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[2012] ZAGPPHC 347
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Andritz Delkor (Pty) Ltd v Bateman Engineered Technologies and Others (48245/11) [2012] ZAGPPHC 347; 2012 BIP 362 (GNP) (4 December 2012)
NOT
REPORTABLE
IN THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
CASE
No. 48245/11
DATE:04/12/2012
In
the matter of:
ANDRITZ
DELKOR (PTY)
LTD
.....................................................................
Applicant
and
BATEMAN
ENGINEERED
TECHNOLOGIES
..........................................
First
Respondent
DELKOR
TECHNIK
B.V
...............................................................................
Second
Respondent
DELKOR
SUB-SAHARA
AFRICA
..............................................................
Third
Respondent
BATEMAN
PROJECTS
LTD
........................................................................
Fourth
Respondent
BATEMAN
AFRICA (PTY)
LTD
....................................................................
Fifth
Respondent
JUDGMENT
Van
der Byl AJ
[1]
The Applicant in effect seeks, in terms of its Notice of Motion
(record pp. 2 to 3), as amended (record pp. 1125 to 1126), an
order -
(a)
interdicting and restraining the Respondents from passing off their
business by using the trade mark DELKOR or any confusingly
similar
trade mark as being that of or associated with the Applicant in the
course of business;
(b)
directing the Respondents to remove the DELKOR trade mark from all
material or deliver up all material that is inseparable from
the use
of the DELKOR trade mark;
(c)
interdicting the Respondents from competing unlawfully with the
Applicant by using the DELKOR trade mark in their names, promotional
material, corporate profiles and websites in such a manner that the
Respondents associate themselves with the Applicant or its
predecessors in title by claiming -
(i)
the Second Respondent has a proven track record stretching over 35
years with more than 2100 installations worldwide;
(ii)
the Second_Respondent_has "over the last 35 years led the way in
innovation and implementation of world class development
of the
filtration industry
(iii)
the DELKOR Group, as defined by the Respondents in their papers, was
formed in 1973;
(iv)
Delkor Technik (Pty) Ltd (“DTP/.") formed part of the
Respondents, or their predecessors in title, by amongst others,
stating in advertising and marketing material that the "DELKOR
brand has, since the early 1970's been well established as
a
recognised leader in the supply of solid and liquid separation
equipment'; and
(v)
the Respondents or their predecessors in title originate from South
Africa or ever traded in South Africa prior to 2009.
[2]
in relation to the third of these prayers (paragraph above) which is
in effect based on allegations of unlawful competition,
Mr Michau SC
who appeared on behalf of the Applicant, made, except for referring
to his heads of argument, no oral submissions,
except to indicate
that he persists with that relief.
[2.1]
It appears from his heads of argument that the relief sought in the
amended Notice of Motion is based on the Respondents’
averments
contained in their answering affidavit -
(a)
that the Second Respondent has a proven track record stretching over
35 years with more than 2100 installations (record pp.
161,418,421,423, 547 and 960);
(b)
that the Second Respondent has over the last 35 years led the way in
innovation and implementation of world class development
of the
infiltration industry (record pp. 161, 418, 421, 423, 547 and 960);
(c)
that the Delkor Group was formed in 1973 (record pp. 143, 416, 541,
543 and 549);
(d)
that it insinuated that DTPL form part of the Respondents by stating
that the Delkor brand has since the early 1970's been well
established as a recognised leader in the supply of solid and liquid
separation equipment (record pp. 143, 416, 541, 543 and 549);
(e)
that it stated that the Respondents or their predecessors in title
originate from South Africa or ever traded in South Africa
prior to
2009 (record pp. 143, 416, 541,543 and 549).
[2.2]
According to the Applicant all these averments are false.
[2.3]
The difficulty with the Applicant's approach in this regard is that
the Applicant for the first time raised what it perceived
to have
been unlawful conduct on the part of the Respondents in reply which
seems to constitute a new case in reply to which in
any event the
Respondents have-not-been in a position to respond thereto and which
is generally not permissible (Betiane v Shelly
Court CC
2011 (1) SA
388
(CC) at 396C, para [29]).
[2.4]
In any event, as indicated by Mr. Ginsburg SC who, together with Ms
Cirone, appeared on behalf of the Respondents, there is
no indication
or reasonable apprehension that the conduct complained of will be
perpetuated in future.
[2.5]
I will accordingly not concern myself any further with the relief
claimed in this prayer.
[3]
In relation to the other prayers set out in the Notice of Motion it
is, as is apparent from the founding affidavit, the Applicant’s
case, broadly stated -
(a)
that, although a host of companies incorporated internationally are
using the DELKOR trade mark, the Applicant is the only entity,
and
its predecessors in title were the only entities, that used that
trade mark in South Africa;
(b)
that, however, the First, Second, Third, Fourth and Fifth Respondents
together have now recently been offering products and
services in
South Africa under the DELKOR trade mark, which include “a
comprehensive range of mineral processing and solid/liquid
separation
equipment, including flotation cells, thickeners, horizontal vacuum
belt filters and ‘Delkor belt screens'".
[4]
The Applicant is ANDRITZ DELKOR (PTY) LTD, a South African company
(acquired in 2010 by an Austrian company, Andritz AG which
origins
date back to 1852) which is wholly owned by Andritz AG and is
involved in"customised plant, systems and services for
the hydro
power, pulp and paper, steel and other specialised industries,
including the solid liquid separation, feed and bio fuel
industries".
