Turbek Trading CC v A & D Spitz Ltd and Another (565/08) [2009] ZASCA 158; [2010] 2 All SA 284 (SCA) (27 November 2009)

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[2009] ZASCA 158
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Turbek Trading CC v A & D Spitz Ltd and Another (565/08) [2009] ZASCA 158; [2010] 2 All SA 284 (SCA); 2009 BIP 219 (SCA) (27 November 2009)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case No: 565/08
TURBEK TRADING CC
Appellant
and
A & D SPITZ LIMITED
First Respondent
REGISTRAR OF TRADE MARKS
Second Respondent
Neutral citation:
Turbek
Trading v A & D Spitz
(565/08)
[2009] ZASCA 158
(27 NOVEMBER 2009)
Coram:
HARMS DP, LEWIS, PONNAN, MHLANTLA JJA and HURT AJA
Heard:
16
NOVEMBER 2009
Delivered:
27 NOVEMBER 2009
Updated:
Summary:
Trade
marks – revocation on the ground of prior rights
_____________________________________________________________________
ORDER
On appeal from:
High
Court (TPD):
DU
PLESSIS J
sitting as court of
first instance:
The appeal is upheld with costs.
The order of the court below is set
aside and replaced with an order dismissing the application with
costs.
JUDGMENT
HARMS DP (LEWIS, PONNAN, MHLANTLA JJA
and HURT AJA concurring):
Introduction
[1] The appellant, Turbek Trading CC
(‘Turbek’), is the proprietor of two registered trade marks, both
consisting of the initials
‘KG’. The one, TM 2000/03828, is
registered in class 25 in relation to clothing, footwear and
headgear; and the other, TM 2000/13267,
is a service mark in class
35. Turbek’s controlling member is Mr Kenneth Gordon, a shoe
designer, and he used his initials ‘KG’
as trade mark. Turbek
deals exclusively in footwear.
[2] Turbek filed its applications on 7
March 2000. At the time it sought registration for ‘KG Italia’.
In view of an indication
by the Registrar of Trade Marks that the
mark would only be registered with a disclaimer or limitation
limiting its use to goods
originating from Italy, Turbek amended its
applications by deleting the word ‘Italia’ and thereby limiting
the marks to ‘KG’
simpliciter. The applications were accepted,
duly advertised and in the absence of opposition registered on 29
February 2005.
[3] Kurt Geiger has the same initials
as Mr Gordon. Whether Kurt Geiger was or is a living person does not
appear from the papers
but the name ‘Kurt Geiger’ is a trade mark
that has been used by the present respondent, A & D Spitz Ltd
(‘Spitz’),
for a number of years especially for footwear but also
more generally in relation to clothing. ‘Kurt Geiger’ was
registered
in class 25 for boots, shoes and slippers on 17 December
1990.
[4] Spitz lays claim to the trade
mark ‘KG’, alleging that it had used the mark before the
application date of Turbek’s trade
marks. It accordingly approached
the court below for an order for the expungement of these
registrations. In order to interdict
Turbek from using the mark ‘KG’,
Spitz relied on trade mark infringement and on passing-off. The court
below upheld the application
on all three grounds and issued
appropriate consequential orders. The appeal is with its leave.
The expungement claim
[5] Concerning the expungement claim,
Spitz alleged that it had made extensive use of ‘its KG trade mark’
over many years before
7 March 2000 and that at that date it enjoyed
a very substantial reputation and goodwill in respect of goods
falling in class 25
and that it, accordingly, had a prior right to
the mark. Spitz, it should be added, also filed an application for
the ‘KG’
mark in class 25 but that was only on 20 September 2001.
Its case was, consequently, that Turbek’s registrations were liable
to be revoked under
s 10(16)
of the
Trade Marks Act 194 of 1993
,
which provides that a mark may not be registered as a trade mark or,
if registered, is liable to be removed from the register
if the
registration of that mark (in this case Turbek’s) is contrary to
existing rights of the person (Spitz) who filed a later
application
for registration of the same or similar mark.
The trade mark infringement claim
[6] The trade mark infringement claim
of Spitz was based on its trade mark registration in respect of the
mark ‘KG’ in class
9 in respect of ‘optical devices, apparatus
and instruments including spectacles, sunglasses, frames and lenses.’
