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[2016] ZAGPPHC 620
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KWV Intellectual Properties (Pty) Limited v Mirco Foods CC (82407/14) [2016] ZAGPPHC 620; 2016 BIP 205 (GP) (8 June 2016)
IN THE
NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER 82407/14
DATE:
8/6/2016
In the matter between:
KWV INTELLECTUAL
PROPERTIES (PTY)
LIMITED APPLICANT
And
MIRCO FOODS
CC RESPONDENT
(Trade
Mark Application)
JUDGMENT
MAVUNDLA,
J.
[1]
This matter concerns two oppositions to the registration of trade
mark/s, which each of the parties contends that the other's
trade
mark is confusingly similar to its mark and is likely to cause
confusion and should therefore not be registered in the Registrar
of
Trade Marks.
For
purposes of convenience and to avoid confusion, the parties shall be
referred to in their respective names.
[2]
The sequence of the relevant applications and oppositions are as
follows:
2.1
On the
3 November 2011, KWV
applied for the registration of
its trade mark under application number 2011/19021 mark "CIAO!"
which is pending before
the Registrar of Trade Marks under class 33
covering:
"Alcoholic
beverages (except beers); wine".
2.2
On the
3 February 2012 Mirco
applied for the registration of
CIAO I Stylized mark pending since then, under application:
2.2.1
no 2012
I
02533 in class 32 covering:
"Beers;
mineral and aerated waters and other non-alcoholic drinks; fruit
drinks and fruit juice; syrup and other preparations
for making
beverages." and
2.2.2
no 2012
I
02534 in class 33 covering "Alcoholic beverages
(except beers); wine.
2.3
On the
20 November 2013
KWV filed its
opposition
to
Mirco's application mentioned in 2.2. above.
2.4
On the
24 February 2014
Mirco filed its
opposition
to
KWV's application mentioned in 2.1 above.
[3]
The first opposition is that of KWV since it was lodged earlier, on
the 20 November 2013 whereas that of Mirco was lodged later
on the 24
February 2014. It therefore becomes necessary to first deal with
KWV's opposition to MiRCO's application and thereafter
with Mirco's
opposition to KWV's application. It however needs mentioning that the
main application and the counter application
are inextricably
overlapping.
[4]
KWV's opposition to Mirco's registration application is that the
latter's trade mark is identical to the former's trade mark
and as
such is likely to cause confusion. KWV further contended that Mirco's
alleged prior proprietary is confined to class 29
in respect of trade
mark 99/18548 "CIAO" in class 29; trade mark 99/18549 in
class 30 and trade mark 99/18550in in class
43.
[5]
According to KWV it is the licensee of the trade mark covered by its
application No 2011/19021 CIAO in class 33 and which has
been so
employed since June 2010. The marketing of the fruit based
cocktail-in-a-box product and sold by KWV under the trade mark
CIAO
was first launched on the market in September 2011. The first order
of its product CIAO were procured in September 2011 and
distributed
commercially shortly thereafter through most of South Africa's major
retail chains including Pick' n Pay, Shoprite
Checkers, Spar Group,
Makro etc.
[6]
KWV attached annexure A containing a bundle of photographs showing
the get-up and packaging of its CIAO product which is sold
in 1and 2
litre box form and which show the product displayed on the shelving
of retail outlets, together with a record of responses
on FACEBOOK by
the public to the product.
[7]
KWV further attached annexure B which is schedule setting out the
quantity in litres, by CIAO product sub-type, distributed
monthly by
KWV into the South African market during the months of September
2011to 2012 (KWV'S financial year end showing a total
distribution of
493,221 litres. At a median retail price per litre of R32,
distribution of this volume in retail trade, generated
retail sales
of some R15, 783, 000. 00.
[8]
According to KWV it produced annexure B and C which show total litre
sales since September 2011 to date November 2013 of 1,
262, 348
litres, which transfer into retail sales (at R32 per litre) of sum
R40, 4 million. KWV contended in its papers that it
enjoys a
substantial and visible presence in the RTS liquor market place in
South Africa, and did so prior to 3 February 2012 when
Mirco filed
its applications under no 2012
I
02533·4 Ciao! Stylized.