[5]
The First Respondent is cited as BATEMAN ENGINEERED TECHNOLOGIES
with
its address at 1 Kramer Road, Bedfordview, Gauteng, South Africa.
[6]
The Second Respondent is cited as DELKOR TECHNIK BV, a Dutch company
allegedly conducting business in South Africa, also from
1 Kramer
Road, Bedfordview, Gauteng.
[7]
The Third Respondent is cited as DELKOR SUB-SAHARA AFRICA cited as,
inter alia, an "association", allegedly carrying
on
business at 1 Kramer Road, Bedfordview, Johannesburg.
[8]
The Fourth Respondent is cited as BATEMAN PROJECTS LTD also with its
principal place of business at 1 Kramer Road, Bedfordview,
Gauteng.
[9]
The Fifth Respondent is cited as BATEMAN AFRICA (PTY) LTD, similarly
with its principal place of business at 1 Kramer Road,
Bedfordview,
Gauteng.
[10]
It would appear-
(a)
- that, according to the Respondents, the First and Fifth Respondents
are one and the same entity and that the First Respondent
is, as
cited, simply the trading name of the Fifth Respondent which is a
wholly owned subsidiary of Bateman
Engineering
NV, the holding company of the “Bateman Group":
(b)
that, as far as the Second Respondent is concerned, the Respondents
deny that, although it has subsidiaries that trade in Africa,
including South Africa, it does not itself trade;
(c)
that, as far as the Third Respondent is concerned, the Respondents
contend that DELKOR SUB-SAHARA AFRICA does not exist as a
trading
entity, but is merely a"generic term to embrace any business
within the Bateman group that trades in sub-Sahara Africa"
(record p. 674, para 114);
(d)
that, as far as the Fourth Respondent is concerned, the Respondents
contend that the Fourth Respondent uses the name BATEMAN
ENGINEERED
TECHNOLOGIES outside South Africa, but, as part of the policy of “the
Bateman Group", is not authorised to
use the name and does not
use the name in the conduct of trade in South Africa (record p. 673,
para 111).
[11]
Mr Michau SC who appeared on behalf of the Applicant in argument
accepted that the First and the Fifth Respondents are the
same entity
and conceded that the Third Respondent is merely a reference to a
trading region.
[12]
The Respondents’ case is that the Fifth Respondent is the only
entity that uses the DELKOR logo trade mark in South Africa,
but is
doing so in conjunction with the trade mark BATEMAN.
[13]
It was, however, submitted by Mr. Michau SC that a case has indeed
been made out also against the Second and Fourth Respondents
and that
they are correctly cited.
[14]
In order to properly evaluate the evidence it is in my view necessary
to deal beforehand with the dispute as to who should
for purposes of
this application be regarded as the Respondent or Respondents.
Citation of the Second Respondent
[15]
In this regard it is the Applicant’s case that the Second
Respondent, although a company incorporated in the Netherlands,
conducts, according to, inter afia, its website and the website of
its holding company, Bateman Engineering B.V, business in South
Africa from offices it shares with the First Respondent at 1 Kramer
Road, Bedfordview.
[16]
In response to the Applicant’s contention it is, as I have
already indicated, stated by the Respondents that although
the Second
Respondent has subsidiaries in South Africa it does not itself trade
in South Africa. If, so it was further contended,
any approach is
made to it through any of the websites referred to by the Applicant
or otherwise in respect of business in South
Africa, it would simply
refer any enquiry to the appropriate subsidiary (record p. 674, para
113).
[17]
I have no reason not to accept the Respondents’ direct evidence
in this regard as opposed to the Applicant’s case
which
consists of mere inferences drawn from, particularly, the various
websites.
Citation of the Fourth Respondent
[18]
As far as the Fourth Respondent is concerned, Mr. Michau SC, relying
on Annexure GW 10 (record p. 142), submitted that the
Fourth
Respondent is seemingly using the DELKOR trade mark in South Africa.
Annexure GW 10 is a catalogue published in South Africa
from which it
appears that “Bateman Engineered Technologies”,
describing itself as “A division of Bateman Projects
Ltd"
(which is the Fourth Respondent), advertised itself under the DELKOR
trade mark so as, so it was contended, to attract
business in South
Africa.
[19]
Mr Ginsburg SC, however, submitted, referring to the Respondents’
response to the Applicant's contentions in relation
to Annexure GW
10, that, applying the principles enunciated in the judgment in
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty)
Ltd
[1984] ZASCA 51
;
1984 (3) SA
623
(A) at 634G-635B, it cannot be disputed that the Fourth
Respondent uses the name Bateman Engineered Technologies outside
South
Africa and that the catalogue concerned" serves the
purpose of attracting trade outside South Africa to the Fourth
Respondent
which trades as Bateman Engineered Technologies outside
South Africa” (record p. 673, para 111).
[20]
I have, once again, no reason, considering the allegations of the
Respondents, as opposed to the somewhat argumentative response
in the
replying affidavit, not to accept the Respondents version in this
regard and I am satisfied that the Fourth Respondent is
not using the
DELKOR trade mark to attract any business in South Africa, but that,
as was submitted by Mr. Ginsburg SC, it would
appear from the
Respondents’ response that the aim of the advertisement is to
put entities in South Africa that are interested
in doing business
offshore into contact with subsidiaries abroad.
