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1986
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[1986] ZASCA 27
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Berman Brothers (Pty) Ltd. v Sodastream Ltd. (47/86) [1986] ZASCA 27; [1986] 2 All SA 252 (A) (24 March 1986)
IN THE
SUP
REME
COURT
0 F S0UTH
AFRIC
A ( APPELLATE
DIVISION )
In the matter between:
BERMAN BROTHERS (PROPRIETARY)
LIMITED Appellant
and
SODASTREAM LIMITED
1st Respondent;
TELTRON HOLD
I
NGS
(
PROPR
IET
ARY)
LIMITED 2nd Respondent:
CORAM: Corbett, Hoexter, Botha, JJA, Nicholas el Nestadt AJJA.
DATE OF HEARING
: 17 Feb 1986
DATE OF JUDGMENT: 24
March 1986
J_ U D G M E N T CORBE
TT, JA:
This appeal conce
r
ns an action for the infringe-ment of certain
t
rade marks an
d for
relief under
th
e Merchan-dise Marks Act
17 of 1941. The action was institu-
/ ted
2
bed in the Transvaal Provincial Division by first and second respondents
, as co-plaintiffs, against appellant, as defendant. After
the close of
pleadings it was agreed by the parties at a pre-trial conference that the action
should proceed on the basis of a special
case stated in terms of Rule 33 of the
Uniform Rules of Court . A state-ment setting forth the agreed facts and the
legal contentions
of the parties ( which I sha11 ca11 the "Stated Case") was
prepared and the Court a
quo
, presided over by
O'DONOVAN J, was asked
to adjudicate thereon . After-hearing the parties O'DONOVAN J concluded that
certain admitted conduct on the
part of the appellant constituted an
infringement of one of first respondent's registered trade marks and also
contravened certain
provisions
of the Merchandise Marks Act, and he granted an interdict with costs and
certain ancillary relief.
I shall deal with the terms of the order in
/ more
3
more detail later. The judgment of the Cour't a
quo
has been
reported: see
Sodastream Ltd and Another
v
Herman brothers (Pty)
Ltd
I984 (4) SA 425 (T).
With the leave of the Court a q
uo
appe11ant appeals to this Court
against the whole of the judgment and order of the Court a
quo
, save in
two minor respects; and, similarly with the leave of the Court a quo,
respondents have cross-appealed against portions of
the judg-ment and the order
of the Court a quo . I shall 1ater in-
d
icate the portions of the judgment
and o
r
der covered by the appeal and cross-appeal respectively.
THE PACTS AND CONTENTIONS
The facts revealed by the Stated Case are as follows . The first respondent,
Sodastream Limited,is a British company with its factory
and principal place of
business in Peterborough. England. In certain countries
/in.......
4
in Southern Africa, including the Repub1ic of South Africa,
f
irst
respondent markets it products through second respondent in terms of a
distributorship agreement which appoints second respondent"the
exclusive
distributor" of first respondent's products in these countries (termed "the
Territory" in the agreement).
First respondent is the proprietor of a number of South African trade marks
registered in terms of the Trade Marks Act, 62 of 1963,
including -
(a) trade mark no 78/4435 for the mark "Sodastream" registered in class 1 of
Schedule IV to the Trade Marks Regulations in respect
of " chemica1 substances
and chemical preparations for use in manufacture, and gases for use in
manufacture and dispensing of beverages"
(to be referred to as "the gas mark");
and
/ (b) trade
5
(b) trade mark no 78/4436 for the mark "Sodastream" registered in class 6
of
schedule IV to the Regulations in respect of "containers made wholly
or principa1ly of common metal and their alloys;and parts and
fittings therefor
" (to be referred to as "the cylinder mark").
Under the distributorship agreement second respon-dent is given the "so1e
right" to purchase what are termed " the Products " f
rom
first respondent
for re-sa1e
in
the Territory. The products are defined in a schedule to
the agreement as meaning the following components:-
"1. Sodastream domestic carbonating machines manufactured or sold by the Company
to the specifications (if any) required in the Territory
( 'the Sodastream
machines') .
2. Cylinders chargeable with carbon dioxide for use with the Sodastream machine
manufactured or sold by the Company to the specifications
(if any) required in
the Territory ('the Sodastream Cylinders' ) .
/ 3.
Concentrated
6
3. Concentrated flavour syrups for use with the
Sodastream or other machines
manufactured or
sold by the Company to the specifications
(if any) required in the Territory ('the Sodastream Flavours').
4. Accessories manufactured or sold by the Com
pany for use with the
Sodastream machine ('the
Sodastream
Accessories')."
In addition the agreement grants
second respondent "the exclusive right" to sell in the Territory under, inter
alia, the "Sodastream"
trade marks the following items not purchased from first
respondent -
(a) concentrated flavour syrups for use with Sodastream and other machines;
(b) carbon dioxide gas rechargeable into cylinders for use with Sodastream
machines;
(c) accessories for use with Sodastream machines.
In pursuance of
the distributorship agreement first and second respondents also entered into a
user agreement granting second respondent
the right to use
in.....
7
in the Republic of South Africa for the
duration of the distributorship agreement certain trade marks of which first
respondent was
the proprietor, including the gas mark and the cy1inder mark. It
was the desire and intention of the parties that second respondent
be entered as
a registered user of the marks in terms of sec. 48 of the Trade Marks Act. And
this was evidently done.
In terms of the distributorship agreement and the registered user agreement
the second respondent has, in the Republic of South Africa
and more particu1ar1y
in the Transvaal Province, traded in products under the aforementioned trade
marks and will continue to do
so in the future. Both respondents have derived
income through the course of such trade and will continue to do so. Details of
these
trading activities are given in para-7 of the Stated Case which reads as
follows (first and second respondents being referred to
as first and second
/ plaintiffs):
8
plaintiffs):
"7. (a) In particular, the second plaintiff
has from time to time filled cylinders bearing the word 'Sodastream' with
carbon dioxide gas for use in the manu-facture of beverages
such as sodawater or
flavoured soft drinks or mixers based on soda water. Such gas is
hereinafter-referred to as 'gas'. The gas used
by the second plaintiff for this
purpose has not been manufactured or produced by either of the plaintiffs but
has been selectively
purchased by the second plaintiff from different sources,
and inspected and decanted by the second plaintiff, and the second plaintiff
assumes responsibility for the good quality of this gas. 'The second plaintiff
has further so1d such cylinders containing gas to
members of the trade or
exchanged them (with a cash adjustment for empty cylinders), the price of such
cylinders or such cash difference
being charged to the members of the trade :
members of the trade have in turn sold or exchanged such cylinders to members of
the
/ public
9
public, the price of such cylinders or the cash adjustment being charged
to the members of the public (the retail price
of such cylinders being in the order of Rl8.00 whilst the retail price of
the gas therein being in the order of Rl,50 ) . The second plaintiff has
there-after accepted the return of such cy1inders from its
customers, has
refilled them with gas, and has then resold them to its cus-toiners or
re-exchanged them . Photographs of such a cylinder
bearing a label applied by
the second plaintiff are attached hereto as Annexures El and E2, and samples of
such cylinders wi11 be
handed in at the hearing of this matter marked Exhibits
I. and
XX.
Exhibit I is a cylinder without the particular wording
'guaranteed' filled by a athorised Sodastream distributor referred to in
sub-paragraph
7(d) infra, and Exhibit 11 is a cylinder with this wording marked
on it. These cylinders were originally made by or to the order
of the first
plaintiff in Europe and sold by the first p1aintiff to the second p1aintiff: in
South Africa for resale or exchange
containing gas.
/ (b) The
10
(b) The gas-containing cylinders sold or
resold or exchanged b
y
the first and second plaintiffs in the Republic of
South Africa have in all cases carried a firmly applied gummed label bearing the
word 'Sodastream' . These labels have varied over the course of time and copies
of the 1abels used up to the present are set out
in Annexures Fl to F6
respectively.
(c) The gas-containing cylinders sold or resold or exchanged by the first and
second plaintiffs in the Republic of South Africa have
in all cases been stamped
with the word 'Sodastream'. This marking has appeared on a va1ve at the head of
the cylinder, in conjunction
with other stamped markings. Such markings are set
out by way of example in Annexure G together with a correct explanation (not
present
on the cylinders themselves) of the significance
th
e
reo
f.
( d ) Some of the gas-containin
g
cylinders
sold or resold or exchanged by the first and second p1aintiffs in the Repub1ic
of South Africa have been further stamped
/ with
11
with the wording guaranteed frilled by authorised 'Sodastream
distributor'.
( e ) In filling cy1inders as described In
sub-paragraph (a) above, the second plain-tiff has acted in accordance with
qua1ity control procedures laid down by the first plaintiff.