[9]
Annexure B shows more particularly that as at 30 January 2012, KWV
had sold 315, 095 litres of its CIAO product since September
2011
(representing some 157, 547, 2 litre units) which translate into
retail sale (at R32 per litre) in the sum of R10,083,040.00.
[10]
KWV per e-mail of 14 August 2013 sent to Mirco's attorneys of record,
objected to the latter's applications under nos. no2012
I
02533-4
ciao! device and called upon Mirco to withdraw these
applications, supporting these demands by asserting:
(a)
the priority rights It enjoyed under its 3 August 2011application no
2011/19021 CIAO in class 33, and
(b)
Its common law rights it enjoyed by virtue of the extensive use it
had made of the market of a fruit based cocktail-in-a- box
product
which had been distributed since October 2011through all the major
chains in South Africa.
[11]
Mirco has declined to comply with KWV's demands, asserting that it
enjoys prior rights of the mark CIAO by reason of the fact
that:
11.1
it conducted a restaurant under this name mark (an Italian Tratoria
with pizza burning oven) at shop 35 Brooklyn Mall, 338
Bronkhorst
Street, Pretoria since November 2006 and which business it had
acquired for a third party, Roberto Rosa, who had conducted
a
restaurant business under this name (at an undisclosed address in
Pretoria) since 1999;and
11.2
because the menu at the restaurant offered a sangria, as part of the
restaurant's menu offering.
[12]
According to KWV, Mirco has admitted that it does not sell a bottled
beverage under the name CIAO! but asserts rights on the
basis that a
CIAO sangria drink appears (and has for the past 13 years) appeared
on its menu. As is the case with Ciao Combo patty
fried strips of
beef and chicken dish that similarly appears on the menu, Mirco's
Ciao sangria is menu item, and is by nature "a
catering service"
offering in the context of a restaurant, namely a service of the kind
covered by Mirco's registration no
1999/18550 Ciao! in class 42.
[13]
KWV contends that Mirco's rights are confined to those it enjoyed
under the said registration no 1999/18550 in class 43 in
respect of a
catering service, and that such right does not confer on it any right
of priority with respect to the KWV'S 3 August
2011application no
2011
I
19021 CIAO in class 33.
[14]
The case of Mirco, KWV' as It contends in its answering affidavit, is
that KWV could not have acquired rights in CIAO trade
mark because
this trade mark was registered in the name of Mirco in classes 29, 30
and 42 with effect from 11October 1999 and have
been in use and in
force since then.
[15]
According to Mirco as part of its business it sells food stuff
(including pasta sauces, cake and the like) under its trade
mark
CIAO!. It further contended that it has an existing reputation
under the trade mark in respect of foodstuff and restaurant
services
and also has already existing rights in the CIAO trade mark in
classes 29, 30 and 42 which date back to 11 October 1999,
which have
been valid and in use prior and had therefore prior rights.
[16]
Mirco conceded that KWV distributes its product through various
retail chains, including Makro. Mirco, however, contended that
as
part of its business, it sells foodstuff (including pasta sauces,
cakes and like) under its CIAO! Trade mark.
[17]
In its counterclaim Mirco contended that it is the registered
proprietor of the following marks:
17.1
Trade Mark 99/ 185 48 CIAOI registered in class 29, with effect from
11October 1999, in relation to Meat, fish, poultry and
game of all
kinds including products made thereof or consisting of or containing
same, meat extracts, preserved, dried and cooked
fruits and
vegetables, jellies, jams, eggs, milk and other dairy products; food
additives, flavourings, seasonings and sauces;
dietary and
nutritional foods including vitamins, minerals, proteins, fats and
carbohydrates;
17.2
Trade Mark 99/ 18549 CIAO! Registered in class 30, with effect from
11October 1999,in relation to Coffee, tea, cocoa, sugar,
rice,
tapioca, sagi, artificial coffee; flavours and preparations made from
cereals, bread, biscuits, cakes, pastry and confectionery;
ices,
sandwiches; fillings of all kinds within the class, honey, treacle;
yeast, baking powder; salt; mustard, pepper, vinegar,
sauces, spices,
marinades; prepared foods in the class, food substitutes in the
class, fast foods in the class, food additives,
flavourings and
seasonings, dietary and nutritional foods including those containing
vitamins, minerals, proteins, trace elements,
fats and carbohydrates,
weight reducing foods and edibles.
