About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2010
>>
[2010] ZAWCHC 223
|
|
Strydom v Bader and Others (9830/2010) [2010] ZAWCHC 223; 2010 BIP 192 (WCC) (26 October 2010)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE HIGH
COURT, CAPE TOWN)
CASE NO
:
9830/2010
In the application of:
ANDRÉ DE VOS
STRYDOM
….................................................
Applicant
and
WALTER KARL BADER
…............................................
First
respondent
VIVA AFRICA WINES CC
t/a W K WINES
…...........
Second
respondent
SALEMAX 18 CC t/a
RAILWAY BAR
AND LIQUOR STORE
…...............................................
Third
respondent
JUDGMENT DELIVERED ON
26 OCTOBER 2010
_____________________________________________________
BLIGNAULT J
:
[1] This judgment deals
with two related trade mark applications. In the first application
applicant applies for an order restraining
respondents from
infringing his rights in the trade mark, registration no 2004/13744,
Late Harvest Sunrise/Sonstraal (“the
infringement
application”). In a counter-application second and third
respondents apply for the expungement of the trade
mark from the
register (“the expungement application”).
[2] To avoid confusion I
shall refer to the parties herein as they are named in the
infringement application. Applicant is Mr André
de Vos
Strydom. He is the owner of a liquor store situated in Malmesbury.
First respondent is Mr Walter Karl Bader. He is a member
of second
and third respondents and acts on their behalf. Second respondent is
Viva Africa Wines CC, a close corporation trading
as W K Wines at the
corner of Swartland Street and Industria Crescent, Moorreesburg.
Third respondent is Salesmax 18 CC, a close
corporation trading as
Railway Bar and Liquor Store at 6 Bokomo Road, Malmesbury.
[3] Applicant is the
registered proprietor of the trademark known as Late Harvest
Sunrise/Sonstraal and the sun device, which is
registered in terms of
section 27 of the Trade Marks Act 194 of 1993 (“the Act”)
under number 2004/13744 class 33 in
respect of alcoholic beverages
except beer. On 11 November 2008 he bought the registered trade mark
from Solocorp 149 CC (“Solocorp”).
Registration in his
name took place on 25 January 2010, effective as from 11 November
2008.
[4] Applicant annexed
colour photographs to his affidavit of a label with the registered
trade mark and a label of the mark used
by respondents. The two marks
are virtually identical. Applicant accordingly contended that
respondents’ use of the offending
mark is an infringement of
his rights in respect of the registered trade mark.
[5] In order to explain
the history of the trade mark applicant referred to a supporting
affidavit deposed to by Mr Eben von Waltsleben.
He used to be the
sole member of Solocorp. Mr Von Waltsleben said, inter alia:
“
4.2
During 2003 the former holder of the rights in the Late Harvest
Sunrise/Sonstraal label, Darling Kelders, gave the rights to
use the
label to Druiwetros Kelders (“Druiwetros”) and Nemesia
Hotel. Darling Kelders indicated that they would not
use the label
any longer.
4.3
Druiwetros and Nemesia Hotel approached me to package the Late
Harvest Sunrise/Sonstraal label for them. Mr Loubscher, who was
the
owner of Druiwetros at that stage, informed me that he was the owner
of the label.
4.4
I proceeded to produce and package the label as agreed with
Druiwetros.
It
came to my knowledge that the First Respondent, trading as the
Second and/or Third Respondent were also using the trade mark
on
the labels of his wine. The First Respondent’s father,
Walther Bader senior, alleged that he had a written agreement
with
Darling Kelders to use the label. Neither the First Respondent nor
his father were at any time able to produce such an
agreement, not
even during subsequent correspondence and steps towards litigation.
As
a result I was confused regarding the ownership of the label and
approached Mr Shephard of Darling Kelders, the original
owners of
the label. He informed me that Darling Kelders no longer wanted
anything to do with the label, and that the rights
were open for
anyone to use. He denied that any written agreement was ever
entered into by Darling Kelders regarding the ownership
of the
label.
As
I was eager to obtain legal certainty regarding the rights to the
label, I registered the trade mark in my name during 2004.
I
informed the First Respondent of such registration during 2007.
During this time correspondence took place between my attorneys
and
the First Respondent’s attorneys regarding the First
Respondent’s intention to challenge the registration in
my
name.