These procedures
include provision for the use of gas of food quality, and for the checking and
when necessary the repair of the
cy1inders , using spare parts supp1ied by the
first p1aintiff . These procedures are intended to ensure that the cy1inders to
which
they have been applied are mechanically sound and safe for the public to
handle, and that the gas they contain is of an accepta-b1e
qua1ity and quantity
.
( f) The word 'Sodastream' as used on the cy-1iriders when sold or
exchanged by either of the p1aintiffs as set forth above in this paragraph
is a trade mark as defined in the Trade Marks Act
,
No 62 of 1963 and as
registered under either or both of the trade marks nos . 78/4435 and
78/4436
/T shall
12
I shall make reference later to the
content of the gummed labels, annexures Fl to F6, mentioned above.
The gravamen of respondents complaint concerning the conduct of appe1lant is
contained in para.8 of the Stated Case, which reads (appellant
being referred to
as
defendant):-
" 8 . ( a ) Subsequent to the registration of
the two abovementioned trade marks , the defendant has from time to
ti
m
e accepted from customers (both retailors and members of the
publ
i
c who are end-users ) cylinders stamped with the word 'Sodastream'.
The defendant has then in most cases exchanged such cylin ders
by supplying such
customers with similar cylinders filled by the defendant with gas and has
charged for the gas only; and in the
other cases has sold such refi11ed
cy1inders to its customers. These cylinders emanated originally from the first
plaintiff.
/ (b) After
13
(b) cylinders with gas the defendant has from time to time exchanged or sold
such cylinders, as detailed in paragraph 8(a) above,
and the gas therein
contained , to retailers
and to members of the pu-b1ic with the
cy1inde
r
s still bear-ing the word 'Sodastream' stamped upon them and, in
some cases, sti11 bearing one of the gummed 1abe1s referred to above
in
paragraph 7 (b ) .
( c ) The gas contained in these cylinders when sold or exchanged by the
defen-dant was not supplied by or obtained from either of
the plaintiffs, save
in relation to the cylinders mentioned in paragraph 12 infra .
(d) From time to time the defendant
has covered the marking, 'guaranteed fi11ed by Sodastrea
m
d
istribto
r
' present on some of these cylinders. the covering materia1
being
an opaque gummed label, a sample of which is attached hereto marked
Annexure H.
/ (e) Subsequent
14
(e) Subsequent to September 1982 all
cylinders exchanged or sold by the
defendant as aforementioned have borne
labels as exemplified in Annexure H.
The facts stated on Annexure H are
correct.
( f ) From time to time the defendant has app1ied the 1abe1 of Annexure H to
cylinders bearing the marking 'guaranteed fi11ed by authorised
Sodastream
distributor' in a position in which the 1abe1 has not obscured such marking
( g) From time to time the defendant has
removed from the cylinders the gummed label bearing the word 'Sodastream' and
referred to in paragraph 7 ( b ) above, and has in other
cases wholly or
substantially obscured this gummed label with the 1abel of Annexure H .
(h) The conduct of the defendant set out in
sub-paragraphs (a) to (g)
of this para
graph has not been expressly autho-
rised by the plaintiffs
.
/ (i) When
15
(i) When refilling the cylinders referred to above, the defendant does
n
o
t ob-serve quality control standards laid down or supervised by either
of the p1aintiffs, and the defendant does not repair the cylinders
with spare
parts supp1ied by either of the plaintiffs; but the plaintiffs agree that such
repairs as may take p1ace from time to
time do not change the cha
r
acter
of the cylinders and are conducted under strict qualilty control . The defendant
is not aware of the quality control standards
of the plaintiffs, but adheres to
a strict qua1ity contro1 standard of its own. In particular, the defendant
selects certified food
quality CO
2
gas from Messrs Afrox Limited.
When refilling the cylinders as aforementioned;, the defendant ensures by means
of weighing on a scale
approved and assized by the Assize Division of the
Department of 1ndustries , Com -merce and Tourism that the gross weight
appearing
on each cy1inder ( and exemp1ified in Annex
u
re G ) is correct,
after fi11ing .
/ ( j ) Samples
16
(,i ) Samples of the cylinders sold or exchanged in the ordinary course of
trade by the defendant and refer-
r
ed to in sub-paragraphs ( b ) , ( d ) ,
( f ) and ( g) above wi11 be handed In at the hearing of this matter marked
Exhibits III.
IV, V, VI and VII respectively . "
Apart from certain details which are not relevant for present purposes, what
the gummed label, annexure H, states (in both official
languages) is: "Filled
with food CO
2
by Herman Bros (Pty) Ltd" , followed by appellant's
postal address.
Relevant portions of the Stated Case continue:
"9.
Despite demand made by the plaintiffs
on the defendant, the defendant has refused to desist from the conduct set
out in paragraph 8 above.
10 ,
11. 11.1 The defendant has been in law
ful possession of, and has
been
the lawful owner, of the cylinders
/ received
17
received by it for refilling from customers and referred to in paragraph 8
above .
11.2 The defendant does not sell or
exchange the aforementioned • cylinders as new cy1inders. but sells the
gas contained in these cylinders as fresh gas of food
quality •
1
2.
The defendant has since 1980 to the
present, and with the knowledge of the
second p1aintiff, la
w
fu11y
purchased
new machines for making beverages and
new and used gas-filled
cylinders bear
ing the mark SODASTREAM from the
second plaintiff , as well
as beverage
concentrates, kept a stock of such
machines and cylinders, and
sold the
same to members of the public. The
cylinders as received by the
defendant
from the second plaintiff have in all
cases been filled with gas
supplied
by the second p1aintiff , and have been
sold by the defendant
in
the ordinary
course of trade, the defendant being a
stockist and
supplier of such products
/ 13. Other
18
13. Other parties in the Republic of
South Africa have from time to time refilled and do refill cylinder's bearing
the label and markings referred to in paragraph 7 above
and have sold or
exchanged them and do se11 and exchange them , such activities having taken
p1ace without the authority of either
of the p1aintiffs . At the hearing of this
matter the defendant will hand up to the above Honour-ahie Court ex
amples
of such cy1inde
rs
received and exchanged or sold by other parties,
marked Exhibits VIII, IX and X respective1y."
The contentions of respondents are contained in
paras.14
to 18
inclusive of the Stated Case, which read as follows:-
"14. The conduct of the defendant set forth in paragraph 8 above constitutes
infringement of the trade mark 78/4435 and/or infringement
of the trade mark
78/4436 under section 44(1)(a) of the
/ Trade Marks Act
19
Trade Marks Act, No 62 of 1963.
15. (a) The wording 'guaranteed filled by authorised Sodastream distributor ' is
a trade description within the meaning of the Merchandise
Marks Act .
(b) The same wording describes the gas within if not also describing the
cylinder itself.
16. Neither the first plaintiff nor
the
second plaintiff has made any representation of any nature to the defendant that
the plaintiffs authorise or condone the conduct
of the defendant set forth in
paragraph 8 above.
17. The conduct of the defendant set forth in paragraph 8 above
constitutes:
(
a
) Contravention of section 7 of the
Merchandise Marks Act, No. 17 of 1941, in that, in acting as a fore-said, the
defendant has sold
goods, namely: (i) The gas, to which a forged
trade mark was applied; and
/ to
20
to which a trade mark was fa1sely applied; within the meaning of these terms
under the Merchandise Mar
k
s Act.
(ii) The cylinders, to which a
forged trade mark was applied, within the meaning of the terms 'forged' and
'trade mark' under the Merchandise Marks
Act.
(b) Contravention of section 6 of the Merchandise Marks Act in that, in acting
as aforesaid, the defendant forged
one or
more trade marks; falsely
applied a trade mark to goods (name1y the gas ) ; and applied a false trade
description to goods (namely
the gas): all within the meaning of the relevant
terms under the Merchandise Marks Act.
The conduct of the
defendant complained of by the plaintiffs amounts to the delict of un1awfu1
competition if such conduct does not
amount to contravention
/of
21
of the Trade Marks Act and of the
Merchandise Marks Act . "
The contra
ry contentions
of appellant, as
set forth in paras. 19 to 22 inclusive; are:-
"19 The defendant,. having purchased or
othewise obtained 1awfu1 possession and ownership of cylinders ma
rk
ed
as described above in paragraph 8. is entitled to conduct itself in the manner
hereinbefore described in the course of refi11ing
such cy1inders with gas and
preparing them for resale or exchange as second-hand goods to the defendant's
customer's in the Republic
of
South Africa.
