About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2013
>>
[2013] ZASCA 158
|
|
Orange Brand Services Ltd v Account Works Software (Pty) Ltd (970/12) [2013] ZASCA 158; 2013 BIP 313 (SCA) (22 November 2013)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 970/12
Not reportable
In the matter between:
ORANGE BRAND SERVICES LIMITED
.....................................
Appellant
and
ACCOUNT WORKS SOFTWARE (PTY)
LTD
.........................
Respondent
Neutral citation:
Orange
Brand Services v Account Works Software
(970/12)
[2013] ZASCA 158
(22 NOVEMBER 2013)
Coram:
NUGENT, TSHIQI,
THERON and MAJIEDT JJA and SWAIN AJA
Heard:
7 NOVEMBER 2013
Delivered: 22 NOVEMBER 2013
Summary: Trade Mark –
prior application for registration - whether ‘likely to deceive
or confuse’ -
ORANGE
and
ORANGEWORKS
relating to computer
software.
__________________________________________________________
ORDER
___________________________________________________________
On appeal from North Gauteng High
Court, Pretoria (Pretorius, Ranchod and Fabricius JJ) sitting on
appeal from Registrar of Trade
Marks.
The appeal is upheld with costs
that include the costs of two counsel. The order of the court below
is set aside and substituted
with the following:
‘
The
order of the Registrar of Trade Marks is set aside and substituted
with the following:
(a) The opposition to trade mark
application number 2006/05687
ORANGEWORKS
in
Class 9 succeeds and the application is refused.
(b) The applicant for
registration is directed to pay the opponent’s costs of
opposition’.
___________________________________________________________
JUDGMENT
___________________________________________________________
NUGENT JA (TSHIQI, THERON and
MAJIEDT JJA and SWAIN AJA CONCURRING)
[1] The respondent –
Account Works Software (Pty) Ltd – applied to the Registrar of
Trade Marks under
s 16
of the
Trade Marks Act 194 of 1993
for
registration as a trade mark of the mark
ORANGEWORKS
in class 9, in
respect of ‘computer software and software programmes relating
to accounting’, disclaiming exclusive
use of the word or colour
orange separately and apart from the mark.
1
[2] Prior to that application
being made, Orange Personal Communications Services Limited – a
company incorporated in the
United Kingdom, and a member of the
Orange Group of companies – had applied for registration of the
mark
ORANGE
,
also in Class 9, in respect of a vast array of goods and technology
relating mainly to the telecommunications industry, but including
‘computer programmes’ and ‘computer software’.
It opposed the application by Account Works Software but
its
opposition failed before the registrar. On appeal to the North
Gauteng High Court (Pretorius, Ranchod and Fabricius JJ) Orange
Brand
Services Limited was substituted for Orange Personal Communications
Services Limited. Why that occurred is not altogether
clear but
nothing turns on it and I have assumed it was accounted for by a
change of name. The appeal met the same fate as the
opposition before
the registrar and Orange Brand Services now appeals to this court.
[3]
Section 10(15)
of the
Trade
Marks Act 194 of 1993
prohibits registration of, amongst others, a
mark that is so similar to a mark that is the subject of an earlier
application by
a different person, that the use thereof in relation
to the goods or services in respect of which it is sought to be
registered,
which are the same as or similar to the goods or services
in respect of which the earlier application is made, ‘would be
likely to deceive or cause confusion’.
[4] It is not disputed that the
goods in respect of which Account Works Software seeks to register
its mark fall within the category
of goods for which Orange Brand
Services has applied for registration.
The
only question we are called upon to decide is whether the use of that
mark in relation to the goods for which Account Works
Software seeks
registration – ‘computer software and software relating
to accounting’ – would be likely
to deceive or cause
confusion.
[5] The Orange Group of companies
carries on extensive business in the telecommunications industry in
various countries under the
trade mark
ORANGE
of which it is the
registered proprietor in those countries. In deciding whether the use
by the parties of their respective marks
would be likely to cause
confusion the court below – and the registrar – compared
the use of the marks on the basis
that
‘
the
goods of the appellant and the goods of the respondent are not in
competition with each other as the appellant used ORANGE in
the
telecommunications industry, whilst the respondent used ORANGEWORKS
in the accounting industry’.
[6] The registrar and the court
below erred in approaching the matter in that way. While there is
some question as to whether the
comparison is to be made with
reference to actual use in infringement proceedings,
2
in opposition proceedings the
question that falls to be decided is not how the parties use or
intend to use their marks, but how
they would be entitled to use them
if both were to be registered – that is, how they might
notionally be used. In this case
if both marks were to be registered,
the respective parties would be entitled to use them in relation to
computer software, including
software for accounting, and the
question is whether it would be likely to cause confusion if both
marks were to be used in that
way.
