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[2012] ZAGPPHC 139
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Bayerische Motoren Werke Aktiengesellschaft v Grandmark International (Pty) Ltd and Another (50212/2010) [2012] ZAGPPHC 139 (25 July 2012)
REPORTABLE
IN THE NORTH GAUTENG HIGH COURT,
PRETORIA /ES
(REPUBLIC OF SOUTH AFRICA)
CASE NO: 50212/2010
DATE:25/07/2012
IN
THE MATTER BETWEEN:
BAYERISCHE
MOTOREN WERKE
AKTIENGESELLSCHAFT
….................................................................
APPLICANT
AND
GRANDMARK
INTERNATIONAL (PTY) LTD
…...................................
FIRST
RESPONDENT
ALLAN
C
HO
….........................................................................................
SECOND
RESPONDENT
JUDGMENT
RANCHOD.
J
[1]
This is an application for certain declaratory, interdictory and
ancillary relief.
[2]
On 19 January 1999 under case no 841/1999 this court (VAN DUKHORST,
J) granted an order against the first respondent (which
was
previously incorporated as Grandmark International CC) (I use the
words "first respondent" or "Grandmark"
interchangeably) in terms of which it was restrained from infringing
certain registered designs and trade marks of the applicant
in
relation to parts to fit BMW motor vehicles. In this judgment I will
refer to that order as "the 1999 court order".
Paragraphs 1
and 2 of the 1999 court order read as follows:
"1.
Restraining the defendant (Grandmark) from infringing the plaintiffs
(BMW AG's) registered designs by importing and/or
using and/or
disposing of parts for BMW vehicle (sic) which have been made without
the authority or licence of the plaintiff and
which are covered by
the plaintiffs registered designs reflected in annexure A' hereto. 2.
Restraining the defendant from infringing
the plaintiffs registered
trade marks nos 88/6895 and/or 88/6896 by making unauthorised use in
the course of trade of such marks
or any trade marks which so nearly
resemble the plaintiffs aforesaid registered trade marks as to be
likely to deceive or cause
confusion by importing and/or selling
and/or distributing unauthorised BMW grills.";
[3]
Some twelve years later on 2 August 2010 the applicant (BMW AG) (I
use the words "the applicant" and "BMW AG"
interchangeably) obtained an Anton Pillar order granted by KRUGER, AJ
in this court. That order (commonly known as a "search
and
seizure order") was executed at the business premises of the
first respondent from 3 to 5 August 2010. Although the order
afforded
BMW AG thirty days in which to carry out its search and seizure
operation, it stopped after three days having concluded
that it had
sufficient evidence to launch the present application before me.
[4]
In this application, BMW AG seeks an order as follows:
(1)
declaring the first respondent to have been and/or to be in contempt
of paragraph 1 of the order of this honourable court dated
19 January
1999 in case number 841/99, a copy of which is annexed to the
founding affidavit of Jurgen Fegbeutel marked "BM1",
by the
importation and/or use and/or disposing of parts to fit BMW vehicles
having designs protected by the applicant's design
registrations nos
A90/0974, A90/0976, A90/0977, A90/0979, A98/0056, A98/0062, A98/0064
and/or A98/0065;
(2)
directing the first respondent to purge its contempt in relation to
those design registrations referred to in the aforesaid
court order
which are currently in force and to comply with the order within
forty eight hours of service of this order upon it;
(3)
granting the applicant leave to approach this court on an urgent
basis on the same papers, duly supplemented, for an order directing
that the second respondent be arrested and committed to prison for
contempt of the aforesaid court order in the event of the first
respondent failing to comply with paragraph 2 above;
(4)
restraining the first respondent from infringing the rights of the
applicant in its design registrations nos A98/0056, A98/0062,
A98/0064 and/or A98/0065, by importing and/or using and/or disposing
of any parts for motor cars which embody, without the authority
of
the applicant, any of the aforesaid designs or designs not
substantially different therefrom in terms of the provisions of
section 35(3)(a) of the Designs Act, 195 of 1993;
(5)
restraining the first respondent from infringing any of the further
and subsisting design registrations of the applicant which
are
included in annexure "JF16" to the founding affidavit of
Jurgen Fegbeutel (but not referred to in paragraph (4) above)
by
importing and/or using and/or disposing of any parts for motor cars
which embody, without the authority of the applicant, any
of the
aforesaid designs or designs not substantially therefrom in terms of
the provisions of
section 35(3)(a)
of the
Designs Act;
(6
)
restraining the first respondent from infringing the rights of the
applicant in any of its trade mark registrations nos 1979/06501
BMW,
1998/17028 BM, 2001/20102 E46 and/or 1984/01620 3 SERIES, all in
class 12, by making unauthorised use in the course and trade
of any
of these trade marks in relation to the goods covered by these
registrations, and/or of any trade marks which are confusingly
and/or
deceptively similar thereto, in terms of the provisions of
section
34(1
)(a) of the Trade Marks Act, 194 of 1993;
(7)
directing the first respondent to surrender and deliver-up to the
applicant all parts in its possession or under its control
which
infringe the registered designs of the applicant set out in paragraph
4 above in terms of the provisions of
section 35(3)(b)
of the
Designs
Act;
(8
)
directing the first respondent to remove from all packaging,
labeling, computer records and databases, stock records and printed
matter all reference to the trade marks BMW, BM and E46 and/or 3
SERIES in relation to unauthorised parts to fit BMW vehicles;
alternatively, in the event of it not being possible to remove such
trade marks from such matters, directing the delivery-up of
such
matter to the applicant in terms of the provisions of
section
34(3)(b)
of the
Trade Marks Act;
(9
)
restraining the second respondent from causing and/or aiding and/or
abetting the first respondent to act in any of the manners
set out in
paragraphs (1), (4), (5) and (6) above;
(10)
directing the first and second respondents to pay the costs of this
application, and of the application under case no 44784/10,
and of
the execution of the resulting order, on the attorney and own client
scale, jointly and severally, including the costs of
two counsel if
applicable;
(11)
granting the applicant further and/or alternative relief.
[5]
Grandmark gave notice of its intention to bring a counter-application
at the hearing of the matter for an order revoking certain
design
registrations relating to the E46 BMW motor car which are registered
in the name of BMW AG ("the counter-application").
It seeks
the following order:
(1)
revoking South African design registrations A1998/0062 "bonnet
for an automobile", Al998/0065 "headlight assembly
for an
automobile", A1998/0064 "grill" and A1998/0056 "front
fender", registered in the name of the applicant;
(2)
ordering the applicant to pay the costs of this application,
including the costs of two counsel.