20 (a) The defendant contends that the word
'Sodastream' as appearing on
the
cylinders sold or exchanged by the
defendant as set forth above
in
paragraph 8 is not a trade mark as
defined in the Trade Marks
Act
,
No. 62 of 1963, and farther con
tends that the word
'Sodastream'
/ has
22
has not been used by the defendant as such a trade
mark.
(b) The contention set forth
in
sub-
paragraph 20 (a) app
1
ies to the word 'Sodastream' as it appears in or
on:
(i) The wording guaranteed filled by authorised
Sodastream dis-tributor' stamped on certain cylinders;
(ii) The labels forming Annexures F1 to F6 hereto and applied to
cylinders;
(iii) The wording stamped on the va1ve of the cy1inders .
21. The defendant contends further that its conduct, either as complained of or
at all, does not in any way constitute:
(a) Infringement of any of the provisions of the Trade Marks Act;
(b) Contravention of any of the provisions of the Merchandise Marks Act; and
(c) Unlawfu1 competition
vis-a-vis
either of the plaintiff's
.
/ 22. The
23
22. The defendant contends further that one or both of the plaintiffs have
represented to it that its conduct is unobjectionable;
the defendant has acted
on such representation to its detriment and the plaintiffs are therefore
estopped from claiming the relief
sought."
As the Stated Case shows, there were three main
matters in contention
between the parties: (i) the alleged trade mark in fringements, (ii) the claim
based on alleged contraventions
of the Merchandise Marks Act, and (iii)
estoppel. (The claim founded on un1awfu1 competiti
o
n was not pur -sued.)
In addition
,
in its heads of argument appellant has contended
that
}
whatever the outcome of the appeal, certain of
the ancillary relief should not have been granted by the Court a
quo
. And
in certain supplementary heads of argument appellant has raised a point not
previously taken and not mentioned in the application
for leave to appeal, viz .
that respondents did not have
1ocus standi
to apply for relief
/ in
24
in
respect of appellant's alleged contraventions of the
Merchandise Marks Act. At the hearing of the appeal. however, appellant's
counsel
announced that he was not pressing the estoppel contention o
r t
he
point based on
locus stand
i. In my view, counsel acted wise1y in so
doing. I sha11 deal with the other matters seriatim.
THE ALLEGED TRADE MARK INFRINGEMENTS
As far as trade mark infringement
is concerned, the conduct on the part of the appellant complained of by
respondents consists of
receiving empty Sodastream cylinders from members of the
trade or the general public, refilling them with its (appellant's) own carbon
dioxide gas and re-selling or exchanging the gas-filled cylinders in the course
of trade -
(1) with the mark "Sodastream" stamped on the valve at the head of the
cy1inder;
/ (2) in
25
(2) in some instances, with the words "Guaranteed fi11ed by authorised
Sodastream distributor" stamped on the cylinder and with these
words remaining
uncovered or unobscured in any way; and
(3) in some instances bearing one of the gummed 1abels constituting annexures
F1 to F6 ,
such label remain-ing unobscured.
Each of these complaints, and the issues arising therefrom, must be
considered separately, but before I do so there are some observations
of a
general nature which should be made. Respondents origina11y based their case on
the infringement of both the gas mark and the
cy1in-der mark in terms of see.
44(1)(a) of the Trade Marks Act. The relevant portion of sec 44 reads as
follows:
(1)
(1) the rights acquired
by registration of a trade mark shall be infringed by
—
(a) unauthorized.....
26
(a) unauthorized use as a trade mark in relation to goods or services in
respect of which the trade mark is registered, of a mark
so nearly resembling it
as to be likely to deceive or cause confusion;"
With this provision must be read certain definitions con-tained in sec. 2 of
the Trade Marks Act. In sec. 2(1) a "mark" is defined
to include a name or word;
and a "trade mark" is defined to mean —
" a mark used or proposed to be used
in relation to goods or services for the purposes of —
(a) indicating a connection in
the c
ourse of trade between the goods
or services and some person having the right, either as proprietor or as a
registered user, to use
the mark , whether with or without any indication of the
identity of that person; and
(b) distinguishing the goods or services in relation to which the mark is
used or proposed to be used, from the same kind of goods
or services connected
in the course of trade with any other person."
/In..........
27
In sec. 2(3)(a) it is provided:
"(a) References in this Act to the
use of a mark in relation to goods shall be construed as references to the
use thereof upon, or in physica1 or other relation to,
goods."
In this case we are not concerned with a mark "nearly resembling" the
registered trade marks: it is in each case the mark itself,
viz. the word
"Sodastream" , that is alleged to have been used unauthorizedly by the appellant
Originally sec. 44(1) spoke of —
"the unauthorized use... of the identical
trade mark or of at trade mark
so nearly
resembling "
This was the wording in paragraphs (a) and (b). For some reason, obscure to
me, the words "of the identical trade mark or" were deleted
in both paragraphs
by sec 21 (a) of Act 46 of 1971. Presumably it was thought that if the mark used
by the infringer was the identical
mark it would
/ necessarily
28
necessarily be a mark so nearly resembling as to be likely to deceive or
confuse. Obviously it was never the inten-
tion to exclude from the ambit of
infringement the use of the identical mark (cf.remarks of Chow1es and Webster,
The South African Law of Trade Mark
s, 2nd ed . , p 98). I think that this
amendment is an unfortunate one and not conducive to clarity; and I would hope
that when the
Act is again amended the deleted words be restored. At al1.
events, the unauthorized use of the identical mark must,in my view, be
regarded
as falling under sec. 44(1) (a).
Furthermore, in this case there a re two marks involved, the gas mark and the
cylinder mark. In terms of the alleged acts of infringement
(1), (2) and (3)
above, the word "Sodastream" appears upon the same object, that is, the
cylinder; and
in
each case the question arises as to whether it is used
only in relation to the cylinder itself (in which case only the cylinder mark
becomes rele-
/ vant )
29
vant) or only in relation to the contents of the cylinder (in which case only
the gas mark becomes relevant ) or in relation to both
the cylinder and its
contents (in which case both marks are relevant) . The importance of these
distinctions lies in the fact that
the Court a
quo
held (see reported
judgment; p 429 F-I) that no infringement of the cylinder mark had been
established and the further fact that
this finding is accepted by respondents. I
agree with this finding. It need not now be decided
w
hether the true
basis of such non-liability be, as held by the Court a_
quo,
that in
dealing with the cylinders themselves the appellant trades with "genuine" goods
(see also in this connection l
lampo Systems (Pty) Ltd v Audio-lens (Cape)
(Pty) L
td
1985 (4) SA 257
(C), at p 261 C-F) or that, having regard to all
the circumstances, the appellant is authorized to deal with the cylinders
themselves
and to use the cylinder mark in relation thereto.
I return to the a11eged trade mark infringements. The first matter to be
determined is which, if any, of the uses of the word "Sodastream"
on the
cylinder by the res-
/ pondents
30
pondents relate to the gas mark or to the gas mark
and the cylinder
mark
. I
f the appellant has used the marks, then his user cannot differ
from that of the respondents as far as the identity of the mark used
is
concerned and for the reasons already stated only uses relating to the gas mark
can give rise to liability on the part of the
appellant. Uses re1ating only to
the cy1inder mark can consequently be disregarded.
As to the al1eged trade
mar
k
infringement (1) above, it was held by the Court a quo that the word
"Sodastream" stamped on the valve was use of the cylinder mark
only and could
therefore be disregarded (see reported judgment at p 428 F). On appeal appellant
naturally supported this finding,
whereas respondents, in terms of their
cross-appeal
,
challenged it.
Where the same word constitutes the trade mar
k
under more than one
registration, each in respect of a separate class of goods, and this word is
used upon an article which comprehends
elements which fall within
/ more........
31
more than one of these classes of goods, the test as to which of the
registered trade marks is so used should , in my view , be an
objective one .
The court must ask itse1f: having regard to all the circumstances
,
to
what would the ordinary reasonable consumer of the article regard the mark as
referring?
In regard to the word " Sodastream" stamped on the valve it was submitted by
respondents' counsel that the Court a
quo
had erred in ignoring the other
markings stamped on the valve, which, so it was argued, linked Sodastream" with
the carbon dioxide
gas. The valve is a brass fitting which evidently screws onto
the head of the cylinder.
In
addition to the word "Sodastream" there are
stamped upon it various cryptic letters and figures which relate to such matters
as the
mass of the cylinder when full and empty, the year of manufacture, the
test pressure and the country of manufacture. One of the stampings
is
"CO
2
": but it is not in close proximity
to
the word
"Sodastream".
/ These
32
These markings are not at all prominent. I accept that the reasonable
consumer would know that Co
2
meant carbon dioxide gas. but I do not
think that he would regard the word "Sodastream" as relating to the gas inside
the cylinder
In my view, he would relate this use of the mark to the valve or to
the cylinder as a whole and not to its contents. I
,
therefore
}
agree with the finding of the Court
a_
quo
.
