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[2017] ZASCA 189
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Cochrane Steel Products (Pty) Ltd v M-Systems Group (1272/2016) [2017] ZASCA 189; 2017 BIP 134 (SCA) (13 December 2017)
Links to summary
IN
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
No: 1272/2016
Reportable
In
the matter between:
COCHRANE
STEEL PRODUCTS (PTY)
LTD
APPELLANT
and
M-SYSTEMS
GROUP
RESPONDENT
Neutral
citation:
Cochrane
Steel Products (Pty) Ltd v M-Systems Group
(1272/2016)
[2017] ZASCA 189
(13 December 2017)
Coram:
Navsa
ADP and Ponnan and Bosielo JJA and Tsoka and Schippers AJJA
Heard:
22 November 2017
Delivered:
13 December 2017
Summary:
Disclaimer
and admission in relation to the trade mark ‘CLEARVU’ –
registration of mark giving no right to the
exclusive use of the
words ‘clear’ and view’ separately and apart from
the mark – admission that the registration
of this mark shall
not debar others from the
bona
fide
descriptive
use in the course of trade of the words ‘clear view’ and
‘view’.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Pretoria (Basson J sitting as court of
first instance):
Save for the amendment of
para 1.2 of the order of the court below by the deletion of the words
‘The trade mark registrant
admits that’, the appeal is
dismissed.
JUDGMENT
NAVSA
ADP (Ponnan and Bosielo JJA and Tsoka and Schippers AJJA concurring):
[1]
The appellant, Cochrane Steel Products (Pty) Ltd (Cochrane), applied
for the registration of the mark ‘CLEARVU’
in two
categories, one in Class 6 (in respect of non-electric cables and
wires of common metal; metal fences; metal mesh; pipes
and tubes of
metal) and another in Class 37 (in relation to building,
construction, repair and installation services) of the International
Classification of Goods and Services. The applications were opposed
by M-Systems Group (Pty) Ltd (M-Systems), which at the time
was a
competitor of Cochrane in producing and installing fencing products.
[2]
The basis of the opposition was that the mark was not registerable in
that:
(i) it consists
exclusively of an indication which may serve in trade to designate
the kind, quality, intended purpose or other
characteristics of the
goods or service (s 10(2)
(b)
of the Trade Marks Act 194 of
1993 (the Act);
(ii) it is not capable of
distinguishing the goods and services for which it is to be used (ss
9(1) and 10(2)
(a)
of the
Act).
[3]
The Gauteng Division of the High Court, Pretoria (Basson J), ordered
the registration of the mark subject to the following:
1.1.
The registration of this mark
shall give no right to the exclusive use of the word “clear”
and “view” separately
and apart from the mark;
1.2.
The trademark registrant
admits that the registration of this mark shall not debar others from
the
bona fide
descriptive use in the course of trade of the words “clear
view” and “view”.
[4]
The reasons supplied by the court below for imposing those orders
are exceptionally brief and are contained in the following
two
paragraphs:
‘
52. In conclusion it is
necessary to briefly deal with the opponent’s submission,
although in the alternative, for the entry
of one or more
endorsements. More in particular it is submitted that the Court
should not allow the applicant to become entitled
to any exclusive
right to the word “clear” or “view” (or “VU”)
when used in relation to fences
(separately from “CLEARVU”).
53. I am in agreement with this
submission and [have] made it part of my order in so far as the words
“clear” and “view”
(not “VU”) is
concerned.’
[5]
It is solely against those orders that the present appeal by
Cochrane, with the leave of the court below, is directed. M-Systems
has since been placed in liquidation and the liquidators elected to
abide the decision of this court.
[6]
In the two paragraphs that follow, I set out a pictorial depiction of
some of the products manufactured by Cochrane together
with
descriptions employed by it in relation thereto. I also deal with how
competitors in the fencing industry describe their products.