The
First Respondent, trading as the Second and/or Third Respondent
continued to use my trade mark despite being informed about
the
registration in Solocorp’s name. I was very unhappy with this
and we had quite a dispute, consisting of correspondence
and
threats of legal action. I briefed counsel to draft papers, but was
not able to continue with the litigation due to a lack
of funds.
… … …
Despite
the above correspondence and threats, the Respondents never
challenged the registration of the trade mark in Solocorp’s
name with the Registrar or in court. The Respondents also never
applied to be registered as honest concurrent users in terms
of the
Act. I submit that the Respondents at this stage abandoned such
remedies.”
[6] Applicant said that
after purchasing the trade mark from Solocorp he was under the
impression that he would only become the
owner of the registered
trade mark upon registration of the assignment to him. While waiting
for the registration to take place
he had to find another supplier to
produce the wine carrying his label. As second respondent was already
producing the wine with
the label he approached second respondent for
that purpose. During the period January 2009 to December 2009 he
bought wine bearing
the trade mark from second respondent. On 13
October 2009 he was informed by the attorneys attending to the
registration that full
and beneficial ownership of the trade mark had
been assigned to him on 21 November 2008 and that he had been able to
use and enforce
it from that date.
[7] Applicant said that
he went to see first respondent personally on 15 December 2009. He
informed first respondent that he was
the proprietor of the
registered trade mark and that he should stop using the mark. First
respondent did this for a while and then
started to use the mark
again and continued to use it.
[8] First, second and
third respondents opposed the infringement application. First
respondent deposed to the answering affidavit
on behalf of all three
respondents. He is a member of second and third respondents. Second
respondent produces, markets and sells
wine under the name of “Late
Harvest Sunrise Sonstraal”. Third respondent owns a liquor
store which carries on business
in Malmesbury in direct competition
with applicant.
[9] First respondent
raised a defence
in limine
namely that no relief should be
sought against him personally as the impugned conduct was carried out
by second and third respondents.
[10] First respondent
provided his version of the history of the trade mark. Darling
Cellars (then known as Groenkloof Drankhandelaars)
designed and used
the trade mark, then unregistered, since the late 1990’s. In
the beginning of 2003 Darling Cellars decided
to cease the
distribution of the product bearing the trade mark. Towards the end
of February or early March 2003 he concluded an
oral agreement with
Mr Sheppard, the general manager of Darling Cellars, in terms of
which he acquired the user rights in respect
of the trade mark from
Darling Cellars. Since the beginning of 2003 he used the trade mark
on products packed, marketed and sold
by him.
[11] As he did not
possess a liquor licence to market and sell his own products he
entered into an arrangement with Solocorp in
November 2003 in terms
of which he would sell his products, including the Late Harvest
Sonstraal product, under Solocorp’s
licence. Prior to that date
he had sold his own product with the trade mark for about eight
months. Before he started to sell the
Late Harvest Sonstraal product
under Solocorp’s licence, first respondent said, Solocorp was
not aware of the existence of
the trade mark.
[12] Solocorp, he said,
started to sell wine with the trade mark in March 2004,
inter
alia
, to first respondent’s main customers, Druiwetros
Drankwinkel and Nemesia Hotel, and managed to coax them away from
first
respondent. He said that he took no action against Solocorp at
the time as he did not have the financial means to do so.
[13] First respondent
said that as a result of Solocorp’s conduct their business
relationship deteriorated and he acquired
his own licence to market
and sell his wine products. Second respondent had since March 2004
packed, marketed and sold wine products,
including the product with
the Late Harvest Sonstraal mark, under its own licence. In August
2006 his attorney wrote a letter to
Solocorp calling upon it to cease
using the trade mark. Solocorp, however, continued using the trade
mark.
[14] In December 2007,
first respondent said, he received a letter from attorneys acting for
Solocorp informing him that Solocorp
had registered the trade mark
and that second respondent should cease using the mark. This was the
first time that he learnt that
Solocorp had registered the trade
mark. His attorneys replied that Darling Cellars had been using the
trade mark continuously and
bona
fide since the late 1990’s
and that Solocorp knew that he had acquired the trade mark in March
2003 from Darling Cellars and
used it since. Second respondent
continued to use the trade mark without any further threats from
Solocorp.
[15] Solocorp was
liquidated in January 2009 and thereafter, until January 2010, second
respondent was the only supplier of the
product with the trade mark.