As to (2) above (the inscription "Guaranteed filled by authorized Sodastream
distributor" stamped on the cylinder - for the sake of
brevity I shall call this
"the stamped guarantee" ) , it was held by the Court a_
quo
that the acts
of the appellant in refilling with its own gas and selling cylinder's with the
stamped guarantee constituted a use of
first respondent's gas mark (see reported
judgment at p 429 B-C) . 1 agree with this conclusion. It was argued by
appellant's counsel,
both before us and in the Court a quo, that the word
"Sodastream" in the
/ stamped
33
stamped guarantee qualifies the word "distributor" and relates to a
service, ie. the refilling of gas cylinders; and in this connection
reference
was made to certain other registered trade marks in respect of services of which
first respondent is the proprietor. There
is, in my view, no substance in this
argument. As the trial Judge succinctly put it (at p 429 B-C) —
"A member of the public, when exchanging an empty cy1inder fo
r
a
gas-filled cylin-der, is purchasing gas, which he is told has been supplied by a
distributor with the authority of the registered
proprietor of the trade mark.
This description of
t
he source of the gas amounts to a use of the trade
mark 'in re1ation to goods' in c1ass 1."
(The
gas
mark relates to class 1.) And,I might just add, the service
marks referred to by counsel relate, respectively, to class 37 ("construction
and repair") and class 42 ("miscellaneous").
As.........
34
above As to (3) / (the use of the gummed labels annexures
Fl to F6), these labels fall into three groups: (a) Fl, F2 and F3; (b) F4 and
F5; and (c) F6. Each group must be considered separately.
Fl, F2 and F3, which
are substantially identical, are headed in large script "Sodastream Car-bonator"
and underneath, in small script,
appear the injunctions "Keep in a cool place",
"Do not store in a car"
,
"Do not tamper with valve", "Do not attempt to
refill". "Treat carefully" and "Avoid direct sunlight". The Court a.
quo
held that these labels were used solely in relation to the metal cylinder
and its attachments and therefore did not have reference
to the gas mark (see
reported judgment p 428 G). Respondents cross-appealed against this finding.
Although the point is debatable,
I am of the view that the reasonable consumer
would regard this 1abel, including the word "Sodastream", as having reference
both
to the cylinder and to its contents. This label consequently does involve
the gas mark.
/
In
36
script "Serviced and refilled with Sodastream gas under licence from
Sodastream Ltd., Peterborough, England, in accordance with approved
procedures
and standards of qua-1ity"; and at the bottom second respondent's name and
address . "In argument appe11ant's counse1
conceded that the use of the mark
Sodastream on this label was in relation to both the cylinder and the gas. In my
view this concession
was well-founded.
Finally, as regards F6 , appellant's counsel contended that the trial Court
had erred in holding that it related to the cylinder and
the gas, whereas
respondents' counsel supported this finding. The essence of this label is the
word Sodastream written in a fancy
script and below this the words " Guarantee
this CO
2
cylinder
to be full ex factory". Again the matter is
debatable but on the whole I think that the reasonable consumer
/ would
35
In regard to F4,F5 and P6, the Court a
quo
found that the word
"Sodastream" on them was obviously used in relation to both the cylinder and the
gas, but proceeded to disregard
these labels on the ground that
the Stated
Case did not indicate whether the appellant
had ever marketed gas-filled
cylinders bearing any of those
labels . This view was presumably founded on
the learned Judge's interpretation of paragraphs 7 (b) and 8(b) of the Stated
Case. Whatever
the merits of this view, appellant's counsel indicated that his
client did not wish to rely upon this finding and asked the Court
to rule on
these labels on the basis that appellant did market gas-filled cylinders bearing
these labels. F4 and
F5
are substantially identical. Apart from a warning
in regard to the handling of cylinders, the label contains, at the top, the
words
in bold type "Original Carbonator Cylinder"
;
below that the word
"Sodastream" in large fancy writing; below that the words, in smaller
/ script
37
would regard the label as a use of the word Sodastream in
re1ation to the
cy1inder rather than the gas .
In the result, therefore
}
the vise of the
mark
"Sodastream" on the cylinder should be
construed as having reference to the contents of the c
y
1inder and
therefore as involving the gas mark in the case of the stamped guarantee and
labels Fl, F2 ,
F3 , F
4 and F5 • The q
u
estion now is whether
appellant's conduct in re-selling the cylinders, filled with its own gas and
still bearing the stamped guarantee
and/or one or other of the labels Fl to F5
inclusive. constituted an infringement of the first respondent's gas mark. This
depends,
in terms of sec. 44(1)(a), on whether such conduct amounted to
—
(i) the use by appellant of a mark, (ii) as a trade mark;
(iii) in relation to goods in respect of which the trade mark is
registered,
(iv) such use being unauthorized.
/ It is
38
3 8
It is common cause that if
t
he other requisites are satisfied
requisite (iii) is satisfied, i.e. the user, if established, was in relation to
goods in respect
of which "the trade mark (the gas mark) is registered. The
other three requisites are, however, in contention .
It was submitted by appe1lant's counse1 that appellant did not use the mark
at all. Me argued that when a mark is used in connection
with consumab1e goods
it ceases to exist, or at any rate loses its attri-butes as a trade mark, once
those goods have been con-sumed;
that, consequently, although second respondent
vises the gas mark when marketing its new cylinders, once the ultimate consumer
has
used the gas in the cylinder the marks lose their attributes as marks and in
effect no longer exist; and that, therefore, in subsequently
refilling and
selling the returned empty cylinder's appellant does not use a mark. Counsel
used the homely
/ example
3
9
example of a slab of chocolate. I can appreciate the argument if in the
example given the mark is app1ied to the chocolate itself,
but where the mark is
to be found on the wrapping paper or, as in this case, on the cylinder
containing the gas,
I
find the argument unconvincing. I do not believe
that a seller of chocolate who used, say, a discarded Cadbury's chocolate
wrapper
(the chocolate bar having been consumed), bearing the Cadbury's trade
mark (if there be one), in which to market a brand of chocolate
other than
Cadbury's cou1d c1aim that he was not using the Cadbury's mark. Nor do I believe
that the appellant in this case can claim
that it is not using the gas marks
appearing on the cylinders which he has refilled and supplied to customers. When
appellant refills
and sells or exchanges one of the cylinders in question, the
cylinder still has on it one or more of first respondent's gas marks.
These
marks are a
/ physical reality.
physical reality. In no way can they be said no longer to exist. They are
there for all to see. And since, ex
hypothesi
, they relate to the gas
inside the containers, there is, in my view, no escape from the conclusion that
in so dealing with the cylinders
the appellant uses the mark in relation to the
gas which it sells in the cylinder. And it matters not that appe11ant did not
itse1f
p1ace the mark on the cy1inder This conclusion
,
which f1ows
fr
o
m an app1ication of the provisions of Act 62 of 1963., seems to be
broadly in conformity with what has been the approach in similar
cases in other
jurisdictions (see
Rose v Loftus
(1878) 47 LJ Ch . 576 ; B
arr and Co v
Ma:i
v
and Dougall
(1904) 21 RFC 665;
Calor Gas (Distribution) Co
Ltd v Cooper
["1962] RPC 16, at pp 22-4; cf.
Thwaites &
Co
M'Evilly
(1904) 21 RPC 397
; Kerly's
Law of Trade Marks and Trade
Names
, 11 ed., pa
r 14 -
08 . p 245:
/ Prest-O-Lite
40
41
P
rest-O-Lite Co v Avery Li
g
hting Co
161 Fed. 648
; 87
Corpus Juris Secundum 876). Accordingly, I find that requisite (i) above is
satisfied.
As to requisite (ii) , use of a mark" as a trade mark", this means, in terms
of the definition of "trade mark", that the use must
be for "the purposes of"
(i) indicating a connection in the course of trade between the gas in the
cylinders and the proprietor of
the mark (first respondent) or the registered
user (second respondent) and (ii) distinguishing such gas from the same kind of
gas
connected in the course of trade with any other person. There is no question
that as far as respondents are concerned the gas marks
appearing on the
cylinders were used for these purposes. The Stated Case does not deal with the
question as to the purposes for which
appellant used the gas marks. It seems to
me, however, that where, as
in
this case, an alleged infringer has used a
trade mark on or in re-
/ lation
42
lation to goods in such a manner as to lead others to think that there
is a connection in the course of
trade between the goods and the
proprietor registered user of the trade mark, and the alleged infringer was
aware of this (or must
be taken to have been aware of this), he must be held to
have used the trade mark as a trade mark and cannot be heard to say that,
subjectively, in reality this was not his purpose. In this sense the test, in my
view , is an obejective one. (
Cf
. the remarks of Chowles and Webster,
op
. cit., at p 204;
and, in another context, the observations of
TRENGOVE JA in Ca
pe Town Munici
p
ality v
F
rerich Holdings (Pty)
Ltd
1931 (3) SA 1200
(A), at p 1216
G-H).