This registration
(TM 2001/16484) post-dates Turbek’s and the claim
was consequently premised on two suppositions: first, that footwear
is so ‘similar’
to optical devices and the like that in use there
exists the likelihood of deception and confusion
(s 34(1)(b))
; and,
second, because the use of any identical or confusingly similar
registered trade mark cannot infringe another registered
mark
(s
34(2)(g))
, that its application to revoke Turbek’s registrations
was to succeed.
The passing-off claim
[7] According to Turbek’s counsel
the passing-off claim depended on Spitz’s success in having its
trade marks revoked while
Spitz’s counsel, relying on a statement
in
Kellogg Co v Bokomo
Co-operative Ltd
1997 (2)
SA 725
(C) 736J-737A, submitted that a registered trade mark is not
an ‘absolute defence’ in passing-off cases. In other words, as

counsel submitted, Spitz could rely on passing-off to prevent Turbek
from using the ‘KG’ trade mark even if it were unable
to have the
trade marks expunged.
[8] The effect of a registered trade
mark on passing-off cases was first dealt with in
Glenton
& Mitchell v Ceylon Tea Company
1918 WLD 118.
It was an application for an interim interdict based on
passing-off. The respondent, unbeknown to the applicant, had
registered
a trade mark and relied on its registration in opposing
the application. Having found that the applicant had established a
prior
reputation in the mark as registered
the court concluded that if
a prima facie case was made out that the mark should not have been on
the register, an interim interdict
could issue. In other words,
registration is not a defence to a passing-off claim if the claimant
for interim relief is able to
show that the register ought to be
rectified by the removal of the registration.
[9]
Glenton
& Mitchell
relied for
its conclusion on s 127 of the Patents, Designs, Trade Marks and
Copyright Act 9 of 1916 which provided that the provisions
of that
Act did not affect the rights of action against anyone for
passing-off or the remedies in respect thereof. A preceding
section,
s 124, provided that no one was entitled to institute trade mark
infringement proceedings unless the trade mark was registered.
These
provisions were taken over from the applicable UK Act. The purpose of
s 127 was to set to rest any doubt that may have been
created by s
124 as to whether a person could rely on an unregistered mark for
purposes of passing-off (
Sebastian’s
Law of Trade Mark
5 ed 1911
p 392) and it recognized the practice that a trade mark could be
removed from the register simultaneously with the grant
of an
interdict or injunction on the ground of passing-off (
op
cit
p18).
[10] Section 43 of the Trade Marks Act
62 of 1963 (as amended in 1971) conjoined the provisions of sections
124 and 127, and the
terms of s 127 became a proviso to those of s
124.
1
In
Solmike (Pty) Ltd t/a
Skipper's Cabin v West Street Trading Co (Pty) Ltd t/a Skipper Bar
1981 (4) SA 706
(D) 711H-712B, after quoting from
Glenton
& Mitchell
, Page J said
this:
‘
There
is no authority quoted for the proposition that it is incumbent upon
the person seeking relief for passing-off under these
circumstances
to show that he is prima facie entitled to a rectification of the
register. It seems to me, with great respect, that
the postulation of
this requirement constitutes the introduction of an unnecessary and
irrelevant element into the plaintiff's
cause of action. If the fact
that the defendant is the proprietor of a registered trademark is
irrelevant to passing-off proceedings,
the question of whether it is
liable to expungement or not is equally irrelevant. Of course, the
fact that the use by the defendant
of his registered mark constitutes
passing-off will ordinarily mean that the registration is liable to
expungement or some other
form of rectification; and it is normally
expedient for the plaintiff in such cases to move for the
rectification (Kerly on
Trademarks
10th ed paras 16 - 81 at 429 - 430). But neither such rectification
nor the right to obtain it is an element of the cause of action
in
passing-off.
’
[11] With all due respect to the
learned judge, an expert in trade mark law, I venture to disagree
with his premise and conclusion
and I also do not understand why he
made the statement in the context of the facts of that case. It is
true that there was no authority
for the mentioned proposition in
Glenton & Mitchell
but there was also no authority to the contrary. (The cases referred
to by
D
Kitchen et al
Kerly’s
Law of Trade Marks and Trade Names
14 ed (2005) para
15-209
are particularly unhelpful.) The
Glenton
& Mitchell
proposition
appears to me to be eminently sensible having regard to the Act as a
whole. I have already explained that the purpose
of the proviso is to
confirm that the Act did not abolish the principles of passing-off,
meaning in context that the owner of a
common-law or unregistered
trade mark is entitled to enforce it with a passing-off action. Such
a party has, however, to suffer
the disadvantages of
non-registration, for instance, it has to prove its prior reputation
in the mark – something unnecessary
and even irrelevant in most
trade mark infringement cases.