During the period January 2009 to December 2009 applicant purchased
the product with the trade mark
from second respondent. It was only
on 3 February 2010, on receipt of a letter from applicant’s
attorneys, that he learnt
that applicant had purchased the trade mark
from Solocorp.
[16] Applicant filed a
replying affidavit. He responded to the defence
in limine
that
first respondent should not have been joined as a party. He contended
that first respondent in his personal capacity was assisting
the two
other respondents to infringe his trade mark.
[17] Applicant denied
that respondents’ use of the trade mark had been
bona fide.
He also contended that as first respondent claimed to have
obtained the trade mark from Darling Cellars, the parties shared a
common
predecessor. Respondents could therefore not show that their
predecessor used the trade mark from a date anterior to that of
applicant’s
predecessor.
[18] Applicant denied
that first respondent concluded an agreement during February/March
2003 with Mr Sheppard, the general manager
of Darling Cellars, in
terms of which he acquired the user rights to the trade mark. He
filed a supporting affidavit made by Mr
John Sheppard. He said that
as from 2001 he was the chief executive officer of Darling Cellars.
During 2004 Von Waltsleben approached
him to buy the trade mark which
Darling Cellars had discontinued to use in approximately 2000 as they
went onto the export market.
He told Von Waltsleben that he could
utilise the label as he distanced himself from the label. Some time
later first respondent
contacted him and said that there was a
dispute between him and Von Waltsleben concerning the label. First
respondent asked him
whether he could use the label and he said yes.
He said that he did not give exclusive rights concerning the label to
first respondent.
Sheppard’s allegations regarding Von
Waltsleben’s approach to Darling Cellars in 2004, were
confirmed in an affidavit
made by Mr Marius Botha, the production
manager of Darling Cellars.
[19] On 20 July 2010
second and third respondents brought the counter-application for an
order directing the Registrar of Trade
Marks to remove trade mark no
2004/13744 from the register on the ground that it was a
non-registrable trade mark. In the alternative
second and third
respondents sought an order that applicant’s application for an
interdict be suspended pending the determination
of an application by
them in terms of section 14 of the Act to be registered as honest
concurrent users of the trade mark.
[20] First respondent
deposed to the founding affidavit in the expungement application on
behalf of second and third respondents.
He said that Von Waltsleben
was aware of the following facts when he caused the trade mark to be
registered in the name of Solocorp:
That Darling Cellars had
used the trade mark continuously and
bona fide
since the late
1990’s until about March 2003.
That he in his personal
capacity had used the trade mark continuously and
bona fide
from
about March 2003 to about March 2004.
That second respondent
used the trade mark continuously and
bona fide
from March
2004.
[21] Despite his
knowledge of these facts, first respondent contended, Von Waltsleben
applied for the registration of the trade
mark in the name of
Solocorp. He did not have a
bona fide
claim with respect to
the trade mark and it was therefore not registrable. Solocorp’s
application for registration was for
the same reason not brought
bona
fide.
[22] Applicant opposed
the expungement application on the basis of the facts set forth in
his affidavits in the infringement application.
He also opposed
respondents’ alternative relief, namely that the interdict be
suspended pending their application to be registered
as honest
concurrent users. In his answering affidavit in the expungement
application applicant referred expressly to the contents
of the
affidavits of Sheppard and Botha, which, he said, show that he did
not act
mala fide
when he applied for the registration of the
mark.
[23] In his replying
affidavit in the expungement application first respondent said the
following in response to applicant’s
reference to the contents
of the affidavits of Sheppard and Botha:
“
11.
Ad
paragrawe 22, 22.1, 22.2, 22.3 en 22.4 daarvan
:
11.1
Ek ontken dat Von Waltsleben toestemming gehad het om die handelsmerk
te gebruik voor ek toestemming verkry het om die handelsmerk
te
gebruik.
11.2
Dit is nie moontlik om uit Eerste Respondent, Sheppard, Botha of Von
Waltsleben se verklarings, waarna Eerste Respondent in
hierdie
paragrawe verwys, te bepaal wanneer Von Waltsleben toestemming verkry
het om die handelsmerk te gebruik nie. Op die tydstip
wat Von
Waltsleben egter die handelsmerk gedurende Maart 2004 vir die eerste
maal begin gebruik het, het ek reeds vir ongeveer
12 maande die
handelsmerk gebruik.