It was argued by appellant's counsel that
appellant was not using the word "Sodastream" to connote a connection in the
course of trade between its gas and respondents. In support
thereof counsel
cited a
/ number
43
number of hypothetical examples invo1ving a member of the public who
approached the appellant with an empty Soda-stream cylinder which
he wished to
have refi11ed and was made aware of the fact that what he obtained was a
cy1in-der filled with appellant's own gas.
The Stated Case contains no reference
to such hypothetical situations. but what it does make clear is that appellant
has from time
to time exchanged or sold refilled cylinders to retailers as well
as members of the pub1ic. As ap-pe11ant's counsel conceded, this
argument based
on hypothetical situations would not apply where the refilled cylinder reached
the consumer' through a retailer and,
in my view, it would often not apply even
where appellant dealt directly with the customer. Consequently, assuming in
appellant's
favour that someone who has
used in relation to his goods the trade mark of another
can avoid liability for infringment on the ground that
A
by reason of extraneous circumstances the public at the
/ time
44
time of purchase became aware of the fact that the goods were those of the
alleged infringer and not those of the proprietor
or
registered user of
the trade in mark (and I might add that I am by no means convinced of the
validity of this proposition), I do not
see how this argument can assist the
appellant on the facts of this case. Obvious1y in many instances this
hypothetical situation
would not occur. And it has never been the law that in
order to constitute infringement the unauthorized use of another's trade mark
should mislead ail members of the public.
In similar vein appellant's counsel further submitted that the app1ication of
the label annexure "H" to the cylinders since 1982 negatived
the gas marks as
indicators of a connection in the course of trade between the gas and the
proprietor or registered user of the mark.
This particular argument was
explicitly rejected by the Court a
quo
(see reported judgment at p 429
E). I agree that it is unsound. 1 very much doubt whether, once
/ it
45
it is clear that appellant has used the gas mark, considered on its own, as a
trade mark, appellant can avoid infringement by showing
that annexure H
indicated a different origin for the gas (see in this regard
adidas
Sporbschuhfabriken Adi Dassler K G
v
Harry Walt
&
Co (Pty)
Ltd
1976 (1) SA
530
(T) at pp 535 H - 536 A;
Aristoc Ld v Rysta
Ld
(1945) 62 RPC 65
at p 77;
Lever Brothers, Port S
u
nlight, Ld v
Su
nniwi
te Pro-ducts, L
d
(1949) 66 RPC 84
, at p 89); but in any event
1 do not think that annexure "H" does unequivocally proclaim that the gas with
which the cylinder has
been filled is not Soda-stream gas, but gas selected or
produced by appellant.
For these reasons I am of the opinion that respondents established requisite
(ii) as well.
With regard to requisite (iv)
,
unauthorized. user, appellant's
counsel made the submission in their heads of argument that to give business
efficacy to the
/ contracts
46
contracts whereby second respondent sold Sodastream cylinders to appellant
(and other traders) it was necessarily to be implied that
appellant and fellow
traders were authorized to conduct themselves in the manner set out in para.8 of
the Stated Case . This point
was not pursued with any enthusiasm in argument
before us. In my view , it is devoid of substance. The question is whether it is
necessarily to be implied that traders to whom second respondent sold cylinders
were entitled to refi11 them with their own gas and
resell or exchange them
under first respondent's mark. There is no such necessary implication. On the
contrary, the more likely implication
is that empty cylinders would have to be
returned to second respondent or some authorized agent or sub-distributor for
refilling
. There is no basis for finding that the user of first respondent's
gas mark by appellant was in any way authorized. Requisite (iv)
was, therefore, established.
/ Accordingly
47
Accordingly I hold that in refilling with its own gas and selling or
exchanging cylinders carrying the stamped guarantee and/or one
or other of the
labels Fl to F5 inclusive, appellant infringed first respondent's gas mark and
this entitled respondents to an interdict
and damages. As far as labels Fl to
F5
inclusive are concerned this goes further than the finding of the
Judge a
quo
(see reported judgment at p 4 29 I)•
THE ALLEGED CONTRAVENTIONS OF
TH
E
MERCHANDISE MARKS
ACT
.
The provisions of the Merchandise Marks Act which
appellant is alleged to have contravened are sec. 6(a) , (b)
and (e) and
sec. 7. These read as follows:
"6. Any person who —
(a)
forges any trade mark;
or
(b)
falsely applies to goods any trade
mark; or
(e) applies any false trade description to
goods;
shall be guilty of an offence
/7. Any......
48
7. Any person who sells any goods to which
any forged trade mark or false
trade
description is applied, or to which any
trade mark is falsely
applied, sha11
be guilty of an offence ..."
(Each of these sections contains an exemption clause, but neither is relied
upon by the appellant.)
As in the Court below, appellant's main argument on appeal was that the
Merchandise Marks Act did not apply to trade marks registered
in terms of the
Trade Marks Act 6 2 of 1963. This argument was rejected by 0'DONOVAN J (see
reported judgment p 430 A-G). And the
argument based on respondent's alleged
lack of
1ocus standi
was, as 1 have said, not pursued.
It is true that sec. 1 of the Merchandise Marks Act defines a "trade mark" (I
quote only the relevant portion) as -
/ / "... .a trade
49
".... a trade mark registered in the register
of trade marks kept under
the Patents, Designs,
Trade Marks and Copyright Act, 1916 (Act No
9 of
1916)
It is also true that first respondent's trade marks (and here we are
concerned with both marks) were registered not in terms of Act
9 of 1916, but in
terms of Act 62 of 1963. Nevertheless, it is provided by sec. 12(1) of the
Interpretation Act 33 of 1957 that -
"Where a law repeals and re-enacts with
or
without modifications, any
provision of a former law, references in any other' law to the provision so
repealed shall, unless the
contrary intention appears, be construed as
references to the provision so re-enacted".
Respondents contend that in terms of sec. 12(1) the reference in the
definition of "trade mark" in sec. 1 of the Merchandise Marks
Act to the Patents
,
Designs, Trade Marks and Copyright Act, 1916 (Act No 9 of 1916) must be
construed as a reference to the Trade Marks Act 62 of 1963.
Appellant, on the
other hand, contends that sec. 12(1) does not apply.
/ I have
50
I have no doubt that respondents contention is the correct one. Act 62 of
1963 repealed so much of Act 9 of 1916 as related to trade
marks (see sec. 82 of
Act 62 of 1963) and replaced what had been repealed with its own provisions. It
was argued by appellant's counsel
that the provisions of sec. 12(1) do not apply
as there is no "provision" of the 1916 Act which was re-enacted in the 1963 Act
and
which is referred to in the Merchandise Marks Act: sec. 82 of the Trade
Marks Act of 1963 repealed the 1916 Act in its entirety,in
so far as it related
to trade marks. I am not sure that I understand the intended import of this
argument. In so far as it may suggest
that sec. 12(1) does not apply where the
repealed provision forms part of an Act, or portion of an Act, which has been
repealed and
replaced in it entirety the argument is clearly wrong (see eg. Rex
v
N
gcobo
1941 AD 412
, at p 425;
Publ
i
cations Control Board v
C
e
ntral News Agency Ltd
1977 (1) SA 717
(A), at pp 739 H - 740 A).
The argument may, however, merely mean that there has not
been a repeal and
re-enactment "with or without modifications"
/ of
51
of a provision (or provisions) of the 1916 Act by the 1963
Act. To this issue I now turn.
The reference in the Merchandise Marks Act,
under the definition of "trade mark", to the Act of 1916 relates to a trade mark
registered
in the register of trade marks. The 1916 Act defined "trade mark" and
in sec. 132(1) it provided:
"(1) There sha11 be kept at the trade marks office a register of trade marks
wherein shall be entered particu1ars of —
(a) all registered trade marks, with the names a
nd
addresses of their
proprietors and of all registered users thereof together with the date of
registration and expiry there-of;
(b)
notification of assignments
and transmissions, and disclaimers: and
(c)
any other matte
r
s relating to registered trade marks which
are prescribed."
/ The. . .