[6]
Grandmark says that the counter-application is brought, firstly, on
the basis that the relevant E46 designs are functional in
nature and
lack any aesthetic features and therefore cannot be registered as
aesthetic designs and, secondly, on the basis that
they are not novel
or original. In its affidavit opposing the present application
Grandmark also gave notice of its intention to
bring an application
for referral of the conduct of BMW AG to the Competition Tribunal in
terms of section 65(2) of the Competition
Act, 89 of 1998 ("the
referral application") in the event of the counter-application
being dismissed.
[7]
Counsel for the applicant, Mr Michau, submitted that the first issue
which must be determined is whether there has been compliance
by the
respondents with the 1999 court order as it is central to the present
application and to the earlier Anton Pillar application.
He further
submitted that the counter-application is completely irrelevant in so
far as the relief relating to Grandmark's alleged
contempt and trade
mark infringement is concerned. The respondent's counter-application
for revocation of the relevant designs
and the application for
referral to the Competition Commission should not be considered until
the 1999 court order is complied
with and the respondents have purged
their contempt. He argued that the court should not permit a litigant
to approach it for relief
when it is flagrantly disregarding and
refusing to comply with court orders. Such a litigant, he says, acts
mala fide and approaches
the court with unclean hands and should not
be entitled to request the court for relief.
[8]
I agree with counsel for the respondents, Mr Marriot, that this court
cannot grant an interdict in respect of the alleged design
infringement without hearing the counter-application for revocation
of the designs in issue. If the counter-application should
succeed a
complete defence to the design infringement application would result.
The counter-application was heard for another reason
as well. If it
is found that the respondents are in contempt of court and they
should purge the contempt and, it is also found
that the applicant's
design registrations fall to be revoked, then in that event the
contempt would be purged. In this regard it
is apposite to state that
the 1999 court order was obtained by agreement between the parties
and, as I understand it, without the
dispute having been fully
ventilated in a trial or full blown application hearing before the
court.
[9]
It would also be apposite at this stage to describe the parties in
more detail.
[10]
The applicant BMW AG is a German company which is the developer,
manufacturer and distributor (by itself and through its licensees)
of
BMW motor cars, their parts, components and accessories in various
countries in the world, including South Africa.
[11]
Grandmark is a South African company which is in the business of
importing, selling and offering for sale spare parts to fit
vehicles,
including BMW motor cars. It was originally incorporated in 1994 as
Grandmark International CC and was thereafter converted
to a company
in 2003. The second respondent, Mr Allan Ho, is the sole director of
Grandmark and also its sole shareholder. He is
also stated to be the
managing director of Grandmark. As such he has no doubt been directly
responsible for the control, management
and business operations of
Grandmark since 1994 when he started the business.
[12]
I turn then to the question of contempt of court.
[13]
In contempt of court proceedings the applicant must show the
following:
(1)
that an order was granted against the respondent;
(2)
that the respondent was either served with the order or informed of
its contents or had knowledge thereof; and
(3)
that the respondent disobeyed the order "deliberately and mala
fide" (Fakie v CCU Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 4 SA 326
(SCA) at 333
par [9]):
"The
test for when disobedience of a civil order constitutes contempt has
come to be stated as whether the breach was committed
'deliberately
and mala fide\ A deliberate disregard is not enough, since the
non-complier may genuinely, albeit mistakenly, believe
him or herself
entitled to act in the way claimed to constitute the contempt. In
such a case, good faith avoids infraction. Even
a refusal to comply
that is objectively unreasonable may be bona fide (though
unreasonableness could evidence lack of good faith)
(footnotes
omitted)."
[14]
From the papers it is apparent that Mr Ho was present at a meeting
which was held on 4 December 1998 during which the settlement
of the
action as a result of which the 1999 court order was obtained was
discussed and Grandmark consented to the granting of that
order.
There can therefore be no doubt that both Mr Ho and Grandmark had
knowledge of the court order granted against the latter
and the terms
of that order.
[15]
The deponent to the founding affidavit in the main application says
that BMW AG and its duly authorised licensee, BMW South
Africa (Pty)
Ltd ("BWM SA") remained suspicious of the activities of
Grandmark and received, from time to time, indications
that Grandmark
was continuing with its unlawful conduct and was not complying with
the terms of the 1999 court order. It therefore
set about trying to
obtain evidence of Grandmark's non-compliance with that order through
investigators appointed by BMW AG's attorneys.
The appointed
investigators were unsuccessful in obtaining relevant evidence and
BMW AG thereupon instructed its attorneys to close
their file during
2005.
[16]
Some five years later on 15 April 2010 BMW AG decided to act in terms
of the
Counterfeit Goods Act, 37 of 1997
. It lodged a complaint under
the Act. Acting under a warrant in terms of the Act, officials of the
Department of Trade and Industry
and officers of the South African
Police Service entered the premises of a company named Autofever
Motor Corporation (Pty) Ltd
("Autofever") and seized parts
to fit BMW vehicles. Various financial records and documents were
also seized and copied
by the Department of Trade and Industry
including invoices from various suppliers of parts to Autofever.
Several of the invoices
were issued by Grandmark says applicant, and
these invoices showed that significant quantities of replacement
parts to fit BMW
vehicles had been supplied by Grandmark to
Autofever. The evidence obtained in this operation was, inter alia,
used in the later
Anton Pillar application in August 2010. Further
evidence used in that application was that of a Mr Potter, BMW AG's
investigator,
who managed to purchase a bonnet to fit an E46 BMW
vehicle from the Pretoria premises of Grandmark on 8 July 2010.
Applicant says
these parts were examined by Mr Chris Joy of BMW S A
and were found to be unauthorised.
[17]
Applicant says that during the execution of the Anton Pillar order
evidence of further infringement was secured. Pursuant to
the
execution of the Anton Pillarorder against Grandmark, twenty six
bonnets to fit the E46 BMW motor car were found at its premises.
It
is not in dispute that these were not bonnets authorised by BMW AG.
Mr Joy confirmed that these bonnets and body designs were
not
substantially different from those covered by design registration no
A98/0062 "bonnet for an automobile". Mr Joy
also confirmed
that the unauthorised headlights and a bonnet for the E46 BMW motor
vehicles which were supplied by Grandmark to
Autofever embodied
designs which are substantially the same as the designs covered by
BMW AG's design registrations nos A98/0065
and also A98/0062. These
design registrations were listed in annexure "A" to the
1999 court order. Grandmark therefore
failed to comply with paragraph
1 of the 1999 order.