[21]
I am accordingly satisfied that, should the Applicant succeed in
showing that it is entitled to any relief, such relief can
only be
granted against the Fifth Respondent.
[22]
In the result I will consider this matter on the question as to
whether or not a case has been made out by the Applicant against
the
Fifth Respondent.
Legal principles relevant to the
issues involved in this matter
[23]
Although there is no difference between the parties in respect of the
applicable legal principles relating to11 passing-off',
I do regard
it necessary to briefly deal with those principles so as to
appreciate the differences between the parties in respect
of the
interpretation of the facts.
[24]
“Passing-off' is a form of wrongful competition and is unlawful
because "it results, or at any rate Is calculated
to result, in
the improper filching of another's trade and an improper infringement
of his goodwill and/or because it may cause
injury to that other's
trade reputation" (Brian Boswell Circus (Pty) Ltd v
Bosweff-Wilkie Circus (Pty)_LtdJ985 (4) SAJ66 (A)
at 4781).
[25]
In Caterham Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd
and Another 1998(3) SA 938 (SCA) at 9461, para [13] the
Court
identified, what it referred to as the 'classical trinity\ the
elements of the delict of passing-off as -
(a)
reputation (or goodwill) which, as explained by the Court, means, in
general terms and in a practical and business sense, a
sufficient
reputation amongst a substantial number of persons who were either
clients or potential clients of a plaintiff’s
business;
(b)
misrepresentation; and
(c)
damage.
[26]
The elements of passing-off were explained in more detail in Premier
Trading Co (Pty) Ltd and Another v Sporttopia (Pty) Ltd
2000(3) SA
259 (SCA at 266G as follows:
"Passing
off is a wrong consisting of a false representation made by one
trader (the defendant) to members of the purchasing
public that the
enterprise, goods or services of a rival trader (the plaintiff)
either belong to him (the defendant) or are connected,
in the course
of trade, with his own enterprise, goods or services. (I shall
abbreviate, for the sake of convenience, "enterprise,
goods or
services" to the single term "the product"since this
is a case of "product confusion" rather
than "business
connection confusion") The defendant's representation is a
misrepresentation if it is likely to deceive
or confuse a substantial
number of members of the public as the source or origin of his
product. Passing- off, to be actionable,
erodes the plaintiff's
goodwill. Goodwill is the product of a cumulation of factors; the
most Important-of-which, in the context
of passing off, is the
plaintiff's reputation. Reputation is the opinion which the relevant
section of the community holds of the
plaintiff or his product. If
favourable, it would dispose potential customers to patronise the
plaintiff or his product and, if
unfavourable, it would tend to
discourage them from doing so. The plaintiffs reputation may be
associated with the symbol under
which his product is marketed. The
symbol renders the product distinctive of the plaintiff or his
product A false representation
by the defendant about the symbol used
by the plaintiff may encourage or induce potential customers of the
plaintiff, believing
that they were patronising him, into patronising
the defendant.....
From
the above paraphrase of what is said in the cases there can be
extracted two minimum requirements which a plaintiff must normally
prove in proceedings for an interdict on passing-off involving the
use of a symbol, namely (i) his own reputation in relation to
the
symbol which epitomises his product and (ii) deception, or at the
very least confusion, on the part of a not insignificant
segment of
the buying public, caused by the conduct of the defendant, as to the
origin of the product or a trade connection with
the defendant, and
which would likely have had an influence on their decision to procure
it".
[27]
In the Brian Boswell Circus case, supra, at479B, Corbett JA (as he
then was) stated that there were two important considerations
in
respect of the acquisition by a business of a reputation in a trade
name:
"Firstly,
whether the general public will be confused or deceived into
thinking, because of identity or similarity of names,
that the
business of the defendant is that of the plaintiff, or is connected
therewith, must, as a matter of logic, depend on the
extent to which
that name is associated in the minds of members of the public with
the business carried on by the plaintiff, ie
the extent to which
plaintiff has acquired a reputation in that trade name. Secondly, as
the rationale of the wrong of passing
off is the protection of the
plaintiff’s trade and goodwill, a valid cause of action would
seem to postulate the existence
of a goodwill, ie reputation,
attaching to that trade name".
[28]
In the
Caterham Car Sales case, supra, at 950E, para[21]
the
Court explained the nature of the reputation that a plaintiff has as
follows:
“
The
nature of the reputation that a plaintiff has to establish was well
stated by Lord Oliver in a judgment referred to at the outset
of this
judgment, namely Reckitt & Colman Products Ltd v Borden inc and
Others
[1990] UKHL 12
;
[1990] RPC 341
(HL) ([1990]
1 All ER 873)
at 406 (RPC) and
880g -h (All ER):
'First,
he must establish a goodwill or reputation attached to the goods or
services which he supplies in the mind of the purchasing
public by
association with the identifying "get-up" (whether it
consists simply of a brand name or a trade description,
or the
individual features of labelling or packaging) under which his
particular goods or services are offered to the public, such
that the
get-up is recognised by the public as distinctive specifically of the
plaintiff’s goods or services.'
See
also Lord Jauncey at 417 (RPC). The words emphasised are pertinent
and echo those of Nicholas J that 'the plaintiff must prove
that the
feature of his product on which he relies has acquired a meaning or
significance, so that it indicates a single source
for goods on which
that feature is used'.
