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[2011] ZAGPPHC 160
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Beecham Group PLC v Colgate-Palmolive Company (A828/08, A829/08, A830/08) [2011] ZAGPPHC 160; 2011 BIP 159 (GSJ) (11 May 2011)
UNREPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA)
Case
No: A828/08; A829/08; A830/08
Date
heard: 13/04/2011
Date
of judgment:11/05/2011
In
the matter between:
Beecham
Group
PLC
..............................................................................................
APPELLANT
and
Colgate-Palmolive
Company
.............................................................................
RESPONDENT
JUDGMENT
Introduction
[1]
There are three related appeals before us. The appeals are against
almost identical orders made by the Deputy Registrar of Trade
Marks.
[2]
The appellant ("Colgate") made three applications to the
Registrar of Trade Marks for the registration of trade marks
in terms
of the Trade Marks Act, 194 of 1993 ("the Act"). The
respective applications are for registration of the trade
marks
COLGATE GERMDEFENSE and GERMDEFENCE in different classes. The
applications were respectively advertised for purposes of opposition
in the Patent Journals of September and November 2003.
[3]
Section 21 of the Act provides that "(a) ny interested person
may, within three months from the date of the advertisement
of an
application in terms of section 17 or within such further time as the
registrar may allow, oppose the application in the
manner
prescribed."
[4]
On 25 April 2005, some 18 months after the applications had been
advertised, the respondent ("Beecham"), through its
attorneys, DM Kisch Inc, gave notice of its intention to oppose the
registration of each of the trade marks.
[5]
Having followed the steps prescribed by the rule, Colgate's
attorneys, Adams & Adams, applied to the Registrar in terms
of
rule 30 of the High Court Rules
1
for orders declaring each of the opposition notices to have been an
irregular step. Orders dismissing Beecham's opposition were
also
sought and Colgate also sought orders directing that certificates of
registration be issued in respect of each of the marks.
[6]
Beecham opposed the rule 30 applications and also filed conditional
counter applications. In the counter applications Beecham
sought, in
the event of the rule 30 applications succeeding, "condonation
for late filing of request for an extension".
(The quotation is
from the heading to the counter applications. I shall in due course
make more detailed reference to the specific
prayers
2
.)
[7]
The three applications and the conditional counter applications came
before the Deputy Registrar, (it is convenient to refer
to him as
"the Registrar".) The Registrar dismissed Colgate's three
rule 30 applications and in each case he ordered
that the opposition
to the registration of the trade marks is to proceed. In the result
it was unnecessary for him to rule on the
conditional counter
applications. The Registrar has as yet not heard the now opposed
applications for registration.
[8]
Colgate now appeals in each of the three matters against the
dismissal of its rule 30 applications and against the Registrar's
resultant failure summarily to dismiss Beecham's opposition.
[9]
Beecham has filed notice of a conditional cross-appeal. The
cross-appeal is conditional upon this court holding that Beecham's
opposition was indeed an irregular step. In the latter event, Beecham
seeks orders aimed at this court allowing it to oppose the
registration of the trade marks.
3
The
core facts
[10]
The three records before us are for practical purposes identical.
What follows is a summary of the facts in case number A829/08.
[11]
Colgate's trade mark application was advertised in the Patent Journal
of September 2003. In October 2003 DM Kisch addressed
respective
letters to the Registrar and to Adams & Adams, Colgate's
attorneys. In these letters DM Kisch informed the addressees
that its
client, "GlaxoSmithKline" (Beecham was not mentioned), was
"considering opposition" to the trade mark
applications.
They requested an extension of the statutory opposition period
4
until 28 February 2004. Adams & Adams did not object to the
extension.
[12]
In view of GlaxoSmithKline's possible opposition, settlement
negotiations
followed between Adams & Adams for Colgate and DM Kish,
throughout acting for GlaxoSmithKline. In the course of
the
negotiations DM Kisch repeatedly requested Adams & Adams for
further extensions of the opposition period. Such extensions
were
granted. On 13 April 2005 DM Kisch sought, and Adams & Adams did
not object to, a final extension until 18 April 2005.
