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[2016] ZASCA 118
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Yuppichef Holdings (Pty) Ltd v Yuppie Gadgets Holdings (Pty) Ltd (1088/2015) [2016] ZASCA 118; 2016 BIP 269 (SCA) (15 September 2016)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 1088/2015
In the matter between:
YUPPIECHEF
HOLDINGS (PTY) LTD
APPELLANT
and
YUPPIE
GADGETS HOLDINGS (PTY) LTD
(FORMERLY
YUPPIE STUFF ONLINE CC)
RESPONDENT
Neutral citation:
Yuppiechef Holdings (Pty) Ltd v
Yuppie Gadgets Holdings (Pty) Ltd
(1088/2015)
2016 ZASCA 118
(15 September 2016)
Coram:
LEWIS, WALLIS, SWAIN and DAMBUZA JJA and SCHOEMAN
AJA
Heard
:
1 September 2016
Delivered
:
15 September 2016
Summary:
Trade
mark – online retailer – whether mark used in relation to
goods in respect of which mark registered – s 2(3)
(a)
of
Trade Marks Act 194 of 1993
–
whether marks confusingly similar or calculated to deceive –
registered mark a composite of words in common use –
attempt to
secure a monopoly in the word ‘Yuppie’ – no
likelihood of confusion – marks not similar in terms
of
s 34(1)
(c)
of
Trade Marks Act – no passing
off.
ORDER
On appeal from:
Western Cape Division of the High
Court (Mayosi AJ sitting at first instance):
The appeal is dismissed
with costs.
JUDGMENT
Wallis JA (Lewis,
Swain and Dambuza JJA and Schoeman AJA concurring)
[1]
The word ‘yuppie’ entered the
lexicon of the English language in the early 1980’s
[1]
as an acronym derived from ‘young, urban or upwardly-mobile,
professional person’. It described a person who was young,
aspiring and affluent with a lifestyle of conspicuous consumption and
even a measure of excess in the flaunting of affluence. It
soon
acquired derogatory overtones and its use fell away,
[2]
but it has seen a resurgence in recent years and describes:
‘
a
member of a socio-economic group comprising young professional people
working in cities and noted for their careerism and affluent
lifestyle’.
[3]
Some people falling
within this description regard it as a badge of pride to be described
as a yuppie.
[2]
The word ‘chef’ has a far
longer pedigree in English, as a description of a professional cook.
When the two are combined,
as has been done by the appellant,
Yuppiechef Holdings (Pty) Ltd (Yuppiechef), in its mark ‘Yuppiechef’,
the resulting
word conveys an impression of young people living an
affluent lifestyle with a serious interest in culinary matters. And
that is
precisely the image that its progenitor, Mr Shane Dryden,
sought to convey when he and Mr Andrew Smith founded their successful
business under the name Yuppiechef. It principally sells kitchen
equipment, although it does sell some other household and garden
goods and is expanding into food and beverages. From humble
beginnings in 2006 it had secured a substantial turnover by 2014,
when the present proceedings were commenced.
[3]
Yupppiechef has registered the name
‘Yuppiechef’ as a mark, in terms of the Trade Marks Act
194 of 1993 (the Act), in
respect of the goods described in classes
8, 11 and 21. These classes encompass different types of kitchen
equipment, which was
the primary focus of the business when it was
established, as well as other items of household equipment. Its
primary complaint
is that the respondent, now a company bearing the
name Yuppie Gadget Holdings (Pty) Ltd (Yuppie Gadgets), is infringing
these marks
by using, in relation to its own online business selling
quirky and unusual items and gadgets for household and office use,
the
unregistered mark ‘Yuppie Gadgets’. In the
alternative it contends that Yuppie Gadgets is passing its business
off
as that of Yuppiechef. Mayosi AJ, in the Western Cape Division of
the High Court, dismissed its claims, but granted leave to appeal
to
this court.
The facts
[4]
Yuppiechef’s business is that of an
online retailer of kitchen and household goods. It is aimed at the
younger and more affluent
section of the market consisting of the
people who are most comfortable with shopping online. Overwhelmingly,
the goods that it
sells bear well-known marks, such as Le Creuset and
Jamie Oliver cookware, Wusthof knives or Weber braai equipment. It
apparently
sells some goods bearing its own mark, but we were not
given any examples of these. It advertises its business extensively
both
in conventional media such as magazines, but also through social
media, such as Facebook or Twitter, and on the internet, particularly
through the medium of Google Ads. In all of its advertising the mark
Yuppiechef is prominent.
[5]
Yuppie Gadgets’s business is also
that of an online retailer. It started operations in 2010, initially
under the name ‘Urban
Gadgets’. Its focus is different
from that of Yuppiechef, although there is a limited degree of
overlap in the goods that
they market. Its main target market
consists of younger, more affluent, consumers who are attracted by
what it describes as ‘hot’
and ‘cool’ gadgets
and gizmos. These are quirky, slightly unusual items of household and
office equipment, decorative
items and unusual gadgetry. They are
best described as novelty items. To illustrate the point the papers
include a large and fairly
expensive mirror in the shape of a pair of
sunglasses. Other items referred to in the papers include
multi-function tools, a dinner
utensil in the shape of a bulldozer, a
vase in the shape of a whale, a self-stirring cup and a lampshade in
the shape of a bowler
hat. Not all are unconventional. A home cinema
popcorn maker, a camp stove and stackable cutlery set all feature on
their website.
