Standard Bank of South Africa Ltd v United Bank Ltd and Another

• Judge: Schutz J
• Judgment Date: 05 July 1991
• Citation: 1991 (4) SA 780 (T)
• Court: Transvaal Provincial Division

Schutz J:

The Standard Bank of South Africa Ltd ('Standard') sought interdicts against United Bank Ltd as the first respondent and United Building Society Ltd as the second respondent. I shall refer to the two respondents collectively as 'United'. The first interdict, which is G still sought against the respondents jointly and severally, is against their infringing Standard's rights flowing from the registration mark 76/1352 in the form of the word 'Access' by:

(i)

using in relation to home loans, or any other service in respect of which the trade mark is registered, the trade mark H Equity Access, or Equity Access Plan or United Equity Access Plan or any other trade mark so nearly resembling Standard's aforesaid registered trade mark as to be likely to deceive or cause confusion;

(ii)

using as a name, description or designation in relation to home loans or any other services in respect of which the said trade mark is registered the terms Equity Access or Equity I Access Plan or United Equity Access Plan or any other name, description or designation consisting of or incorporating the word Access which is likely to cause injury or prejudice to Standard.

These interdicts, which are sought as final interdicts, are phrased so as to accommodate both s 44(1)(a) and s 44(1)(b) of the Trade Marks Act 62 of 1963 ('the Act'), the former subsection being concerned with J infringing

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A use as a trade mark, and the latter with such use otherwise than as a trade mark. During the course of the argument both counsel appeared to accept that s 44(1)(b) (use otherwise than as a trade mark) is irrelevant.

The next interdict originally sought was based on alleged unlawful competition, but with the special form of it called passing off expressly disavowed. This interdict was sought in final form, B alternatively as an interim interdict, pending the determination of the application, or of an action to be instituted by Standard. The form of interdict prayed was:

'Restraining (the two respondents), jointly and severally, from competing unlawfully with (Standard) by using in relation to home C loans a name, description, designation or trade mark consisting of or incorporating the word Access or any word confusingly similar thereto.'

This application was heard for three days during March 1991 and then postponed. At the commencement of the resumed hearing Mr Puckrin (who appeared for Standard) announced that he was not asking for an order on prayer 2 (unlawful competition). Yet he was not abandoning it. He might yet raise it in 'another Court'. I pointed out that I could not D understand how any appeal Court could deal with this separate cause of action when I had not dealt with it because the applicant had so asked. Mr Serrurier (who appeared for United) said he was content to leave matters as they were, and deal with the matter when it arose again, if that were ever to happen. However, for the purposes of the proceedings in this Court, Mr Puckrin conceded that if he succeeded on the trade E mark claim, some as yet unquantified costs would have to be borne by Standard because of the introduction of the second cause of action. I might mention that, before the forsaking of this relief, Mr Puckrin had argued unlawful competitionin-chief. Mr Serrurier had not yet answered but had filed heads on the matter. Without expressing any considered F view, I would mention that I had formed the preliminary view that this cause of action stood no chance.

There was also an ancillary prayer for delivery up for destruction of offending matter, but Mr Puckrin dropped it during argument.

It is common cause that Standard is the proprietor of the registered trade mark 76/1352 'Access'. The mark was registered on 15 March 1976, G and is registered in Part A of the Trade Marks Register, in class 36, in respect of 'financial, banking, mortgage loan and insurance services included in this class'.

Standard has also applied for registration as a trade mark in class 36 of the word 'Accessbond'. Much evidence is devoted to this word, but for trade mark purposes (as opposed to unlawful competition) it is to be H noted that Accessbond is not a registered trade mark.

As part of its defence to this application United has brought a counter-application for the expungement of the registered 'Access' mark. Several grounds are relied on. I deal with that counter-application in a separate judgment.