(Adcock-lngram
Products Ltd v Beecham SA (Pty) Ltd
1977 (4) SA 434
(W) at 437A-B.)
Put differently, reputation is dependent upon distinctiveness (cf Van
Heerden and Neethling at 169).".
[29]
The proof of a reputation is critical to the proof of the
misrepresentation that is required to sustain a “passing-off'
action. This was explained in Royal Beech-Nut (Pty) Ltd t/a Manhattan
Confectioners v United Tobacco Co Ltd t/a Willards Foods
[1992] ZASCA 113
;
1992 (4) SA
118
(A) at 122E as follows:
“
One
of the elements which a plaintiff in a passing-off action based upon
such an implied representation must establish is a reputation
in such
trade mark. By this is meant that by user or advertising or some
similar means the trade mark has become associated in
the mind of the
purchasing public with goods emanating-from the plaintiff and has
thus become distinctive of his goods. Because
only if there is such a
reputation will the user by the defendant, on his own goods, of this
mark, or one deceptively similar,
be capable of amounting to an
implied representation that defendant's goods emanate from the
plaintiff or are connected in some
way with the plaintiff and thus be
capable of causing consequential damage to the plaintiff.”.
[30]
I can now against the background of these principles consider whether
the Applicant has on the facts of this matter established
a case in
respect of which the relief claimed can be granted against the Fifth
Respondent.
[31]
Leaving aside the question, with which I have already dealt with,
whether the Fifth Respondent is unlawfully competing with
the
Applicant, the essence of the dispute between the parties is twofold,
namely -
(a)
firstly, whether or not the Applicant has proved that it has the
necessary reputation to found a case for passing off; and
(b)
if so, secondly, whether or not the Applicant has established that
the Fifth Respondent is passing-off (namely, whether its
conduct is
likely to deceive or confuse a substantial number of members of the
public as the source or origin of its product).
[32]
I deal
seriatim
with each of these issues.
Evidence relating to Applicant’s
reputation
[33]
The Applicant was in this regard at pains to deal with the history of
the use of the DELKOR trade mark in South Africa by itself
and its
predecessors in title since the early
1970's
in order to show that a long and continuous use of the trade mark
DELKOR by itself and its predecessors in title resulted
in an
“enormous goodwill and reputation” in the trade mark.
[34]
The essential averments by the Applicant in this regard are in
essence the following:-
[34.1]
in the early 1970’s Delkor (Pty) Ltd (“DHPL") was
incorporated and the trade mark DELKOR was used in relation
to
engineering services (more particularly in later years the use of the
trade mark DELKOR in relation to a range of solid liquid
separation
equipment and related services).
[34.2]
In 1974 Delkor Technik (Pty) Ltd (“DTPL”) was
incorporated and DHPL and DTPL were using the DELKOR trade mark
in
producing, marketing and selling solid liquid separation equipment
until December 1986 after which they merged their operations
into two
new entities, namely, Delkor Investment Holdings {"DIHL")
and Delkor Technik (Pty)Ltd ("DTPLA”).
[34.3]
When DIHL and DTPLA commenced operations in December 1986, the change
of corporate structure "was seamless and it was,
in a manner of
speaking, business as usual” utilised a uniform trading style
which included the DELKOR mark as a central
focus point.
[34.4]
in 1995 a company, D1H Investment Company ("D/H"), was
formed and together
[34.5]
On 28 October 2003 the DELKOR South African group of companies sold
its business operations, including all assets, such as,
the DELKOR
“common law trade marks” and the goodwill and reputation,
as a going concern, to a South African company
by the name of
Business Venture Investments no.808 (Pty) (" BV1808") and
that the gross sales figures of products sold
and services rendered
under the DELKOR trade mark were, referring to sales figures for the
period 2002 to 2003, substantial.
[34.6]
BVI808 changed its name to 1ST Industrial (Pty) Ltd ("ISTI")
which, in turn, in December 2003 assigned all of its
rights to the
DELKOR trade mark to 1ST Holdings (Pty) Ltd ("ISTH") which,
in turn, sold ail rights which vested in the
DELKOR trade mark,
including all common law and statutory trade marks, to a company
Dubbro Investments which, in turn, then changed
its name in January
2009 and sold this business as a going concern to Fast Pace Trade and
Invest 22 (Pty) Ltd transferring, inter
alia, all the goodwill and
reputation vesting in the DELKOR trade mark.
[34.7]
In turn, Fast Pace Trade and Invest 22 (Pty) Ltd changed its name to
Delkor Capital Equipment (Pty) Ltd on 22 August 2009
and on 29
September 2010, again, to Andritz Delkor (Pty) Ltd, the Applicant in
this matter.
[34.8]
In view of the aforegoing, it is contended by and on behalf of the
Applicant -
(a)
that “it owns the goodwill in the ‘new corporate
identity’ which was utilised by the
applicant’s
predecessors, DTPLA, the 1ST Group and GKD Delkor” (record p.
56, para 12.74.5);
(a)
that the long and continuous use of the trade mark DELKOR resulted in
an “enormous goodwill and reputation" in the
trade mark,
whether so used as DELKOR simpliciter, GKD - DELKOR or ANDRITZ
DELKOR, as it had for the last 40 years as a common
thread used the
word DELKOR in its trading name.