[12] I do not understand the provision
to mean that a common-law mark may, without more, trump a registered
mark. It is often said
that intellectual property rights are negative
rights meaning that they do not give the holder a right to do
something but only
a right to prevent others from doing so. It is not
necessary to debate the correctness of the theory in the present
context because
trade marks are granted on the understanding that
they will be used. This flows not only from the definition of a trade
mark but
also from the fact that they are subject to revocation on
the ground of non use. (See
South
African Football Association v Stanton Woodrush (Pty) Ltd t/a Stan
Smidt & Sons
2003 (3)
SA 313
(SCA);
[2003] 1 All SA 274
(SCA) para 14.)
And
there is also s 34(2)(g) which states that a registered trade mark is
not infringed by the use of any identical or confusingly
or
deceptively similar trade mark which is registered. It appears to me
to be anomalous to have a situation that a registered mark
may not be
trumped by another registered mark but that it may by an unregistered
mark.
[13] The position in my judgement is
that if party A wishes to prevent party B from using B’s registered
trade mark, party A has
to establish a ground for revocation. In
interim proceedings this need only be done on a prima facie basis and
the approach in
Glenton &
Mitchell
should be
followed. In proceedings for final relief the ground has to be
established on a balance of probabilities and for the
sake of good
order the relief sought should include as a precondition the removal
(or limitation) of the registered mark. It is
in this sense that a
registered trade mark is not an ‘absolute defence’ to a
passing-off claim.
[14] In any event, I have difficulty
in understanding the point that Spitz sought to make. As I have
indicated, its case for removal
of the trade marks from the register
was premised on the supposition that it had a prior reputation in
‘KG’. Should Spitz be
unable to establish this, I fail to see how
it could establish the same fact in a passing-off context.
Turbek’s delay defence
[15] Turbek’s first line of defence
was a reliance on what counsel referred to as an ‘equitable
defence’ of delay: if a party
delays in enforcing its rights the
party may in the discretion of the court either forfeit the rights or
be precluded from enforcing
them. The factual basis of the defence
was, briefly put, that Spitz had knowmn since 1 October 2001 of
Turbek’s trade mark applications
and its use of the mark ‘KG’
on footwear but only took steps to enforce its alleged common-law
rights when it instituted the
present proceedings during July 2007.
This delay, according to the submission, amounted to acquiescence
which disentitled Spitz
from attacking the registrations or obtaining
an interdict. Counsel relied on a statement by Patel J that our law
recognises a
defence of acquiescence distinct from estoppel and that
the doctrine can be applied to halt cases where necessary to attain
just
and equitable results (
Botha
v White
2004 (3) SA 184
(T)
para 24 and 31). That Patel J had failed to take account of binding
authority that contradicted his bald statement and that
he had
misread authority on which he sought to rely was pointed out by
Thring J in
New Media
Publishing (Pty) Ltd v Eating Out Webb Services CC
[2005] ZAWCHC 20
;
2005 (5) SA 388
(C) 406I-407J. During argument it became clear that
counsel was unable to contend more than that delay may in a suitable
case be
evidence of an intention to waive, evidence of a
misrepresentation that might found estoppel, or evidence of consent
for purposes
of the
volenti
non fit injuria
principle
.
In other words, counsel was unable to substantiate his submission
that acquiescence is a substantive defence in our law. Delay,
in the
context of trade mark law, may provide evidence of a loss of goodwill
or distinctiveness but that was not Turbek’s case
on the papers.
All this does not mean that delay may not have procedural
consequences; for instance, it may be a factor to take
into account
in exercising a court’s discretion to refuse to issue a declaration
of rights or an interim interdict or, maybe,
even a final interdict,
leaving the claimant to pursue other remedies such as damages. Maybe
this was what Patel J had in mind.
If not, he erred.
The s 10(16) attack: Did Spitz
have an existing right?
[16] Against this background I proceed
to consider the real issue between the parties and that is whether
Spitz had, as at 7 March
2000 (the date of Turbek’s applications),
an existing right in the trade mark ‘KG’ in class 25 for purposes
of s 10(16) of
the Act. There was no attempt in either the papers or
argument to establish a right in class 35 and I shall leave it aside.