[18]
The applicant says that in addition to the parts actually located at
the premises of Grandmark during the execution of the
Anton Pillar
order further information was extracted from the stock records and
data base of Grandmark by representatives of Price
Waterhouse Cooper
Advisory Services (Pty) Ltd ("PWC") during the execution
which indicated that Grandmark had imported
into and sold in South
Africa hundreds of parts to fit BMW vehicles since about 2007. The
applicant says that in light of the fact
that Grandmark's business
is, inter alia, to import and sell in South Africa replacement parts
for vehicles, that is, non-genuine
parts made without BMW AG's
authority, the inescapable inference is that the parts imported and
sold by it in the past were also
made without the authority or
licence of BMW AG. I agree. However, in relation to the parts to fit
the E36 motor vehicles Grandmark's
conduct in importing and selling
such parts from 2007 to date would not have infringed the E36 designs
as they had expired on 1
November 2005. Nevertheless, I was urged by
BMW AG to draw an inference that between 1999 and 31 October 2005 the
respondent would
have imported and sold such parts and this would
have infringed the E36 designs at that time. I need not decide the
issue. The
other available evidence indicates that Grandmark had
failed to abide by the 1999 court order.
[
19] Was it deliberate and mala fide?
[20]
Mr Ho confirmed that he started the Grandmark business and that he is
its managing director. He attached a copy of one of what
he says were
numerous e-mails he sent to his staff instructing them not to trade
in the offending parts. He further states that
only a "few
infringing bonnets" were found to have been sold in
contravention of the earlier court order and alleges
that a decision
had been taken in 1999 not to stock body parts to fit BMW vehicles.
Mr Ho says it was impossible for him to monitor
whether employees of
Grandmark abided the decision taken. BMW AG has limited the relief in
relation to contempt of court specifically
to the importation, use or
disposing of parts to fit BMW vehicles having the designs protected
by the applicant's design registration
numbers that are referred to
in prayer 1 of the notice of motion, which include registrations for
both the E36 and E46 models.
[21]
BMW AG's counsel submitted that Grandmark must show, on a balance of
probabilities, that the previous court order was not intentionally
disobeyed. This submission is not correct. The court must be
satisfied beyond reasonable doubt (the test in criminal proceedings)
that the offence has been committed. (Fakie v CCII Systems (Pty) Ltd
{supra) at paras [19] and [20].) In Fakie, at para [41] it
was held:
"Finally,
... this development of the common law does not require the applicant
to lead evidence as to the respondent's state
of mind or motive: Once
the applicant proves the three requisites (order, service and
non-compliance), unless the respondent provides
evidence raising a
reasonable doubt as to whether non-compliance was willful and mala
fide, the requisites of contempt will have
been established. The sole
change is that the respondent no longer bears a legal burden to
disprove willfulness and mala fides
on a balance of probabilities,
but need only lead evidence that establishes a reasonable doubt."
Grandmark
has adduced sufficient evidence to create a reasonable doubt that it
deliberately and mala fide disobeyed the court order.
In the
circumstances the application for contempt of court must also fail.
In any event, even if it were to be found that Grandmark
was in
contempt of the 1999 court order, its contempt has been purged in
view of the finding I make that BMW AG's relevant designs
fall to be
revoked.
[22]
I turn then to BMW AG's application with regard to the infringement
of its design rights. In prayer 4 of the notice of motion
BMW AG
seeks an interdict specifically in respect of four of its design
registrations regarding a bonnet for an automobile, headlight
assembly for an automobile, grill and front fender. (These all relate
to the E46 model and will be referred to as the "E46
design
rights").
[23]
An order for delivery up is sought in respect of any articles which
infringe the E46 design registrations in prayer 7.
[24]
In prayer 5, BMW AG seeks an interdict prohibiting Grandmark from
infringing "any of the further and subsisting design
registrations of the applicant which are included in annexure 'JF16'
to the founding affidavit". There are no fewer than one
hundred
and fifty design registrations listed in this annexure. I will deal
first with the interdict sought in prayer 5. It is
trite law that to
obtain a final interdict an applicant must establish a clear right
and, as a minimum, a reasonable apprehension
of the infringement of
that right. In my view BMW AG has not established either of these
requirements in respect of the designs
covered by prayer 5. I say
this for the reasons that follow.
[25]
BMW AG's "right" is design registration in its name. BMW AG
must prove, on a balance of probabilities, that it has
that right in
respect of each of the designs which it seeks to enforce. So as to
overcome the difficulties associated with proving
the existence of an
incorporeal (part registered) right,
section 40
of the
Designs
Act provides
that applicants need only obtain a certificate from the
Registrar of Designs confirming the registration of the design in
order
to prove its right. In fact, an extract from the Register of
Designs may have sufficed. The
Designs Act provides
:
"40.(1)
A certificate purporting to be signed by the Registrar, to the effect
that any entry authorised by this Act to be made,
has or has not been
made or that any other thing so authorised to be done has or has not
been done, shall be prima facie evidence
of the matters specified in
that certificate. (2) A copy or an extract purporting to be a copy of
an entry in the register or of
a document kept at the Designs office
or an extract from the register or any such document, and purporting
to be certified by the
Registrar and to be sealed with the seal of
the Designs office, shall be admitted in evidence in all courts
without further proof
or production of the originals."
BMW
AG sought to overcome the difficulty it faced for not having earlier
filed such certificates from the Registrar together with
its founding
affidavit by seeking to apply a mere two days before the hearing of
the matter, to amend its notice of motion. I refused
that application
and therefore in so far as the approximately one hundred and fifty
designs covered only by the interdict sought
in prayer 5 are
concerned there is no evidence before me that the list of design
registrations in annexure "JF16" to
the founding affidavit
establishes that any of these registrations have been entered into
the Register of Designs in the name of
BMW AG, or that they remain
there. My reasons for refusing that application follows.
[26]
The respondents filed an affidavit by Ms Sara-Jane Puke opposing the
application for amendment. Two grounds for amendment were
advanced by
BMW AG, namely that it be allowed to amend the notice of motion by
attaching certain register sheets to the notice
of motion,
alternatively, that the affidavit in support of the amendment
application be admitted as part of the record. Annexed
to the
affidavit were copies of certain register sheets from the Registrar
of Designs relating to designs which are sought to be
enforced in
terms of prayer 5 in the main application. BMW AG was, in effect,
seeking leave to introduce new evidence in the form
of the register
sheets. Firstly, it is incompetent to seek to introduce evidence as
an attachment to a notice of motion. It would
be irregular. Evidence
in motion proceedings is adduced by affidavit. Secondly, if an
application is out of time, condonation must
first be sought. This
was not done. Nor was there a proper application seeking leave to
introduce new evidence and providing adequate
reasons for the
applicant's failure to do so earlier. For all these reasons the
application to amend the notice of motion was refused.
[27]
There is also no evidence before me as to the scope of the rights
allegedly conferred on BMW AG by these design registrations.