[35]
The Respondents -
(a)
contend that the aforesaid allegation by the Applicant are devoid of
factual substantiation and are no more than unsubstantiated
assertions or conclusions;
(b)
having analysed the evidence on which the Applicant relies, contend
that the Applicant has failed to prove that any reputation
and
goodwill vested in its predecessors in title and, that if it did,
that such reputation and goodwill was transferred to the
Applicant
and that it in any event has a reputation and goodwill in the use of
ANDRITZ DELKOR, being the only format of use that
the Applicant has
adopted incorporating the name DELKOR.
[36]
This in my view calls at this stage for a consideration of the
history of the DELKOB_trade mark which seems to explain what
had give
rise to the Fifth Respondent
commenced
using the DELKOR mark in conjunction with the name BATEMAN.
[37]
It would appear not to be in dispute that Bateman Luxembourg is
currently the proprietor of the DELKOR logo mark.
[37.1
] The DELKOR trade mark was, as an artistic work, created by a
certain Mr. Bex in the course and scope of his employment by
Industrial Marketing and Publishing Services Pty Ltd, an Australian
company that is an affiliate of the Second, Fourth and Fifth
Respondents. The mark is enjoying protection under the Copyright Laws
of Australia which is a Berne Convention country to which
the South
African Copyright Act,
1978
(Act 98 of 1978), extends by virtue of Govern Notice 136 of 1989
issued in terms of section 37 of that Act.
[37.2]
The copyright was assigned to Delkor Pty Ltd, an Australian company,
by way of a Deed of Assignment dated on 3 March 2003.
[37.3]
In 2009 the copyright was assigned to Bateman Luxembourg S.A in which
the copyright is currently vested which right of ownership
extends to
South Africa by virtue of the provisions of the Berne Convention.
[37.4]
Delkor Pty Ltd and, since 2009, Bateman Luxembourg S.A has authorised
its affiliated companies to use the mark in the course
and scope of
business operations so as to indicate their connection to the Delkor
Group of companies.
[37.6]
This right, however, according to the Respondents, was terminated on
28 October 2003 when DTPLA sold its business on that
date to Business
Venture Investments Number 808 (Pty) Ltd, whereupon, it ceased to be
a member of the Delkor Group of companies.
[38.7]
It is to be noted that neither the Applicant nor any of its
predecessors in title ever used the word DELKOR on its own since
2006
which seems to show that none of them wished to use DELKOR on its own
as indicative of any of its businesses.
[37.8]
According to the Respondents Delkor Pty Ltd did not authorize the
Applicant and its predecessors in title to use the DELKOR
logo after
28 October 2003, but it nevertheless continued used the logo without
the authority of Bateman Luxembourg S.A
Evidence relating to deception or
likelihood of deception or confusion
[38]
The Applicant refers to the following three instances of confusion.
[38.1]
Firstly, it refers to an instance (record p. 74, para 14.20) where it
came to the notice of the Applicant during August or
September 2010
that an employee of a client of the Applicant, Pering Mining,
received a Delkor corporate jacket from the Second
Respondent under
the impression that it was the Applicant, or at least, Delkor Capital
who-Aadjsent him the jacket.
[38.2]
Secondly, it refers to an instance (record p, 74. para 14.21) where
someone
confused
the Applicant’s business with that of the Second Respondent,
ie., Delkor Global
SA.
[38.3]
Thirdly, it refers to instances (record p. 75, para 14.22} of callers
contacting the Applicant when trying to reach the Second
Respondent.
Evaluation
of the evidence
[39]
As is apparent from the views expressed eloquently and clearly in the
decided cases to which I have referred to above, I am
in my view in
effect called upon to determine whether the Applicant has at least
proved the following minimum requirements to entitle
it to the
interdict it is claiming, namely -
(a)
its own reputation in relation to the DELKOR trademark which
epitomises its product and services; and
(b)
deception, or at the very least confusion, on the part of a not
insignificant segment of the buying public caused by the conduct
of
the Fifth Respondent as to the source or origin of the product or
services rendered by the Applicant.
[40]
I find it convenient to first deal, as was done by Mr. Ginsburg SC,
with the alleged deception or confusion on the part of
the Fifth
Respondent.
Alleged
deception or confusion caused by the Fifth Respondent
[41
] Having considered all the evidence submitted and the submission
made, it seems to me; as was submitted by Mr. Ginsburg SC,
that the
issue in this matter actually lies in the question whether the
Applicant has shown misrepresentation or confusion. If
it hasn’t
the question whether or not it has a reputation is irrelevant and it
cannot suffer any loss or damage.
[42]
As I have already indicated, the Applicant relies on three instances
of deception or confusion.
[42.1]
In response to the allegations by the Applicant in this regard, it is
contended -
(a)
in relation to the first instance (the jacket sent to Mr. Mangwiro),
that the Respondents in South Africa do not have or distribute
any
jackets and that if a jacket of that nature was sent to Mr. Mangwiro
it was undoubtedly sent to him by a business outside South
Africa
(record p. 693, para 182);
(b)
in relation to the second instance (information erroneously sought
from and sent to Applicant), that the email forwarded to
was
erroneously forwarded to the Second Respondent (record p 694, para
183 to 187);
(c)
in relation to the third instance (callers contacting Applicant
intending to reach Second Respondent), that the allegation relates
to
the Second Respondent that is not trading in South Africa (record p.
683, para 138).