[7] As it was expressed in
Bristol Laboratories
Inc v Ciba Ltd
,
3
which was affirmed in
Adcock
Ingram Intellectual Property (Pty) Ltd v Cipla Medpro (Pty) Ltd
:
4
‘
The
question is not what the appellant says it intends doing, but what it
will be permitted to do if its application is granted
in respect of
all goods in Class 3. In my opinion it is correct to say, as
ROMER,
J
.,
held in
Jellinek’s
Application
,
63 R.P.C. 59
at p. 78, that
“
The
onus
must
be discharged by the applicant in respect of all goods coming within
the specification applied for, and not only in respect
of those goods
on which he is proposing to use (the mark) immediately, nor is the
onus
discharged
by proof only that any particular method of user will not give rise
to confusion; the test is: What can the applicant
do?”’.
[8]
Section 10(15)
applies to
competing applications, while
s 10(14)
applies to applications that
compete with trade marks already registered, but the test to be
applied in each case – would
the mark be ‘likely to
deceive or cause confusion’ – is the same. The same test
applied under s 17(1) of the
Trade Marks Act 62 of 1963, which was
replaced by s 10(14) of the present Act. Thus it is not necessary for
present purposes to
distinguish the various cases that have applied
that common test under any one or other of those sections.
[9] In
Cowbell
AG v ICS Holdings Ltd,
5
decided under s 17(1) of the
former Act, this court formulated the test as follows
‘
Section
17(1) creates an absolute bar to registration provided the
jurisdictional fact is present, namely that the use of both marks
in
relation to goods or services in respect of which they are sought to
be registered, and registered, would be likely to deceive
or cause
confusion. The decision involves a value judgment and
"[t]he ultimate
test is, after all, as I have already indicated, whether on a
comparison of the two marks it can properly be
said that there is a
reasonable likelihood of confusion if both are to be used together in
a normal and fair manner, in the ordinary
course of business".’
It went on to say that in
considering whether the use of the respondent’s mark would be
likely to deceive or cause confusion,
‘regard must be had to
the essential function of a trade mark, namely to indicate the origin
of the goods in connection with
which it is used’. Citing
Sabel
BV v Puma AG, Rudolf Dassler Sport
,
6
it said the likelihood of
confusion must ‘be appreciated globally’ and
‘
the
global appreciation of the visual, aural or conceptual similarity of
the marks in question, must be based on the overall impression
given
by the marks, bearing in mind, in particular, their distinctive and
dominant components.’.
[10] The authors of
Kerly’s
Law of Trade Marks and Trade Names
7
point out that whether there is a
likelihood of deception or confusion is a question of fact, and for
that reason decided cases
in relation to other facts are of little
assistance, except so far as they lay down any general principle.
While I have found various
cases referred to by counsel for Account
Works Software informative, each was decided on its own facts,
without laying down any
new principles, and I do not think it is
helpful to refer to them.
[11] The approach to be taken
when comparing marks is conveniently summarised in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
.
8
That case concerned infringement,
but that is not a material distinction. Corbett JA expressed it as
follows:
9
'In an infringement
action the
onus
is on the plaintiff to show the probability or
likelihood of deception or confusion. It is not incumbent upon the
plaintiff to
show that every person interested or concerned (usually
as customer) in the class of goods for which his trade mark has been
registered
would probably be deceived or confused. It is sufficient
if the probabilities establish that a substantial number of such
persons
will be deceived or confused. The concept of deception or
confusion is not limited to inducing in the minds of interested
persons
the erroneous belief or impression that the goods in relation
to which the defendant's mark is used are the goods of the proprietor
of the registered mark, ie the plaintiff, or that there is a material
connection between the defendant's goods and the proprietor
of the
registered mark; it is enough for the plaintiff to show that a
substantial number of persons will probably be confused as
to the
origin of the goods or the existence or non-existence of such a
connection.
The determination of
these questions involves essentially a comparison between the mark
used by the defendant and the registered
mark and, having regard to
the similarities and differences in the two marks, an assessment of
the impact which the defendant's
mark would make upon the average
type of customer who would be likely to purchase the kind of goods to
which the marks are applied.
This notional customer must be conceived
of as a person of average intelligence, having proper eyesight and
buying with ordinary
caution. The comparison must be made with
reference to the sense, sound and appearance of the marks. The marks
must be viewed as
they would be encountered in the market place and
against the background of relevant surrounding circumstances. The
marks must
not only be considered side by side, but also separately.
It must be borne in mind that the ordinary purchaser may encounter
goods,
bearing the defendant's mark, with an imperfect recollection
of the registered mark and due allowance must be made for this. If
each of the marks contains a main or dominant feature or idea the
likely impact made by this on the mind of the customer must be
taken
into account. As it has been put, marks are remembered rather by
general impressions or by some significant or striking feature
than
by a photographic recollection of the whole. And finally
consideration must be given to the manner in which the marks are
likely to be employed as, for example, the use of name marks in
conjunction with a generic description of the goods.'