In my
view, courts cannot grant interdicts of indeterminate scope, which is
in effect, what this court is asked to grant in terms
of prayer 5.
Importantly, there is no evidence that any of the designs which are
the subject of prayer 5 have been infringed. In
the absence of such
proof there can be no reasonable apprehension that these "rights"
(if they exist) may be infringed
in the future. In any event, an
interdict of the breadth sought in prayer 5 is unheard of and in my
view, the prayer, if granted,
would be nothing short of an abuse of
BMW AG's market power and the court process. Prayer 5 therefore falls
to be dismissed.
[28]
I turn then to the relief sought in prayers 4 and 7 with regard to
the E46 design rights.
[29]
Section 20(1)
of the
Designs Act describes
the fact of the
registration of a design as follows:
"20(1)
The effect of the registration of a design shall be to grant the
registered proprietor in the Republic, subject to the
provisions of
this Act, for the duration of the registration the right to exclude
other persons from the making, importing, using
or disposing of any
article included in the class in which the design is registered and
embodying the registered design or a design
not substantially
different from the registered design, so that he shall have and enjoy
the whole profit and advantage accruing
by reason of the
registration."
[30]
To ascertain whether or not there has been an infringement of a
design registration, it is necessary to establish whether:
(1)
the alleged act is of such a nature that it could constitute an
infringement of the design registration or is excusable;
(2)
the article in issue is included in the class in which the design is
registered;
(3)
the alleged infringement falls within the scope of the registrations
having regard to the representations and definitive statement
filed
in support of the application for registration; and
(4)
the defendant or respondent has a valid defence. [Bunnell's South
African Patent and Design Law (3rd ed).]
[31]
BMW AG has established that an act has been done as envisaged in
section 20(1) and that the article to which it has applied
the design
is included in the class in which the design is registered. The next
step is to interpret the representations and definitive
statement
filed in support of the application for registration to determine
whether or not the alleged infringing design falls
within the scope
of the design registration.
[32]
The definitive statement is central to the enquiry as it must be used
to interpret the scope of the protection afforded by
the registered
design. Whether or not the alleged infringing design is or is not an
infringement must be determined by the eye
of the court through the
spectacles of the likely customer or consumer of the class of article
to which the design is applied.
The test is whether the alleged
infringing design has substantially the same appearance as the
registered design. The two designs
must be viewed side by side and
also separately and ultimately it may be a matter of differences.
[33]
In terms of
section 35(5)
of the
Designs Act in
any proceedings for
infringement, the defendant may counter-claim for the revocation of
the registration of the design and, by
way of defence, rely upon any
ground on which the registration may be revoked.
[34]
The first step is to determine the infringement or validity of the
registered design by ascertaining the scope of the design
right.
[35]
Each of the E46 designs has a definitive statement of the omnibus
type. BMW AG lays claim to the "shape or configuration
of a
[bonnet/headlight assembly/grill for an automobile/front fender]
substantially as shown in the representations" attached
to the
design registrations. In Clipsal Australia (Pty) Ltd & Another v
Trust Electrical Wholesalers & Another
2009 3 SA 292
(SCA) at
para [7] HARMS, DJP explained that:
"This
means that the shape or configuration as a whole has to be
considered, not only for purposes of novelty and originality,
but
also in relation to infringement.
[8]
Important aspects to consider when determining the scope of the
registered design protection flow from the definition of an
'aesthetic design', namely that design features have to appeal to and
be judged solely by the eye. First, although the court is
the
ultimate arbiter, it must consider how the design in question will
appeal to and be judged visually by the likely customer.
Secondly,
this visual criterion is used to determine whether a design meets the
requirements of the Act and in deciding questions
of novelty and
infringement. And thirdly, one is concerned with those features of a
design that 'will or may influence choice or
selection' and because
they have some 'individual characteristic' are 'calculated to attract
the attention of the beholder'. To
this may be added the statement by
Lord Pearson that there must be something 'special, peculiar,
distinctive, significant or striking'
about the appearance that
catches the eye and in this sense appeals to the eye (footnotes
omitted)."
[36]
From the papers it is not clear what it is about any of the E46
design rights that merits the monopoly right which BMW AG seeks
to
enforce. It has not led any evidence as to which features of the
"whole" of the relevant designs appeal to the eye.
It has
also failed to identify in what respects the design in issue differs
from the prior art. The degree to which the design
differs from the
prior art determines the scope of the monopoly claimed. [Clipsal
Australia (Pty) Ltd (supra); Homecraft Steel
Industries (Pty) Ltd v S
M Hare & Son (Pty) Ltd & Another
[1984] ZASCA 36
;
1984 3 SA 681
(A); and
Schultz v Butt
1986 3 SA 667
(A).] On BMW AG's evidence, headlight,
grill, bonnet and fender of the BMW E46 are functional in nature. In
this regard one should
also bear in mind that implicit in the
exclusion of section 14(6) is a recognition by the legislature that
spare parts are by their
nature functional because they only have one
purpose in life. The attempt by BMW AG to bypass that provision by
registering the
parts as aesthetic designs fall to be revoked. Put
another way, a replacement part for an E46 BMW serves only one
function and
that is to replace a part on an E46 BMW. It has to look
the same, it has to fit the same and it cannot look any other way, as
BMW
itself concedes, to serve its purpose.
(A).]
On BMW AG's evidence, such as it is on this point, I am unable to
make any finding as to the scope of the monopoly of the
designs in
issue.
[37]
BMW AG has also not sought to distinguish functional features in its
designs from those which are aesthetically pleasing. Counsel
for BMW
AG accepts that there are at least some functional features included
in each of the E46 designs. Mr Michau, for BMW AG,
says that the
shapes and configurations of the BMW parts protected are only
partially (and not solely) necessitated by the function
which they
perform. However no explanation is provided as to which features in
each of BMW AG's designs are functional and which
are aesthetic.
[38]
In my view, BMW AG, which bears the onus of establishing the scope of
its monopoly at least in so far as infringement of design
is
concerned has failed to discharge that onus.
[39]
BMW AG's failure to identify any novel aesthetic features of its
design is in my view fatal to its cause of action for design
infringement. The relevant parts of an E46 BMW can only look one way
if they are to perform their function as replacement parts
for a BMW
E46 vehicle. BMW AG has not in the founding papers in this
application, anywhere stated what it is that are the aesthetic
features of the E46 design rights. From the quoted cases it is clear
than an aesthetic design is one having features which appeal
to and
are judged solely by the eye. In the papers before me, BMW AG has not
identified any features in any of the E46 design rights
which appeal
to the eye. The relevant parts are spare parts which, considered
separately from the car as they must be, have in
my view no features
that will or may influence the choice or selection or have some
individual characteristics which are calculated
to attract the
attention of the beholder.
