Tie Rack plc v Tie Rack Stores (Pty) Ltd and Another

• Jurisdiction: South Africa

Tie Rack plc v Tie Rack Stores (Pty) Ltd and Another
1989 (4) SA 427 (T)

1989 (4) SA p427

Citation	1989 (4) SA 427 (T)
Court	Transvaal Provincial Division
Judge	Kriegler J
Heard	May 9, 1989
Judgment	June 26, 1989

Flynote : Sleutelwoorde B

Trade and trade mark — Trade — Passing of — Applicant conducting business in England and a number of foreign countries, but not in South Africa — Applicant having no goodwill in South Africa C — Respondent conducting business in South Africa under name similar to applicant's name — Fact that people in South Africa might know of applicant's business abroad and might be misled into believing that first respondent's businesses associated in some way with applicant's not affording applicant a proprietary right in South Africa — D First respondent's actions in giving its business a name similar to applicant's businesses accordingly not likely to cause any patrimonial harm to applicant — Relief on the grounds of passing off refused.

Trade and trade mark — Trade — Unlawful competition — Applicant E conducting business in England and a number of foreign countries, but not in South Africa — First respondent conducting business in South Africa under a name similar to applicant's and designedly setting out to copy applicant's business to first respondent's advantage — No evidence that applicant proposed trading in South Africa at any particular stage in the future — Parties accordingly not in F competition — Relief on the grounds of unlawful competition refused.

Trade and trade mark — Trade mark — Expungement of — Such sought on the ground that first respondent not the proprietor of the trade mark within the meaning of s 20(1) of the Trade Marks Act 62 of 1963 — Meaning of 'proprietor' — A person can rightly claim to be G the proprietor of a trade mark if he has originated, acquired or adopted it and has used it to the extent that it has gained the reputation indicating the goods for which it is used are his — Also applies to one who has originated, acquired or adopted the trade mark but has not yet used it at all or to requisite extent, provided he proposes to use H it — A trade mark is legally operative only within the territory in which it is used and for which it is registered or to be registered — The proprietorship and actual or proposed use of a trade mark mentioned in s 20(1) accordingly premised to be within South Africa — A person can be regarded as the author of a trade mark in South Africa even if he has copied or selected it in respect of certain goods from a trade I mark registered and used in a foreign country, provided there was no prior user of the trade mark by the foreigner in South Africa — In latter case, the foreigner is the proprieter of the trade mark — Applicant, a foreigner, seeking expungement of first respondent's trade mark and averring that applicant was the proprietor of the trade mark J — No evidence of

1989 (4) SA p428

A any user by applicant of its trade mark in South Africa at relevant time — No basis upon which first respondent's proprietorship could be validly challenged.

Trade and trade mark — Trade mark — Expungement of — Such sought on the ground that original owners of trade mark had applied for B the trade mark with a view to trafficking therein — Meaning of 'trafficking' — Trafficking conveys the notion of dealing in a trade mark primarily as a commodity in its own right and not primarily for the purpose of identifying or promoting merchandise in which the proprietor of the mark is interested — Facts indicating that original owners of C the trade mark in question had intended to use the mark to identify and promote the business they were seriously contemplating launching — Trafficking in the trade mark not established — Fact that original owners subsequently formed the opinion that venture would not be viable and thereafter sold their rights to first respondent not deogating from D conclusion that trafficking had not taken place — Expungement refused.