[6]
The bone of contention between the parties
arises from Yuppie Gadgets’s decision in April 2011 to change
the name under which
it conducted its business from Urban Gadgets to
Yuppie Gadgets.
[4]
The founders of the business, Ms Chantal Kisten and Mr Lukas Swart,
explained the change of name as being prompted by the fact
that their
existing name was mundane and not apt for their typical customers.
They considered using the name ‘Yuppie Stuff’
but decided
that this ‘lacked pizzazz’. Eventually they settled on
Yuppie Gadgets. Although both Ms Kisten and Mr Swart
were aware of
appellant’s business and name, they disavowed any intention to
imitate what was already a successful business,
or to try and ride on
its coattails. Their attitude was that there was relatively little
overlap between the two businesses, no
real possibility of confusion
between them or the deception of potential customers, and that this
was an endeavour by Yuppiechef
to create a monopoly in the use of the
word ‘yuppie’ in the course of trade.
[7]
It is appropriate to say something about
the nature of an online retail business. These depend on customers
accessing the website
of the business. If the customer knows the name
of the business or has its website address this can be entered into
the search
box on a search engine (Google, Bing, Yahoo or the like)
and that website will be shown as one of the results for the search,
although
not necessarily the first result, because of the impact of
advertisements. Repeat customers may ‘bookmark’ the site,
which enables them to go directly to the site without a search.
[8]
The concern in this case is largely with
potential customers rather than established clientele, although there
was some evidence
claiming that established customers may be led to
believe that there is a connection between the two businesses.
Potential customers
must first find the website from which the
business operates. They can do this in one of two ways. If they are
aware of the existence
of the business, for example because they have
seen an advertisement or been told about it by someone else, they
will search specifically
for that business. This involves typing into
the search box of the search engine as much of the name of the
business as they know
or can remember and then pressing the search
button or ‘enter’ on the keyboard of their device. This
generates a number
of hits ranked in order of relevance, that is, the
likelihood that they are what is being searched for. The
algorithms that
operate the search engine determine the ranking. By
working their way through these possibilities, and perhaps refining
the search
while doing so, customers will try to find the site they
are looking for.
[9]
The other route they can follow is to
search for sites that sell goods fitting the general description of
those that they are looking
for. So, a person looking for a mixer or
a set of kitchen knives will enter those words as a search term,
whether alone or with
others that occur to them, and then navigate
the sites that the search engine generates to try and find a retailer
who can supply
what they are looking for. If they are seeking goods
of a particular brand it is likely that they will include the brand
name in
their search.
[10]
Alongside the ‘natural’ or
‘organic’ results produced by the search other results
appear in the form of
‘sponsored links’ or ‘Ads’.
These are advertisements and are a major source of revenue for the
operator
of the search engine. They appear on the search result page
because the search term used by the potential customer is linked to
a
keyword or keywords that the advertiser has secured by paying a fee
to the operator of the search engine. As one would expect
the more
that is paid by the advertiser to link its website with the keywords,
the more prominently is its advertisement displayed.
The aim is that
the person engaged in the search will click on the advertisement and
be taken to the advertiser’s website.
[5]
[11]
One of the central complaints by Yuppiechef
is that when the word ‘Yuppie’ is typed into the Google
search engine a
drop down menu appears below the search box showing
both Yuppiechef and Yuppie Gadgets. They submit that this is proof of
the similarity
of the two marks and that it must inevitably result in
the diversion of customers from their site, even if it is only idle
curiosity
on the part of the browser that takes them to Yuppie
Gadgets when they were looking for Yuppiechef. As Mr Price, a digital
marketing
specialist employed by Yuppiechef, said in his affidavit:
‘…
even
those customers who are not confused are likely to find out about
[Yuppie Gadgets] by searching for the Applicant [ ie Yuppiechef]
on
the internet’
and
‘
This
function [the drop down menu] could further increase the visibility
of [Yuppie Gadgets’s] website, which is lesser known
than the
Yuppiechef website and cause users to be misdirected or to assume
that the websites are associated.’
In support of these
contentions Yuppiechef referred to some incidents that it said
demonstrated actual confusion. I will revert
to these.
[12]
Yuppiechef pursued its claim of trade mark
infringement under each of ss 34(1)
(a)
,
(b)
and
(c)
of the
Act and added a claim based upon passing off under the common law. It
is convenient to deal with each in turn.
Section 34(1)
(a)
of the Act
[13]
In
Rembrandt
Fabrikante & Handelaars (Edms)
Bpk v Gulf Oil Corporation
[6]
Trollip J said that the statutory system of
trademark protection ‘is designed to protect, facilitate and
further the trading
in the particular goods in respect of which the
trademark is registered’. Save that, since he said that, it has
become possible
to register trademarks in respect of trading in
services as well as goods, the statement remains apposite.
[7]
The trademark serves as a badge of origin of the goods or services to
which it is applied.