17.3
Trade Mark 99/ 18550 CIAO! registered in class 43, with effect from
11October 1999, in relation to services relating to the
import and
export of foodstuffs and beverages; wholesale, retail and
merchandising services, market, sale and distribution of foodstuffs
and beverages, catering services, market, sale and distribution of
foodstuffs and beverages, catering services and all other services
included in this class concerned with the provision of foods.
[18]
Mirco further contended that s10 (12) of the Trade Mark prohibits the
registration of a mark that is "inherently deceptive
or the use
of which would be likely to deceive or cause confusion and that
therefore the application for registration of CIAOI
Trade mark in the
name of KWV should be dismissed and that its application for the
registration of ciao! Stylized under no 2012
/ 02533-4 which are
pending in the trade mark classes in classes 32 and 33 should be
registered.
[19]
It is apposite to first deal with the opposition that was lodged
first, and that is the one of KWV, thereafter with that of
Mirco as
it was lodged later.
[20]
KWV in opposing the registration of Mirco's trade mark application no
2012
I
02533-4 Ciao! Stylized which are pending in the trade
mark in classes 32 and 33, relies on its own pending application no
2011
I
19021 Ciao! in class 33 and in particular on the ground
of section 10(15) of the Trade Mark Act, which provides that a mark
will
not be registered if:
"subject
to the provisions of section 14 and paragraph (16), a mark which is
identical to a mark which is the subject of an
earlier application by
a different person, or so similar thereto that the use thereof in
relation to the goods or services in respect
of which It is sought to
be registered and which are the same as or similar to the goods or
services in respect of which the mark
in respect of which the earlier
application is made, would be likely to deceive or cause confusion,
unless the person making the
earlier consents to the registration of
such
mark.".
[21]
KWV further contended that Mirco on the papers before the Court has
not, on a balance of probabilities
[1]
,
discharged the duty on it to satisfy the Court that there are no
reasonable probabilities of confusion or deception in its classes
32
and 33 trade marks with those of KWV to qualify for registration, and
that the Court is obliged to dismiss Mirco's opposition.
[22]
It is not in dispute that the respective parties share the same trade
mark name "CIAO" with the exception that Mirco
has added to
the said name Stylized.
[23]
In order to determine whether the trade marks are identical and
likely to cause confusion requires the Court to make a two
stage
inquiry. The Court must satisfy itself that the trade mark applied
for by Mirco is the same or similar to that applied for
and protected
by KWV mark. Only thereafter can the Court proceed to determine the
likelihood of confusion or deception and make
a global assessment of
the trade marks, and similarity of thereof and then make a value
judgment.
[2]
[24]
In doing the aforesaid assessment the Court will have regard to,
inter
alia,
the
respective use or function of the respective goods or services, the
channel through which such goods will be used or dispensed
to the
public domain, e.g. large chain stores; the physical nature,
character of the goods or services; the potential user of the
commodity or services; and whatever circumstances the Court deems
relevant.
