and deception was avoided: the fact of respondents quality control of the goods on which the mark appeared and its relationship with respondent (as holding company) constituted a sufficient trade connection.

Held, accordingly, that the counter-application had been correctly dismissed.

With regard to the infringement issue and the application for an interdict based on s 44(1) of the Act, in terms of which the appellant F had in essence to prove on the probabilities that there had been no passing off,

Held, that the appellant's denial of respondent's allegation that a substantial reputation in the trade mark had been acquired and, therefore, its distinctiveness established, was a bare one and accordingly no fault could be found with the Court a quo's conclusion that appellant had failed to negate the existence of sufficient distinctiveness adhering to Pep's mark.

G Held, further, that applying the test for passing off, namely whether ordinary members of the public or a substantial section thereof might be confused or deceived into believing that appellant's footwear was, or was connected with, that of respondent, the appellant's shoe was regarded as an expensive and up-market product because of its design and structure and its sale was confined to speciality sports shops whereas respondent's product was a lightweight product and in a completely different price range, and the differences in prices and outlets tended to show that the products did not attract the same or similar custom and H there was, in essence, no common field of business activity between them.

Held, further, that by reason of the prominence on appellant's footwear of the well-known adidas trade marks, there were substantial differences which the average buyer would observe, in general appearance of the parties' respective products, and together with the facts that the products were in different price categories, were sold from different outlets and appellant had not produced any admissible evidence of actual non-deception or non-confusion, the cumulative effect of such I considerations was that appellant had established that the use of Grand Prix was not likely to be taken as indicating a connection in the course of trade between its goods and the respondent's.

Held, accordingly, that appellant's reliance on the proviso of s 44(1) should have been upheld and the respondent's application for an interdict refused.

The decision in the Cape Provincial Division in Pep Stores SA (Pty) Ltd J v Sportshoe (Pty) Ltd reversed.

1990 (1) SA p724

Case Information

Appeal from a decision in the Cape Provincial Division granting an interdict preventing the use of a registered trade A mark and dismissing a counter-application for expungement from a register (Van Heerden J). The facts appear from the judgment of Nestadt J.

C E Puckrin SC (with him W P N Sceales ) for the appellant referred to the following authorities: As to the application for an interdict: B adidas Sportschuhfabriken Adi Dassler KG v Harry Walt & Co (Pty) Ltd 1976 (1) SA 530 (T); adidas Sportschuhfabriken Adi Dassler Stiftung & Co KG v Continental Wholesalers (Transvaal Provincial Division 8 September 1988, unreported); Tri-ang Pedigree (South Africa) (Pty) Ltd v Prima Toys (Pty) Ltd 1985 (1) SA 448 (A) at 472H - 474C. As to the issue of C jurisdiction, see Spier Estate v Die Bergkelder Bpk and Another 1988 (1) SA 94 (C); Maryland Products Distributors v Liddell 1978 (4) SA 455 (T); Esquire Electronics Ltd v Executive Video 1986 (2) SA 576 (A) at 590H; Gulf Oil Corporation v Rembrandt Fabrikante en Handelaars (Edms) Bpk 1963 (2) SA 10 (T) at 19B - 20B; William Spilhaus & Co (MB) (Pty) Ltd v D Marx 1963 (4) SA 994 (C) at 996D and 996H; Sonia (Pty) Ltd v Wheeler 1958 (1) SA 555 (A) at 563C; Steytler NO v Fitzgerald 1911 AD 295; Estate Agents Board v Lek 1979 (3) SA 1048 (A) at 1060A; Roberts Construction Co Ltd v Wilcox Bros (Pty) Ltd 1962 (4) SA 326 (A); Majola v Santam Insurance Co Ltd and Others 1976 (1) SA 874 (SE). As to the counter-application for expungement, see Pinto v Badman (1891) 8 RPC 181 E at 194; Adcock-Ingram Laboratories Ltd v SA Druggists Ltd and Another 1982 (1) SA 856 (T); Adcock-Ingram Laboratories Ltd v SA Druggists Ltd and Another; Adcock-Ingram Laboratories Ltd v Lennon Ltd 1983 (2) SA 350 (T) at 354A; Ritz Hotel Ltd v Charles of the Ritz Ltd and Another...