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[2012] ZAGPPHC 136
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Safrotex International (pty) Ltd v Abdul Naeem Hassan t/a Sinoville Fabrics (41661/11, 40489/11) [2012] ZAGPPHC 136; 2012 BIP 162 (GNP) (28 June 2012)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
NORTH DIVISION, PRETORIA
Case
No. 41661/11
40489/11
DATE:28/06/2012
In
the matter between:
SAFROTEX
INTERNATIONAL (PTY)
LTD.
......................................................................
Applicant
and
ABDUL
NAEEM HASSAN t/a SINOVILLE
FABRICS
......................................................
Respondent
JUDGMENT
1.
The applicant is Saprotex International (Pty) Ltd, a company with
limited liability, duly incorporated as such and with principal
place
of business at 25 Hoepoe St., Fort Jackson, East London, Eastern Cape
Province. The applicant imports, distributes and sells
yarn under
various trade names and is the holder of several trademarks relating
to such goods.
2.
The respondent is Abdul Naeem Hassan, an
adult businessman trading as Sinoville Fabrics at Shop No 40, Rudolph
St., Sunderland Ridge,
Pretoria.
The
respondent describes his business activities as being in the textile
and haberdashery business.
3.
The respondent sells wool used for knitting. He alleges that he has
purchased such yarn from a variety of sources, including
the
applicant.
4.
Respondent relates that he imports his own yarn since 2005. Among
these are two types of yarn identified as 'double-knitting'
and '4
ply3 respectively. The yarn of this type is packaged with a label
that displays the word "classic" on the ball
band. Such
wool has been imported since 2010 and the respondent asserts that he
uses the word "classic" not as a trade
mark, but as a
descriptive term to describe conventional or plain yarn.
5.
The significance of this description lies in the fact that the
applicant registered the word "classic" as a trademark
during 2000 under Class No. 23 which refers to 'yarns & threads,
for textile use'. It is common cause that the applicant registered
the mark in February 2000 under No 2000/02552 and that the mark was
renewed on 27 August 2009. It is therefore clear that the applicant
is entitled to the protection of the mark provided by
section 34
of
the
Trade Marks Act 194 of 1993
.
1
('the TMA').
6.
Applicant alleges that it has licensed Yarntex (Pty) Ltd, a private
company which has the same registered address as the applicant,
to
trade in and distribute wool under its trademark 'Classic'. Both
Yarntex and the applicant are subsidiary companies of Bertrand
Management Services (Pty) Ltd.
7.
The applicant avers that the respondent's trade in the wool he
describes as "Classic" is an unauthorised use of its
registered trademark 'Classic' and that its rights protected by the
Trade Marks Act 193 of 1994 are infringed thereby. In addition,
applicant is of the view that the respondent is guilty of dealing in
counterfeit goods and transgresses the Counterfeit Goods Act
37 of
1997 ('the CGA'). It has instituted action under the above case
number against the respondent on the grounds of the alleged
trade
mark infringement in terms of section 34 (1) (a) TMA, of passing off
and of the alleged dealing in and distribution of goods
that are
counterfeit, calculated to be confused with the applicant's product
and therefore liable to be seized in terms of the
CGA.
8.
In the trial action applicant claims a permanent interdict
restraining the respondent from infringing its trade mark; an order
disclosing the source of the offending goods and the persons from
whom such goods have been obtained and delivery of all the offending
goods for purposes of destruction thereof.
9.
The applicant initiated a search and seizure operation by the police
acting as inspectors under the CGA. On 23 June 2011 a large
quantity
of the allegedly offending goods was attached and placed in a
counterfeit goods store. The respondent launched an urgent
application in terms of section 7 (4) of the CGA for the return of
the goods and related relief. The application was struck off
the roll
for want of urgency, but on 20 June 2012 this court set aside the
warrant in terms of which the goods had been seized
and ordered the
return of such goods to the respondent.
10.
Applicant also threatened to lay a criminal charge against the
respondent, but it does not appear from the papers what progress
has
been made with it, if any.
11.The
pleadings in the civil action are closed and a trial date has been
set. Pending the finalisation of the trial proceedings,
the applicant
now seeks an interim interdict restraining the respondent from
continuing to infringe the applicant's intellectual
property rights
arising from the trade mark by dealing in the allegedly offending
goods, together with consequential relief and
costs. The respondent
opposes this application.
12.
The applicant relies on the same causes of action that support his
particulars of claim in the principal action: the need to
protect its
registered trade mark against infringement by the respondent, against
passing off and against the respondent's alleged
dealing in
counterfeit goods for the granting of the interim interdict. It is
trite that the applicant is entitled to an interim
interdict if it
has a clear right; or a prima facie right, though open to some doubt,
which right is infringed or exposed to a
reasonable apprehension of
imminent harm; provided the balance of convenience is in the
applicant's favour and there is no reasonable
alternative to protect
such right: Saidex (Pty) Ltd & Others v Minister of Minerals and
Energy & Others
[2011] ZASCA 102
(unreported) and the authorities
there cited.