[40]
Mr Chris Joy, who filed a supporting affidavit on behalf of BMW AG,
is the manager: New Business After Sales, Lifestyle and
Accessories,
of BMW SA according to his affidavit. He says that the parts in
question are infringements because they embodied the
design in
question. No reasons for this opinion are provided. In the result,
that evidence is inadmissible or at best of no value.
[41]
One final point in this regard. BMW AG argues that because it found
reference in stock documentation of Grandmark to bonnets,
headlights
and grills "to fit E46 BMW cars" these must have infringed
the registered design in relation to those parts.
There is no visual
evidence of infringement. Without that the court, as the ultimate
arbiter, cannot make any finding that the
design and the allegedly
infringing articles "compared side by side and apart" were
the same. Furthermore, the scope
of monopoly claimed in terms of the
relevant design has not been defined, as I said earlier.
[42]
BMW AG also alleges infringement of a 1998/0056 "front fender"
design registration. Here too, there is no evidence
in the founding
affidavit relating to the alleged infringement and the cause of
action in relation to this design registration
falls to be dismissed.
To sum up: prayers 4, 5 and 7 of the notice of motion fall to be
dismissed.
[43]
I turn then to the counter-application for revoking the E46 design
registrations.
[44]
Section 31(1 )(c) of the
Designs Act provides
as follows:
"31(1)
Any person may at any time apply to the court in the prescribed
manner for the revocation of the registration of a design
on the
following grounds, namely-(a) (b)
(c)
that a design in question is not registrable under
section 14
;"
[45]
A "design" is defined in
section 1(1)
of the
Designs Act as
"an aesthetic design or a functional design".
[46]
An "aesthetic design" is defined in
section 1(1)
of the
Designs Act to
mean:
"Any
design applied to any article, whether for the pattern or the shape
or the configuration or the ornamentation thereof,
or for any two or
more of those purposes, and by whatever means it is applied, having
features which appeal to and are judged solely
by the eye,
irrespective of the aesthetic quality thereof."
[47]
A "functional design" is in turn defined in the same
section of the Act as:
"Any
design applied to any article, whether for the pattern or the shape
or the configuration thereof, or for any two or more
of those
purposes, and by whatever means it is applied, having features which
are necessitated by the function which the article
to which the
design is applied, is to perform, and includes an integrated circuit
typography, a mask work and a series of mask
works."
[48]
In terms of section 7(5) the Register of Designs consists of a part
A, containing aesthetic designs and a part F, containing
functional
designs. Section 14(1) of the Act provides that:
"14(1)
The proprietor of a design which -
(a)
in the case of aesthetic design, is-
(i)
new; and
(ii)
original,
(b)
in the case of a functional design, is-
(i)
new; and
(ii)
not common place in the art in question,
may,
in the prescribed manner and on payment of the prescribed fee apply
for the registration of such design."
[49]
Section 14(5) of the Act provides that:
"14(5)
No-
(a)
feature of an article in so far as it is necessitated solely by the
function which the article is intended to perform; or
(b)
method or principle of construction,
shall
afford the registered proprietor of an aesthetic design any rights in
terms of this Act in respect of such feature, method
or principle."
[50]
Section 14(6) of the Act provides that:
"14(6)
In the case of an article which is in the nature of a spare part for
a machine, vehicle or equipment, no feature or
pattern, shape or
configuration of such article shall afford the registered proprietor
of a functional design applied to anyone
of the articles in question,
any rights in respect of this Act in respect of such feature."
[51]
Finally, in terms of
section 15
of the
Designs Act which
relates to
the registration of the design, the Registrar shall examine the
application for registration and, if it complies with
the
requirements of this Act, register the design in part A of the
register if it is an aesthetic design or in part F of the register
if
it is a functional design.
[52]
Having sketched the relevant legal framework I turn then to the facts
of the counter-application before me.
[53]
It is common cause that there are two separate attacks on the
validity of the E46 design registrations. Firstly, the designs
are
attacked because they are not aesthetic designs. The "features"
of the designs are necessitated solely by their function
and they
lack any semblance of aesthetic appeal. Secondly, the designs are
attacked on the basis that they lack novelty or originality.
Mr
Marriot submitted that the attacks are linked in the sense that a
design registered as an aesthetic design which lacks any semblance
of
aesthetic appeal and the features of which are dictated entirely by
the function of the article in question cannot be novel
or original.
[54]
Section 14(1) provides that a design may only be registered as such
if it is an aesthetic design or a functional design within
the
meaning of the Act. Furthermore, section 14(5) provides that if an
aesthetic design includes functional features, those features
must be
ignored in determining its scope. Section 31(1) provides that a
design which should not have been registered under section
14 may be
revoked. In Klep Valves (Pty) Ltd v Saunders Valve Co Ltd
1987 2 SA 1
(A) at 28D (albeit with reference to the 1916
Designs Act) it
was
held:
"...
One has to see whether that which it is desired to register is
something which can be treated as a design appealing to
the eye, or
whether the shape is obviously nothing more than part and parcel of
the function without any appeal to the eye as a
design, in which case
there should be no registration."
[55]
The crisp issue in the first attack on the validity of the designs
therefore is whether or not the E46 designs have any "aesthetic
features" which are not functional features and which must
therefore be ignored in terms of
section 14(5).
Firstly, one must
exclude from the scope of the design any "functional feature"
of it. Secondly, one must determine if
whether what is left includes
features which "appeal to and are judged solely by the eye,
irrespective of the aesthetic quality
thereof.
[56]
BMW AG says that the overall design of the E46 BMW motor car is
attractive and appealing to the eye. It says that in the competitive
luxury car market outer body car design is an essential and important
aspect of the ability to market and sell the vehicles and
achieve
sales which will afford a reasonable return on the enormous
investment involved in the development and design of each model.
In
this regard, says BMW AG, the aesthetic or eye appeal of the car body
design is central to the process of development and design
of motor
vehicles and plays a major role. BMW AG says further that the E46
designs for the component parts of the E46 vehicle simply
form part
of the overall design and shape of the vehicle. It submits that the
parts do not lose their aesthetic character or eye
appeal based on
the fact that they constitute parts of the vehicle. Grandmark's
response is that it is not attacking the overall
design of the
vehicle nor is it attacking the registered design in respect of the
overall design of the vehicle. It also accepts
that there is much
research and development that goes into designing a new car. However,
says Grandmark, the case is not about
the design of an entire new
vehicle. It is about replacement parts for the vehicle. This, to my
mind, is the nub of the dispute
here. The headlight, grill, bonnet
and fender no doubt contribute to or attain the aesthetic
characteristics attributable to and
required of them as part of the
overall design of the E46 motor car. The question is whether those
aesthetic characteristics are
retained as such when judged as
individual body parts. BMW AG submits that they do. As I understand
BMW AG's argument body parts
of BMW vehicles have aesthetic and
functional features. And, where a design contains both aesthetic and
purely functional features,
it may be registered as an aesthetic
design and only the aesthetic features thereof will be protected by
the registration as an
aesthetic design. It concedes that in terms of
section 14(6) of the Act spare parts cannot be registered as
functional designs.