11.3
Ek doen aan die hand dat Von Waltsleben se oneerlike gedrag deur
aansoek vir die registrasie van die handelsmerk te doen, ongeag
daarvan dat hy deeglik bewus was van die feit dat Applikante die
handelsmerk op daardie tydstip reeds vir ’n geruime tyd
bona
fide gebruik het, ’n duidelik aanduiding is dat die handelsmerk
nie registreerbaar was ten tyde van die aansoek vir
registrasie nie.
11.4
Von Waltsleben was deeglik bewus daarvan dat hy geen bona fide
aanspraak op besitreg ten opsigte van die merk gehad het ten
tyde van
die aansoek om registrasie van die handelsmerk nie.”
[24] The infringement and
expungement applications were heard by me on 11 August 2010. Ms Lise
Smit appeared on behalf of applicant.
Ms Minette Treurnicht appeared
on behalf of respondents.
[25] The infringement
application is brought in terms of section 34(1)(a) of the Trade
Marks Act 194 of 1993 (“the Act”).
It reads as follows:
“
34
Infringement of registered trade mark
(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 trade mark is registered,
of an
identical mark or of a mark so nearly resembling it as to be likely
to deceive or cause confusion;”
[26] It is not disputed
by respondents that their use of the trade mark falls within the
ambit of section 34(1)(a) of the Act. It
is identical to applicant’s
registered trade mark. Respondents’ defence, however, is that
in terms of section 36(1)
of the Act they or their predecessors in
title made continuous and
bona fide
use of the trade mark from
a date anterior to the use of the trade mark by applicant or his
predecessors in title.
[27] Section 36(1) of the
Act reads as follows:
“
36
Saving of vested rights
(1)
Nothing in this Act shall allow the proprietor of a registered trade
mark to interfere with or restrain the use by any person
of a trade
mark identical with or nearly resembling it in respect of goods or
services in relation to which that person or a predecessor
in title
of his has made continuous and bona fide use of that trade mark from
a date anterior-
(a)
to the use of the first-mentioned trade mark in relation to those
goods or services by the proprietor or a predecessor in title
of his;
or
(b)
to the registration of the first-mentioned trade mark in respect of
those goods or services in the name of the proprietor or
a
predecessor in title of his,
whichever
is the earlier, or to object (on such use being proved) to the trade
mark of that person being registered in respect of
those goods or
services under section 14.”
[28] Ms Smit (for
applicant) submitted that respondents were not able to rely on the
provisions of section 36(1)(a) of the Act as
Darling Cellars was the
predecessor in title of both applicant and respondents. The use of
the trade mark by respondents’
predecessor in title was
therefore not from a date anterior to that of applicant’s
predecessor in title. Ms Smit submitted
further that respondents’
use of the trade mark was in any event not
bona fide.
[29] Ms Treurnicht (for
respondents) argued with reference to the facts set out in first
respondent’s affidavit that his continuous
and
bona fide
use of the trade mark predated that of applicant’s predecessor.
According to first respondent’s version he sold a wine
product
with the Sonstraal trade mark since February/March 2003 whilst
Solocorp did so for the first time in March 2004.
[30] Respondents’
expungement application, in turn, is based on the provisions of
sub-sections 10(3) and 10(7) of the Act
which read as follows:
“
10
Unregistrable trade marks
The
following marks shall not be registered as trade marks or, if
registered, shall, subject to the provisions of sections 3 and
70, be
liable to be removed from the register:
… … …
(3)
a mark in relation to which the applicant for registration has no
bona fide claim to proprietorship;
………
(7)
a
mark the application for registration of which was made mala fide”;
[31] The provisions of
sections 10(3) and 10(7) of the Act overlap to a considerable extent.
For purposes of the application of
both sub-sections to the facts of
the present case the single issue is whether Von Waltsleben had
“
a
bona fide claim to proprietorship
”
of
the trade mark at the time when he applied for the registration
thereof in the name of Solocorp. If he did not, his application
would
have been made
mala fide
.
[32] The resolution of
the issues in this matter thus depends upon the interpretation and
application of two key statutory criteria.
The first is
“
bona
fide use”
within the meaning of section
36(1) of the Act and the second is
“
bona
fide claim to proprietorship”
within
the meaning of section 10(3) of the Act.
[33] I propose to refer
first to certain relevant legal principles before turning to the
facts of this case. The word
proprietorship
is not defined in
the Act or in the previous Trade Marks Act 62 of 1963 (“the
1963 Act”). It has been said that the
use of this word is “
a
legacy from early English trade mark legislation”.