13.The
respondent counters the applicant's case by pleading that the trade
mark 'Classic' is not a valid mark and liable to expungement
as it is
not a trade mark as contemplated in s 10 (1) of the TMA; is not
capable of distinguishing the goods and services of the
applicant
from the goods and services of another person in terms of section 10
(2) (a) of the TMA; because it consists exclusively
of a sign or an
indication to designate in the yarn industry the kind, quality and/or
other characteristics of yarn in terms of
section 10 (2) (b) or 10
(3) of the TMA; and/or that a period of five years or longer elapsed
from date of issue of the certificate
of registration and the date
three months before the filing of the plea in the principal action
without the applicant having used
the trade mark during this period
in a bona fide fashion as contemplated in section 27 (1) (b) of the
Act. The respondent furthermore
raises the defences that the
interdict application has been brought after an unreasonable delay
and that the balance of convenience
is clearly in his favour.
14.The
applicant has joined issue with these arguments.
15.
While the Registrar of Trade Marks was originally not a party to the
action instituted by the applicant, the respondent has
since taken
the necessary steps to effect his joinder, without which the validity
of the registered trademark could not be considered
as the Registrar
obviously has an interest in the outcome of that dispute. The
Registrar has not filed any affidavits and abides
the outcome of the
application.
16.
An applicant seeking an interim interdict must establish all the
elements set out above, those relating to the existence of
a right -
in this instance the entitlement to the registered trade mark -, the
imminent threat to the enjoyment of that right if
it is open to some
doubt, the entitlement to an interdict on the balance of convenience
and the absence of an alternative remedy.
17.The
respondent denies that his products are similar to those protected by
applicant's trade mark and claims that no danger exists
of the two
marks being confused. He also denies ever having harboured the
intention of infringing a mark the existence of which
he claims to
have been unaware of. He has launched a spirited attack on the
assertion that the word 'classic' is properly capable
of registration
as a trade mark. His argument that the word is of a laudatory nature
that has no connection with the yarn industry
and should therefore
never have been registered as a trade mark appears to have, prima
facie, more than just passing merit and
must be seriously
investigated. The same consideration applies to the argument that the
mark has not been used for a period of
more than five years prior to
the date three months before the filing of the plea in the principal
action. The applicant, on the
other hand, is clearly entitled to the
protection of its trademark until it is expunged or held not to have
been used in a bona
fide fashion. In respect of both these disputes
the onus rests on the respondent.
18.The
affidavits filed in support of the parties' allegations display
unsurprising disputes of fact in regard to the question whether
the
trademark is liable to expungement because it was not used for longer
than five years. All these contentions would have to
be considered
and analysed in detail before the conclusion to grant or refuse an
interim interdict could be reached. To do so would
present an
interesting and stimulating forensic exercise well worth the effort
and it is not without some regret that the court
must come to the
conclusion that the present instance is not the appropriate occasion
for such an endeavour.
19.lt
would be invidious to express any prima facie view on the parties'
respective contentions in the light of the fact that the
contentious
issues will soon have to be decided at the trial. Deciding, even pro
tempore and prima facie, any of the legal or factual
issues might
create the impression that this court might wish to influence the
trial court in coming to a conclusion, which suggestion
must
obviously be avoided. This consideration is one of the principal
reasons why the court has come to the conclusion that the
balance of
convenience is heavily weighted in the respondent's favour.
20.
There are other factors that strongly militate against the granting
of the interim interdict:
a)
After the respondent's goods were attached in late June 2011,
respondent apparently received another consignment of the allegedly
offending goods, but the present application was only launched in
September 2011. The first time applicant accused the respondent
of
infringing its mark during March 2011, some six months before the
launching of this application;
b)
The trial action was commenced on the 20th July 2011, four months
after applicant became aware of the alleged infringement of
its
rights;
c)
A significant time has therefore elapsed before this application was
commenced with and it certainly was not pursued with any
urgency
until the hearing in March 2012;
d)
The respondent was deprived of his goods to the value of some R 1,5
million after they were seized in a fashion that this court
has held
to have been unlawful;
e)
These goods have been ordered to be returned to the respondent only a
matter of days ago. It is clear that the respondent must
have
suffered significant trade losses while his goods were held in an
unlawful fashion. It would offend against fairness and equity
to
issue an interim interdict at this stage while the genuine disputes
between the parties will soon be fully aired in the trial
court, and
so deny the respondent the opportunity to ameliorate some of the
losses that were caused during the past year;
f)
The respondent has not quantified any trading losses other than to
quantify the value of the goods that were unlawfully removed
and to
state that the removal has caused him economic harm. The applicant,
on the other hand, has not favoured the court with any
indication of
actual losses suffered as a result of the respondent's alleged
actions. No liquidated damages claim has been preferred
in the trial
action. This suggests that applicant will not suffer undue harm if
the interim interdict is refused;
g)
Applicant will in any event have future opportunities to institute
and prove any damages that it might have suffered. Respondent
is
clearly not a man of straw and no reason exists to suspect that he
will be unable to pay whatever damages applicant may be able
to
prove.