However, its parts for the BMW vehicles, although
containing functional aspects, are primarily aesthetic designs.
Respondents submit
that the spare parts must be looked at in
isolation and not as part of the overall design of the car. I agree.
[57]
BMW AG made clear in its founding affidavit that each of the features
of the E46 designs have to look the way they do (and
in fact no other
way) if they are to perform the function which they do. The deponent
to the founding affidavit says: "I respectfully
submit that it
is an inescapable inference that the parts listed in paragraph 5.6
above, which were imported and sold in the past
by Grandmark, were
also made without the authority or licence of BMW. They must of
necessity have embodied designs substantially
the same as those
covered by BMW's aforesaid E36 and E46 designs. Had they not, they
would not have been fit for purpose and would
not have fitted and
matched the car E36 and E46 car bodies." (Emphasis added.)
Although
this statement is made in relation to Grandmark's parts, in my view
it equally applies to BMW's parts and the registered
designs for
them. In my view, (although counsel for BMW AG disputed this
interpretation) it is a clear admission by BMW AG that
the features
of the articles protected by E46 designs are necessitated by the
function which that article is intended to perform.
The use of the
word "necessity" correlates directly with the use of the
word "necessitated" in section 14(5)(a)
of the Act. The
articles clearly have to look the way they do if they are to perform
their function as a spare part for an E46
BMW vehicle.
[58]
Mr Ho in his replying affidavit in the counter-claim says:
"I
made it clear in my previous affidavit that the overriding
consideration in making the individual parts (the grill, fender,
the
bonnet and the headlights) is that they have to perform the function
of a replacement part for a BMW E46 vehicle. BMW has not
anywhere
answered this attack."
[59]
Mr Ho further says:
"Furthermore,
while minor variations in dimension may be acceptable from one model
of vehicle to the next, the overriding considerations
of shape and
configuration in making a grill, a bonnet, a headlight and a front
fender are dictated by the shape and configuration
of the vehicle
itself These parts cannot look any other way if they are to perform
their function. Their shape and configuration
is therefore
necessitated by the function which these parts are to perform. There
is nothing left to protect once the functional
features have been
removed."
In
Dyson Ltd & Qualtex (UK) Ltd
2006 EWCA CIV 166
(Court of Appeal
(Civil Division)) at para [60] quoted with approval the statement by
Julian Jeffs QC, sitting as the registered
designs appeal tribunal in
Fords Design APPN
[1993] RPC 399
where he said that:
"The
designer of the door did not intend it to form an integral part of a
vehicle with the door missing. From its first conception,
the door
was intended to form an integral part of a complete vehicle."
The
parties in the Qualtex case agreed that that was the correct
approach. The
court
then went on to say at para [61]:
"So
at least this much was common ground: that one must ask whether there
is a feature of shape of the part which is dependent
on the
appearance of the whole machine."
[60]
Mr Marriot submitted that accordingly a part of a vehicle has no
independent existence. Its only function is to form an integral
part
of a complete vehicle. Bearing in mind the provisions of section
14(5) and (6) (supra) I conclude that the headlight, grill,
bonnet
and fender of the BMW E46 are functional in nature. In this regard
one should also bear in mind that implicit in the exclusion
of
section 14(6) is a recognition by the legislature that spare parts
are by their nature functional because they only have one
purpose in
life. The attempt by BMW AG to bypass that provision by registering
the parts as aesthetic designs fall to be revoked.
Put another way, a
replacement part for an E46 BMW serves only one function and that is
to replace a part on an E46 BMW. It has
to look the same, it has to
fit the same and it cannot look any other way, as BMW itself
concedes, to serve its purpose.
[61]
But there is another issue that must be considered and that is the
question of lack of novelty.
[61]
But there is another issue that must be considered and that is the
question of lack of novelty.
[62]
Grandmark alleges that the registered designs of BMW AG in respect of
the bonnet, grill, headlights and fender lack novelty
by virtue of
prior designs created and registered for BMW AG's earlier models.
[63]
Section 14(2) of the Act defines "new" as follows:
"14(2)
A design shall be deemed to be new if it is different from or does
not form part of the state of the art immediately
before the date of
application for registration thereof or the release thereof whichever
is earlier ..."
BMW
AG submits that the overall designs of the E46 vehicles are different
from the overall designs or the designs of the external
body parts of
prior models of the BMW range, including the E36 and E39 models. That
is why, says BMW AG, the models look different
and have different
shapes. It says further that as far as the requirements of novelty
and originality are concerned, it is explained
in the replying
affidavit that the development and design of each new model BMW car
is a lengthy and intensive process lasting
many years. It says that
if one compares the E36, E39 and E46 BMW cars, there are significant
differences between the models despite
the fact that they all
incorporate certain thematic similarities (such as the double kidney
radiator grill designs) which are incorporated
for the purpose of
evoking the BMW brand and image. Each external body part which makes
up a section of the overall design of the
vehicle is unique and
differentiated from its predecessors. Therefore, says BMW AG, the
design of each fender, bonnet, grill and
headlight must be different
to the previous design. If that was not the case, the parts for all
of the E-models would be interchangeable.
However, it says, this is
not the case because of aesthetic and functional differences between
the models. It says there are specific
and important differences
between the designs of the respective parts of the different models
referred to by the respondents. These
are highlighted in the
affidavit by Stefanie Brigitta Jenauth of BMW AG and, having regard,
to such differences, it cannot be said
that the designs sought to be
revoked are not novel. I will revert to the evidence of Ms Jenauth
presently.
[64]
Section 14(2) {supra) refers to "the state of the art".
Section 14(3) provides:
"The
state of the art shall comprise-
(a)
all matter which has been made available to the public (whether in
the Republic or elsewhere) by written description, by use
or in any
other way; and
(b)
all matter contained in an application-
(i)
for the registration of a design in the Republic; or
(ii)
in a convention country for the registration of a design which has
subsequently been registered in the Republic in accordance
with the
provisions of section 44, of which the
date of application in the
Republic or convention country, as the case may be, is earlier than
the date of application or the release
date contemplated in
subsection (2)."