See
Oils
International (Pty) Ltd v Wm Penn Oils Ltd
1965 (3) SA 64
(T) at
70F. The word
proprietorship
appeared in section 20(1) of the
1963 Act which provided, insofar relevant, that “
any person
claiming to be the proprietor of a trade mark used or proposed to be
used by him”
may apply for the registration thereof. It is
apparent that the same concepts are used in section 10(3), read with
the definition
of trade mark, in the Act. The decisions which dealt
with section 20(1) of the 1963 Act are therefore still relevant and
applicable
to the interpretation and application of section 10(3) of
the Act.
[34] In
Victoria’s
Secret Inc v Edgars Stores Ltd
[1994] ZASCA 43
;
1994 (3) SA 739
(A) Nicholas AJA
dealt with section 20(1) of the 1963 Act. He said the following, at
744 I – 745 A:
“
In
terms of s 20(1) one can claim to be the proprietor of a trade mark
if one has appropriated a mark for use in relation to goods
or
services for the purpose stated, and so used it. (I use the verb
appropriate in its meaning of 'to take for one's own'. It is
a
compendious expression which comprehends the words favoured by Mr
Trollip in the Moorgate judgment, namely originate, acquire
and
adopt.)
Section
20(1) applies not only to a person claiming to be the proprietor of a
trade mark used by him, but also to a person claiming
to be the
proprietor of a trade mark proposed to be used by him.”
[35] It appears from the
passage quoted above that there are two categories of persons who may
apply for registration – those
who are actual users of the
trade mark and those who propose to use it. In regard to the first
category, ie the actual users, the
requirements for the acquisition
of common law proprietorship of a trade mark apply. These were
formulated in a passage in a determination
made by the Honourable W G
Trollip in the matter of
Moorgate Tobacco Co Ltd v Philip Morris
Incorporated,
delivered on 21 May 1986. After referring to a
number of decisions he said the following:
“
The
effect of the relevant dicta in those decisions can be summarised
thus. An applicant can rightly claim to be the common-law
proprietor
of the trade mark if he has originated, acquired or adopted it and
has used it to the extent that it has gained the
reputation as
indicating that the goods in relation to which it is used are his.
(See Chowles and Webster, South African Law of
Trade Marks, 2 ed at
p61). He can then claim to be registered as the statutory proprietor
of the trade mark with all the benefits
and rights conferred by our
Act.”
[36] It appears from this
formulation, which was referred to with approval in
Victoria’s
Secret,
at 744BC, that there are two requirements for the
acquisition of common law proprietorship, which, for ease of
reference, I shall
call
appropriation
and
drawing power
.
[37]
Appropriation
is the term used in
Victoria’s Secret
, at 744 I, by
Nicholas AJA as a compendious expression of the words “
originate,
acquire and adopt”
.
Drawing power
is the English
equivalent of “werfkrag” (see
Caterham Car Sales &
Coachworks Ltd v Birkin Cars (Pty) Ltd and Another
[1998] ZASCA 44
;
1998 (3) SA
938
(SCA) para 15) a concept introduced into our law by Dr H J O van
Heerden, later a judge of The Supreme Court of Appeal. See van
Heerden-Neethling
Unlawful Competition
2
nd
Edition
106 footnote 58. I prefer to use the term
drawing power
as it
is more precise than “goodwill” or “reputation”,
both of which may have other connotations depending
upon the context.
[38] The second category
of applicants who are entitled to apply for registration comprises
those who propose to use the trade mark.
The meaning of
propose
in this context appears from the following passage in the judgment of
Lord Hanworth MR in
In re Ducker's Trade Mark
[1929] 1 Ch 113
(CA)
([1928]
45 RPC 105)
at 121
which was quoted with approval by
Nicholas AJA in
Victoria’s Secret
at 744 E-G:
“
...
a man must have an intention to deal, and meaning by the intention to
deal some definite and present intention to deal, in certain
goods or
descriptions of goods. I agree that the goods need not be in being at
the moment, and that there is futurity indicated
in the definition;
but the mark is to be a mark which is to be definitely used or in
respect of which there is a resolve to use
it in the immediate future
upon or in connection with goods. I think that the word "proposed
to be used" mean a real
intention to use, not a mere
problematical intention, not an uncertain or indeterminate
possibility, but a resolve or settled purpose
which has been reached
at the time when the mark is to be registered.'”