[7]
In its opposition to the registration of the mark, M-Systems rightly
described Cochrane as a manufacturer of physical perimeter
security
barriers and provided pictures from the latter’s website
depicting the fencing alongside the mark. The fencing products
were
described, inter alia, as an ‘invisible wall’ which
apparently is a mark that belongs to Cochrane and as a ‘shadow
wall’. A balustrade manufactured by Cochrane is described as
transparent. Some of the pictorial depictions drawn from the
website
and supplied by M-Systems appear hereunder.
[See
PDF for images]
It
appears from what is set out above that a key characteristic of the
fence is that whilst it serves as a barrier, it does not
obstruct
sight. The point made by M-Systems is that the misspelling in the
composite mark ‘CLEARVU’ of the word ‘view’
does not detract from it being comprised in its ordinary meaning of
the words ‘clear’ and ‘view’.
[8]
M-Systems, in its objection to the mark, supplied material from
websites operated by a number of other companies within the
security
barrier industry in which they use the words ‘clear’ and
‘view’ in describing their fencing products.
One company
is called C-Thru Fencing which equates to fencing through which one
has a view. Another competitor, Betafence, offers
products called
‘Betaview’. Trellidor, also referred to as a competing
company produced a product called ‘Trellidor
Clear Guard’.
Trellidor describes its products as ‘security screens that
provide a clear view’. They go on to
say that their products
enable users to ‘enjoy the view without feeling vulnerable’,
‘allow unobstructed views
of the outdoors’, ‘appear
to be invisible while helping to protect against unwanted intruders’
and ‘provide
security without detracting from the views or
aesthetics of the premises’. Clear View Security Solutions, yet
another competitor
that sells a range of products which they describe
as ‘clear security solutions’, including ‘clear
bars’,
‘clear armed bars’ and ‘clear gates’.
It explains on its website that all of its products ‘ensure
that no light or view is lost’. In part of its answer to the
objection, Cochrane stated that CLEAR VIEW is registered as
a trade
mark in the name of Clear View Security Solutions and says that there
is no reason why the mark cannot be a good trade
mark in relation to
burglar bars made of impact resistant transparent Perspex-type
material.
[9]
It is well to bear in mind certain foundational principles in
relation to trade marks. Trade mark law is concerned with the
conveyance of information regarding trade origin. At the heart of
trade mark law is truth in competition.
[1]
In
Commercial
Auto Glass (Pty) Ltd v BMW AG
2007
(6) SA 637
(SCA) para 8, Harms ADP said the following:
‘
The object of trade mark law as
reflected in s 34(1)
(a)
and
(b)
is
to prevent commercial “speech” that is misleading. Trade
mark use that is not misleading (in the sense of suggesting
provenance by the trade mark owner) is protected, not only
constitutionally but in terms of ordinary trade mark principles. As
Justice Holmes said [in
Prestonettes
Inc v Coty
[1924] USSC 81
;
264 US 359
(1924) at 368]:
“
When the mark is used in a way
that does not deceive the public, we see no sanctity in the word as
to prevent its being used to
tell the truth.”’
[10]
The principles and precepts of trade mark law are abused when they
are used, not for their legitimate purpose, but in order
to prevent
or inhibit competition. In
Société des Produits
Nestlé SA v Cadbury UK Ltd
[2012] EWHC 2637
(Ch) Birss J
said the following:
‘
Conventional trade marks such
as trade names (“Cadbury”) or logos (such as a glass and
a half of milk on a bar of Cadbury’s
Dairy Milk) do not give
rise to the same conceptual problems as what have been called
“exotic” trade marks such as
smells, colours
per
se
and other things. The
attraction of a trade mark registration is that provided it is used
and the fees are paid, it gives a perpetual
monopoly. The problem is
the same as the attraction but from the other perspective. Unless the
registration of trade marks is kept
firmly in its proper sphere, it
is capable of creating perpetual unjustified monopolies in areas it
should not.’
