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[2014] ZAGPPHC 69
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Firstrand Bank Ltd v First Central Insurance Ltd and Another (21241/2012) [2014] ZAGPPHC 69; 2014 BIP 137 (GP) (7 February 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case No: 21241/2012
Date: 7 February
2014
Not Reportable
Not of Interest to
other Judges
In the matter
between:
FIRSTRAND
BANK LTD
……………………………………………………
.
Applicant
and
FIRST
CENTRAL INSURANCE LTD
………………………………
.
1
st
Respondent
REGISTRAR OF TRADE
MARKS
…
………………………………
.
2
nd
Respondent
JUDGMENT
FOURIE, J:
[1]
The
applicant seeks an order in terms of sections 24(1) and/or 27(1)(a)
of the
Trade Marks Act 194 of 1993
for the removal of trade mark
registration 1998/03956 “FIRST CENTRAL INSURANCE” and
device
in Class 36, registered in the name of the first respondent. The
application is opposed by the first respondent.
BACKGROUND
[2]
The applicant
is the proprietor of a series of trademarks incorporating “FIRST”
as a prefix and has registered these
trade marks in Class 36 in South
Africa. It is, in particular, the proprietor of, inter alia, trade
marks such as FIRST NATIONAL,
FIRST LEASING and FIRST LINK. The
first-mentioned trade mark relates to banking, financial and credit
card
services
whereas the other two are associated with insurance and financial
services.
[3]
The
first respondent’s trade mark registration, FIRST CENTRAL
INSURANCE and device, wholly incorporates
“FIRST
”
as a prefix. It is contended by the applicant that the inclusion of
the word “
FIRST
”
as a prefix in the first respondent’s trade mark registration
is likely to lead the public to assume that the first
respondent’s
trade mark is part of the applicant's series of “
FIRST”
trade marks or that the first respondent’s services are
connected or associated with the applicant.
[4]
These
allegations are denied by the first respondent and more particularly
it is denied that the applicant has locus standi to bring
this
application. It is also pointed out by the first respondent that the
applicant has no exclusivity to the word "
FIRST
”
and it is unclear why the applicant insists that it is entitled to
the sole use of this word, despite the applicant disclaiming
exclusive use to this word in the Trade Marks Register. I shall first
consider the issue with regard to locus standi and thereafter
the
merits of the application.
LOCUS STANDI
[5]
It was
submitted on behalf of the first respondent that the applicant’s
alleged locus standi is premised on the prefix "FIRST”
and
based on the misconception that the applicant has some form of
monopoly of the word “FIRST”. It was also submitted
that
the applicant has not presented any evidence or proof to show that it
enjoys a substantial reputation and goodwill in South
Africa with
regard to the name “FIRST” and neither has it presented
any proof to show that the genera! public would
assume that the first
respondent’s trade mark is part of the applicant’s
business. Therefore, it was argued, the applicant
has failed to prove
it has locus standi.
[6]
Both
section 24(1)
and
section 27(1)
of the Act provide that the applicant
for expungement or cancellation of a mark or rectification of the
Register should be an “interested
person”. In
South
African Football
Association v Sandton Woodrush
(Pty) Ltd
2002
(2) SA 236
(T) at 239 Spoelstra J ruled that the principles relating
to the requirement under the previous Trade Marks Act, 1963, that the
person applying for expungement or rectification should be an
“aggrieved person” are still applicable for the
Interested
person” test. The learned Judge also pointed out
that it was clear from the cases in which the term “person
aggrieved”
had been considered that it referred to persons who
were “in some way or other substantially interested in having
the mark
removed from the register” or who had a “genuine
and legitimate competitive interest in the trade to which the
offending
mark relates”
[7]
These
principles related, in substance, to whether or not the person
applying for the rectification of the Trade Marks Register
or
cancellation of the trade mark, had a trading interest in having the
mark removed from the Register. If so, the locus standi
of that
applicant was recognised (
Danco
Clothing v Nu-care Marketing Sales and Promotions
[1991] ZASCA 121
;
1991 (4) SA 850
(AD) at 858 and 859 F-G). Having regard to these
guidelines, I am satisfied that in this matter, the applicant has a
trading interest
in the FIRST CENTRAL trade mark. Furthermore, the
applicant has a trading interest in trade mark registrations which
include the
word
"FIRST”
and which are to be used in relation to the identical services which
the applicant provides. For these reasons I am satisfied that
the
applicant has the necessary
locus
standi
to bring this application.