52
The 1963 Act. the general object of which, according' to the long
title, is "(t)o consolidate and amend the law relating to trade
marks", also
defines "trade mark" and in sec. 31(1) and (3) provides:
"(1) There shall be kept at the trade
marks office a register of trade in marks wherein shall be entered
particulars
of __
(a) a11 applications to register trade marks and at registra-tions of trade
marks with the names and addresses of their proprietors
and of all registered
users thereof, together with the date of registration and the date of expiration
of the registration;
(b) notifications of assignments
and transmissions
;
and disclaimers; and
(c) any other matters relating to registered trade marks which are
prescribed.
{ 3 ) The register kept under the repea1ed law and existing at the
commencement
of
53 53
of this Act shal1 be incorpora
t
ed with and form part of part A of the
register kept under this Act . "
There are differences between the provisions of the 1916 Act relating to
these matters and those of the 1963 Act. And in this connection
appellant's
counsel emphasized in particular the fact that the definition of " trade mark"
had been widened in the 1963 Act to include
container marks and marks in respect
of services. I shall assume in appellant's favour that the reference in the
Merchandise Marks
Act comprehends the definition of "trade mark" in the Act of
19-16 and that, therefore, the new definition of "trade mark" in the
1963 Act is
relevant to the enquiry. The question then is whether or not. bearing in mind
these aforementioned differences, there
has been a re-enactment with
modifications of the relevant provisions of the 1916 Act. In
D v Minister
o
f the Interior
1962 (1) SA 655
(T), at p 659 D, the Full Bench of the
Transvaal Provincial Division
/ approving
approving the finding of WILLIAMSON J in the same case (see I960 (4) SA 905,
at 909) held that in this context the word "modifications"
-
is not limited to the action of limiting or qualifying or toning down or
restricting any statement; i
t
can mean to make partial changes or to make
changes in respect of certain qualities or to alter or vary without radical
transformation.
Insofar as the meaning of the word 'modifications' in sec. 12(1)
of the Interpretation Act is concerned it seems to me that WILLIAMSON
J was
correct when he held that it must mean any alteration which does not change the
essential nature or character of the repealed
provision."
This.....
54
55
This interpretation and the test adopted were followed in
_Nk
o
m
o
and Others v Minister of Justice and Others
1965
(1)
D-G SA 498 (SR, AD), at p 505/; Ex parte
Glavoni
c 1967 (4) SA
141 (N), at pp 142 H - 143 A; and
S v Msitshana
1978 (1) SA 386
(W),
at pp 388 H - 389 C; and it seems to me that they should be followed by this
Court. Applying the test in the present case, the
question is whether or not the
relevant provisions of the 1963 Act, in repealing and re-enacting with
alterations the corresponding
provisions of the 1916 Act, changed "the essential
nature or character" of the repealed provisions. In my opinion, they did not.
In
particular, I do not think that the inclusion of container marks and service
marks within the definition of "trade mark" changed
the essential nature and
character of a trade mark.
Appellant's counsel also referred to the definition of "use" in sec. 2{2) and
the new sec. 44(1)(b) of the 1963 Act, but these provisions
do not appear to
me
/ to
56
to have any relevance to the reference contained in the Merchandise Marks
Act.
Sec. 12(1) contains the qualification "unless the contrary intention
appears". It is not clear whether the existence of this contrary
intention is to
be sought only in "the other law" which makes reference to the repealed
provision (as was done in
R v Ngcobo
,
supr
a, at p 425 and in R v
Grove
1956 (2) SA 254
(A), at p 258 H - 259) or only in the law which repeals
and re-enacts (as was done in
Re
x v
Fynn
1941 NPD
95
,
at p
97 and in
S v Msitshana,
supra
, at p 389 C-D ) or in either. It is
not necessary to decide this point for in neither the Merchandise Marks Act nor
the Trade Marks
Act of 1963 do I discern any such contrary intention. In fact
"there are various pointers in the opposite direction. The Legislature,
when
enacting the Merchandise Marks Act. would surely have been cognizant of the fact
that the law governing trade marks and their
/ registration,
57
registration, as embodied in the 1916 Act (which by then had been on the
statute book for some 25 years), would probably be replaced
in a consolidating
and amending measure at some time in the future. And to me it seems very
unlikely that it would have been intended
that the provisions of the Merchandise
Marks Act should not apply to trade marks registered under such new legislation:
that once
the trade marks registered under the 1916 Act had run their course the
Merchandise Marks Act should become a dead letter. Moreover,
sec. 31(3) of the
1963 Act, which provides that the register of trade marks kept under the 1916
Act should be incorporated with and
form part of the register kept under Act 62
of 1963, also appears to negative the suggested distinction between trade marks
registered
under the 1916 Act and those registered under the 1963 Act.
Appellant's counsel also argued that the fact that
/ the
58
the Merchandise Marks Act had been amended as recently as 1967 without
the definition of "trade mark" being altered supported his
case. Assuming that
it is appropriate to have regard to this factor, it takes the matter no
further
,
in my opinion. The Legislature,
had it adverted to this
point, could well have considered that, in view of the provisions of sec. 12(1),
such alteration was not necessary.
For these reasons I am of the view that sec.
12(1) does apply and that, applying it , the reference in the definition of
"trade mark" in the Merchandise Marks Act bo the 1916
Act must be read as a
reference to the corresponding provisions of the 1963 Act. The net result of
that is that under the Merchandise
Marks Act "trade mark" now means a trade mark
registered in the register of trade marks kept under Act 62 of 1963.
I turn now to the alleged contraventions of the Merchandise Marks Act. These
are:-
/ (1) That
59
(1) That, in covering the stamped guarantee with the opaque
gummed label, annexure H (as described in par. 8(d) of the Stated Case)
and in
either removing labels Fl to F6 or obscuring them with annexure H (as described
in par. 8(g) of the Stated Case), appellant
was guilty of forging a trade mark
and, therefore, of contravening sec. 6(a):
( 2 ) That in filling the cylinders in question with its own gas (as
described in par. 8(a) and 8(b) of the Stated Case) while first
respondent's gas
marks were thereon and remained visible appellant falsely applied a trade mark
to goods (ie the gas) in contravention
of sec. 6(b);
(3) That in filling the cylinders in question with its own gas while the
stamped guarantee and/or the statements contained in the
1abels annexures F1
to
/ F6 inclusive
60
F6 inclusive were thereon and remained unobscured,
the appellant applied to the goods (ie the gas)
a false trade description in contravention of sec
6(e); and
(4) That appellant had contravened and was contravening sec. 7 by -
(a)
selling its gas in
cylinders to which forged trade marks had been applied in the circumstances
described in ( 1. ) above : and/or
(b)
selling
its gas in cylinders to which a trade mark had been falsely applied in the
manner set forth in (2) above; and/or
(c)
selling its gas in cylinders to which false trade descriptions had
been applied in the manner described in
(3)
above.
/ Generally
61
Generally, in regard to the alleged contraventions of the Merchandise Marks
Act, appe1lant's counse1 raised the same argument as was
advanced in regard to
the trade mark infringements, viz. that once gas cylinders emanating from the
respondents had been emptied
of Sodastream gas, those representations of
"Sodastream" on the cylinder which related to the gas mark ceased to exist or
ceased
to have the attributes of a trade mark. For the reasons already stated,
when dealing with the question of trade mark in fringe-ment,
this argument
cannot prevail. 1 proceed to consider individually the alleged contraventions of
the Merchandise Marks Act.
As to (1) above (the alleged forging of a trade
mark), the provisions of sec. 6(a) must be read with sec. 2(3)(b), which reads
—
"A person shall be deemed to forge a trade mark who —
(b) alters, adds to or effaces any genuine trade mark".
/ It
62
It is not disputed that each of the various acts on the part of the
appellant, as described in (i) above , amounted to the effacing
of a trade mark.
Appellant's counsel submitted, however, that in the circumstances the trade mark
was not a "genuine" one. The argument
ran thus: a "genuine" trade mark in the
context of sec. 2(3)(b) means a registered trade mark used in connection with
the registered
proprietor's goods; a registered trade mark used in relation to
goods which are not those of the registered proprietor is a false
and not a
genuine trade mark; consequently , since appellant's effacement of first
respondent's gas mark coincided with the filling
of the cylinder with
appellant's own gas, the gas mark was not genuine when effaced. (It was conceded
that this argument did not
apply to the effacement of a cylinder mark.) This
argument was not addressed to the Court a quo.