[39] The question of the
application of the
appropriation
requirement with respect to
the second category of applicants, ie those who propose to use the
trade mark, is not clear. In
Oils International,
at 70H-71A,
Colman J said the following:
“…
..some
of the authorities suggest that all that is required of the applicant
for registration of a new mark is that he should claim,
in good
faith, the right to have it registered in his name (see e.g. Kerly on
Trade Marks, 8th ed., p. 34; Rawhide Trade Mark,
1962 R.P.C. 133
at
p. 143). But other cases have said that something more is required.
The applicant must be in a position, if his claim to proprietorship
is challenged, to show some sort of a title to the mark, in the sense
that he either acquired it from someone, or originated it.
(Vitamin
Ltd.'s Application,
1956 R.P.C. 1
; Broadway Pen Corporation v
Wechsler & Co. (Pty.) Ltd.,
1963 (4) SA 434
(T) ). The concept of
'origination' within the meaning of these authorities is, I think,
wider than invention; it would cover a
decision to use, as a trade
mark, a well-known word or phrase.”
[40] The expressions
bona
fide
and
mala fide
appear in various provisions of the
Act. In
LAWSA
2
nd
edition Vol 29 Trade Marks para
30 it is submitted, with reference to section 10(7) of the Act, that
an action (such as the registration
of a trade mark) is
mala fide
if it would regarded as
contra bonos mores
in the particular
trade or industry concerned. I agree with this submission. It is
supported by authority such as the following
passage in
Victoria
Secrets
at 747 H-I:
“
In
the Moorgate judgment Mr Trollip pointed out that factors relevant in
the determination of an applicant's claim to proprietorship
of a
trade mark are
'. . . any factors
that may have vitiated or tainted his right or title to the
proprietorship thereof. Those factors would comprehend
dishonesty,
breach of confidence, sharp practice, or the like.'”
The concept
contra
bones mores,
I may point out, is well known in the law of
unlawful competition. See
Atlas Organic Fertilizers (Pty) Ltd v
Pikkewyn Ghwano (Pty) Ltd and Others
1981(2) SA 173 (T) at 186 D
– 188 H.
[41] I now turn to the
application of these principles to the facts of this case. My views
in this matter are based upon a number
of findings of fact, some of
which may be common cause whilst others are arrived at by way of
inferences drawn from the facts stated
or omitted in the affidavits.
I propose to summarise these findings in chronological order.
[42] The first fact is
that Darling Cellars had used the Sonstraal trade mark as
unregistered trade mark for a number of years.
As a result of such
use the trade mark acquired drawing power. Darling Cellars was the
proprietor of that trade mark and its concomitant
drawing power. At
some point in time, probably before March 2003, Darling Cellars
decided to abandon the trade mark. The result
thereof was that
Darling Cellars’ proprietorship of the trade mark with its
drawing power came to an end. The asset became
res derelicta
,
it belonged to no one.
[43] First respondent
started using the trade mark. There is no evidence to contradict his
statement that this was from about March
2003.
[44] Von Waltsleben also
started using the trade mark. It is, however, difficult to determine
the date when this commenced. His
own affidavit is not helpful. First
respondent says it was only in March 2004. The trade mark, however,
was registered on 11 August
2004. The application for registration
must have been lodged a few months before that. This occurred after
his visit to Sheppard
which in turn followed a period of disputes
between the parties. In the circumstances one cannot be more precise
than saying, at
best for applicant, that it was probably towards the
end of 2003 when he started to use the mark. For purposes of this
judgment
the determination of this point in time is, however, not
relevant.
[45] After Von Waltsleben
started using the trade mark there was a period of rivalry, threats
and potential litigation between him
and first respondent. This
probably continued for a period of say three months. The exact
commencement and duration of this period
is also not relevant.
[46] Von Waltsleben then
visited Sheppard. He learnt from Sheppard that first respondent had
not acquired the trade mark from Darling
Cellars and that Darling
Cellars, having abandoned the trade mark, had no objection to him
(Von Waltsleben) using it. Von Waltsleben
then proceeded, probably
soon thereafter, to apply for registration of the trade mark.
[47] In order to answer
questions regarding the
bona fides
or
mala fides
of Von
Waltsleben and first respondent, it is important to determine, on a
balance of probabilities, what the knowledge and state
of mind of
each of these two rivals was during the period of disputes which
preceded Von Waltsleben’s visit to Sheppard.