[8]
The reference to a badge of origin is directed at the original source
of the goods or services, not the mechanism through which
they were
acquired. Thus, to say that one bought a pair of shoes at A&D
Spitz or some other well-known shoe store merely identifies
the shop
where the goods were purchased and not their origin. The shoes in
question will in turn bear a trademark, such as Carvela
or Kurt
Geiger or Jimmy Choo. Those are the marks that indicate their origin.
The mark A&D Spitz identifies the shop and not
the goods that can
be purchased there.
[14]
The marks that Yuppiechef seek to protect
are registered in respect of goods in three classes. It is common
cause that there is
at least some overlap between the goods sold by
Yuppie Gadgets and the goods specified in these classes. In terms of
s 34(1)
(a)
the
three marks would be infringed by the unauthorised use in the course
of trade in relation to the goods referred to in those
classes of an
identical mark or one so nearly resembling it as to be likely to
deceive or cause confusion. That highlights both
the scope and the
limits of the protection provided by registration of the mark. It is
prohibited use to use an identical, deceptive
or confusingly similar
mark in relation to goods falling within those classes. But the use
of the same mark on other goods or services,
falling outside the
class of goods or services covered by the registration, does not
amount to an infringement under this section.
[15]
That brings me to the first line of defence
of Yuppie Gadgets. It contended that it did not use its unregistered
mark at all in
relation to goods, but only in relation to the conduct
of their business as an online retailer of goods. As the registered
mark
is a mark in respect of goods, and the use of Yuppie Gadgets was
as a mark to identify its business, it contended that its use did
not
infringe in terms of s 34(1)
(a)
.
It said that this was use as a service mark in terms of the Act
and the Yuppiechef marks are not service marks, so that
the use of
Yuppie Gadgets was not an infringement under s 34(1)
(a)
.
Use in respect of goods
[16]
In terms of s 2(3)
(a)
of the Act references in the Act to the use of a trade mark in
relation to goods shall be construed as references to the use thereof
‘upon, or in physical or other relation to’ such goods.
Yuppiechef did not contend that the mark Yuppie Gadgets was
being
used on or in physical relation to goods. Instead it argued that by
using the mark Yuppie Gadgets on its website, which advertised
for
sale goods that apparently bore no other mark, the mark was being
used ‘in other relation’ to those goods. It submitted
that there was nothing to make a shopper suspect that the goods
appearing on the website were not those of Yuppie Gadgets and that
consumers would accordingly assume that the goods originated from
Yuppie Gadgets and hold it liable for any defects in the goods.
[17]
I do not think that the fact that a website
bears the retailer’s mark would ordinarily convey to a
prospective customer that
the goods advertised for sale on that site
emanate from the retailer. The position might be different when
dealing with a speciality
retailer, but in the case of a retailer of
a range of general goods customers do not ordinarily expect the goods
to originate with
the retailer. One does not walk into a shop selling
household goods for the kitchen expecting that the cutlery and
crockery, the
pots and pans, and the other utensils and pieces of
equipment, ranging from toasters to mixers, frying pans to
corkscrews, all
originate from the owner of the store. An online
retailer is no different. As regards liability for defects in the
goods, that
will depend upon the terms of the contract of sale and
consumer protection legislation, rather than being an indication of
the
use of a mark in relation to the goods sold.
[18]
Section 2(3)
(a)
of the Act reproduces exactly the
corresponding section in the previous Trade Marks Act 62 of 1963. The
expression ‘in other
relation to’ was considered by this
court in
Miele
et
Cie GmbH & Co v Euro Electrical (Pty) Ltd
.
[9]
Beyond saying that ‘in relation to’ – which may not
be quite the same – is a phrase susceptible of a wide
meaning,
the court made no attempt to define further what it meant. It said
that this would be for a court to decide in each case
given the
context. On the facts it held that the use of the registered mark
Miele in the name of a shop trading in household electrical
equipment
and providing technical services was use in relation to goods of the
kind for which the mark was registered, although
the use was not as a
mark.
[19]
There is a brief passage in Webster and
Page
[10]
that says that use in ‘physical relation’ to goods covers
use in physical juxtaposition to the goods, such as use on
containers
or wrappers for the goods or on tickets or tags, while use in ‘other
relation’ to goods covers use physically
divorced from the
goods, but of such a nature as to be identifiable with those goods.
The authors suggest this would include use
on invoices or other
documents relating to the goods. In my view both propositions are too
broadly stated. Online retailers may
well package the goods they sell
for transmission by post or courier in packaging that identifies them
as the retailer. Anyone
who has purchased something from Amazon will
be aware that it will arrive in packaging reflecting that fact, but
this is not, nor
is it intended to be, any indication of the
provenance of the goods inside the package. The same, I think, goes
for Yuppie Gadgets,
whose packaging also reflects that the goods were
purchased from it. As to the proposition that use of a mark on an
invoice for
goods is a badge of origin of those goods, it manifestly
cannot be correct in relation to goods that bear some other mark and
would
not ordinarily be the case in relation to any goods.
[20]
It does not seem to me that Yuppie Gadgets
uses its mark on, or in physical relation to, or in other relation to
goods. That would
be contrary to its business model. As with any
other retailer it uses the mark to identify its business of selling
its stock in
trade. In that it is no different from household names
in the world of bricks and mortar, such as Macy’s in New York,
Harrod’s
in London, or Galeries Lafayette and Carrefour in
Paris. Misleading use of such names could found actions based on
passing off,
but if they were not used in relation to goods they were
incapable of being registered as trade marks.