/ Counsel
63
Counsel were not able to refer this Court to any authority on the meaning of
"genuine" in this context; nor have I been able to find
any, either in our law
or in English law, with reference to sec. 4(b) of the English Merchandise Marks
Act, 1887, which is similar
to sec. 2(3)(b) of our Act. In
S v Smith en
Andere
,
1978 (3) SA 749
(A) this Court had occasion to consider the meaning
of "eg" (English: "genuine") appearing, with reference to writing, in
sec. 228
of the
Criminal Procedure Act 51 of 1977
. In delivering the judgment of the
Court on this aspect of the case, TRENGOVE AJA (as he then was) stated (at p 756
A) :
"Na my mening beteken die woord 'eg' (of 'genuine'), in die sinsverband van
art 228, 'werklik synde wat dit skyn, aangeneem word of
voorgee om te wees',
soos dit in die WAT gestel word, of, 'really proceeding from its reputed source
or author', wat een van die
betekenisse is wat in die
Oxford English
D
ic
tionary
aange-gee word."
/Similarly
64 64
Similarly it seems to me that in
the
context of.
sec. 2(3)(b)
"genuine"
means really proceeding from its reputed source or author, ie . having in fact
been applied by the registered proprietor
or some person authorized to use and
apply the ma
r
k. On this interpretation appe11ant's argument must be
rejected. The trade marks in question were in ract app1ied by the registered
proprietor or an au
t
ho-rized user. I accordingly hold that the conduct
described in (1) above did amount to contraventions of
sec. 6(a).
As to (2) above (the a11eged contraventions of
sec. 6(b)
), the Court a quo made
no fi
n
ding on this issue and respondents cross-appealed against its
failure to do so.
Sec. 6(b)
must be read in conjunction with
sec. 2(1).
the
relevant portion of which provides:
"(i) A person
shall be deemed to apply a
trade mark or trade description to goods who —
c) places... the goods in.... any covering. . . to which that trade ma
rk
o
r tra
de desc
r
iption has been applied."
/ "Covering"
65
"Covering" is defined to include a " container" . There can be no
question that the conduct of the appellant described in ( 2 ) above
amounted to
applying first respondent's gas mark to appellant's goods, viz. the gas.
Inasmuch as this involved the intentional and
unauthorized application of a
trade mark to goods not emanating from the proprietor of the trade mark, I have
no doubt that appellant
falsely applied the mark and thereby contravened
sec.
6(b).
And I did not understand appellant's counsel really to dispute these
propositions.
As to (3) above (applying a false trade description)
sec. 6(e)
must be read
with
sec. 2(1)
(c), quoted above, and with the definition of "trade description"
appearing in sec. 1 of the Merchandise Marks Act, the relevant
portion of which
reads:
/ "'trade'......
66
'trade description' means any description statement or other indication,
direct or
indirect, as to the name of
the manufacturer or producer (sc. of any
goods) or as to the mode of
manufacturing or producing any goods ...
It was respondents' case, as set forth in their contentions in the Stated
Case, that appellant contravened sec. 6(e) by applying a
false trade description
to goods "namely the gas". The application relied upon was that deemed in terms
of sec. 2(1)(c) by reason
of appellant having placed goods, ie the gas, in a
container, ie the cylinder, to which a trade description had been applied. The
Court a quo held that the stamped guarantee constituted a trade description and,
when thus applied to a cylinder filled with appellant's
own gas, constituted a
false trade description (see reported judgment p 431 A-D).
/ Appellant's
67
Appellant's counsel challenged this finding, arguing that respondents do not
"manufacture or produce" the gas which they sell, but
only select the same, and
that the stamped guarantee could, therefore, not amount to a trade
description.
The reasoning of the Court a quo is contained in the following passage
in
the reported judgment (at p 431 B-C):
"The words 'trade description' are com
prehensively defined and include
any indi
cation, direct or indirect, of the mode
of producing goods. The
plaintiffs do
not manufacture gas, but 'producing' does
not necessarily
mean 'manufacturing' .
The selection of gas, which is what the
plaintiff's
do, in order to ensure that it
is of the required quality, and the
pro
cess of filling pressure cylinders with
the selected gas for the
purpose of sale,
involve an expenditure of time and effort
which amounts,
in my view, to 'producing"
1
the gas. The words 'Guaranteed filled
by
authorised Sodastream distributo
r
' which
appear on certain of
the cylinders are
therefore a trade description "
/ With
68
With respect, it seems to me that in deciding whether the stamped guarantee
constitutes a trade description one is concerned with
what the words of the
stamped guarantee convey rather than the actual operations of respondents in
filling the cylinders,
The
Oxford English Dictionary
gives three basic meanings for the verb
"produce". The first meaning conveys, the idea of bringing forth, presenting to
view, exhibiting
and is clearly not relevant in the context of the definition of
trade description. Nor is the second basic meaning, which is a geometrical
term.
The third basic meaning comprehends:
"3. To bring forth, bring into being or existence.
a.
generally.
To bring (a thing) into existence from its raw materials
or elements, or as the result of a process; to give rise to, to bring about,
effect, cause, make (an action, condition, etc.).
/ b . Of an
69
b. Of an animal or plant: To generate,
bring forth, give birth to, bear,
yield,
(offspring, seed, fruit, etc.).
c. Of a country , region, river, mine ,
process, etc.: To give forth,
yield,
furnish, supply; to grow, raise (plants);
to yield or bring in as
profit.
d. To compose or bring out by mental
or physical labour (a work of literature or art); to work up from raw material,
fabricate, make, manufacture (material objects )
; in Pol. Econ . often blending
with sense c."
It seems to me that where the definition of "trade
description" speaks of "the mode of manufacturing or producing any goods", the
word "producing" conveys the operation of bringing into being or existence the
goods in question. "Produce" is a wider concept than
"manufacture". It would
include the fabrication or manufacture of goods , but it would also include, for
example, the raising of
animal products and the growing of agricultural products
(operations which would not fall under the description of "manufacture")
: cf .
South Afr
i
can Rai
lwa
ys and Harbours
/ v Cem
afr
i
que
70
v Cemaf
rique 1978 (3)SA 388 (A), at p 394;
Rex v Rabie
1952 (1)
SA 577
(C), at p 58O B.
Assuming that the stamped guarantee conveys that the cylinder is filled with
gas selected by an authorized Soclastream distributor,
I
do
not think
that this amounts to a trade description. The mere act of selecting gas from
that made available by gas suppliers does not,
in my view, connote "producing"
the gas. The gas was produced by those who, by some process, brought it into
being or existence.
And in this connection it is significant that in the
definition of "mark" in the Merchandise Marks Act a distinction appears to be
drawn between the concepts of "manufacture", "production" and "selection"
By parity of reasoning I am of the view that none of the labels Fl to F5
constitutes a trade description, either as to the name of
the
produce)"
1
or the mode of production. Accordingly, the respondents
did not establish a contra-
/ vention
71
vention of sec. 6(e) on appellant's part.
As to (4) above (the alleged contraventions of sec. 7), it has already been
Pound with reference to (1 ) above that in certain instances
appe11ant must be
deemed to have forged trade marks on gas cylinder's. It is not disputed that
appellant used such cylinders in which
to sell its own gas. Reading sec. 7 in
conjunction with sec. 2(1), it is clear that on these facts appellant was guilty
of selling
goods to which a forged trade mark had been applied. Similarly, the
finding, in regard to (2) above, that appellant in certain instances
falsely
applied first respondent's gas mark to his own goods, viz. the gas, together
with the undisputed fact that appellant subse
q
uent1y sold such gas,
establishes the further contravention of sec
7,
viz. selling goods to
which a trade mark is falsely applied. On the other hand, the finding that the
stamped guarantee and the labels
annexures F1 to F5 did not amount
/ to
72
to or contain trade descriptions disposes of any claim that appellant
sold goods to which a false trade description had been applied.
THE RELIEF GRANTED.
The relief granted by the Court a_ q
uo
was the following:
"(a) The defendant is interdicted and restrained from infringing the first
plaintiff's mark No 78/4435 in class 1 (schedule
IV
) (
the
'gas
mark' ).
(b)
The defendant is
interdicted and restrained from contravening ss 6 and 7 of the Merchandise Marks
Act 17 of 1941.
(c)
That delivery up be made
to one or both of the
plaintiffs:
(i) of all cylinders which the
defendant possesses
and which bear the first piaintiff's gas mark and in respect of which a
contravention of the Trade Marks Act 62
of 1963, has been committed; and
/ (ii)
73
(ii) of all cylinders which the
defendant possesses and which bear one or more of the first plaintiff's gas
mark or cylinder mark and in respect of which a contravention
of s 6 of the
Merchandise Marks Act 17 of 1941 has been committed .
(d) The plaintiffs are awarded the costs of suit, inc1udi
n
g the costs
of two counsel.
(e) The action is postponed to a date to
be arranged in order that the question of damages suffered by the plaintiffs
may be investigated and determined."
It is not disputed that on the basis of the Court's finding and in view of
what was stated in par. 9 of the Stated Case, the respondents
were entitled to
interdicts. Appellant's counsel, however, criticised the interdicts granted in
terms of paras. (a) and (b) of the
Court's order on the ground that they are
general in their terms, whereas the Court a
quo
found only certain
specific acts of infringement or contravention, as the case may be.