[65]
In Clipsal (supra) it was held, at para [13], that it is not
permissible for purposes of determining whether or not a registered
design is new to mosaic together various features found in prior art
articles. Every feature of the registered design must be found
in one
prior art article or document. The court, however, added the
following proviso at para [14]:
"This
does not mean that absolute identity has to be shown; only
substantial identity is required. Immaterial additions or
omissions
are to be disregarded, so, too, functional additions or omissions.
That is why it is usually said that an ordinary trade
variant is not
sufficient to impart novelty. This principle is well illustrated by
the facts in Schults v Butt.
The
design in issue related to a boat and differed from a previous design
by the addition of what was assumed to be a novel and
original window
structure. This addition did not make the claimed design new.
Basically its function was to protect the occupants
against spray and
wind and since it was an ordinary trade variant and since the design
as a whole was not substantially novel,
the design was held to be
invalid." (Emphasis added. Footnotes omitted.)
In
Schultz v Butt it was further held at p686H-I:
"The
window structure of a sea-going ski-boat is the equivalent of the
wheel house of a larger boat - its function is to provide
some
protection to the occupants against wind and spray. Basically its
design is determined by that function, and variants are
matters of
taste or choice in the trade."
[66]
It follows that the question of the novelty of a design turns on the
question of whether or not a particular prior art article/publication
anticipates the registered design ie that a single document includes
all of the features of the design, save for those features
which are
immaterial or functional or ordinary trade variants. As I said
earlier (para [35]), a court must identify features of
the registered
design which "will or may influence choice or selection" or
have some "individual characteristic",
or features which
are "calculated to attract the attention of the beholder"
or which have something "special, peculiar,
distinctive,
significant or striking" about the appearance that catches the
eye and in this sense appeals to the eye"
and then determine
whether these features are present in one allegedly anticipatory
prior art document. In this matter before me
the evidence of Mr Ho
that there are no such features in the registered designs of BMW AG
stands uncontradicted. He attached copies
of BMW AG's prior art
registrations in respect of the E46 designs. The evidence shows that
in respect of each of the E46 designs,
there is at least one prior
design registration by BMW AG which anticipates that design in that
the general shape and configuration
of the earlier design is
substantially identical to that of the E46 part in question. BMW AG
has failed to adduce any evidence
about which features of each of the
E46 designs should be considered novel. It has failed to show what it
believes are the aesthetic
features of its designs which differ from
the prior art and which have been included in the allegedly
infringing design. The E46
designs thus lack novelty and originality
for this reason.
[67]
As I said earlier, the fact that the whole of the body of a vehicle
looks different from another does not mean that particular
parts
making up that vehicle are novel. The grill is a good example of
this. BMW's "kidney shaped" grill is a trade mark
of its
vehicles. A grill of substantially "kidney shape" has been
included in BMW vehicles for decades before the E46
grill design was
filed. That filing of the design registration did not make the
grill's design novel or original at the time of
registration.
[68]
I turn then to Ms Jenauth's evidence. She purports to give evidence
to the effect that there are what appear to be very minor
differences
between the prior art relied upon by Grandmark and the E46 design
registrations. That is not relevant. A court must
have regard only to
the general shape and configuration of the whole. But, I have a
further difficulty with Ms Jenauth's evidence.
She says she holds
several qualifications. She is a certified translator for the English
language, special fields: law and natural
sciences: she is a sworn
translator and has a Master of Arts in American cultural studies,
American literary studies and private
law. She says she joined BMW AG
on 1 April 2004 as administrative clerk and rose to her current
position as design protection specialist
since 1 February 2006. She
says in her present position she is responsible for managing the
process of registering the designs
of BMW cars and certain of their
parts in various countries including South Africa. Her evidence then,
is given by someone with
no relevant expertise in the field and is
accordingly inadmissible.
[69]
I should nevertheless mention that Ms Jenauth's comparisons are in
any event not correct. It is trite law that the comparison
one must
carry out is between the prior art design and the design in issue (ie
the relevant E46 design in this case). Ms Jenauth
compared the actual
BMW body part with the prior art body part. This too makes her
evidence irrelevant and inadmissible. (See Homecraft
(supra)
atp694C-D.)
[70]
I therefore hold that the uncontested evidence before me is that none
of the E46 design rights in issue are novel. They are
each
anticipated by earlier BMW design registrations. The design
registrations fall to be revoked on the ground of lack of novelty
as
well. For all these reasons the relief sought in the
counter-application should succeed and the infringement application
by
BMW AG falls to be dismissed, with costs.
[71]
I turn then to the issue relating to trade mark infringement.
[72]
BMW AG is the proprietor of the following registered trade marks in
South Africa which are relevant to this application:
(1)
No 1979/06501
for the trade mark
'BMW";
(2)
No 1998/17028
for the trade mark
"BM";
(3)
No 2001/20101
for the trade mark
"E36";
(4)
No 2001/20102
for the trade mark
"E46";
and
(5)
No 1984/01626
for the trade mark
"3 SERIES
All
these trade marks are registered in terms of the
Trade Marks Act in
class 12 for inter alia vehicles and vehicle parts and accessories.
[73]
BMW AG relies only on the provisions of
section 34(1
)(a) of the
Trade Marks Act in
seeking the relief which it does in prayer 6 of
the notice of motion. The section reads as follows:
"(1)
The rights acquired by registration of a trade mark shall be
infringed by-
(a)
the unauthorised 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." Since it relies
only on the use
of an identical mark it must therefore establish the unauthorised use
as a trade mark, in the course of trade,
of a mark which is identical
to the relevant BMW trade mark and in relation to goods or services
in respect of which the BMW trade
mark is registered. (See Commercial
Auto Glass (Pty) Ltd v BMW AG
2007 6 SA 637
(SCA) [3].)
[74]
There is no dispute or it is common cause that Grandmark's use of the
relevant BMW trade marks are unauthorised. However, Grandmark
disputes that it has used these trade marks in the course of trade
and in certain instances, it disputes whether an identical mark
has
been used.
[75]
In so far as use as a trade mark is concerned the Supreme Court of
Appeal has held that
section 34(l)(a):
"which
deals with primary infringement and gives in a sense absolute
protection, can, therefore, not be interpreted to give
greater
protection than that which is necessary for attaining the purpose of
a trade mark registration, namely protecting the mark
as a badge of
origin."
(Verimark
(Pty) Ltd v BMW AG: BMW AG v Verimark (Pty) Ltd
2007 6 SA 263
(SCA)
at 268A-B para [5].) It is stated further in the same paragraph by
HARMS, ADP (as he then was) that:
"There
can only be primary trade mark infringement if it is established that
consumers are likely to interpret the mark, as
it is used by the
third party as designating or tending to designate the undertaking
from which the third party's goods originate."