Headnote : Kopnota

The applicant had successfully established a business of selling men's ties and other clothing accessories in London, England, and had extended its business to other cities in England, North America, Europe and Australia. Although further extensions of the business were planned, there were no plans for extending the applicant's business into the Republic of South Africa. The applicant's businesses were known as E 'Tie Racks' shops and a distinctive logo was devised for them. The applicant conducted no trade in South Africa although its businesses were known to many South Africans who travelled overseas. During 1985, L and M registered in South Africa the trade mark 'The Tie Rack'. L and M had intended opening a business with that name but had subsequently decided that the business would not be viable. During 1987 the rights to the aforesaid trade mark were sold to the first respondent and F the assignment of the trade mark was registered thereafter. The first respondent opened various businesses in South Africa under the name 'Tie Rack' and a logo for such businesses, which was very similar to the applicant's logo, was devised. The applicant thereafter sought relief against the first respondent on the grounds of passing off and unlawful competition. The applicant also sought relief in the form of an order for the expungement of the trade mark assigned to the first respondent on the ground that L and M, and accordingly the first respondent, were not 'the proprietors' of the trade mark within the meaning of s 20(1) G of the Trade Marks Act 62 of 1963 and further on the ground that L and M had applied for the trade mark with the view to trafficking therein. Relief was also sought on the ground that the first respondent had infringed the applicant's copyright in the applicant's logo.

Held, as to the relief claimed on the ground of passing off, that the applicant had no goodwill and no attractive force in South Africa: H the fact that people in South Africa, even if there were many of them, knew of applicant's businesses abroad and might have been misled into believing that first respondent's shops were in some way associated therewith did not afford the applicant a proprietary right in South Africa; applicant had no business of any kind in South Africa and nothing which the first respondent had done could or was likely to do any harm to the applicant in the patrimonial sense in this country.

I Held, accordingly, that the relief claimed on the grounds of alleged passing off had to be refused.

Held, further, as to the relief claimed on the ground of unlawful competition, that the parties were not and had never been in competition with one another: the applicant had no business in South Africa; even though the first respondent had stolen a march on the applicant and had designedly set out to copy the applicant's business to the first respondent's advantage, the applicant did not trade in South Africa and there was no evidence that it proposed doing so at any particular J stage in the future.

1989 (4) SA p429

A Held, accordingly, that the relief sought pursuant to the allegations of unlawful competition had to be refused.

Held, further, as to the claim for expungement of the first respondent's trade mark on the ground that L and M had not been the proprietors thereof, that there was no basis upon which the claims of proprietorship by L and M could validly be challenged.

Held, further, that the effect of various dicta in decided cases on the true meaning of s 20(1) of the Trade Marks Act could be summarised B as follows: an applicant for a trade mark could rightly claim to be the common law proprietor of the trade mark if he had originated, acquired or adopted it and had used it to the extent that it had gained the reputation as indicating the goods in relation to which it was used were his; such an applicant could then claim to be registered as the statutory proprietor of the trade mark with all the benefits and rights conferred by the Act; s 20(1) was not confined to that kind of applicant but applied also to one who had originated, acquired or adopted the trade mark but had not hitherto used it at all or to the C requisite extent, provided he proposed to use it.

Held, further, that the following observations had to be added to the above summary of the true meaning of s 20(1), namely (1) that a trade mark was purely a territorial concept; it was legally operative or effective only within the territory in which it was used and for which it was to be registered or was registered and therefore the proprietorship, actual use or proposed use of a trade mark mentioned in s 20(1) were all premised by the subsection to be within the Republic D of South Africa; and (2) that the word 'adopted' had been added to the crucial expression 'originated or acquired the trade mark' as used in the dicta referred to above in order that an applicant could be regarded as the author of a trade mark in South Africa even if he had copied or selected (ie adopted) the trade mark in respect of certain goods from a trade mark registered and used (even extensively used) in respect of the same goods in a foreign country, the only proviso thereto being that there must have been no prior user of the trade mark by the foreigner in South Africa as such prior use 'negatives the claim' of the applicant E to 'authorship', or it then meant that the foreigner, and not the applicant, was the proprietor of the trade mark.

Held, further, applying the above principles and having regard to the fact that there was no evidence of any user by the applicant in South Africa of its trade mark as at the date of registration of L and M's application, that the expungement of the first respondent's trade mark could not be granted on the ground that L and M had not been F the...