/ It
74
It is obvious to me that the learned Judge a
quo
intended the orders
(a) and (b) to be read in the light of his specific findings ; and that, in my
view, is how his order ought to
be interpreted. Nevertheless, it is always open
to a court, in cases of trade mark infringement, either to grant an interdict in
general terms or to prohibit the specific form or forms of infringement which
have been established, with or without a general prohibition
(see Chowles and
Webster, op .
cit
., p 236 ; and also as to the English practice Kerly, op
.
cit
. , par. 15-66 , pp 295-6 ). And it seems to me that the same
princip1es should app1y to contraventions of the Merchandise Marks
Act. Indeed,
here the reported cases seem to show a preference for a specific order (see eg.
Sheffield
E
lec
tro-Plating a
nd Enamelling
Works Ltd v
Metal Signs and Name
plates
(Pt
y)
Ltd
and
Ano
ther
1949 (1) SA 1034
(W), at pp 104.L-2; T
obler y Durban
Con
fectionery Works (Pty) Ltd
1965 (4) SA 497
(C), at p 504 F-G). In the
present case this Court has altered a
/ number
75
number of the findings of the Court a quo and since the resulting grounds of
liability, both as to trade mark infringement and as
to contravention of the
Merchandise Marks Act, are somewhat complex, I think that it is advisable that
the order made by this Court
should spell out specifically the terms of the
interdicts. Inasmuch, however, as the parties have not had the opportunity to
make
representations in regard to paragraphs (a) and (b) as reformulated by this
Court, this portion of the order will be provisional
in order to enable the
parties to make such representations, should they wish to do so.
Appellant's counsel also objected to the delivery-up order granted by the
Court a q
u
o on the ground that the appellant was the lawful possessor and
owner of the cylinders in its possession. Respondents' counsel indicated.
that
his clients were prepared to agree to a compromise: (i) that in regard to empty
Sodastream cylinders in appellant's possession,
appellants be ordered to
remove
/ therefrom
76
therefrom, under supervision by a representative of the respondents, all
labels thereon not affixed by the respondents; and (ii) that
in regard to
Sodastream cylinders filled by appellant and in its possession all unauthorized
labels be
removed under
supervision as
in
(i) above and, in
addition, that appellant be ordered to empty the cylinders by releasing the gas,
again under supervision. Appellant's
counsel did not indicate his attitude to
this proposal. It seems to me, however, to be a reasonable one and 1 propose to
adopt it.
Thirdly, appellant's counsel submitted in their heads that the Court a
quo
"erred in ordering an enquiry into the damages suffered by the
respondents". No argument was addressed to us in support of this submission.
The
actual order made by the Court a quo appears from the reported judgment at p 432
C-D. It is similar to the form of order adopted
in H
arvey Tiling Co (Pty) Ltd
v
Rodomac (Pty) Ltd and Another 1977 (1) Pty 316 (T), at
/ P 330
77
p 330 A-B and subsequently followed in other cases. I can see no objection to
this form of order.
COSTS OP APPE
AL A
ND CR
OSS-AP
PEA
L The only success
achieved by appellant has been in regard to the issue of trade description which
arises under both sec. 6(e) and
sec. 7 of the Merchandise Marks Act and in
regard to the amelioration of the delivery-up order. As the conduct giving rise
to the
allegation of liability under sec. 6(e) will, from a practical point of
view, be restrained by the interdict granted in respect of
trade mark
infringement and as it has been found that appellant contravened sec. 7 in other
respects, viz. selling goods to which
a forged trade mark had been applied and
to which a trade mark has been falsely applied, I do not consider that in these
respects
appellant has achieved substantial success on appeal. Nor do I think
that the
/ amelioration
78
amelioration of the delivery-up order constitutes substantial success.
Appellant is, therefore, not entitled to any costs on appeal.
Respondents, on the other hand, have succeeded in establishing that, contrary
to the finding of the Court a q
uo
, the labels FI to F5
inclusive
related
to
the gas mark and that appellant's conduct constituted the
unauthorized user of these marks as trade marks . In addition, respondents
have
obtained a specific order in respect of sec. 6(b) of the Merchandise Marks Act.
This must be regarded as substantial success
and as entitling the respondents to
the costs of the cross-appeal. Since the Court a
quo
's orders (a) and (b)
must, as I have indicated, be read subject to the limitations imposed by the
Court's findings as to infringement,
etc., it seems to me that the cross-appeal
was necessary and, to the extent
that it was successful, justified.
/ ORDER
79
ORDER
The following order is made:-
(1) The appea1 is a11owed in
pa
r
t and the cross-appeal is allowed in part. (The extent of the success
respectively of appeal and cross-appea1 appears from the judgment
and from para.
3 of this Order.)
(2) Appellant is to pay the costs of appea1 and
cross-appeal including costs of two counsel.
(3) The order of the Court is altered to
read
as fo11ows:
"(a) The defendant is interdicted and
restrained from infringing the first
p1
a
intiff's trade mark No
78/4435 in
class 1 (schedule IV) (the 'gas
mark') by selling, exchanging
or
otherwise dealing in gas cylinders,
when such cylinders are
filled
with carbon dioxide gas by anyone
other than an authorized
Sodastream
/ distributor
80
distributor and bearing first plaintiff's gas mark in one or more of the
following forms:
(i) the words 'Guaranteed
filled by authorised Soda-stream distributor' stamped on the cylinder,
and/or
(ii) the labels, annexures F1,F2, F3, F4
or F5 to the Stated Case
.
(b) The defendant is interdicted
and
restrain-ed from contravening
—
(i) sec. 6(a) of the Merchandise Marks Act 17 of 1941 by effacing or
otherwise forging first plaintiff's gas mark or first plaintiff's
trade mark No
78/4436 in class 6 (sche-du1e iv) (the 'cylinder mark') as applied to any gas
cylinder in one or more of the forms
stated in paras. (a) (1) and (ii) above and
in the form of the label annexure F6 to the Stated Case;
(ii) sec 6(b) of the said Act by filling any gas cy1inder, bearing first
plaintiff's gas mark in one or more of the forms stated in
paras, (a) (i) and
(ii) above, with carbon dioxide gas;
/ (iii) sec
81
(iii) lsec . 7 of the said Act by
selling carbon dioxide gas
in any gas
cylinder in res -
pect of which first plain-
tiff's gas mark and or
its
cylinder mark as applied in
one or more of
the
forms sta
-
ted in para . (b) (1) above has
been effaced or otherwise
larged::
and
'.
( iv) sec. 7 of the said Act by selling carbon dioxide gas in any gas
cylinder to which first
plaintiff ' s gas mark has been applied in one or
more of
the
forms
stated in
paras. (a) (i) and (ii) above and
which has been filled with corbon dioxide gas by anyone other than a
distribu-tor authorized by
first plain-tiff or second
plaintiff.
(c)
The defendant
remove from all gas cylinders emanating
from
t
he plaintiffs in
its possession all
label
s not
at fixed thereon by the plaintiffs
or by a distributor authorized by first plaintiff or second plaintiff, such
removel to take place
under
/supervision....
82
supervision by an autorized
representative if the plain-
tiffs;and
(iii)in addition empty all such gas
cylinders in its possession
which have been filled with
carbon dioxide gas by anyone
other than a distributor autho-
rized by first plaintiff or
second plaintiff, by releas-
ing the said gas, such emptying
to take place under supervi-
sion by an authorized
repre-
sentative of the plaintiffs.
The plaintiffs are awarded the costs of
suit , including the costs of two coun-sel.
(e) The action is postponed to a date to b arranged in order that the question
of damages suffered by the plaintiffs may be investigated
and
determined."
(4) The order made in,para . 3 above, in so far as it substitutes new paragraphs
for paras. (a), (b) and (c) of the order of the
Court a
quo
, is
provisional and leave is granted to each party , if so advised . to make
wr
itten applica-tion. supported by written submissions, for the
variation.......
83
variation of the said paras, (a) (b) or
Such written application sha1l be served ON THE
other party and filled with the Registrar of this
Court on or before 14 April 1986 . The pa
rty
upon whom an application is served shall be
entitled to file written
sub-
,
missions in reply
thereto within a period of 21 days of service
of the application . If
no s
uch written app
cation is filed by the appointed date, the pro-
visional order shall forthwith become final .
If such written application or applications to
the Court are filied, the Court will make a
further order.
M M
CORBETT
HOEXTER, JA)
BOTHA, JA
\)
NICHOLAS., AJA)
NESTADT, AJA)
CONCUR