[11]
Such registration only became permissible in the circumstances
outlined below.
[21]
When registration of trade marks in respect
of the provision of services became possible, retailers in both
England and South Africa
attempted to register their well-established
trading names as trade marks. Those endeavours failed
[12]
because of the difficulty of identifying the service provided by a
retailer of goods. Bingham LJ
[13]
summarised the difficulty in the following way:
‘
There
must be many providers of distinctive professional, financial,
commercial or person services who could reasonably claim that
their
activities deserve the same statutory protection as has been given to
manufacturers and sellers of goods. Trademark legislation
provides a
convenient and rather summary means of protecting goodwill; the
goodwill of one who sells a service is not the less
in need of
protection.
I do
not, however, think that a retailer of goods (who may obtain
trademark protection for the goods he sells) can sensibly be regarded
as trading in the provision of retail services. Doubtless these
applicants, and other retailers, take great care and use much
imagination and spend large sums of money to provide attractive
premises and an attractive range of goods and an attractive and
helpful sales staff and an efficient and convenient selling
procedure. But these services (if one calls them such) are not
services
which the retailer sells as such; they are simply things he
does to promote sales and maximise his profits as a retailer. Most of
the services are available for customers who do not buy as well as
those who do; and even those who do buy do not pay for the services
as such, although doubtless the price paid usually covers the costs
of sale. I find nothing in the Act to suggest that the essentially
simple process of selling goods by retail is to be broken down so as
to label part of the process that of rendering a retail service
and
the balance that of trading in goods.’
[22]
In
Tool
Wholesale Holdings
,
[14]
Hoexter JA, after considering in some detail the decision in
Dee
,
said that it provided authority for three propositions that were
equally of application in South Africa, namely that:
‘
(1)
Service marks are designed to provide statutory protection for the
goodwill of persons who trade
in the provision of services;
(2)
The business of a retailer of goods is not the provision of services
calculated to
facilitate the sale. The business of a retailer is the
sale itself;
(3)
Services which are purely ancillary or incidental to retail selling
are logically
indissociable therefrom.’
It
appears that this was also the approach of the Court of Justice of
the European Union,
[15]
which said that the purpose of a trade name or shop name is to
designate the business that is being carried on and such use is
not
use in relation to goods or services. It is only where the trading
name is attached to the goods that are marketed, as occurs
with a
house brand, that it becomes use in relation to goods.
[23]
In view of the
difficulties in regarding retail or wholesale trading as a service,
the definition of ‘services’ in s
2(1) of the Act is now
qualified by the statement that:
‘
Services’
includes the
offering for sale or the sale of goods in the retail or wholesale
trade’.
[16]
That gives
effect to the provisions of the International Classification of Goods
and Services for the purposes of Registration of
Marks (the Nice
Classification, 8 ed, 2001) to which South Africa adheres. Class 35,
which is the first class under the general
heading of services,
refers to:
‘
Advertising;
business management; business administration; office functions.’
In the
explanatory note it is said that:
‘
This
Class includes, in particular:
─
the
bringing together, for the benefit of others, of a variety of goods
(excluding the transport thereof), enabling customers to
conveniently
view and purchase those goods; such services may be provided by
retail stores, wholesale outlets, through mail or
per catalogues or
by means of electronic media, for example, through web sites or
television shopping programmes’.
[24]
The effect of all this
is to place the mark of a retailer or wholesaler, when used only to
identify their business and not on, or
in any relation, physical or
otherwise, to any goods, squarely within the field of a service mark.
That is apparent from the following
passage in the judgment in
PPI
Makelaars
&
another v Professional Provident Society of South Africa
:
[17]
‘
The
latter marks are inherently different: services are ephemeral;
they
are often concerned with the provision of trade-marked products of
third parties
; they
are not offered side by side enabling customers to make instant
comparisons; quality control is difficult, if not absent.
In
addition, service-marks such as those relating to vague topics like
financial services are more indefinite than goods marks
relating to,
say, clothing.’ (Emphasis added.)
[25]
If Yuppiechef had been registered as a
service mark in class 35 for retail services its complaint against
Yuppie Gadgets would have
been restricted to the question whether the
two marks so nearly resembled one another that the use of Yuppie
Gadgets was likely
to deceive or cause confusion. Its endeavour to
shoehorn the Yuppie Gadgets mark into the category of a mark in
relation to goods
arose from the fact that it had not registered
Yuppiechef as a services mark. It could not overcome this by
contending that the
Yuppie Gadgets mark was used in other relation to
goods. In my view its case based on the use of the mark Yuppie
Gadgets in other
relation to goods must fail.
The likelihood of
deception or confusion
[26]
The second string to the defence of the
claim under s 34(1)
(a)
was
that in any event the two marks did not so nearly resemble one
another that there was a likelihood of deception or confusion.