DEFECTIVE ENTRY?
[8]
The
applicant sets out in its founding affidavit that the first
respondent’s trade mark registration is an entry wrongly made
in the Register and should, in terms of section 24(1) of the Act, be
removed. The point in essence is that the first respondent’s
trade mark registration is very unclear and indistinct and does not
comply with Regulation 13(4) of the Act. It was argued that
upon very
close inspection the words “FIRST CENTRAL INSURANCE” are
just apparent, but these words are unclear and indistinct.
It was
also pointed out that the device and the markings below the device
are obscure to the point of being unidentifiable and
illegible.
[9]
Section
24(1) of the Act provides as follows:
"In the event of
non-insertion in or omission from the register of any entry, or of an
entry wrongly made in or wrongly remaining
on the register, or of any
error or defect in any entry in the register, any interested person
may apply to the court or, at the
option of the applicant and subject
to the provisions of section 59, in the prescribed manner, to the
registrar, for the desired
relief, and thereupon the court or the
registrar, as the case may be, may make such an order for making,
removing or varying the
entry as it or he may deem fit."
With
reference to this subsection it is alleged in the founding affidavit
that the first respondent’s trade mark is an entry
“wrongly
made” on the Register, because that entry is contrary to the
provisions of Regulation 13(4).
[10]
Regulation
13(4) provides as follows:
"All representations of
the marks shall be of a durable nature and on one side of the paper
only. Letters, figures and lines
shall be clear and distinct. If in
the opinion of the Registrar, the representations of the mark are not
satisfactorily, he may
at any time require other representations,
satisfactorily to him, to be substituted before proceeding with the
application."
[11]
As the
applicant does not contend that the trade mark has subsequent to its
registration become deceptive or lost its distinctiveness,
the
relevant date for the purposes of proceedings under this heading
should be the date when the entry was made. The applicant
should
therefore in my view prove, on the facts existing at that date, that
the entry
was
wrongly made, (cf
Sportshoe (Ptv) Ltd v
Pep Stores (SA) (Ptv) Ltd
1990
(1) SA 722
(AD) at 726E).
[12]
Regulation
13(4) provides for letters, figures and lines which “shall be
clear and distinct”. Although this appears
to be a peremptory
provision, it still remains within the discretion of the Registrar to
decide whether or not there is compliance.
If not, he may require
other representations, satisfactorily to him to be substituted.
[13]
In terms
of section 51 of the Act registration of a trade mark shall be prima
facie evidence of the validity of the original registration.
This
section provides as follows:
"in ail legal proceedings
relating to a registered trade mark (including applications under
section 24] the fact that a person
is registered as the proprietor of
the trade mark shall be prima facie evidence of the validity of the
original registration of
the trade mark and of all subsequent
assignments and transmissions thereof"
[14]
The
applicant has provided a photocopy of the trade mark registration as
it appears on the Register of Trade Marks. The trade mark
on the
photocopy appears to be unclear. The words FIRST CENTRAL INSURANCE
are just apparent and the device and markings below the
device are
obscured to the point of being unidentifiable. However, I am unable
to compare the photocopy with the first respondent’s
trade mark
registration as it appears on the Register of Trade Marks.
