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[2009] ZAGPPHC 123
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Federation International de Football Association (FIFA) v Metcash Trading Africa (Pty) Ltd (53304/07) [2009] ZAGPPHC 123; 2009 BIP 457 (GNP) (1 October 2009)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NO:
53304/07
In
the
m
atter
between
FEDERATION
INTERNATIONALE
DE
FOOTBALL
ASSOCIATION
(FIFA)
...............................................................
APPLICANT
And
METCASH
TRADING
AFRICA
(PTY)
LTD
â¦â¦â¦â¦â¦.....................................................................â¦â¦â¦â¦â¦â¦..
RESPONDENT
JUDGMENT
MSIMEKI,
J
INTRODUCTION
[1]
The Applicant is an association which is organised and exists under
the laws of Switzerland. The Applicant is a world wide body
of
"association football". According to Mr
David
Murray
the
deponent to the founding affidavit, the Applicant was founded in 1904
and its membership consists of National Football Associations
of 208
countries around the world. The Applicant is the organiser and
manager of the world famous international soccer tournament
officially called the FIFA WORLD CUP and commonly known as The soccer
world cup' or World cup'. The tournament is staged once in
four
years. Mr Puckrin, on behalf of the Applicant, contended that it is
probably the best known and supported sports tournament
the world
over. Several national teams compete in several qualifying matches
and the final competition which will be staged in
South Africa in
2010. The deponent to the founding affidavit, Mr David Murray,
("Murray") has given figures of international
coverage of
the final competition in a few world cups as follows: 1998 tournament
had 33 billion viewers, the 2002 tournament 28
billion and the 2006
tournament 26 billion. Organising and conducting a soccer world cup
tournament is said to be very expensive.
According to
him it cost in excess of R5 billion to stage the 2006 tournament
which was held in Germany. To stage the tournament, the Applicant
is
said to rely on: television rights which it grants to broadcasters;
sponsorships by commercial enterprises, merchandising goods
and
services that have a connection in the course of trade with the
tournament and licensing its sponsors and merchandisers who
use its
intellectual property. The licensees and sponsors expect protection
and a measure of exclusivity when they pay the fees.
It follows
therefore, it is submitted on behalf of the Applicant, that no
licensee or sponsor would want to be associated with
the soccer world
cup unless all who enjoy the benefits pay fees which usually comprise
large sums of money. Because of the position
it occupies, the
Applicant enjoys both statutory and common law protection in its
trade marks and in the soccer world cup event
that it stages. The
Applicant is the registered proprietor of trade mark number
2003/040150 SOUTH AFRICA 2010 BID & DEVICES
("the
Applicant's trade mark") which is registered in class 30
in respect of, inter alia, "confections".
The soccer world
cup has been declared a "protected event" in terms of
section 15 A of the Merchandise Marks Act of 1994
("the MMA")
which permits the Minister to designate an event as a "protected
event". Government Gazette Notice
28877 of 25 May 2006 ("the
Ambush Marketing Notice") read with section 15 A of the MMA
evidences the declaration of the
soccer world cup as such protected
event. It is submitted on behalf of the Applicant that soccer world
cup tournaments have had
significant publicity and public interests
in South Africa. It is further submitted that there is enormous
repute and goodwill
in the 2010 soccer world cup in South Africa and
that strong common law rights in the event vests in the Applicant.
FACTS
OF THE CASE
[2]
The Respondent is said to be one of the largest South African
distributers of fast moving consumer goods which has made use
of the
mark
Astor
since
1985.
Astor
is
said to enjoy a very substantial representation in the market place.
The
Astor
lollipops,
the subject matter of this application, are marketed under the trade
mark
Astor.
The
trademark was registered in 1985. Mr
Clive
Kairuz, ("Kairuz")
the
deponent to the answering affidavit, averred that the
Astor
2010
pops formed an extension of the Respondent's range of confectionery
and that they were launched in December 2004. He further
averred that
they have contributed 3.3 million Rands worth of revenue since they
were launched and the sales for the period March
to November 2007
contributed R816.539.00. The Applicant alleges that the Respondent is
in unlawful competition with the Applicant
on the strength of the
fact that the Respondent is contravening section 15 A of the MMA. The
Applicant contends that the Respondent
intended its pops to be
associated with, not only soccer, but also the 2010 soccer world cup.
Contrariwise, the Respondent, contends
that it intended its pops to
be associated only with soccer in general. It is further the
Applicant's contention that the soccer
world cup was uppermost in its
mind when the Respondent considered its trade mark for its pops.
According to the Applicant, the
Respondent's use of its trade mark in
relation to the event is calculated to achieve publicity for its
trade mark and in the process
derive special promotional benefit from
the event without the prior authority of the organiser of the event
and without paying
for it. The Applicant contends that the
Respondent's use of the trade mark in its promotion activities
directly or indirectly is
intended to bring it into association with
or allude to the event. This, the Respondent denies. The Applicant,
initially brought
its application on the basis that the Respondent's
conduct complained of constituted passing off, a contravention of
section 15
A of the MMA and/or section 9 (d) of the Trade Practices
Act of 1976 (TPA); and trade mark infringement in terms of the Trade
Mark
Act of 1993 ("the TMA").