The
tests for this are by now well-established and there is little point
in repeating, or seeking to restate, them. What is required
is a
value judgment on the question of the likelihood of deception or
confusion based on a global appreciation of the two marks
and the
overall impression that they leave in the context of the underlying
purpose of a trademark, which is that it is a badge
of origin. The
value judgment is largely a matter of first impression and there
should not be undue peering at the two marks to
find similarities and
differences.
[18]
It is nonetheless not sufficient for judges merely to say that their
impression is that the alleged infringing mark is, or is not,
likely
to deceive or cause confusion. There is an obligation to explain why
the judge holds that view.
[27]
The obvious point of similarity between the
two marks lies in the use of the word ‘Yuppie’. Counsel
sought to argue
that this is the dominant feature of the two marks
and that the addition of ‘chef’ in the one and ‘Gadgets’
in the other does not alter the initial impression. I do not agree.
Those additions are an integral part of the two marks and,
in the
case of ‘Yuppiechef’, the two words have been
deliberately combined to form a single composite word. One cannot
simply disregard the additional elements of the two marks.
[19]
Both visually and aurally the two marks are different. While ‘yuppie’
is common to both, ‘chef’ and ‘gadgets’
are
incapable of being confused, either when seen or when spoken. The one
consists of a single syllable, the other of two. In addition
the
concepts conjured up by the words ‘chef’ and ‘gadgets’
are worlds apart.
[28]
Counsel for Yuppiechef laid considerable
stress on the evidence of actual confusion elicited by Yuppiechef. He
correctly emphasised
the fact that in many cases such evidence is
hard to come by and submitted that this should be decisive. In four
cases affidavits
were delivered by the persons concerned and in the
other five instances reliance was placed solely on the contents of
email exchanges
between members of the public and Yuppiechef. In
dealing with the evidence I will anonymise the names of the persons
concerned.
[29]
MG saw an advertisement on the social media
site Facebook for a general discount of fifteen percent on all goods.
The advertisement
was placed by Yuppie Gadgets. Her affidavit
reflected the ephemeral nature of communication on social media,
because she saw an
advertisement for ‘Yuppie(something)’
and leapt to the conclusion that this was Yuppiechef, with which she
was familiar.
Her response to the advertisement was to email
Yuppiechef and ask if the discount applied to all goods and would be
available all
day. Her affidavit does not indicate why she did this,
that is, whether she simply had an eye for a bargain or saw an
opportunity
to make a purchase already in contemplation at a better
price. When told that Yuppiechef did not have a sale on she went back
to
the advertisement and responded ‘Oh sorry man, its my
mistake, it was Yuppie Gadgets that were advertising it.’ In
other words her confusion arose from her jumping to a conclusion
without reading the advertisement. Had it been an advertisement
by
‘Yuppie Goods, Yuppie Food or Yuppie Home’ her reaction
was likely to have been the same.
[30]
In October 2012 BJ had purchased various
items – a bottle holder, fridge magnets, an Asado Flameboy, a
Fairground popcorn
machine, a Fairground treat dispenser, a backwards
clock and an icecream doorstop – from Yuppie Gadgets at a price
of nearly
R2 000. He had paid by way of an electronic funds
transfer, which would have required him to enter Yuppie Gadgets with
his
bank as a party to which payment could be made using electronic
banking. In May 2013 he wanted to buy another icecream doorstop,
so
he attached a copy of the previous order, clearly addressed to Yuppie
Gadgets, to an email addressed to Yuppiechef. He claimed
to be
confused between the two businesses, but it is unclear on what basis
he made that claim or why on this second occasion he
had not
exhibited the same degree of care with his order as he had eight
months earlier. The facts demonstrate that he made an
error, but not
that he was confused between the two marks.
[31]
PM was an office administrator. She said
that she knew Yuppiechef as an online retail store. In September 2013
she prepared a purchase
order for 180 Solarmonkey Adventurers at a
price of R1 300 each, totalling R234 000. These were gifts
to be handed out
at an event for a client. The order correctly
identified Yuppie Gadgets as the party from whom the goods were to be
purchased and
included a supplier number that could only have
emanated from Yuppie Gadgets. This indicated that there must have
been prior communication
between her and Yuppie Gadgets. The order
contained internal references for the purchaser’s records and
accurately set out
its delivery address. Notwithstanding all of this
and the fact that her email header said that it was a purchase order
addressed
to Yuppie Gadgets, PM sent the order to Yuppiechef, who
pointed out that she had sent it to the wrong address. Her response
was
to say in a joking fashion ‘you can see where my
allegiances lie haha.’
There
was no explanation for the error. If she had previously purchased
goods from Yuppiechef, as appears to be likely, it may be
that in
preparing the email her computer automatically completed the address
by inserting it from her record of addressees previously
used and she
failed to notice.
[20]
Nothing in her affidavit suggested that she was confused between the
two marks.
[32]
The last deponent to an affidavit was NDP.
He sent an email to Yuppiechef on 23 October 2012 reading:
‘
Just
out of curiosity, I take it you guys are not affiliated with
http://www.yuppiegadgets.co.za
right?’
It is not clear to me
how a statement that the two businesses are not related to one
another can constitute evidence of confusion
between them. NDP did
not disclose his reasons for contacting Yuppiechef to ask about this
and his affidavit says that he doubted
a connection between the two
because of the ‘poor quality and presentation’ of the
Yuppie Gadgets website. As he said
that he was a software engineer
that fact perhaps lay behind his enquiry, but in the absence of an
explanation it is not evidence
of confusion between the two marks.