Furthermore, it is possible that the photocopy is not of
the same
quality as the representation of the mark when considered by the
Registrar. If any of the representations was not satisfactorily
he
could have required other representations, satisfactorily to him, to
be substituted In terms of section 29(1) of the Act a trade
mark then
proceeds to registration after acceptance and advertisement. It
appears to be common cause that the first respondent
applied to
register its trade mark and device on 11 March 1998 and that the date
of grant is 29 September 2009
[15]
In view of the
fact that the first respondent’s application for registration
must have been dealt with in terms of section
29 of the Act, that the
Registrar must have been satisfied that all representations complied
with Regulation 13(4) and having regard
to the (rebuttable)
presumption in favour of validity, I am of the view that a Court
should not lightly and without due consideration
of all the necessary
evidence, conclude that on the relevant date the Registrar made a
mistake or caused an entry to be wrongly
made or did not apply his
mind properly. In the absence of sufficient evidence to justify such
a conclusion and having regard to
the provisions of section 51, I
have to accept that the Registrar was satisfied with the
representation of the first respondent’s
trade mark on the
relevant date. Therefore, I am of the view that the applicant has
failed to make out a case for an order in terms
of section 24(1) read
with Regulation 13(4) of the Act.
SECTION 27(1)(a) OF THE ACT
[16]
The
applicant also relies on the provisions of section 27(1 )(a) of the
Act. It provides as follows:
"(1) Subject to the
provisions of section 70(2), a registered trade mark may, on
application to the Court, or, at the option
of the applicant and
subject to the provisions of section 59 and in the prescribed manner,
to the registrar by any interested person,
be removed from the
register in respect of any of the goods or services in respect of
which it is registered, on the ground either
-
(a) that the trade mark was
registered without any bona fide intention on the part of the
applicant for registration that it should
be used in relation to
those goods or services by him or any person permitted to use the
trade mark as contemplated by section
38, and that there has in fact
been no bona fide use of the trade mark in relation to those goods or
services by any proprietor
thereof or any person so permitted for the
time being up to the date three months before the date of the
application
[17]
As far
as the onus of proof is concerned, subsection (3) provides as
follows:
"In the case of an
application in terms of paragraph (a) or (b)
of subsection (1) the onus of
proving, if alleged, that there has been relevant use of the trade
mark shall rest upon the proprietor
thereof ”
[18]
With
reference to the evidence of an investigator, the applicant sets out
in its founding affidavit various reasons for contending
that the
first respondent does not trade and that since 11 March 1998
(application to register trade mark and device) no bona fide
use of
the trade mark has taken place. It is alleged that the registered
address of the first respondent is actually the address
of Ismail
Ayob & Partners, a firm of attorneys. It is also alleged that the
first respondent has no website, signage or contact
details and the
only contact possible is with its director, Mr Ismail Ayob.
[19]
The
deponent to the first respondent’s answering affidavit is Zayd
Ismail Ayob, a partner in the firm of attorneys Ismail
Ayob &
Partners, the attorneys of record for the first respondent in the
matter. His answer to the allegations made by the
applicant is that
the first respondent
“is
a company that trades under the mark and the device, the company has
over 250 shareholders and is currently involved in
litigation ...”
It is also alleged that
“there
has been bona fide use of the trade mark and the device and continues
to be”
.
Reference is made to an article sourced from the Internet and
published by Profiles Financial Markets, dated 20 October 2003 in
which the author of the article quotes the Financial Services Board
saying that a curatorship of the first respondent will end
at any
time after December 2003. It is also alleged in the affidavit that
the name of the first respondent is prominently displayed
on the
ground floor of the building in which the attorneys firm Ismail Ayob
& Partners are practising.
[20]
Approximately
10 months after service of the answering affidavit the first
respondent served a supplementary affidavit in which
the same
deponent gives the following explanation:
“
I apologise profusely
to the Court Upon preparation for the primary Motion, after it had
been set down for hearing, I realised that
on my Answering Affidavit,
the honourable Court may have been placed in a position where it
would not be able to decide whether
indeed there had been use of the
name and device of FIRST CENTRAL INSURANCE as disclosed in the Trade
Marks Register, despite my
reference to such use and evidence of such
use tendered in my Answering Affidavit in the primary Motion”
[21]
In the
supplementary affidavit reference is made to an article in the
Business Times,
printed from the Internet, stating
inter
alia
that the first respondent “
is
gearing up for an October listing
’’
and has written business with more than R52 million in annualised
premium income to date and expects this figure
to grow to R125
million in its first year of trading. When asked what the source of
this information is, counsel for the first
respondent was unable to
provide an answer, simply because it has not been dealt with in any
of the affidavits filed on behalf
of the first respondent.