[3]
[25]
At registration the applicant,
in
casu,
Mirco,
must prove that there is no likelihood of confusion;
vide
Smithkline Beecham Consumer Brands (Pty) Ltd
[1995] ZASCA 26
;
1995 (2) SA 903
AD at
910A-B: "The test is
to
take
into account all the relevant circumstances, and compare the
respective marks, and also have regard to the Danco Clothing v
Nu-Care Marketing Sales and Promotions
[1991] ZASCA 121
;
1991 (4) SA 850
at 860 D-C. In
the matter of American Chewing Products Corporation v American Chicle
Campany it was held, inter alia, that: "the
general principle is
to refuse registration if there is any possibility of confusion in
fair or normal use"; vide also Greenblatt
v Hirschson
[4]
; Stellenbosch Farmers' Winery Stellenvale Winery {Pty) Ltd.
[5]
[26]
The Court must also take into account the surrounding circumstances
relevant to the use of the trade marks alleged to be identical.
The
fact that the trade marks carry common parts does not carry much
weight. The Court must also take into account the use of the
trade
marks and the channels through which the goods carrying the identical
name are to be marketed, vide Plascon-Evans Paints
v Van Riebeeck
Paints.
[6]
[27]
Mirco's class 33 CIAO! Stylized trade mark covers: "Alcoholic
beverages (except beers); just as KWV's trade mark Ciao
in class 33,
which is pending before the registrar since 3 August 2011, does.
Mirco does not dispute that these trade marks are
similar and are
likely to cause confusion.
[28]
In respect of Mirco's class 32 goods, a postulated notional use of
thereof are likely to cause confusion or deception when
compared with
the notional use by KWV of its CIAO trade mark because both goods are
beverages covered by that of KWV's trade mark
in class 33. In this
regard the authorities provide that the relevant marks should not be
compared side by side but should be compared
from the point of view
of an ordinary purchaser who might at one or other stage see or hear
one of the marks and later, possibly
with an imperfect recollection
of the mark, come across the other mark and confuse one for the other
or vice versa and determine
whether there is a reasonable possibility
of confusion or deception; vide Stellenbosch Farmers' Winery
Stellenvale Winery (Pty)
Ltd;
[7]
American Chewing Products Corporation v American Chicle Company
[8]
wherein it was also pointed out that: "the general principle is
to refuse registration if there is any possibility of confusion
in
fair or normal use";
vide
also
Greenblatt
v Hirschson.
[9]
In my
view, Mirco's trade mark in both classes 32 and 33 are likely to
cause confusion or deception.
[29]
A careful perusal of the answering affidavit of Mirco, reveals that
the latter does not dispute that the relevant trade marks
of both
parties are identical. Neither does the said answering affidavit
contradict that there is a potential of confusion or deceit,
as
contended for by KWV. In the premises, on the strength of the
Plascon-Evans principles this Court is obliged to find that Mirco
has
not demonstrated on a balance of probabilities that the registration
of its trade mark under classes 32 and 33 are not likely
to cause any
confusion and should be registered.
[30]
In so far as Mirco wants to rely on prior proprietorship on the basis
of trade marks 1999 /18548-50, it was contended by KWV,
quite
correctly so in my view, that Mirco is confined to restaurant
services, which are not similar to alcoholic beverages. In
this
regard it should be borne in mind that Mirco's sangria drinks are
offered to customers in restaurants. Further Mirco does
not produce
or sell alcoholic beverages as a commercial trade, nor sell bottled
beverages under the name Ciao.
[31]
In the matter of
Luster
Products Inc v MGIC Style Sales
CC
[10]
the Appellate Court held that:
"Where,
in an application for a final interdict, the respondent has brought a
counter - application for certain relief, there
is a dispute of fact
and the rule in
Plascon-Evons Paints Van Ribeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634-S is to be applied, the proceedings
consists of separate applications, having a certain overlap and being
argued at
a combined hearing, but separate and independent
applications nonetheless. The proper approach in such circumstances
is that while
the respondent's version must be looked to in so far as
the main application is concerned; the reverse is the case with the
counter
application. (At 21G/H-H/1.)"
[32]
In the matter of
EL
Baik Food Systems Co. SA v AL Baik Fast Faod Distributio Co.