Both Von
Waltsleben and first respondent knew that the trade mark had been
used for some time by Darling Cellars. They knew that
the trade mark
with its drawing power was a valuable asset of Darling Cellars. Both
of them also knew that Darling Cellars had
stopped using the trade
mark.
[48] As far as Von
Waltsleben is concerned, I find, on a balance of probabilities, that
he knew that the trade mark had belonged
to Darling Cellars and that
it had been a valuable asset. He did not know that Darling Cellars
had abandoned the trade mark. It
was his understanding that he would
only be able to use the trade mark lawfully if he had the consent of
Darling Cellars or any
other person who had acquired the trade mark
lawfully from Darling Cellars. He assumed, mistakenly, that he had
validly acquired
such rights via Druiwetros. First respondent then
challenged his entitlement to such rights and claimed that he had
acquired the
rights in terms of an agreement with Darling Cellars.
Von Waltsleben then went to see Mr Sheppard of Darling Cellars in
order to
get clarity. He was informed by Mr Sheppard that First
respondent had not acquired these rights and that Darling Cellars had
no
objection to his use of it. On the strength of this information he
decided to apply for the registration of the trade mark.
[49] As far as first
respondent is concerned, I find, on a balance of probabilities, that
he also knew that the trade mark had belonged
to Darling Cellars and
that it had been a valuable asset. He did not know that Darling
Cellars had abandoned the trade mark. In
order to determine what his
state of mind was when he started and continued using the mark, his
alleged agreement with Darling
Cellars and his treatment of this
subject in the affidavits, becomes important.
[50] In first
respondents’ answering affidavit in the infringement
application he unequivocally based his entitlement to use
the trade
mark during the period in question on the alleged oral agreement
which he had concluded with Darling Cellars to use their
trade mark.
In para 4.5 of his affidavit Von Waltsleben alleged that first
respondent’s father, Mr Bader senior, had said
that he had a
written agreement with Darling Cellars to use the label but that
neither first respondent nor his father was able
to produce such an
agreement. In his answering affidavit first respondent baldly denied
these allegations but from the supporting
affidavit deposed to by his
father, Mr Bader senior, it appears that the denial only related to
the allegation that it was a written
agreement and that it was
concluded by him, ie Mr Bader senior. Mr Bader senior said, in one
cryptic sentence, that he had made
it clear that first respondent
orally acquired the right to use the trade mark.
[51] Applicant then filed
the affidavits of Sheppard and Botha as part of his replying papers
from which it appears that Darling
Cellars did not conclude the
agreement alleged by first respondent. In first respondent’s
replying affidavit, which I quoted
above, he responded to the
contents of the affidavits of Sheppard and Botha. His response,
unfortunately, is vague and evasive.
He did not admit Sheppard’s
statement that Darling Cellars never gave exclusive rights to the
trade mark to him but he did
not deny it either. He made no attempt
to reconcile his earlier allegations regarding the agreement with
Sheppard’s statements.
If his version in the answering
affidavit had been correct, Sheppard would have been plainly
dishonest but first respondent did
not even say that. In the
circumstances I accept Sheppard’s version of these events and
find that there was no agreement
between Darling Cellars and first
respondent regarding the rights to the trade mark.
[52] It appears from this
analysis that when first respondent started using the trade mark in
circumstances where he thought that
he could only do so with the
consent of Darling Cellars, he justified such use of the trade mark
on the basis of the alleged agreement
with Darling Cellars. This
continued not only during the period of disputes with applicant but
also in his answering affidavit
in the present application. First
respondent, however, in these proceedings failed to prove that such
an agreement existed. In
the circumstances it follows that his claim
to use the trade mark was a false claim.
[53] I turn then to the
question whether Von Waltsleben had a bona fide claim to
proprietorship of the trade mark at the time when
he applied for the
registration thereof. I must point out first that it was suggested in
argument that applicant had shown that
Darling Cellars was his
predecessor in title. On my understanding of the word title, however,
it connotes a right or entitlement.
A person can only be a
predecessor in title of another if he transferred that right or
entitlement to his successor. Transfer,
in the present context, is a
bilateral juristic act which requires the intention of the transferor
to transfer the right and the
intention transferee to receive it. On
my reading of Mr Sheppard’s affidavit Darling Cellars did not
intend to transfer its
rights to anyone. It simply abandoned the
trade mark. When Mr Sheppard told Von Waltsleben and later first
respondent that they
could utilize the label, he was, in my view,
simply indicating that Darling Cellars had no objection to such use.