[33]
The emails can be dealt with more
summarily. In the first a recipient of Yuppie Gadgets vouchers
enquired whether she could use
them at Yuppie Chef. That may have
been more in hope than expectation. In the second an order was sent
to Yuppie Gadgets for items
all of which were marked as appearing on
the Yuppiechef website. Why this occurred is unclear. The person
concerned was aware of
the existence of both websites as she was
corresponding with the Yuppie Gadgets site and giving references to
the Yuppiechef website.
The third email started with the following:
‘
I
thought I recently saw a mini desk vacuum advertised in one of your
newsletters.’
The tentative nature
of this enquiry did not indicate any confusion between the marks, and
when Yuppiechef pointed out that it did
not stock such items the
response was ‘Aha thanks so much’, not a complaint of
confusion.
[34]
The fourth email involved a person who said
“I recently saw a self-stirring mug on Yuppiechef, however the
link could not
open.’ Presumably the link had been typed into
the Yuppiechef site search engine, because if the link had been typed
into
a general search engine, such as Google, it would have taken the
enquirer to the Yuppie Gadgets site. Why the enquirer did this
does
not emerge from the subsequent exchange of emails nor did she
complain of being confused. Finally, the fifth and last email
read:
‘
Is
Yuppiegadgets your business or one calculated to deceive the public?
Just asking –confused!!’
In the absence of an
affidavit it is impossible to say what gave rise to this email.
[35] Overall the
affidavits and emails reflect nine instances of claimed confusion
over an extended period in relation to a business
where a typing
error and too rapid pressing of the ‘send’ button can
result in an email being misdirected even in the
absence of
confusion. In my view the evidence does not establish a substantial
risk of confusion or deception between the two marks.
[36]
In considering the likelihood of deception
or confusion it is necessary to ask whether the nature of the two
enterprises, that is,
online retailers, affects the matter. The type
of customer is one who is moderately familiar with computers and not
afraid to shop
online. They will be familiar with search engines and
willing to visit several sites to find what they are looking for.
They will
be aware that the first suggestion by the search engine is
not necessarily their target and will probably have some appreciation
of the distinction between advertisements and other listings. They
will also be familiar with drop down menus and how to navigate
these
to find the desired site. Lastly I think they will accept that
occasionally haste, inadequate typing skills or failure to
read
thoroughly may take them to a destination other than the one they had
in mind. If they encounter separate websites with no
hyperlink
connecting them they will not expect them to be connected.
[37]
There is an inherent safeguard against
confusion between sites in the light of the mechanism for purchasing
items on online retail
sites. This is not as simple as handing over a
credit card or cash at a shop counter. Substantial security features
are built into
the process because it involves the use of a credit
card. The purchaser will have to create an identity and provide
information
such as their name, address (both physical and email),
telephone number and importantly credit or debit card details.
Usually the
identity will include a password and these details are
retained by the online retailer. As the customer selects an item to
purchase
it is placed in a metaphorical basket, trolley or cart and
the customer is asked whether they wish to continue shopping or
proceed
to check out. At every stage of the check out and payment
process details will have to be confirmed. So the shopping process
always
provides time for reflection. A person confronted at every
stage of this process with Yuppie Gadgets is unlikely at the end of
this to believe that they are dealing with Yuppiechef. When dealing
with return customers the process is not repeated as they are
usually
invited to log in to their existing account. So the possibility of
confusion is restricted to persons being led astray
in initially
accessing the site.
[38]
All of these features to my mind serve to
minimise the risk of deception or confusion. At the end of the day
the argument revolved
around the centrality of the word ‘yuppie’
in Yuppiechef’s brand identity. As to that there are many cases
in
which it has been said that it is not the purpose of trade marks
or copyright to enable people to secure monopolies on the commons
of
the English language. Yuppie is an ordinary word in common use. And
as Lord Simonds said in
Office Cleaning
Services
:
[21]
‘
So
long as descriptive words are used by two traders as part of their
respective trade names, it is possible that some members of
the
public will be confused whatever the differentiating words may be. I
am ready to believe that in this case genuine mistakes
were made. I
think they ought not to have been made.’
[39]
For those reasons, in my view both of the
defences raised by Yuppie Gadgets to the claim of infringement under
s 34(1)
(a)
had to succeed and the appeal under that head must fail.
Section 34(1)
(b)
of
the Act
[40]
The claim under this head must fail for the
second reason in respect of the claim under s 34(1)
(a)
.
The section provides that infringement occurs by the unauthorised use
of a mark, which is identical or similar to the registered
mark, in
the course of trade in relation to goods or services that are so
similar to the goods or services in relation to which
the mark is
registered, that in such use there exists the likelihood of confusion
or deception. It therefore extends the scope
of protection beyond the
goods or services in respect of which the mark is registered to use
of a similar mark, likely to cause
confusion or deception, in
relation to goods or services that are similar to those in respect of
which the mark is registered,
while not being covered by that
registration.