[42.2]
In my opinion these instances of alleged confusion do not constitute
genuine examples of confusion.
[42.3]
In his heads of argument (p. 37, para 53) and in argument Mr. Michau
SC, referring, inter alia, to Annexure GW 58 (record
p. 564),
Annexure GW 62 (record p. 591), Annexure GW 39 (record p. 457),
Annexure GW 30 (record p. 417), Annexure GW 35 (record
p. 425),
Annexure GW 40 (record p. 462) and Annexure GW 65 (record p. 1179),
submitted that a likelihood of deception or confusion
is a real
probability.
[42.4.1]
Annexure GW 58 is a document addressed to “Delkor - Client
brief 16 September 2010" which, if read as a whole,
clearly
emanates from Bateman Engineered Technologies BV and Delkor Technik
BV which are Bateman companies.
[42.4.2]
Annexure GW 62 is a publication in “Bateman Globe 82"
which actually gives prominence to the name BATEMAN.
[42.4.3]
Annexure GW 39 is a business card of the Third Respondent which
cannot perse constitute passing off as it merely identifies
the
person who presented it, but, as I have already indicated, an
innocent explanation has been offered by the Respondents.
[42.4.4]
Annexure GW 30 is part of a publication from Bateman Globe 72"
indicating that 'Delkor' can be contacted at the website
''deikor.giobal.com", but the whole of the document clearly
shows that it is a Bateman publication.
[42.4.5]
Annexure GW 35 is a photograph depicting the Bateman building
indicating prominently that it is a BATEMAN building with,
in a
smaller letters, the word “Delkor” which in my view can
hardly deceive, as Mr. Ginsburg SC has argued, any person
entering
the building thinking that he or she is entering the building of
ANDRITZ DELKOR.
[42.4.6]
Annexure GW 40 seems to be an invitation extended by “Delkor -
Part of the Bateman Engineering Group" to a Technical
Interaction Workshop to be held on 25 March 2011 which according to
Mr Michau SC purports to be a Delkor invitation, but it is
highly
doubtful that any person who responds to the invitation thinking that
it is an Andritz Delkor invitation will, if interested
in what he or
she sees there, do business still thinking that he or she will be
doing business with Andritz Delkor.
[42.4.7]
Annexure GW 65 is a document dealing with the company profile
depicting two men with Delkor helmets on and has a prominent
heading
showing that “Delkor - it pays to talk to a specialist on the
first two pages, but on the next page the products
sold by the
Bateman Group are shown which, so it was submitted, the two companies
can hardly be confused because of the sheer size
and intricacy of the
products which each company sells.
[43]
The question which is in my view actually to be asked here is whether
Fifth Respondent is passing off its business by using
DELKOR as being
that of the Fifth
Respondent
or that it is associated with the Applicant.
[44]
In other words that it, by using the DELKOR trademark, presents
itself as the Applicant or that it is associated with it in
business.
[45]
In considering these questions note should be taken of the evidence,
particularly,
the
evidence contained in the Respondents’ answering affidavit.
[46]
In paragraph 86, record p. 664 the following is said:
“
Customers
do not simply buys goods. They require a full service for the
installation and commissioning of equipment and, therefore,
must be
satisfied that atI of the required expertise is available. Also,
because the goods and services that the (Bateman) group
provides are
of such a specialised nature and the contract prices are so
substantial, typically well overR5 million, customers
and potential
customers ensure that suppliers can fully meet those requirements.
They are aware or make themselves aware of the
goods and services
that best suit their needs and that supplier is capable or performing
properly before entering into contracts
for their supply. To do this,
they require a full indication of the capabilities of the supplier.".
[47]
In paragraph 87, record p. 664 the following is said:
“
................
However, whenever Bateman Group seeks to obtain a contract in respect
of the relevant goods and services which
is, usually by tender, the
potential customers require a full explanation of the capabilities of
the Bateman Group. Requests for
tenders have been placed with
companies in the Delkor Group outside South Africa, such as Delkor
(UK) Ltd, and with the Bateman
Group companies in South Africa. At
the time of tendering for the work the Bateman Group has~no~option
but-to refer to the expertise
available to it. This is the expertise
of the Delkor Group outside South Africa, which is supported by the
Bateman Group locally
and referred to in order to prove the
capabilities, skills and support that are available to the Bateman
Group.
Because
the company in the Batemen Group that is responssible does not refer
to any activities of the Applicant. In fact, it makes
it clear that
it is not the Applicant and has totally different skills and support
available, particularly because the Applicant
is a competitor, for
any contract. The Bateman Group has to separate its activities from
those of the Applicant in the mind of
the person who is responsible
for awarding the contract The Bateman Group does not wish to
associate itself with the activities
of the Applicant. It makes it
very clear that it is not associated with it in any way.”.
[48]
In paragraph 89, record p. 666 the following is said:
l'There
is absolutely no possibility that any entity or person dealing with
the Fifth Respondent would be misled or confused into
believing that
the use of BATEMAN with the Delkor logo trade mark is in some way
connected or associated with the Applicant’s
format of use,
namely, ANDRITZ DELKOR, Nor is there any risk of the Applicant
mistakenly losing a contract or work. Contracts are
awarded on merit
and on competitive quotes. The contracts are prepared by experience
and skilled people who know the suppliers
well. The Fifth Respondent
started to provide services in South Africa on this basis in October
2008, the first of which was the
Foskor contract to which the
Applicant refers. However, since then it was involved in tender
negotiations in South Africa leading
to about 20 contracts being
awarded in South Africa and abroad, with an average value well in
excess R5 million. It has commenced
and/or completed the resulting
contracts in South Africa and the Fourth Respondent has commenced
and/or completed the resulting
contracts in the rest of Africa. For
commercial reasons the respondents are reluctant to disclose details
of all of the contracts.