[22]
Also
attached to the supplementary answering affidavit are copies of
policy documents setting out terms and conditions with regard
to,
inter alia, home, fire and public liability insurance as well as
copies of certain correspondence. As part of this correspondence
annexures “ZIA4”, “ZIA5”, “ZIA11”,
“ZIA13" and “ZIA14" purport to indicate
that in
each of those instances an insurance claim was lodged with the first
respondent. However, annexure “ZIA14”
appears to be the
same as annexure “ZIA11” which means that in the
supplementary affidavit there
is
reference to only four insurance claims. Annexure “ZIA4”
is dated 18 June 2007 and it refers to a motor vehicle accident
which
took place on 7 September 1998. Annexure “ZIA5” is dated
15 June 2007 and it also refers to a motor vehicle accident
which
took place on the 7
th
of September 1998. Annexure “ZIA11” is a letter from the
claims department, dated 19 July 2003 and addressed to Ismail
Ayob &
Partners in terms whereof they are called upon to provide an update
report. Annexure "ZIA12” is also a letter
from the claims
department addressed to Ismail Ayob & Partners in terms whereof
they are requested to "
advise
present position”.
This letter is not dated. Annexure “ZIA13” is an email
from Ismail Ayob & Partners dated 18 June 2007 and it appears
to
be linked to annexure “ZIA14”, as it also refers to the
accident which took place on 7 September 1998.
[23]
Copies
of the other correspondence are the following: An undated letter by
the first respondent to the addressee indicating that
“we have
no other documentation on hand” and another undated letter by
the first respondent’s claims department
to Ismail Ayob &
Partners requesting them to “advise present position”. It
should also be pointed out that in some
of these correspondence there
is reference to “FIRST CENTRAL INSURANCE LIMITED under
curatorship”, (annexure “ZIA11”)
and also in
annexure “ZIA5” where it appears that the first
respondent was discharged from curatorship.
[24]
It was
submitted on behalf of the first respondent that use of the trade
mark on a substantial scale to prevent expungement is not
a
requirement in our law, even if the amount of use is small, so long
as such use is bona fide
(Wistvn
Enterprises (Ptv) Ltd v Levi Strauss & Co
1986
(4) SA 796
(T) 816 H-J). It was then pointed out that the first
respondent has indeed attached proof and evidence of trade under the
said
trade mark to its supplementary affidavit to satisfy the
requirements with regard to bona fide use. Counsel for the applicant
attempted
to counter this argument by submitting, having regard to
the documents attached to the supplementary affidavit, that it should
be clear the proprietor of the trade mark had no intention of
conducting trade in the product in a commercial sense. Therefore,
it
was argued, the first respondent failed to discharge the onus
stipulated in section 27(3).
[25]
In this
matter the applicant seeks final relief on notice of motion. In terms
of section 27(3), in the case of an application in
terms of section
27(1 )(a) and (b) the onus of proving, if alleged, that there has
been relevant use of the trade mark rests on
the proprietor thereof.
In
Salts of the Earth Creations (Ptv) Ltd
v The Gap, inc
2010
BIP 163 (GNP) Southwood J pointed out that even though the trade mark
proprietor bears the onus of proving actual use, the
normal approach
in motion proceedings relating to disputes of fact still applies.