[13]
No opposition was noted and on 20 April 2005 Adams & Adams wrote
to the Registrar requesting him to issue the certificate
of
registration of the trade mark.
[14]
On 25 April 2005
5
,
Beecham (and not GlaxoSmithKline)
represented
by DM Kisch filed a notice of opposition to the registration of the
trade mark in its intended form.
6
This was followed by the rule 30 application to set aside the notice
of opposition as an irregular step.
The
Rule 30 application
[15]
The thrust of Colgate's founding papers in the rule 30 application
may be summarised as follows. Extensions of the opposition
period
were sought on behalf of and granted to GlaxoSmithKline. The latter
did not formally note its opposition. Beecham, that
noted opposition,
had neither sought nor had been granted extensions. Hence, Beecham's
purported opposition was irregular.
[16]
In the answering papers the attorney acting for Beecham explains that
he has for many years been representing in South Africa
the
GlaxoSmithKline group of companies and affiliated companies within
the group. Beecham (its full description is Beecham Group
Pic, a
company registered in the United Kingdom) and GlaxoSmithKline Pic are
both members of the group. The attorney (Mr Wimpey)
goes on to
explain that the entire group, including GlaxoSmithKline Pic and
Beecham, share the interest in opposing the registration
of Colgate's
relevant trade marks. Therefore, Mr Wimpey states, "whether
Glaxo and/or Beecham take action to oppose the Trade
Mark
Applications, they are really simply acting as an agent of the
GlaxoSmithKline Group of Companies and conduct the Group's
business
and further the Group's interests as a whole". The thrust of Mr
Wimpey's affidavit is that the extensions granted
to GlaxoSmithKline
should be regarded as having been granted also to Beecham.
[17]
The Registrar gave full reasons for dismissing the rule 30
application. The reasons may be summarised as follows. As a starting
point, Colgate's "main contention was that the irregularity lies
in the fact that the extensions were applied for in the name
of one
legal entity but the opposition was entered in the name of another".
The Deputy Registrar reasoned, with reference
to authority, that "it
is clear that the acts of a holding company (and, I would add, an
affiliated company) are not per se
the acts of its wholly owned
subsidiaries (or affiliates), or vice versa, since .... (each
company) is a separate legal entity
but in recent years, it has
become evident that there has been a relaxed approach to the
application of this basic principle".
After he had quoted
further authority for the relaxation of the principle, the Registrar
held that "the court is entitled
to overlook, in proper cases,
any irregularity in procedure which does (not) work any substantial
prejudice to the other side".
Obviously exercising his
discretion to overlook, in this case, such irregularity as Beecham
may have committed, the Registrar dismissed
the rule 30 application.
Colgate's
appeal
[18]
Rule 30(3) provides: "If at the hearing of such application the
court is of opinion that the proceeding or step is irregular
or
improper it may set it aside in whole or in part .... and grant leave
to amend or make any such order as to it seems meet"
(My
emphasis).
[19]
The adjudication of a rule 30 application entails two stages. First,
the court (registrar) must determine whether the proceeding
or step
complained of was indeed irregular. If it was, "the court is
empowered to set it aside, wholly or in part. The court,
however, has
a discretion. ... It is entitled in a proper case to overlook an
irregularity in procedure that does not cause substantial
prejudice
to the party complaining of it ,..".
7
[20]
In this case the Registrar did not decide the rule 30 application in
two discrete stages. One must, however, not be pedantic
in that
regard. Reading his reasons as a whole the Registrar decided to
pierce the proverbial corporate veil. From this it follows
that he
regarded the extension granted to GlaxoSmithKline as in fact also an
extension to Beecham. On that basis, Beecham's opposition
did not
constitute an irregular step. The Registrar did not stop there,
however. He also decided to overlook the fact that the
extension was
granted to GlaxoSmithKline but that it was Beecham who filed the
opposition.