S.A.E
[11]
Murphy
J held that: "As a general rule, the trade mark applicant bears
the
onus
of
showing that the trade mark sought to be registered by it is in fact
registrable. In motion proceedings, however, the question
of
onus
usually
does
not
arise, and the issues of fact fall to be determined by the
Plascon-Evans
rule,
irrespective of where the legal or evidendential
onus
lies.
That rule provides that where in motion proceedings dispute of fact
arise on affidavits, a final order can be granted only
if the facts
averred in the applicant's affidavits, which have been admitted by
the respondent, together with the facts alleged
by the latter,
justify such order. It is permissible, however, to reject
respondent's version when it is consists
of
bald or
uncreditworthy denials, raises fictitious disputes of fact, is
palpable implausible, far-fetched or so clearly untenable
that the
court is justified in rejecting them on the papers. In a trade mark
application, however, the court may be required to
determine whether
the evidentiary burden imposed by the statute has been met. In the
matter of
New
Balance Athletic Shoe Inc v Dojee ond Others Nno,
Nugent
JA stated : 'But the rule in Plascon-Evans is not blind to the
potential abuse for abuse ...'in the interest of justice,
courts have
been at pains not to permit an unvirtuous not to shelter behind
patently implausible affidavit versions or bald denials'.
That seems
to me to be particularly important in proceedings of this nature, in
which the proprietor respondent who bears the
onus
of
proving relevant use, can be expected to have comprehensive and
peculiar of that fact if it has occurred. In those circumstances
it
can be expected that a proprietor who alleges relevant use, will
advance clear and compelling evidence to that effect and ought
not to
be expected that the evidential burden will be discharged by
allegations that are sparse, ambiguous or lacking in conviction."
[33]
A careful perusal of the answering affidavit of Mirco, reveals that
the latter does not dispute that the relevant trade marks
of both
parties are identical. Neither does the said answering affidavit
contradict that there is a potential of confusion or deceit,
as
contended by KWV. In the premises, on the strength of the
Plascon-Evans
principles this Court is obliged to find that
Mirco has not demonstrated on a balance of probabilities that the
registration of
its trade mark under classes 32 and 33 are not likely
to cause any confusion and should be registered.
[34]
Consequently this Court concludes that KWV's' opposition to Mirco's
registration of trade marks in classes 32 and 33 should
be upheld and
the application for the registration of KWV's trade mark in class 33
must proceed. Mirco must therefore be mulcted
with costs of the
opposition.
[34]
I now proceed to deal with the opposition of Mirco to the
registration of the trade mark of KWV in application No 2011I 19021
Ciao in class 33.
[35]
In so far as Mirco relies on prior proprietorship, premised on its
earlier, registered trade mark in classes, 29, 30 and 43
is
concerned; it is my considered view that this does not avail Mirco
the ground of resisting KWV's application for the registration
of its
trade mark in class 33, for the following reasons. The dominant
characteristic in all these three classes is foodstuff.
It brooks no
argument that "foodstuff" is distinct from beverages
envisaged in classes 32 and 33.
[12]
[36]
In class 43, it is also specifically stated,
inter
alia,
"foodstuffs
and beverages, catering services and all other services included in
this class concerned with the provision of
foods.
[13]
Mirco's foodstuff is dispensed through restaurants, whereas KWV's
commodity is dispensed not through restaurants but big chain
stores.
The "beverage" referred to in class 43 must be construed
within the predominating characteristic component in
this class,
which is foodstuff to be serviced in restaurants. The logical
conclusion is therefore that class 43 is dissimilar to
classes 32 and
33. It was not disputed by Mirco, as contended by KWV, that the
former is not selling bottled beverage under CIAO.
Therefore the
ineluctable conclusion is that Mirco has no existing rights in
respect of classes 32 and 33, but its rights are only
confined to
classes 29, 30 and 43.