The Fifth Respondent has openly solicited
contracts in the course of its trade in South Africa since 2008.
The
Applicant was aware of this use since 2008 but deferred any action,
permitting the Fifth Respondent to develop an independent
trade and
reputation in the goods and services offered. There has not been a
single instance of confusion.".
[49]
Except for rejecting these contentions in an argumentative fashion in
its reply (record pp. 1095 to 1099, paras 37 to 40) as
speculative
with no substantiation and of
no
probative value, the Applicant seems to have been unable to
substantially contradict these averments.
[50]
As I understand the averments made on behalf of the Respondents, they
are in fact aimed at explaining how business is done
in the Bateman
Group.
[51]
I am disinclined to believe that the allegations on behalf of the
Respondents are mere speculation. The deponent to the answering
affidavit is a director of the Second, Fourth and Fifth Respondents
who, according to all indications, knows how business is conducted
in
the group, and he primarily dealt with the manner it which business
is done in the group.
[52]
I am unpersuaded, taking into consideration that both the Fifth
Respondent and Applicant are well established and well-known
companies in South Africa, that persons interested in buying these
heavy and expensive mining equipment will, taking into consideration
a process during which many negotiations relating to, inter alia,
price, quality and guarantee, buy from the Fifth Respondent thinking
that they are buying from the Applicant and that the business of the
one will be confused as that of the other.
[53]
The name DELKOR is almost invariably used by the Fifth Respondent
together with the name BATEMAN and by the Applicant together
with the
name ANDRITZ. If the public sees the name DELKOR BATEMAN the question
is whether they will think that they are dealing
with the Bateman
group of companies and not with the Andritz group of companies.
Taking into consideration the manner in which
business is done by the
Fifth Respondent, I have no reason to believe that there will be any
confusion between the Applicant and
the Fifth Respondent.
[53.1]
It is to be noted, as I have already indicated, that the Bateman
Luxembourg S.A. is the proprietor of the DELKOR logo trade
mark.
[53.2]
Bateman Luxembourg S.A. has authorized its affiliated companies to
use the DELKOR logo trade mark in the course and scope
of business
operations.
[53.3]
The Applicant disputed that the Fifth Respondent always uses the
DELKOR name in combination with the name BATEMAN and refers
in this
regard to a business card used by a former employee of the Applicant
appointed by the “the Third Respondent', Mr.
Pooven Naidoo,
which is, so it is contended, “virtually identical to the trade
mark which was used by the Applicant’s
predecessors in title up
yo 2009" which “clearly confirms the Third Respondent's
association with the Second Respondent.
The business card (Annexure
GW39, record p. 457), however, clearly reflects the use in conjuction
with the word BATEMAN in so far
as it shows that the Third Respondent
is “Part of the Bateman Engineering Group”. In the
answering affidavit it is
in any event pointed out that Mr. Naidoo
was at the time involved in trade outside South Africa.
[54]
In view of these considerations I am unpersuaded -
(a)
that, as it seems to claim in prayer 2 of the Notice of Motion, the
Fifth Respondent is presenting to the world that it is the
Applicant
or that it is associated with the Applicant in business since the
Applicant and the Fifth
Respondent
are well-known businesses in South Africa; and
(b)
that the Applicant has accordingly established any confusion or
deception on the part of the Fifth Respondent and that for this
reason alone it us entitled to the relief claimed.
[55]
In the event that I may be wrong, I deem it necessary to also
consider the evidence relating to the Applicant’s reputation.
The Applicant’s reputation
[56]
I have various difficulties with the question as to whether or not
the Applicant has established reputation or goodwill in
the trade
mark DELKOR.
[57]
The Respondents, relying on the decision in Swissborough Diamond
Mines (Pty) Ltd v Government of the Republic of South Africa
and
Others 1999(2) SA 279
(T)
contend -
(a)
that the Applicant has failed to put up any primary facts or evidence
of the following essential issues that might have warrant
the
conclusion that the Applicant might had a reputation in the DELKOR
name, namely -
(i)
the nature of the goods and services that constituted the business of
the Applicant’s predecessors in title and those
that constitute
the business of the Applicant;
(ii)
figures detailing financial turnover or profit from the sale of the
goods or the rendering of the services by the Applicant’s
predecessors in title and by the Applicant;
(iii)
expenditure on advertising the DELKOR trade mark with details of
where, how and when the trade mark was advertised by the
Applicant’s
predecessors in title and by the Applicant;
(iv)
the trade channels in which the products and services are promoted
and sold by the Applicant’s predecessors in title
and by the
Applicant;
(v)
exhibits and product samples demonstrating how the trade mark was
promoted in advertising and how the trade mark was placed
on goods in
the marketplace by the Applicant’s predecessors in title and by
the Applicant;
(vi)
copies of advertising material and packaging utilised by the
Applicant’s predecessors in title and by the Applicant;
(vii)
customer lists and distribution channels of the Applicant’s
predecessors in title and by the Applicant; and
(viii)
) evidence in order to establish that customers associate the
Applicant’s predecessors in title and the Applicant with
the
DELKOR name under
which
the Applicant’s goods or services were offered and are offered
to the public;
(b)
that the Applicant in any event failed to show that it has a
reputation or goodwill in the use of ANDRITZ DELKOR, being the
only
format of use that the Applicant has adopted incorporating the word
DELKOR.