[11]
More than 100 years ago Cozens-Hardy MR in the case
In Re: Joseph
Crossfield & Sons, Limited
[1910] 1 Ch 13
(CA) made the
following statement:
‘
Wealthy traders are habitually
eager to enclose part of the great common of the English language and
to exclude the general public
of the present day and of the future
from access to the enclosure . . . The Court is careful not to
interfere with other persons’
rights further than is necessary
for the protection of the claimant, and not to allow any claimant to
obtain a monopoly further
than is consistent with reason and fair
dealing.’
[12]
It is against that background that the orders of the court below, the
subject of this appeal, have to be considered. Section
15 of the Act
provides as follows:
‘
If a trade mark contains matter
which is not capable of distinguishing within the meaning of section
9, the registrar or the court,
in deciding whether the trade mark
shall be entered in or shall remain on the register, may require, as
a condition of its being
entered in or remaining on the register –
(a)
That the proprietor shall
disclaim any right to the exclusive use of all or any portion of any
such matter to the exclusive use
of which the registrar or the court
hold him not to be entitled; or
(b)
That the proprietor shall
make such other disclaimer or memorandum as the registrar or the
court may consider necessary for the
purpose of defining his rights
under the registration:
Provided that no disclaimer or
memorandum on the register shall affect any rights of the proprietor
of a trade mark except such
as arise out of the registration of the
trade mark in respect of which the disclaimer is made.’
[13]
Disclaimers are typically in the form set out in para 1.1 of the
order made by the court below.
[2]
A trade mark proprietor cannot bring an action for infringement in
respect of the use of a disclaimed feature. But a disclaimer
does not
affect a proprietor’s right at common law and if he shows that
use by the defendant of the disclaimed feature is
likely to result in
the defendant’s goods being passed off as the goods or services
of the plaintiff he is entitled to an
interdict.
[3]
[14]
Paragraph 1.2 of the order of the court below is in the form of an
admission. This is a practice which is unique to South Africa.
As
pointed out by Webster and Page, the practice is common in the case
of the deliberate misspelling of ordinary descriptive words
which
other traders may wish to use in relation to particular goods or
services. Further, the admission is in respect of the word
in its
ordinary meaning.
[4]
The authors
go on to say the following:
‘
The practice is, however, not
consistent and seems to have evolved into a requirement that an
admission be entered whenever the
particular feature is a misspelling
of a word, whether such word is only remotely one which others may
wish to use descriptively
or whether it is in fact wholly descriptive
or otherwise non-distinctive. In any event, since the phonetic
equivalent of a non-distinctive
word is itself non-distinctive it
would seem to follow that if the word itself is one which ought to be
disclaimed then its phonetic
equivalent should also be disclaimed,
and not only be the subject of an admission.’
The
authors state that an admission may be called for where matter is not
directly descriptive of the goods or services, but which
could
conceivably be used in advertising or in a manner not directly
describing the goods.
[15]
Section 15 of the Act is not concerned with the question of whether a
trade mark itself is incapable of distinguishing, but
whether matter
contained in a trade mark lacks this capability. In this regard see
Cadbury (Pty) Ltd v Beacon Sweets & Chocolates (Pty) Ltd &
another
[2000] ZASCA 2
;
2000 (2) SA 771
(SCA) para 4. Beacon’s composite
mark in that case consisted of a plate of sweets, a little man made
of sweets and a prominent
blank space under the name
Liquorice
Allsorts
. It was registered subject to the following disclaimer:
‘
Registration of this trade mark
shall give no right to the exclusive use of the sweet device [the
plate], separately and apart from
the mark.
The applicant undertakes that, in use,
the blank space shall be occupied only by matter of a wholly
descriptive or non-distinctive
character, or by a trade mark
registered in the name of the applicant in respect of the same goods,
or by a trade mark of which
the applicant is a registered user in
respect of the same goods, or by a trade mark of a registered user
with the consent of the
proprietor of such a mark or the blank space
will be left vacant.
The applicant undertakes that in use
the trade mark will only be used in respect of goods containing or
including liquorice or liquorice
flavour.’