8
In that regard he exercised the discretion afforded to him under rule
30(3). I would paraphrase and summarise the Registrar's reasoning
as
follows: Beecham's opposition was not an irregular step but, if it
was, it should be overlooked in view of the relatedness between
it
and the GlaxoSmithKline group.
[21]
I am inclined to the view that Beecham's late opposition was an
irregular step. I am so inclined because it seems to me that
extensions granted to GlaxoSmithKline cannot, simply because Beecham
belongs to the GlaxoSmithKline group, be held to have been
granted
also to Beecham. I, however, need not enter into the debate as to
exactly when the corporate veil may or may not be pierced.
I shall
proceed on the basis that Beecham's late opposition was an irregular
step.
9
[22]
The assumption that an extension to GlaxoSmithKline cannot in law or
in fact be regarded as one to Beecham, does not render
the
inter-relatedness of the two entities irrelevant. The
inter-relatedness could still afford an explanation for Beecham's
late
opposition. In my view the Registrar cannot in principle be
faulted for deciding to overlook the late opposition (the irregular
step) in view of the inter-relatedness of Beecham and
GlaxoSmithKline. It is one thing to say that in fact and in law an
extension
to GlaxoSmithKline is one to Beecham. It is another to say
that Beecham's late opposition (irregular step) should be overlooked
in view of the inter-relatedness.
[23]
Accepting, as I understood him, the proposition put forward in the
previous paragraph, Mr Michau for Colgate submitted that
there were
insufficient facts before the Registrar on which to decide that the
inter-relatedness was such that Beecham's irregular
step should be
overlooked.
The
assumption makes it unnecessary to consider an argument advanced by
Mr Bester for Beecham that any interested party may note
opposition
once an extension has been granted albeit that such extension was
granted to a completely unrelated party.
In
an able argument counsel submitted that Beecham's answering affidavit
in the rule 30 application does not contain evidence from
which the
Registrar could determine the inter-reiatedness. The affidavit
contains, the argument went, mere conclusions in the stead
of
evidence from which the conclusions may be drawn. It is to that
argument that I now turn.
[24]
In paragraph 17 of the answering affidavit Mr Wimpey, the attorney
who deals with the matter, states: "My firm
10
and I have represented the Glaxo Group of Companies and the
affiliated companies within the Group in their trade mark and other
matters in South Africa over many years. I am therefore conversant
with the Glaxo Group's internal relations, relationships and
structures." Based on knowledge so gained, Mr Wimpey states that
GlaxoSmithKline Pic and Beecham both form part of the GlaxoSmithKline
group. Mr Wimpey then continues to explain that the different
companies within the group share an interest in matters concerning
trade marks and brand names. When his firm received instructions in
this matter, the initial letters were written in the name of
the
principal company in the group. In accordance with the practice
within the group (to use one of the companies in the group
to object)
Mr Wimpey was then instructed to note the objection in the name of
Beecham.
[25]
Mr Wimpey also states that "whether Glaxo and/or Beecham take
action to oppose the Trade Mark Applications, they are really
simply
acting as an agent of the SmithKline Group of companies and conduct
the Group's business and further the Group's interests
as a whole."
[26]
It is correct, as counsel pointed out, that Mr Wimpey's evidence
falls far short of proving a contract of agency in terms whereof
Beecham acted. But that is not the issue. The issue is whether the
evidence puts forward facts that explain why an extension was
sought
on behalf of GlaxoSmithKline while the ultimate objection was made by
Beecham. In my view it does for the reasons that follow.
[27]
While, as counsel submitted, Mr Wimpey might not be qualified to
state as a fact exactly what, in legal terms, the relationship
between the companies is, there is no reason why his evidence as to
the practice that he experienced cannot be accepted. It is
his
experience that, while instructions might be received from one
company in the group, the final instruction to litigate might
come
from another company. His evidence that the relevant companies are
members of the group must, in view of his experience, be
accepted.