[17] In context the question is
whether the mark ‘KG’ formed part of Spitz’s goodwill. Spitz
had to show that it was at
the date the common-law proprietor of the
‘KG’ trade mark, and this required proof that Spitz ‘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’
belonged to Spitz (
Moorgate
Tobacco Co Ltd v Philip Morris Inc
– a trade mark determination by Hon WG Trollip referred to inter
alia by Southwood J in
Butterworths
Publishers (Pty) Ltd v Jacobsens Group (Pty) Ltd
[2005] 2 All SA 588
(T) para 34). As Colman J explained, extensive
use creates the intangible property rights in an unregistered
(common-law) trade
mark (
Oils
International (Pty) Ltd v Wm Penn Oils Ltd
1965 (3) SA 64
(T) 70G). In other words, Spitz had to discharge the
same onus in relation to reputation that it would have had under a
passing-off
claim (
Adcock-Ingram
Products Ltd v Beecham SA (Pty) Ltd
1977 (2) SA 434
(W) 436H-437E;
Caterham
Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd
[1998] ZASCA 44
;
1998 (3) SA 938
(SCA) para 16 and 21-22).
[18] Spitz has a chain of stores
specializing in footwear but it also sells clothing. During 2000 it
had 17 stores countrywide.
As mentioned, it held the ‘Kurt Geiger’
trade mark since 1990, and it sold its trademarked merchandise
exclusively through
its stores. It cannot be doubted that it had,
apart from its registered mark, a substantial reputation in ‘Kurt
Geiger’. Although
Spitz alleged in its founding papers that it also
had a substantial reputation and goodwill during 2000 in the ‘KG’
trade mark
due to extensive use, it appeared that this statement was
seriously misleading as was the whole tenor of the founding affidavit

on prior use. It transpired ultimately that all that Spitz could
establish – as far as footwear is concerned – was that it
had
advertised before 2000, maybe as early as 1997, footwear under a
combination trade mark consisting of the letters KG with an
overlay
of the name Kurt Geiger. Only in reply did Spitz clarify the position
when it admitted that it did not and does not brand
its footwear as
‘KG’. It then stated that the basis of its case was that it had
used the trade mark Kurt Geiger since 1972
in relation to footwear;
that the public has ‘always’ known and referred to the Kurt
Geiger brand as ‘KG’; that it had
used the combination trade mark
in relation to clothing and footwear since ‘at least’ 1997; and
that it had used ‘KG’ in
relation to clothing and related
accessories since ‘at least’ 1997.
[19] There is no objective evidence of
use of the trade mark ‘KG’ prior to the effective date of
Turbek’s applications, namely
7 March 2000, and in the light of the
way the founding affidavit was formulated one cannot rely simply on
the uncorroborated allegations
made on behalf of Spitz. The only
evidence of use of ‘KG’ on clothing or accessories in 2000
consists of two photographs of
shirts taken inside a store. The
camera dated them as ‘00, 9 12’ and this, the deponent said,
proves that they were taken on
12 September 2000. Accepting that, it
does not prove an existing reputation as at the effective date. The
one photo shows a number
of folded shirts with the mark ‘KG’ on
them. It is not possible to determine the significance of the
initials especially where
the unfolded shirts use either Kurt Geiger
or the combination mark. The photo of the store’s interior shows
the use in large
letters of the Kurt Geiger mark – and not the
combination mark – in relation to footwear.
[20] The allegation under oath that
the public has ‘always’ known and referred to the Kurt Geiger
brand as ‘KG’ is not only
a gross overstatement of what the few
unimpressive confirmatory affidavits state but also appears to me to
be contrived and in
conflict with the probabilities that flow from
the steps Spitz took during 2000 and thereafter in respect of trade
marks. On 10
April 2000, Spitz applied for the registration of the
combination mark in class 25. Surprisingly for a company that is
brand conscious
and thought that it had trade mark rights in relation
to the ‘KG’ mark, it did not file at that time a similar
application
for ‘KG’. It was only on 20 September 2001 that it
applied for the registration of ‘KG’ in class 25 and also in
class 9,
which was followed a few days later by a letter of demand
addressed to Turbek. Spitz there stated that it had used its ‘trade

marks Kurt Geiger and KG extensively . . . in relation to . . .
footwear’, presaging the misrepresentation contained in the
founding affidavit. It knew by then that Turbek was using the trade
mark KG Italia which is confusingly similar to ‘KG’ but
in spite
of its threats it took no action based on passing-off until seven
years later.