[16]
Contending that the name
Liquorice
Allsorts
is
descriptive of the product and therefore not capable of
distinguishing in the trade mark law sense, Cadbury applied, without
attacking the validity of the original registration of the trade
mark, for an additional disclaimer, namely that the registration
‘shall also give no right to the exclusive use of the name
Liquorice
Allsorts
,
separately and apart from the mark’. The court concluded that
Beacon was not entitled to the exclusive use of
Liquorice
Allsorts
because
it was used by Beacon and others in the trade to describe the product
and not to distinguish Beacon’s product from
that of others.
[5]
[17]
In
Cadbury
,
Harms JA recorded that since the court below had found in favour of
Beacon the question of the exercise of a discretion in relation
to
the disclaimer did not arise. He noted that there was established
authority that a court on appeal has an original discretion
in that
regard.
[6]
[18]
Paragraphs 13 and 14 of
Cadbury
are apposite. They read:
‘
13. As was pointed out by the
hearing officer in
Philip
Morris Inc’s Trade Mark Application
[1980] RPC 527
at 532-3, a disclaimer is, theoretically, never
necessary since registration of a trade mark cannot give rise to any
rights except
those arising from the mark as a whole. It has
nonetheless a function. Primarily, it is to prevent the registration
of a composite
mark from operating so as to inhibit the use of the
disclaimed element by others. Beacon, relying upon the fact that the
name
Liquorice Allsorts
is
the dominant part of the trade mark, is asserting trade mark rights
in
Liquorice Allsorts per se
against others based upon
this registration. It also has a pending application for the
registration of
Liquorice
Allsorts
simpliciter
.
This is therefore a textbook case for a disclaimer. . . .
14. The court below . . . accepted
Beacon’s argument that Cadbury was sufficiently protected by
the provisions of s 34(2)
(c)
of the Act which provides,
inter alia
,
that a registered trade mark is not infringed by the use of any
bona
fide
description or
indication of the kind of the goods concerned. Cadbury, if its
allegations are to be accepted, is thus without a
disclaimer
possessed of a perfect defence. I find the attitude unrealistic
because I cannot see why Cadbury should be put to the
trouble and
expense of first manufacturing and selling and then be subjected to
the risk of infringement litigation where the Legislature
has given
it a simple remedy akin to a declaration of rights to obtain
certainty. I do realise that due to the proviso to s 15,
Beacon may
nevertheless attempt to assert rights to
Liquorice
Allsorts
by means of a
common-law action based upon passing-off (cf
Antec
International Ltd v South Western Chicks (Warren) Ltd
[1997] FSR 278)
, but that is not a sufficient reason to refuse the
relief sought since the nature of the protection provided by that
action differs
from trade mark protection.’
[19]
In determining whether a discretion should be exercised in favour of
the entry of a disclaimer and admission, it is necessary
to
have regard to
Distillers Corporation (SA) Ltd v S.A. Breweries
Ltd & another;
Oude Meester Groep Bpk. & another v
S.A. Breweries Ltd
1976 (3) SA 514
(A). There this court was
considering, in relation to an application for an entry for
disclaimers, the composite trade mark ‘Oude
Meester’,
which had undoubtedly become distinctive. At 552H-553A, the court
said the following:
‘
Now Meester is not a coined or
invented word, inherently adapted to distinguish the goods to which
it relates. It is, like its English
equivalent, Master, and ordinary,
well known word to be found in any dictionary. As a noun it
ordinarily connotes a superior person
of knowledge, experience,
competence, skill, or authority; therefore, when used in a trade mark
in relation to goods, normally
it impliedly lauds the quality of
those goods. The same commendation is usually conveyed when it is
used adjectively of a person;
and when so used of a thing, that the
thing is made by a “master”.’
The
court, whilst acknowledging that the mark ‘Oude Meester’,
by its use as a whole had become distinctive, held that
such use does
not ‘ordinarily or necessarily mean that Meester
per
se
has
thereby become distinctive’. It found that the court below had
accordingly correctly entered disclaimers.