[37]
It is also significant to note that Mirco does not dispute that the
name "CIAO" is not singularly confined to itself,
so as to
restrict and monopolize the use thereof by others. This is so because
there exists an Italian restaurant with the name
Ciao Baby Cucina
Restaurant. Neither does Mirco dispute the version of KWV that Ciao
Baby Cucina has various outlets located in
Sandton; Clearwater Mall
Shopping Centre, Roodepoort; Fourways, Sandton and Tiger Valley
Shopping Centre, Bellville, Cape.
[38]
The Court must take into account the surrounding circumstances
relevant to the use of the trade marks alleged to be identical.
The
fact that the trade marks carry common parts, in casu the word CIAO,
does not carry much weight. The Court must also take into
account the
use of the trade marks and the channels through which the goods
carrying the identical name are to be marketed,
vide
Plascon-Evans Paints v Van Riebeeck Paints
[14]
[39]
Mirco, in opposing KWV's trade mark registration does not take issue
with the fact that KWV has since September 2011 sold a
fruit-based
alcoholic cocktail in-a-box product under mark Ciao. I have already
referred to earlier to the fact that Mirco's commodity
is dispensed
through one restaurant situated at Brookline Mall, whereas that of
KWV is not.
[40]
In the premises, this Court concludes, on value induction, that KWV's
trade mark in class 33, placed side by side with Mirco's
trade marks
under classes 29, 30 and 43, are so dissimilar that there is no
likelihood of confusion. Accordingly this Court finds
that Mirco does
not have prior proprietorship rights to resists the registration of
KWV's application under class 33. Mirco's opposition
to the
registration of KWV'S trade mark in class 33 should fail and be
dismissed with costs and the latter's trade mark registration
must
proceed.
[41]
Both parties engaged the services of two counsel, because of the
importance of the matter to them and the fine points of law
involved.
It is therefore proper that the costs must follow the event inclusive
the cost of engaging two counsel as it was necessary
to employ same.
[42]
In the premises the following orders are made:
AD
MAIN CLAIM.
1.
That the opposition by KWV to the registration of two trade marks
applied for by Micro Foods CC ("Mirco") under applications
no 2012/02533-4 for the CIAO stylized trade mark in classes 32 and 33
is upheld with costs which costs shall include the costs
of employing
two counsel.
AD
COUNTER CLAIM
2.
That the opposition by Micro Foods CC ("Mirco") to the
registration of trade mark applied for by KWV under applications
no
2011/ 19021 for the CIAO trade mark in class 33 is dismissed with
cost which costs shall include the costs of employing two
counsel.
______________________
N.M.
MAVUNDLA
JUDGE
OF THE HIGH COURT
Date
of Judgment: 08/6/2016
APPLICANTS'
ADVOCATE ADV
P.
GINSBURG SC with ADV P CIRONE
INSTRUCTED
BY HAHN
& HANH
RESPONDENT'
S ADVOCATE ADV
C. J. VAN DER WESTHUIZEN SC with ADV
L. P. MKHIZE
INSTRUCTED
BY D
M KISCH INC
[1]
Accurate
Watch Co v Accurist Watches Ltd
2004
BlP 115 (RTM) at 1176-C.
[2]
Vide
Foschine Retail Group {Pty) Ltd
2013
BIP 275 (GNP) at par [15].
[3]
Cowbell
AG v /CS Holdings Ltd
2001
(3) SA 941
(SCA) at 947J;
British
Sugar Pie v James Robertson
&
Sons
Limited
(1996]
RPC 281.
[4]
1958 (4) SA 371
, at 376E-H.
[5]
1957 (4) SA 235
at 2400-E.
[6]
1948 (3) SA 623
(AD).
[7]
Supra
at
240D-E.
[8]
supra at 742-744.
[9]
Supra at 371, 376E-H.
[10]
1997 (3) SA 13
(AD) at 13G.
[11]
Case No A998 / 13 (NGC) delivered on 1September 2015.
[12]
Vide
Organon Laboratories Ltd v Roche Products (Pty) Ltd
1976
(1) SA 195(T)
202F-203A.
[13]
Vide
para[17]
supra.
[14]
1948 (3) SA 623
(AD).