At
the end the matter was argued on the unlawful competition on the
strength of the contravention of section 15 A of the MMA. The
argument did not include the other two heads which, Mr Puckrin
submitted, were not necessarily abandoned. This then narrowed the
issues to be resolved or determined. The Applicant, initially, had
sought an order in the following terms:
"1.
restraining the Respondent from infringing the Applicant's trade mark
registration no. 2003/04015 SOUTH AFRICA 2010 BID
& device in
class 30 by making unauthorised use, in the course of trade, of the
mark 2010 POPS and/or 2010 in conjunction with
depictions of the
South African flag or parts thereof and/ or depictions of soccer
balls in relation to confectionery products;
2.
restraining the Respondent from passing its products off as being
those of the Applicant or as being products made by or with
its
licence or authority and/or as being connected or associated with the
Applicant and/ or the 2010 FIFA WORLD CUP SOUTH AFRICA
event
(hereinafter referred to as "the event") by using the marks
2010 POPS and/or 2010 in conjunction with depictions
of the South
African flag or parts thereof and/or depictions of soccer balls in
relation to confectionery products;
3.
restraining the Respondent from competing unlawfully with the
Applicant by contravening Section 15 A of the Merchandise Marks
Act
of 1941 (read with Notice 683 of 2006 appearing in Government Gazette
no 28877 of 25 May 2006, designating the event as a protected
event)
and/or Section 9 (d) of the Trade Practices Act of 1976 by using the
mark 2010 POPS and/or 2010 in conjunction with depictions
of the
South African flag or parts thereof and/or depictions of soccer balls
in relation to confectionery products;
4.
ordering the First Respondent to pay the costs of this application,
including the costs of two counsel;
5.
further and/ or alternative relief"
THE
ISSUES TO BE DETERMINED
[3]
The issue then to be determined is whether or not the Respondent is
contravening Section 15 A of the MMA, the issue that was
argued on
behalf of the parties.
COMMON
CAUSE FACTS
[4]
The following facts are common cause.
1.
The Applicant is the organiser and manager of the world famous
international soccer tournament.
2.
The tournament is staged once in 4 years.
3.
The international coverage of the final competition in each world cup
is enormous.
4.
Organising and conducting the soccer world cup tournament is very
expensive.
5.
The organiser and manager relies heavily on:
5.1
granting television rights to broadcasters;
5.2
sponsors and commercial enterprises;
5.3
merchandised goods and service that have connection in the course of
trade with the tournament;
5.4
The use of the intellectual property by the licensees and
merchandisers.
6.
Licensees and sponsors pay fees which are of great assists to the
organiser and manager.
7.
The Applicant is the registered proprietor of inter alia, trade mark
number 2003/04015 SOUTH AFRICA 2010 BID & DEVICES ("The
Applicant's registered trade mark ") registered in class 30 in
respect of inter alia, "confections".
8.
In terms of section 15 A of the MMA read with GG Notice 28877 of 25
May 2005 ("The ambush marketing notice"), the soccer
world
cup has been declared a "protected event."
9.
The soccer world cup tournaments have received significant publicity
and public interest in South Africa.
The
2010 soccer world cup has enormous repute and goodwill which
presupposes the existence of common law rights which vests in
the
Applicant.
[5]
It is important when determining the issue to have regard to the
relevant legislation. The Applicant relies on section 15 A
of the
MMA.
Section
15 A of the MMA provides:
"No
person may use a trade mark in relation to such event
in
a manner which is calculated to achieve publicity for that trade mark
and
thereby
derive special promotional benefit from the event, without the prior
authority of the organiser of such event."
(My
emphasis)
The
use of the trade mark referred to in section 15 A (2) includes:
"the
use of the trade mark in promotional activities, which in any way
directly
or
indirectly,
is intended
to
be brought
into
association with or to allude to an event."
(my
emphasis)
[6]
Mr Puckrin on behalf of the Applicant submitted that section 15 A
needs no complicated interpretation as the section means what
it
says. It is his contention that the words should be given their
simple meaning.
[7]
The Applicant contends that the manufacturing and/or the offering for
sale and/or the selling of confectionery products under
the trade
mark 2010 pops coupled with the partial depiction of the South
African flag and depictions of soccer balls ("the
offending
marks") seen on paginated papers 175, annexure "DM8"
being images of the Respondent's
ASTOR
2010
POPS products showing the manner of use of the offending marks
constitutes unlawful competition in that the Respondent is thereby
contravening section 15 A of the MMA. The Applicant contends that in
the event of the conduct of the Respondent being contrary
to the
provisions of section 15 A of the MMA then and in that event the
conduct will amount to unlawful competition. The contention,
in my
view, has merit.