[20]
In
Distillers
, Trollip JA also had to consider an order
similar in form to para 1.2 in the present case. Trollip JA stated
that what was there
under consideration was not a disclaimer in the
usual form. He had regard to the contention on behalf of one of the
parties that
it was not a disclaimer, but rather an ‘admission’.
Noting that the entry of admissions was a peculiarly South African
practice, particularly where the trade mark contains words that are
regarded as being reasonably required for use in the trade,
he stated
that the purport or effect of admissions ‘does not appear to be
entirely clear; and it is difficult to understand
on what basis the
distinction between disclaimers and admissions is drawn’. He
proceeded to construe the ‘admission’
as a disclaimer and
in that regard said the following:
‘
That construction does not, in
my view, do any violence to the wording or effect of the entry. For
by not debarring others from
using Meester, the entry in effect
disclaims Distillers’ right to the exclusive use thereof.’
[7]
The
same applies here.
[21]
Returning to the facts of the present case, the ‘VU’ in
the composite mark ‘CLEARVU’, is a deliberate
misspelling
of the ordinary word ‘view’ and is understandable in
light of the nature of the product and what it intends
to convey. To
state, as Cochrane does, that it does not embody a misspelling of the
ordinary English word ‘view’, but
that it is a coined
word which just happens to be the phonetic equivalent of the ordinary
English word ‘view’ is to
strain to avoid the implication
that commonly, admissions are entered when there is a misspelling of
a word and to seek a monopoly
that extends beyond that which is
acceptable. Moreover, as pointed out above in para 14, with reference
to Webster and Page, the
phonetic equivalent of a non-distinctive
word is itself non-distinctive and it would seem to follow that if
the word itself is
one that ought to be disclaimed then its phonetic
equivalent should also be disclaimed.
[22]
In my view, neither Cochrane, nor any other trader, is entitled to
appropriate exclusively the ordinary English words ‘clear’
and ‘view’, which, in effect, constitute the composite
mark. Furthermore, those words are commonly used descriptively
in
relation to fencing products. The registration of the mark should not
operate to inhibit the use by others of the disclaimed
elements. As
in
Cadbury
,
this case calls out for a disclaimer in the terms directed by the
court below. Traders should not be put to the trouble and expense
of
manufacturing and selling their products and then be subjected to the
risk of infringement litigation where the Act has provided
a
mechanism to provide certainty.
[8]
It follows for the reasons set out above that the orders of the court
below were warranted, save that para 1.2 should be amended
by the
deletion of the words:
‘
The
trademark registrant admits that’
[23]
The following order is made:
Save
for the amendment of para 1.2 of the order of the court below by the
deletion of the words ‘The trade mark registrant
admits that’,
the appeal is dismissed.
______________________
M
S Navsa
Acting
Deputy President
Appearances:
For
the Appellant: O Salmon SC
Instructed
by:
Rademeyer
Attorneys c/o Klagsbrun Edelstein Bosman
De
Vries Inc., Pretoria
Honey
Attorneys, Bloemfontein
For
the Respondent: No appearance
[1]
See
Webster and Page
South
African Law of Trademarks
,
service edition 17 at 1-3, para 1.1.
[2]
Webster
and Page
South
African Law of Trade Marks
,
para 9.18 at 9-16, service issue 19.
[3]
Webster
and Page, para 9.19 at 9-16, service issue 19.
[4]
Webster
and Page, para 9.20 at 9-17, service issue 19.
[5]
See
paras 2 and 12.
[6]
The
following are the authorities there cited:
Distillers
Corporation (SA) Ltd v Stellenbosch Farmers Winery Ltd
1979
(1) SA 532
(T),
Estee
Lauder Cosmetics Ltd v Registrar of Trade Marks
1993
(3) SA 43
(T) and
Media
Workers Association of South Africa & others v Press Corporation
of South African Ltd (‘Perskor’)
[1992] ZASCA 149
;
1992 (4) SA 791
(A).
[7]
Pages 553G-554C of
Distillers
.
[8]
In
this regard se para 14 of
Cadbury
in which the protection provided by s 34 (2)
(c)
of the Act was discussed.