(Emphasis in the
original).
The
learned judge then also went on to quote at para [6] with approval
from the English case of R v Johnstone
[2003] UK HL 28
where it was
held:
"But
the essence of a trade mark has always been that it is a badge of
origin. It indicates trade source: a connection in the
course of
trade between the goods and the proprietor or the mark. That is its
function. And the exclusive right granted to the
proprietor of a
registered trade mark are limited to use of a mark likely to be taken
as an indication of trade origin. Use of
this character is an
essential prerequisite to infringement. Use of a mark in a manner not
indicative of trade origin of goods
or services does not encroach
upon the proprietor's monopoly rights."
[76]
It is now well established that a person may use a trade mark
otherwise than as a badge of origin and that the use of a mark
in a
descriptive manner does not amount to infringement. (See Century City
Apartments Property Services CC and two others v Century
City
Property Owners Association
2010 3 SA 1
(SCA) [10].)
Whether
or not it amounts to use as a trade mark is a question of fact which
must be determined in the light of the specific circumstances
of use.
What is required is an interpretation of the relevant mark through
the eyes of the consumer. (See Verimark v BMW, supra,
at para [7].)
[77]
In addition to contending that BMW AG has not proved trade mark
infringement, Grandmark relies on the provisions of
section 34(2)(b)
of the
Trade Marks Act which
provides that a trade mark is not
infringed by:
"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 services."
[78]
Section 34(2)(c)
of the
Trade Marks Act provides
that the registered
trade mark is not infringed by 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.
[79]
BMW AG says Grandmark makes unauthorised use of the relevant trade
marks on Grandmark's labeling and packaging of non-genuine
unauthorised parts which it sells and on its quotations and invoices
and do not constitute bona fide use as envisaged in
section 34(2)(c)
of the
Trade Marks Act. As
evidence of trade mark infringement, BMW
attached a number of Grandmark invoices which include reference to
BMW, E46, E30, 3 SERIES
and which include the letters BM in the stock
code. The wording from one invoice will suffice. In the one invoice
(at pi 94 of
the papers) there appears the words
"Replacement
part suitable for:
'BMW
E46'"
and
then follows the various BMW 3 SERIES models and the particular part
is thereafter referred to. Below that in line with the
grand total on
the invoice appears the words "these product(s) are not
manufactured by or under licence from the original
vehicle
manufacturer". The consumer or customer is therefore clearly
informed that he or she has just purchased a replacement
part
suitable for a particular BMW model. This is directly in line with
the approved wording in Commercial Autoglass (Pty) Ltd
v BMW AG
2007
6 SA 637
(SCA) at para [9] where the court quoted (with approval) the
learned authors of Webster and Page who say:
"A
phrase such as 'XYZ spare parts' [where XYZ is the registered trade
mark] would not be protected by the section while 'spare
parts for
XYZ goods' would clearly fall within the provisions of
section
34(2)(c).
"
Grandmark
uses the BMW trade marks by saying "replacement part for ..."
which is a legitimate descriptive use of another's
trade mark.
[80]
BMW AG complains that Grandmark uses its trade mark BM in its stock
codes. An example is "RD BM 00041" (which appears
at pl94
of the papers). It is in my view not identical to the mark BM. In any
event the "BM" forms part of a code, which
is clearly not
confusingly similar to the mark BM. Importantly, however, it is clear
that Grandmark is not using the code as a
badge of origin. The code
is used to identify the part, not the source of the part. This does
not constitute trade mark use or
infringement.
[81]
BMW AG attached a number of photographs to the papers purportedly
showing infringement of its trade marks on Grandmark's packaging.
However, the only relevant photographs in relation to Grandmark's
packaging appear at pp208, 211, 344, 348, 349 and 355 of the
papers.
The remainder of the photographs are not of Grandmark packaging but
third party retailers and therefore are irrelevant.
On the packaging
of the Grandmark box, the "Grandmark International" or "G"
logo trade mark is clearly visible
to any consumer and would be
understood by the consumer as the indication of the origin of the
product in question. Furthermore,
a similar notice to that which
appears on the invoices appears on the bar codes used for Grandmark's
products. Where reference
is made on the packaging to BM (again as
part of a stock code) the label makes clear that the part being
purchased is a "replacement
part for" the BMW part in
question.
[82]
For all these reasons, BMW's cause of action based on trade mark
infringement falls to be dismissed.
[83]
I accordingly need not refer the matter to the Competition Tribunal
as Grandmark had only sought a referral to the Competition
Tribunal
in the event that I were to uphold BMW AG's application for design
infringement and dismiss the counter-application for
revocation of
the designs.
[84]
A few concluding remarks. Grandmark says BMW AG's parts are extremely
expensive compared to the price it charges for the identical
(unauthorised) replacement parts and provides several examples which
indicate that BMW AG charges more than two or three times
the price
it (Grandmark) sells them for. BMW AG's argument is twofold. Firstly,
Grandmark can have those unauthorised parts made
by simply making a
mould of the original made by BMW AG. This results in huge costs
savings for the unauthorised parts manufacturer.
BMW AG also incurs
huge expenditure in having large warehouses in Gauteng, Kwa-Zulu
Natal and the Western Cape where spare parts
are kept. This is a
relative issue. It may well be that this is because it has a large
share of the relevant market segment in
which it sells its luxury
vehicles. In other words, the larger the share of the market probably
the greater the need to have concomitantly
large warehouses. Neither
the
Designs Act nor the
Trade Marks Act provides
that the costs of
designing, producing and storing of the goods are relevant
considerations. As alluded to earlier, the
Designs Act specifically
excludes spare parts from within its ambit in so far as functional
parts are concerned. BMW AG's registration of these parts as
aesthetic designs is clearly an attempt to circumvent the
exclusionary provisions relating to spare parts.
[85]
I make the following order:
1.
The applicant's application to amend dated 24 August 2011 is
dismissed with costs.
2.
The application is dismissed with costs including the costs of two
counsel where so employed and the costs of the Anton Pillar
application under case no 44784/10 and the execution thereof.
3.
The counter-application succeeds with costs including the costs of
two counsel where so employed.
4.
Each party to pay its own costs relating to the conditional
application for referral to the Competition Commission.
N
RANCHOD
JUDGE OF THE HIGH COURT
50212-2010
HEARD
ON:
FOR
THE APPLICANT: MR R MICHAU SC, MR COCKRELL SC AND MR L G KILMARTIN
INSTRUCTED
BY: ADAMS & ADAMS, PRETORIA
FOR
THE RESPONDENTS: MR G MARRIOT AND MR WILSON
INSTRUCTED
BY: MOORE ATTORNEYS, JOHANNESBURG