[12] Account Works Software has
referred to other instances in which the colour orange has featured
prominently in relation to goods
in class 9, and to applications that
have been made for registration of marks incorporating that colour,
as indicative of the fact
that the public is accustomed to
associating the colour with goods within that class. I do not see how
that can be relevant. It
is true that the word ‘orange’,
in ordinary usage, can denote a colour as well as a fruit, but the
mark in this case
is not the colour, but the word. In similar vein it
referred to extensive use of the word in internet domain names, and
company
names, alleging, on that basis, that ‘members of the
public will not identify businesses or their products merely by that
mark, but will seek some other way of identifying the specific
companies or products, like any other words forming part of that
name
or trade mark, or the composite effect of different words making up
the mark’. Once again, I do not think that is particularly
helpful. Many of those names might be distinctive by virtue of their
composition or association, and others might themselves be
confusingly similar to the mark in the present case, all of which
begs the question that confronts us.
[13] Much was also made of the
fact that customers in the market for accounting software, unlike
consumers who select goods from
a supermarket shelf, can be expected
to be intelligently discerning, selecting to purchase the software
only after careful scrutiny
of its suitability, and not merely the
mark. I have no doubt that computer software for accounting is indeed
purchased with considerable
care, but confusion need not be lasting
for it to disqualify a mark from registration. It is sufficient if it
is confusing only
for a short time, sufficient to attract initial
interest, albeit that the confusion might later be cleared up.
10
[14] But ultimately a case of
this kind, as pointed out in
Cowbell
,
comes down to a value judgment to be made by the court, dictated by
the overall impression created by the marks, given their respective
characteristics, and the circumstances in which they are likely to be
encountered, instead of being drawn into excessive analysis.
[15] I accept that ‘orange’
is an ordinary English word, in wide use to describe a colour or a
fruit, and is not a constructed
word finding its distinctiveness in
the word itself. But to my mind the dominant feature of the word when
used as a mark in this
context, is that in its ordinary meaning it
has no association with computer software or computer technology. It
is precisely the
absence of any natural association that makes the
mark distinctive and catches attention.
[16] To my mind it is that
dominant and catching feature that is immediately brought to mind by
the mark
ORANGEWORKS
, aurally, visually and in
concept. The suffix
WORKS –
a word that
might at best suggest an imprecise metaphor – trails off
considerably when the mark is expressed orally, is dominated
visually
by the distinctive
ORANGE
when written, and is
entirely overshadowed by the unusual conceptual use of
ORANGE
in association with technology. In my view the mark is indeed
likely to cause at least initial confusion when used in that context,
albeit that the initial confusion might soon be cleared up. It seems
to me that the registrar and the court below were unduly influenced
in their view by the different industries in which the parties put
their marks to use.
[17] The appeal is upheld with
costs that include the costs of two counsel. The order of the court
below is set aside and substituted
with the following:
‘
The
order of the Registrar of Trade Marks is set aside and substituted
with the following:
(a) The opposition to trade mark
application number 2006/05687 ORANGEWORKS in Class 9 succeeds and the
application is refused.
(b) The applicant for
registration is directed to pay the opponent’s costs of
opposition’.
__________________
R W NUGENT
JUDGE OF APPEAL
APPEARANCES:
For appellants: G E Morley SC
F Southwood
Instructed by:
Adams & Adams, Pretoria
Honey Attorneys, Bloemfontein
For respondents: I Joubert
Instructed by:
De Kock Attorneys, Centurion
Horn & Van Rensburg
Attorneys, Bloemfontein
1
Application
No. 2006/05687.
2
See
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 641H – 642C.
3
Bristol
Laboratories Inc v Ciba Ltd
1960 (1) SA 864
(A) at 871C-E. That
case was decided under s 105 of the Patents, Designs, Trade Marks
and Copyright Act 9 of 1916, but the principle
expressed is equally
applicable under ss 10(14) and 10(15) of the present Act.
4
Adcock
Ingram Intellectual Property (Pty) Ltd v Cipla Medpro (Pty) Ltd
2012
(4) SA 238
(SCA) paras 14 – 15. See, too,
Bata Ltd v Face
Fashions CC
2001 (1) SA 844
(SCA), in which the principle was
applied in infringement proceedings.
5
Cowbell
AG v ICS Holdings Ltd
2001 (3) SA 941
(SCA) para 10.
6
Sabel
BV v Puma AG, Rudolf Dassler Sport
[1998] RPC 199
(ECJ) at 224.
7
14
th
ed para 17 – 023.
8
Above.
9
At
640G – 641E.
10
John
Craig (Pty) Ltd v Dupa Clothing Industries (Pty) Ltd
1977 (3) SA
144
(T) at 151C-D;
Webster and Page’s South African Law of
Trade Marks, Unlawful Competition, Company Names and Trading Styles
4
th
ed by CE Webster and GE Morley para 7.2,
Adidas
AG v Pepkor Retail Limited
[2013] 3 ZASCA para 27.