[41]
Yuppiechef argued that, given that the
goods sold on the Yuppie Gadgets website were the same as some of the
goods in respect of
which its marks were registered, it followed that
an outlet selling those goods is similar to the goods themselves. I
am not sure
that this is correct, as it appears to be an attempt to
bridge the gap between a goods mark and a services mark. I have held
that
Yuppie Gadgets uses its mark in relation to the services it
provides as a retailer of goods. It is unclear to me that those, or
any other, services could ever be ‘similar’ to goods. The
intrinsic nature of goods is wholly different from the intrinsic
nature of services and vice versa. It may be that similarity in this
section, when dealing with a services mark, refers only to
similar
services and, when dealing with a goods mark, refers only to similar
goods.
[22]
However, the question was not fully explored in argument before us
and the matter can be resolved without reaching any conclusion
on
this issue, so it is better to refrain from deciding the point.
[42]
The claim based on s 34(1)
(b)
must fail for the second of the reasons in relation to the s 34(1)
(a)
claim, namely that the marks are not so
similar that the use thereof is likely to cause deception or
confusion. That requires no
further discussion.
Section 34(1)
(c)
of
the Act
[43]
This is the anti-dilution provision of the
Act.
[23]
It prohibits the unauthorised use in the course of trade in relation
to any goods or services of a mark identical or similar to
a
registered mark, if the registered mark is well-known in the Republic
and the use of the alleged infringing mark would be likely
to take
unfair advantage of, or be detrimental to, the distinctive character
or the repute of the registered mark. The section
casts its net more
broadly than the earlier sub-sections in that it applies in the
absence of confusion or deception. It does not
require trade mark use
by the alleged infringer, nor does it necessarily require an attack
on the badge of origin function of the
registered mark. Its purpose
is to protect the reputation, advertising value and selling power of
a well-known mark.
[24]
In order to succeed in this claim it was necessary for Yuppiechef to
show that the mark Yuppie Gadgets was similar to its mark
and that
its use would take unfair advantage of its mark or would be
detrimental to the distinctive character or repute of its
mark.
[44]
Whether the alleged infringing mark is
similar to the registered mark must be considered without regard to
its potential to create
confusion or deception. This court said in
Bata
[25]
that it requires more than a slight resemblance between the two marks
and that ‘a marked resemblance or likeness’ is
the
appropriate meaning. It is not wholly clear how the two marks can
exhibit a marked resemblance or likeness without so nearly
resembling
one another that there is a likelihood of deception or confusion,
[26]
but I need not resolve that conundrum. In my view the only similarity
between the two marks lies in the use of the word ‘Yuppie’
and that does not make them similar for the purposes of s 34(1)
(c)
.
[45]
In any event the further requirements of
the section are not established. In
Verimark
[27]
it was rightly said that the unfair advantage or the detriment must
be properly substantiated to the satisfaction of the court.
In other
words it must be established on a balance of probabilities. That was
not done in this case. There was no evidence to show
that in the
absence of confusion or deception Yuppie Gadgets would obtain an
unfair advantage or Yuppiechef would suffer any detriment.
On both
legs therefore the claim based on s 34(1)
(c)
must fail.
Passing off
[46]
This was the last string to the Yuppiechef
bow. It was based on the reputation in the Yuppiechef name, which is
not only its trading
name but also the domain name of its website.
The basis for alleging confusion or deception on the part of Yuppie
Gadgets was a
contention that persons typing in the website’s
domain or searching for it using a search engine might arrive at the
Yuppie
Gadgets site when they were searching for the Yuppiechef
site. A makeweight point was added that the two websites ‘have
a similar look and feel’. Even after having accepted the
invitation in the heads of argument to visit both sites, the
similarity
in look and feel escaped me. And as to the similarity in
the names that has been adequately dealt with and disposed of earlier
in this judgment. The claim based on passing off must fail.
Result
[47]
In the result the appeal is dismissed with
costs.
M J D WALLIS
JUDGE OF APPEAL
Appearances
For appellant:
G Marriott
Instructed by:
Von Seidels Attorneys, Cape Town,
Honey Attorneys,
Bloemfontein
For respondent:
O Salmon SC
Instructed by:
Schindlers Attorneys, Johannesburg,
Webbers Attorneys, Bloemfontein.
[1]
A book entitled
The Yuppie Handbook
by Marissa Piesman and
Marilee Hartley was published in January 1983 and
Newsweek
magazine pronounced 1984 to be ‘The Year of the Yuppie’.
[2]
Notwithstanding its American roots it is not mentioned in
The
American Heritage Dictionary
(1991).
[3]
New
Shorter Oxford English
Dictionary
6 ed, (2007), Vol 2 at 3700 sv ‘yuppie’.
See also
Collins English Dictionary
6 ed, (2003) at 1865;
Cassell Giant Paperback Dictionary
(1993) at 1520.
[4]
At the same time it changed its name from Nanini 444 CC to Yuppie
Stuff Online CC, but it has now converted from a close corporation
to a company under the name Yuppie Gadgets Holdings (Pty) Ltd.