I Some years ago banks were banks and building societies were building societies. Then that changed. The result was that financial institutions of each type moved into the former sphere of the other. That is the background to this case. The papers reveal (though it may no longer be relevant to the infringement application) that an intense advertising J and selling war broke out between the parties in the home mortgage bond

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A market. This war was in due course relocated to this Court, although, no doubt, the war in the market place continues. The papers on both sides were greatly swollen by the unlawful competition claim. Even now it is not always easy to disentangle the allegations relating to the two original claims.

B I shall first summarise the case made in the founding papers on unlawful competition, which is largely concerned with the actual history. Standard launched a selling campaign in March 1988 using the mark Accessbond (not simply Access). It said that it had acquired a significant reputation and substantial goodwill which 'is associated with the Access and Accessbond trade marks'. The new scheme was said to C be innovative. One ingredient at the beginning was an interest rate 3,5% below that charged by building societies. Next, certain clients might be granted 90% or even 100% bonds. Instant credits (as opposed to monthly credits) were given for moneys paid into the home loan account. This was made possible because of Standard's advanced electronic banking system. D I will not mention all the features of the scheme but two more were important. Whereas before it had been possible in some cases for a borrower to obtain a readvance on his bond, Accessbond now allowed him, without any formality, to borrow any part of the difference between the bond originally authorised and the balance currently owed. Another feature had a tax advantage. The borrower could at any time deposit any E surplus funds into the account, thus effectively obtaining a tax-free rate of return equal to the current bond rate. Accessbond was widely advertised and was very successful.

In July 1988 United applied for the registration as a trade mark of F Equity Access also under class 36. To date this mark has not been registered. In July 1990 United launched a home loan scheme 'under the name' Equity Access or Equity Access Plan. The scheme was in many ways similar to Standard's, but it was not identical. United's advertising of its scheme emphasised several of the features common to both schemes. I shall deal with United's activities more fully below in connection with G the s 46(b) defence.

Standard disavowed ever having claimed that it had an exclusive right to market a scheme such as it had introduced. Naturally it had to make that concession. There was no suggestion of passing off of the word Access. If such a suggestion had been made it would have required an H allegation of actual deception. It was said, however, that there was a confusing similarity to the unregistered mark Accessbond. Various attempts were made to formulate the unlawful competition claim. Thus there was talk of the scheme having a 'branded persona', and of the erosion of the distinctiveness of the words Access and Accessbond, of the dilution of Standard's reputation in these words, of unfair I association of the two products, of reaping where there had not been sown, and of the exceeding of the 'norms of fair competition between financial institutions'. In United's answering affidavit there is an air of bewilderment about what cause of action it was supposed to be facing, which bewilderment does not surprise me. But this has become rather by the way. Nonetheless I have set it out because one formulation of the J trade mark case, with which

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A formulation I shall deal below, may be viewed as an attempt to revive the almost abandoned unlawful competition claim under the guise of a trade mark claim.

The trade mark infringement claim is sketched out in para 7.6 of the founding affidavit as follows:

'It is the applicant's contention that the use by the respondents of B the terms or trade marks Equity Access and/or Equity Access Plan and/or United Equity Access Plan constitutes an infringement of the applicant's rights in its registered trade mark 76/1352 Access in terms of s 44(1) of the Trade Marks Act 62 of 1963.'

Paragraphs 12.5-12.7 bear quotation in full. They read:

'12.5

The aforesaid use of the word or trade mark Access by the respondents is:

12.5.1

C not authorised by the applicant;

12.5.2

use in relation to services in respect of which the applicant's trade mark is registered;

12.5.3

use as a trade mark; alternatively

12.5.4

use otherwise than as a trade mark in the course of trade which is causing the applicant injury or prejudice (this alternative was not pressed in the D latter part of the argument).

12.6

Accordingly, I submit that use by the respondents of the term Equity Access or Equity Access Plan or United Equity Access Plan in respect of financial services (and home loans in particular) constitutes a clear infringement of trade mark 76/1352, in terms of s 44(1)(a) or (b) of the Trade Marks Act 62 of 1963.

12.7

E Moreover it is clear from para 2.5 of the response to the applicant's above-mentioned objection to pending trade mark application 88/5589 Equity Access . . . that the respondents were fully aware at least by 7...