This rule was
properly
formulated by the Appellate Divjsion in
Plascon-Evans
Paints Ltd
v Van
Riebeeck Paints (Ptv) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634H - 635B in terms whereof the principle was
laid down that application proceedings are intended for the
resolution of
legal issues and that final relief may be granted only
if there are no disputes of fact on material issues, subject to
certain
exceptions. For example, where the allegations or denials of
the respondent are so far-fetched or clearly untenable that the Court
is justified in rejecting them merely on the papers (
Plascon-Evans
,
supra, at 635C).
[26]
In
Dhladhla v Erasmus
1999
(1) SA 1065
(LCC) at 1072 Gildenhuys J added the following comment to
the principle laid down in Plascon-Evans.
“
If on the paper before
the Court, the probabilities overwhelmingly favour a specific factual
finding, the Court should take a robust
approach and make that
finding. The same applies when a denial by a respondent of a fact
alleged by an applicant is insufficient
to give rise to a real,
genuine or bona fide dispute of fact. This approach should, however,
be followed with some circumspection.
The Court should not lightly
settle a factual dispute solely by weighing up the probabilities
emerging from the papers, without
the advantage of viva voce
evidence."
[27]
In
New
Balance Athletic Shoe Inc v Dajee N.O
.
[2012] ZASCA 3
(2
March 2012) the respondent had applied for the removal from the
Register of the appellant’s trade mark in terms of section
27(1
)(b). In the
answering
affidavit it was alleged that the goods bearing this trade mark had
been sold to the public during the past four years
with a turnover of
approximately R700 000.00. Also attached to the answering affidavit
was a photograph depicting the interior
of a store with the goods on
display. Having regard to the onus in terms of section 27(3) and the
rule in
Plascon-Evans
Nugent JA expressed himself as follows in this regard (par 17):
"But the rule in
Plascon-Evans is not blind to the potential for abuse. As this Court
said in Fakie NO v CCll Systems (Pty)
Ltd, ‘in the interests of
justice, Courts have been at pains not to permit invertuous
respondents 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
knowledge 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 expect that the evidential burden will
be discharged
by allegations that are sparse, ambiguous, or lacking
in conviction
[28]
In my
view, the above dictum applies with equal force to this application.
Except for documents indicating four or five insurance
claims, copies
of the usual terms and conditions pertaining to insurance policies
and a few pages of correspondence, it is remarkable
that no documents
were advanced to indicate actual use of the trade mark since 2007
(being the last date indicated on the annexures).
There is also no
evidence to explain or to corroborate the information contained in
the
Business
Times
article. The evidence provided in the supplementary affidavit is
indeed sparse and lacking in conviction. What makes this even
worse
is the fact that the deponent on behalf of the first respondent is a
practising attorney who realised that the answering
affidavit had to
be supplemented in order for this Court to decide “
whether
indeed there had been use of the name and device of FIRST CENTRAL
INSURANCE”.
[29]
Furthermore,
reference to only four or five insurance claims since registration
and the absence of other compelling evidence (such
as photographs of
its business premises, whether it trades nationwide or only locally,
copies of brochures and some indication
that it renders a service to
the public in general) create the impression that the first
respondent is not commercially active.
In my view it succeeded only
to indicate negligible involvement in the use of its trade mark and
on this evidence I have to conclude
that the first respondent had no
serious intention of carrying on a trade as a commercial enterprise
(see in this regard
Rembrandt (Edms)
Bpk v Gulf Oil Corporation
1963
(3) SA 341
(AD) at 351 C-D). In my view, this is not sufficient to
comply with the object of the Act and to pass, not only as a user,
but
a bona fide user. In the result it follows that the application
must succeed in terms of section 27(1 )(a) of the Act. I grant the
following order:
It
is ordered that trade mark registration No. 1998/03956 FIRST CENTRAL
INSURANCE and device in Class 36 registered in the name
of the first
respondent (FIRST CENTRAL INSURANCE LIMITED) be removed from the
Register in terms of section 27(1 )(a) of the
Trade Marks Act 194 of
1993
;
2.
The first
respondent is ordered to pay the costs of this application
Date:
6/2/14
D
S FOURIE
JUDGE
OF THE HIGH COURT