[5]
A fuller explanation of the workings of GoogleAds is to be found in
Cochrane Steel Products (Pty) Ltd v M-Systems Group (Pty) Ltd and
Another
[2016] ZASCA 74
;
[2016] 3 All SA 345
(SCA) para 4,
quoting the relevant portion of the judgment of Kitchin LJ in
Interflora Inc v Marks and Spencer Plc
[2014] EWCA Civ 1403
(CA). Neither of those cases is directly relevant to the present one
as they involved the use by a competitor of a registered
trade mark
as a key word in order to prompt the search engine to show their
advertisement on the search result page.
[6]
Gulf Oil Corporation v Rembrandt Fabrikante &
Handelaars (Edms) Bpk
1963 (2) SA 10
(T) at 24D-E .
[7]
McDonald’s Corporation v Joburgers
Drive-Inn Restaurant (Pty) Ltd & another; Mc Donald’s
Corporation v Dax Prop
CC & another; McDonald’s
Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd
and
Dax Prop CC
[1996] ZASCA 82
;
1997 (1) SA 1
(A) at 29H-30;
Arjo
Wiggens Ltd v Idem (Pty) Ltd & another
[2001] ZASCA 109
;
2002 (1) SA 591
(SCA) para 10.
[8]
Verimark (Pty) Ltd v BMW AG; BMW AG v Verimark
(Pty) Ltd
[2007] ZASCA 53
;
2007 (6) SA
263
(SCA) (
Verimark)
para
5.
[9]
Miele et Cie GmbH & Co v Euro Electrical
(Pty) Ltd
[1988] ZASCA 1
;
1988 (2) SA
583
(A) 599G-600B.
[10]
GC Webster and NS Page
South
African Trade Marks
4ed (1997) para
4.3. The authors cite
Abbott
Laboratories and Another v UAP Crop Care (Pty) Ltd and Others
[1999]
1 All SA 502
(C) 514D-I in support of this proposition but that case
dealt with comparative advertising and not the issue with which I am
concerned. It is accordingly unnecessary to consider the correctness
of the reasoning in that decision.
[11]
Use of the trading name in relation to house brands or house lines
would of course be use in relation to goods and could be protected
by registration of the name as a mark in respect of the classes of
goods covered by the house brand or line.
[12]
Dee Corporation plc & others
[1990] RPC 159
(CA) (
Dee
);
Tool Wholesale Holdings (Pty) Ltd v
Action Bolt (Pty) Ltd & another
[1990]
ZASCA 135; 1991 (2) SA 80 (A).
[13]
Dee
183 line 32 to 184 line 9.
[14]
At 91A-D
[15]
Céline SARL v Céline
SA
[2007] EUECJ C-17/06
;
[2007] ECR 1-7041
paras
21 and 22.
[16]
Blockbuster Entertainment Corporation v Registrar of Trade Marks
1994 (3) SA 402
(T) 404C-F.
[17]
PPI Makelaars & another v Professional
Provident Society of South Africa
[1997]
ZASCA 88
;
1998 (1) SA 595
(SCA) at 603D-E.
[18]
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984]
ZASCA 51
;
1984 (3) SA 623
(A) at 641A-E;
National
Brands
Ltd v Blue Lion Manufacturing (Pty) Ltd
[2001]
ZASCA 17
;
2001 (3) SA 563
(SCA) (
National
Brands
) para 6;
Cowbell
AG v ICS Holdings Ltd
[2001] ZASCA 18
;
2001 (3) SA 941
(SCA) paras 10-15;
Puma
AG Rudolph Dassler Sport v Global Warming (Pty) Ltd
[2009]
ZASCA 89
;
2010 (2) SA 600
(SCA) paras 8-9 and
Century
City Apartments Property Services CC & another v Century City
Property Owners’ Association
[2009]
ZASCA 157
;
2010 (3) SA 1
(SCA) para 13.
[19]
Distell Ltd v KZN Wines and Spirits CC
[2016] ZASCA 18
para
16.
[20]
This is a common feature of email programs. For example there are a
number of judges names in my email address book. When I commence
addressing an email to ‘Judge’ the program automatically
shows the names of the judges in the address book. It is
very easy
in those circumstances inadvertently to select an incorrect
addressee.
[21]
Office Cleaning Services Ltd v Westminster Window and General
Cleaners Ltd
(1946) 63 RPC 39
at 43.
[22]
Mettenheimer and Another v Zonquasdrif Vineyards CC and Others
[2013] ZASCA 152
;
2014 (2) SA 204
(SCA) dealt with two different
categories of goods.
[23]
There is a full discussion of the background to and origins of this
provision in
Laugh It Off Promotions CC v South African Breweries
International (Finance) BV t/a Sabmark International
[2004]
ZASCA 76
;
2005 (2) SA 46
(SCA) paras 13-18. The discussion of the
section’s purpose, on appeal from that decision in
Laugh It
Off Promotions CC v South African Breweries International (Finance)
BV t/a Sabmark International (Freedom of Expression
Institute as
Amicus Curiae)
[2005] ZACC 7
;
2006 (1) SA 144
(CC);
2005 (8)
BCLR 743
(CC) paras 34-42, is consistent with that in this court.
[24]
Verimark
supra para 13.
[25]
Bata Ltd v Face Fashions CC and Another
[2000]
ZASCA 192
;
2001 (1) SA 844
(SCA) para 14.
[26]
National Brands
supra para 12.
[27]
Verimark
supra
p
ara 14.