[8]
It is contended on behalf of the Applicant that regard must be had to
the fact that licensees and sponsors of a world cup tournament
use
their own trade marks on the licensed products to promote their own
trade marks and businesses. The examples are: MTN, FNB
and TELKOM.
The use of its trade mark by the Respondent, according to the
Applicant, shows that it intended its pops to be associated
with
soccer and 2010 soccer world cup. If the Respondent had only intended
its pops to be associated with soccer only, then the
need would not
have been there to mention 2010 world cup. The soccer world cup, it
is further contended, was in the Respondent's
'mind' when its trade
mark for its pops was considered. A proper consideration of the
offending marks seem to confirm this. It
is submitted on behalf of
the Applicant that it cannot be correct that the numeral 2010 was
chosen because the Shona Khona programme
would run up to and until
2010. This, according to the Applicant, is simply because the
offending marks make no reference to Shona
Khona. The submission, in
my view, appear to have merit. The change of the initial get up
packaging of the Respondent to its current
get up i.e. from annexure
"J" to annexure "DM8", according to the
Applicant, with. This according to Mr Puckrin,
simply means that
section 36 of the Constitution would allow and justify the limitation
of the Respondent's rights to freedom of
expression or to the
intellectual property if their use would deceive or confuse the
public and end up jeopardising an event such
as the soccer world cup
and at the same time prejudicing the sponsors and the licensees of
the event. There is again, in my view,
merit in this submission.
[11]
It was contended by the Respondent that section 15 A should be used
in circumstances where "the user of a trade mark which
has no
reputation of its own relies on the event rather than the mark's
reputation to sell its products." I do not think this
is what
the legislature intended as section 15 A envisages the use of one's
own trade mark in a manner which would derive special
promotional
benefit from the event. This is the
Applicant's
contention which, in my view, appears to be correct.
The
nub of the matter, is whether the Respondent's conduct is calculated
to achieve publicity for the trade mark which results in
the deriving
of special promotional benefit from the event
without
the prior authority of the organiser of the event",
(my
emphasis)
If
the answer is yes, then the conduct is unlawful, as Mr Puckrin
submitted, irrespective of any damage to the "trade mark"
of the Applicant. I agree.
[12]
Mr Morley on behalf of the Respondent submitted that section 15 A has
some constitutional implications. The submission, in
my view, is
correct. He further submitted that the court should favour an
interpretation of legislation which is consistent with
the
constitutional provisions than the interpretation which would lead to
invalidity (See
Daniels
v Campbell N.O. and Others 2004 (5) South Africa 331 (CC) at [16]/ F
-
G).
This
is trite law.
The
facts of the case and the Respondent's version however, do not
support the Respondent's case.
[13]
It was contended on behalf of the Respondent that section 15 A of the
MMA limits the prohibited use to that which is unfair
and likely to
result in material harm to the Applicant's marks. Section 15 A, as
shown above, is not complicated. According to
it, the conduct is
either unlawful or lawful. The Respondent's version supports the
Applicant's case. The Respondent's conduct
clearly, falls foul of the
provisions of 15 A of the MMA. The submission, on behalf of the
Respondent, "that the Respondent's
trade mark use cannot
reasonably possibly be seen to constitute use in relation to the
event itself nor that its use is intended
to derive special
promotional benefit from the event itself, as required by the
section" in light of the facts of the case,
in my view, cannot
be correct.
[14]
The Respondent's version clearly discloses its intention in the
marketing of its lollipops which is to derive special promotional
benefit from the event itself. Evidence shows how the sales have gone
up since the trademark use was implemented. The association
with the
event or the link thereto has generated a lot of money for the
Respondent without the prior authorisation or authority
of the
organiser of the event. This conduct is therefore, unlawful. No money
is paid for the association or the link while other
sponsors and
licensees are paying fees for the use of their trade marks.
[15]
The Applicant, in my view, has made out a case for the relief that it
seeks. The application, therefore ought to succeed.
[16]
The order that I make, in the result, is as follows:
1.
The Respondent is restrained from competing unlawfully with the
Applicant by contravening section 15 A of the Merchandise Marks
Act
no 17 of 1941 (read with Notice 683 of 2006 appearing in Government
Gazette no 28877 of 25 May 2006, designating the event
as a protected
event.)
2.
The Respondent is ordered to pay the costs of this application
including the costs of two counsel one senior the other junior
M.W.
MSIMEKI
JUDGE
OF THE HIGH COURT
Heard
on: 11 December 2008
For
the Applicant: Adv. C. Puckrin (S.C.) with Adv R. Michau Instructed
by: Adams & Adams
For
the Respondent: Adv. G. E. Morley (S.C.) with Adv. A. M. Annandale
Instructed by: Bouwers Inc.