[28]
It is on those facts that the Registrar exercised his discretion to
overlook the irregular step. In my view the discretion
was properly
exercised on the admissible evidence before the Registrar.
[29]
Mr Michau further argued that the Registrar did not have due regard
to the prejudice that Colgate will suffer as a result of
the
irregular step. In that regard counsel had to concede that Colgate
did not on the papers deny an allegation that it did not
suffer any
prejudice. Counsel submitted, however, that Colgate is bound to
suffer prejudice because, if Beecham's irregular opposition
is
overlooked and it opposes the applications, Colgate would bear the
onus to prove that the marks should be registered.
11
Conversely, if the marks are registered without opposition, it will
be for Beecham to apply to have the marks removed from the
register.
In such event the onus would be on Beecham to prove that the marks
must be removed.
12
The argument loses sight thereof that Colgate bears the onus of
proving to the Registrar that the marks must be registered whether
the applications are opposed or not. Moreover, even the fact that
Colgate will bear an onus to prove its case in the face of opposition
does not in itself amount to substantial prejudice. Had the facts
been that Colgate would be deprived of an opportunity or an ability
to prove its case, that may have been regarded as substantial
prejudice. The question is not whether the late opposition is
prejudicial
to Colgate's interests but rather whether it would or,
possibly, might result in an injustice. (See Amod v SA Mutual Fire &
General Insurance Co. Ltd 1971 (1) SA 611 (N) at 614H to 615A where
it was held that even the fact that a party may lose its case
when
the other party withdraws an admission does not constitute prejudice
or injustice to the extent that the withdrawal should
not be allowed.
See also Metedad v National Employers' General Insurance Co. Ltd 1992
(1) SA 494 (W) at499J to 500A.)
[30]
It is concluded that there is no basis for this court to interfere
with the Registrar's exercise of his discretion. Colgate's
appeal
must therefore fail. This conclusion renders it unnecessary to deal
with the conditional counter appeal (or the conditional
counter
application before the Registrar).
[31]
Costs must clearly follow the event.
The
following order is made:
1.
The appeal in case number A828/08 is dismissed with costs.
2.
The appeal in case number A829/08 is dismissed with costs.
3.
The appeal in case number A830/08 is dismissed with costs.
B.R.
Du Plessis
Judge
of the High Court
I
agree.
S.
Potterill
Judge
of the High Court
I agree.
J.
Goodey
Acting
Judge of the High Court
On
behalf of the appellant:Adams & Adams
Adams
& Adams Place 1140 Prospect Street Hatfield Pretoria
Adv.
R Michau SC Adv. L.G. Kilmartin
On
behalf of the Respondent: D. M. Kisch Inc
Suite
3, Parkland 223 Bronkhorst Street New Muckleneuk
Adv.
A.J. Bester SC
1
Section
45(2) of the Act provides: "Where no provision is contained in
this Act on any matter of procedure, the registrar
shall apply the
rules governing procedure in the Transvaal Provincial Division of
the Supreme Court."
2
The
prayers of the counter application are, in my view, not a model of
clarity. It is clear enough, however, that the intention
was to seek
condonation for the late noting of the opposition.
3
Whether
this court can competently grant such orders will be dealt with
later, if necessary.
4
See
section
21
of
the Act.
5
This
was seven days after the extension had elapsed but, as shall become
apparent, no point is made of thereof.
6
The
reader will recall that this summary of facts relates to appeal
A829/08, that is in respect of the mark COLGATE GERMDEFENSE.
The
opposition to the registration of the mark GERMDEFENCE is not
identical, but the differences are for present purposes immaterial.
7
See
Harms: Civil Procedure in the Supreme Court, B30.8.
8
See
the quotation from the Registrar's judgment in paragraph 17 above.
9
The
assumption makes it unnecessary to consider an argument advanced by
Mr Bester for Beecham that any interested party may note
opposition
once an extension has been granted albeit that such extension was
granted to a completely unrelated party.
10
DM Kisch Inc.
11
See
sections 9 and 16 of the Act.
12
See
section 24 of the Act.