21.The
granting of an interim interdict is a discretionary remedy. In the
light of the above considerations, this discretion must
be exercised
against the applicant.
The
following order is made:
The
application is dismissed with costs, including the costs of two
counsel.
E
BERTELSMANN
Judge
of the High Court
Date
of the hearing : 12 March 2012
Judgment
delivered on : 28 June 2012
Counsel
for the Applicant : Adv I Joubert
Instructed
by : Spoor & Fisher, Pretoria
Counsel
for the Respondent : Adv R Michau SC with Adv T Khatri
Instructed
by : Dawood Attorneys, Johannesburg
1
34.
Infringement of registered trade mark.
(1)
The rights acquired by registration of a trade mark shall be
infringed by-fa) the unauthorized use in the course of trade
in
relation to goods or services in respect of which the trade mark is
registered, of an identical mark or of a mark so nearly
resembling
it as to be likely to deceive or cause confusion;
(b)
the unauthorized use of a mark which is
identical or similar to the trade mark registered, in the course of
trade in relation
to goods or services which are so similar to the
goods or services in respect of which the trade mark is registered,
that in
such use there exists the likelihood of deception or
confusion;
(c)
the unauthorized use in the course of trade in relation to any goods
or services of a mark which is identical or similar to
a trade mark
registered, if such trade mark is well known in the Republic and the
use of the said mark would be likely to take
unfair advantage of, or
be detrimental to, the distinctive
character
or the repute of the registered trade mark, notwithstanding the
absence of confusion or deception: Provided that the
provisions of
this paragraph shall not apply to a trade mark referred to in
section 70 (2).
(2)
A registered trade mark is not infringed
by—
(a)
any bona fide use by a person of his own
name, the name of his place of business, the name of any of his
predecessors in business,
or the name of any such predecessor's
place of business;
(b)
the use by any person of any bona fide
description or indication of the kind, quality, quantity, intended
purpose, value, geographical
origin or other characteristics of his
goods or services, or the mode or time of production of the goods or
the rendering of
the sen/ices;
(c)
the bona fide use of the trade mark in
relation to goods or services where it is reasonable to indicate the
intended purpose of
such goods, including spare parts and
accessories, and such services;
(c)
the importation into or the distribution, sale or offering for sale
In the Republic of goods to which the trade mark has been
applied by
or with the consent of the proprietor thereof;
(e)
the bona fide use by any person of any
utilitarian features embodied in a container, shape, configuration,
colour or pattern which
is registered as a trade mark;
(f)
the use of a trade mark in any manner in
respect of or in relation to goods to be sold or othemise traded in,
or services to be
performed, in any place, or in relation to goods
to be exported to any market, or in any other manner in relation to
which, having
regard to any conditions or limitations entered in the
register, the registration does not extend;
(g)
the use of any identical or confusingly or
deceptively similar trade mark which is registered:
Provided
that paragraph (a) shall not apply to the name of any juristic
person whose name was registered after the date of registration
of
the trade mark: Provided further that the use contemplated in
paragraph (a), (b) or(c) is consistent with fair practice.
(3)
Where a trade mark registered in terms of
this Act has been infringed, any High Court having jurisdiction may
grant the proprietor
the following relief, namely—
(a)
an interdict;
(b)
an order for removal of the infringing
mark from all material and, where the infringing mark is inseparable
or incapable of being
removed from the material, an order that all
such material be delivered up to the proprietor;
(c)
damages, including those arising from acts
performed after advertisement of the acceptance of an application
for registration
which, if performed after registration, would
amount to infringement of the rights acquired by registration; and
(d)
in lieu of damages, at the option of the
proprietor, a reasonable royalty which would have been payable by a
licensee for the
use
of the trade mark concerned, including any use which took place
after advertisement of the acceptance of an application for
registration and which, if taking place after registration, would
amount to infringement of the rights acquired by registration.
(4)
For the purposes of determining the amount
of any damages or reasonable royalty to be awarded under this
section, the court may
direct an enquiry to be held and may
prescribe such procedures for conducting such enquiry as it may deem
fit
(5)
Before a person institutes proceedings in
terms of this section he shall give notice in writing of his
intention to do so to every
user concerned whose name is recorded in
the register, and any such registered user shall be entitled to
intervene in such proceedings
and to recover any damages he may have
suffered as a result of the infringement.