[54] The question then
arises whether applicant established that Von Waltsleben had acquired
proprietorship of the trade mark by
way of the use of it with its
drawing power before he filed his application for registration. In my
view this was not proved. Von
Waltsleben did not acquire the right to
use the trade mark from Darling Cellars and his own use was of
limited duration. First
respondent, moreover, was also using the
trade mark at the time.
[55] Von Waltsleben
could, however, also qualify for registration of the mark if he, at
the time, proposed to use the trade mark.
In my view he did. He had
established from Sheppard that Darling Cellars did not object to his
using the trade mark and that first
respondent had not acquired the
rights to use the mark as had been represented to him. In these
circumstances the very purpose
of the registration of the trade mark
was to use it.
[56] The following
question is whether Von Waltsleben also fulfilled the requirement of
appropriation.
As I pointed out above the application of this
requirement to an applicant who proposes to use the trade mark is
problematical.
In the present case Von Waltsleben took a bona fide
decision to apply for the registration of the trade mark when he was
reliably
informed that Darling Cellars did not object thereto. In my
view nothing more was required of him.
[57] There is then one
remaining question, namely whether first respondent had not become
the common law proprietor of the trade
mark before Von Waltsleben
applied for the registration of the trade mark. In that event Von
Waltsleben could not have acquired
proprietorship by way of a mere
proposal to use it.
[58] First respondent
used the trade mark for quite some time and he was thereby exploiting
its drawing power. He was under the
impression that the trade mark
could not be used without the consent of Darling Cellars. He knew
that Von Waltsleben, land probably
others, were also under that
impression. He defended his use of the trade mark, however, by way of
false statements to Von Waltsleben
(and probably to others) that he
had acquired the rights from Darling Cellars. It appears from this
that he used and claimed the
rights to the trade mark by way of
fraudulent misrepresentations. The law will not protect a drawing
power which was acquired by
way of such representations. See
Caterham
Car Sales & Coachworks
para [31]:
“
[31]
Whether a passing-off action can be used to protect a misapprehension
or a false reputation appears to me to be open to serious
doubt but
since it was not argued it need not be decided. However, to the
extent that a reputation is founded upon a conscious
falsehood,
public policy demands that legal protection should be withheld.
Compare Scott and Leisure Research and Design (Pty)
Ltd v Watermaid
(Pty) Ltd
1985 (1) SA 211
(C) at 220G--221C. Caterham cannot be
permitted to benefit from its own wrong.”
[59] It follows from my
findings regarding first respondent’s state of mind that his
use of the trade mark prior to its registration
was not
bona fide
.
Respondents’ defence to the infringement application which is
based upon the provisions of section 36(1) of the Act therefore
fails.
[60] First respondent’s
point
in limine
, I must say finally, is without merit. First
respondent is a member of second and third respondents and he is
clearly participating
in their unlawful conduct.
[61] That brings me to
the counter-application for the removal of applicant’s trade
mark from the register of trade marks.
This application is based upon
the provisions of sections 10(3) and 10(7) of the Act. In the light
of my finding that Von Waltsleben
had a bona fide claim to
proprietorship of the trade mark at the time when he applied for the
registration of the trade mark, this
application falls to be
dismissed. It follows further that second and third respondents had
not established any honest concurrent
user within the meaning of
section 14 of the Act.
[62] In the result, I
make the following orders:
(1) First, second and
third respondents are restrained, in terms of
section 34(1)(a)
of the
Trade Marks Act 194 of 1993
, from infringing applicant’s rights
in the trade mark registration no 2004/13744 Late Harvest
Sunrise/Sonstraal by using,
in the course of trade in relation to
alcoholic beverages, applicant’s late Harvest Sunrise/Sonstraal
trade mark or any mark
which is confusingly or deceptively similar.
(2) First, second and
third respondents are ordered to remove the infringing mark from all
material in thei possession.
(3) First, second and
third respondents are ordered to pay, jointly and severally, the
costs of the infringement application
Second and third
respondents’ counter-application for the removal of the trade
mark from the register, alternatively for
the suspension of
applicant’s application pending an application by second and
third respondents for the registration of
the trade mark in terms of
section 14 of the Act, is dismissed.
(5) Second and third
respondents are ordered to pay, jointly and severally, applicant’s
costs in the counter-application.