[21] Spitz’s fallback argument was
that ‘KG’ was the dominant part of the combination mark and that
its rights to the ‘KG’
mark flowed from that fact. I do not
believe that it was dominant. ‘Kurt Geiger’ is the older and more
prominent mark. Furthermore,
clothes – and this applies also to
footwear – usually have a clear indication of their trade origin on
internal labels (
DaimlerChrysler
AG v Javid Alavi t/a Merc
[2001] RPC 813
823 – the facts of this case are rather
illuminating) and are bought with reference to their labels (
Jeremy
Phillips
Trade
Mark Law – A Practical Anatomy
(2003)
OUP paras 10.29-10.33). This is especially true in the case of
‘designer’ clothing such as ‘Kurt Geiger’ products.
Spitz
sold the products only in its own stores where, according to the
photos, the mark ‘Kurt Geiger’ was displayed prominently
without
the combination. In my judgement the scale and nature of the
conjunctive use was such that no separate and distinct reputation

arose in relation to ‘KG’ simpliciter.
The s 10(15) attack
[22] I have
mentioned that Turbek, before acceptance and advertisement, applied
for the amendment of its applications from ‘KG
Italia’ to ‘KG’.
The amendment was effected after the date of Spitz’s application
for registration of ‘KG’ in class
25, namely 20 September 2001.
Spitz alleged that the amendment could not have been effected ex
parte and without notice to it.
The amendment took place in terms of
s 46(1), which entitles the registrar, before the registration of a
trade mark, to permit
the amendment of any document relating to the
application on such terms as he may think just. The complaint is that
the registrar
should have required notice to Spitz of the proposed
amendment in the light of its pending ‘KG’ application in class
25. On
the assumption that the registrar had erred, the complaint
should have been addressed by means of review proceedings under s 57

of the Act, something Spitz has failed to do. Indirect reviews are
generally not countenanced (compare
Kimberly-Clark
of SA (Pty) Ltd (formerly Carlton Paper of SA (Pty) Ltd) v Proctor &
Gamble SA (Pty) Ltd
1998 (4) SA 1) (SCA) 14H-15C;
[1998] 3 All SA 77 (A);
South
African Football Association v Stanton Woodrush (Pty) Ltd t/a Stan
Smidt & Sons
2003 (3)
SA 313
(SCA);
[2003] 1 All SA 274
(SCA) para 28).
[23] Section 10(15) provides that a
mark may not be registered and, if registered, is subject to
revocation, if it is identical
or confusingly similar to a mark which
is the subject of an earlier application by a different person in
respect of the same or
similar goods or services. Spitz submitted in
this regard that since its application for the ‘KG’ mark
pre-dates Turbek’s
amendment to ‘KG’, its application for
registration of ‘KG’ in class 25 is an earlier application for
purposes of the provision.
The argument assumes that the amendment
increased the scope of Turbek’s rights. I do not accept the
correctness of the assumption
on the facts of the case. It has always
been common cause that ‘KG’ and ‘KG Italia’ are confusingly
similar. Furthermore,
‘KG Italia’ could have been registered
subject to a disclaimer or limitation relating to ‘Italia’. In
that event Spitz
would have had no case under s 10(15). The deletion
of ‘Italia’ had more or less the same effect as a disclaimer or
limitation
would have had.
Conclusion
[24] Having found that Spitz’s
application to have the two registrations removed has to be dismissed
it follows in the light of
my earlier findings that Spitz’s
application as a whole should have been dismissed with costs in the
court below. The appeal
has therefore to succeed with costs and the
following order is made:
1 The appeal is upheld with costs.
2 The order of the court below is set
aside and replaced with an order dismissing the application with
costs.
________________________
L T C HARMS
DEPUTY PRESIDENT
For Appellant: A J BESTER
Instructed by: SPOOR & FISHER
PRETORIA
MATSEPES INC
BLOEMFONTEIN
For Respondent: G E MORLEY SC
A M ANNANDALE
Instructed by: BOWMAN GILFILLAN INC
JOHANNESBURG
HONEY ATTORNEYS
BLOEMFONTEIN
1
Section 43:
‘No person shall be entitled to institute any proceedings, to
prevent, or to recover damages for, the infringement of a trade
mark
not registered under this Act: Provided that nothing in this Act
shall affect the rights of any person, at common law, to
bring an
action against any other person for passing-off goods or services as
those of another person.’