[58]
In support of these contentions the Respondents refer to the various
periods referred to by the Applicant.
[59]
In respect of the period 1973 to 1986, it is pointed out that the
Applicant resorted, in contending that DTPL and DHPL traded
under the
DELKOR name, to a bundle of documents annexed to the founding
affidavit as Annexure GW16. Apart from criticising the
Applicant for
not giving any indication of what sections of the bundle are being
relied upon (see: Lipschitz & Schwartz NNO
v Markowitz
1976 (3)
SA 772
(W) at 775H), it is submitted that the bundle does not in any
event support the existence of any reputation or goodwill in the
DELKOR name as none of the documents makes reference to, for example,
what products were sold by DTPL and DHPL or what services
they
rendered and that it should not be accepted that any reputation or
goodwill existed in the stylised D Delkor Logo mark for
the period
1973 to 1986.
[60]
In respect of the period 1986 to 2001, it- is submitted that, in so
far as.the Applicant relies on a bundle of documents annexed
to the
founding affidavit as Annexure GW 17 (record p. 230), it contains no
factual evidence or record of the 11 reputation"
that allegedly
vested in DTPLA at that time since the documents, consisting largely
of communications between DTPLA and the offshore
Delkor companies, do
not reveal who DTPLA;s customers were or what services or goods were
supplied and to what extent these were
supplied to its South African
customers.
[61]
In respect of the period 2003 to 2006, in so far as the Applicant
contends that DIHL, DTPLA and DIH sold their business operations
and
assigned the alleged reputation and goodwill to Business Venture
Investments No. 808 (Pty) Ltd that changed its name to ISTI
that
assigned its rights to the DELKOR mark to ISTH, the Respondents
submit, inter alia -
(a)
that no document evidencing the assignment is attached to the papers
and that such assignment has not been proved;
(b)
that there is also no evidence of the identity of the DELKOR mark
that was assigned to ISTH;
(c)
that the Applicant failed to identify what DELKOR mark ISTH actually
used.
[62]
In respect of the period 2006 to 2009, in so far as the Applicant
concedes that Dubbro operated its business under the name
GKD DELKOR
and not DELKOR, it is submitted that the Applicant did not prove the
existence of a reputation under that name.
[63]
In respect of the period 2009 to date, in so far as the Applicant
contended that
upon
the sale to it of the shareholding in Delkor Capital it continued to
use the Delkor trade mark, it is submitted that none of
the
intellectual property sold to the Applicant in the sale of GKD Delkor
(Pty) Ltd to Fast Pace Trade and Invest (Pty) Ltd) (which,
having
undergone various name changes, is in effect the Applicant) is
identified in the agreement of sale (Annexure GW 15, record
p. 201).
[64]
It would appear that from September 2010 the Applicant commenced
trading under the name ANDRITZ DELKOR, being a date after
the Fifth
Respondent commenced conducting business in South Africa.
[65]
I have no reason to reject these contentions raised by the
Respondents and am on the probabilities unpersuaded that the
Applicant
has established reputation or goodwill in the DELKOR trade
mark simpliciter.
Conclusion
[66]
I am accordingly of the view that the Applicant failed to prove -
(a)
that any goodwill and reputation vested in its predecessors in title
and, even if it did, that such goodwill or reputation was
transferred
to the Applicant or that it has a goodwill in the use of the name
ANDRITZ DELKOR, being, as is apparent from -the evidence,
the only
format of use that the Applicant has adopted incorporating DELKOR;
(b)
that there is any misrepresentation by the Fifth Respondent or that
there is a reasonable likelihood that members of the public
may be
confused by believing that the business or goods or services of
ANDRITZ DELKOR are those of or are connected with the business,
goods
or services of BATEMAN DELKOR.
Costs
[67]
Counsel were in agreement that this is a matter where costs should
follow the result and in the case of the Respondents that
the costs
of two counsel are justifiable
Order
[68]
In the result I make the following order:
THAT
the application be dismissed with costs, including the costs
attendant upon the employing of two counsel.
P
C VAN DER BYL
ACTING
JUDGE OF THE HIGH COURT
ON
BEHALF OF THE APPLICANT: ADV R MICHAU SC
On
the instructions of: BOUWERS INC
Ref:
L1356ZAOO Mr. D Bouwer
Tel:
011 325 5530
c/o
R C CHRISTIE INC
Suite
503, Fifth Floor Standard Bank Chambers
PRETORIA
Ref: L1340ZA02
Tel
: 011 325 5530
ON
BEHALF OF THE RESPONDENTS:ADV P GINSBURG SC
ADV
P CIRONE
On
the instructions of: ADAMS & ADAMS
Lynnwood
Bridge, 4 Daventry Street Lynnwood Manor
PRETORIA
Ref:
IN40058ZA00/AJS/NS Mr Alan Smith (012) 432 6303
DATE
OF HEARING: 1 NOVEMBER 2012
JUDGMENT
DELIVERED ON:4 DECEMBER 2012