Pick 'n Pay Retailers (Pty) Ltd v Commissioner of South African Revenue Services and Others (13354/2007) [2008] ZAWCHC 24; 2008 BIP 187 (C) (6 May 2008)

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[2008] ZAWCHC 24
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Pick 'n Pay Retailers (Pty) Ltd v Commissioner of South African Revenue Services and Others (13354/2007) [2008] ZAWCHC 24; 2008 BIP 187 (C); 71 SATC 52 (6 May 2008)

“
REPORTABLE”
IN THE HIGH COURT OF
SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE NO:
13354/2007
In
the matter between:
PICK
‘N PAY RETAILERS (PTY) LTD
Applicant
And
THE
COMMISSIONER OF SOUTH AFRICAN
REVENUE
SERVICES
1
st
Respondent
COLLIN
JANSEN
2
nd
Respondent
THE
COMMISSIONER FOR CUSTOMS
AND
EXCISE
3
rd
Respondent
CROCS
INC.
4
th
Respondent
THE
MAGISTRATE, CAPE TOWN
MAGISTRATE’S
COURT
5
th
Respondent
JUDGMENT:
6/05/008
VAN
REENEN, J:
1]
This application is about the procedural and substantive propriety of
the
detention
by Mr Collin Jansen (the second respondent), an employee of the South
African Revenue Services, acting in his capacities as a customs
officer in terms of the Customs and Excise Act, No 91 of 1964
(CEA) and as an inspector in terms of the Counterfeit Goods Act,
No
37 of 1997  (CGA) and the
seizure
of 19524 pairs of beach sandals  (the seized goods) imported
into South Africa from China by Pick ‘n Pay Retailers  (Pty)
Ltd  (the applicant) in containers TGHU 467653 and TGHU 7265570
(the containers) by virtue of a warrant granted by Senior
Magistrate
M.A. Attridge the (fifth respondent) on 5 September 2007 in terms of
section 6(1) of the CGA.  It is also about whether
the seized
goods are counterfeit or not and if not whether they should be
returned to the applicant.
2]
The applicant is a well-known retailer with a substantial number of
outlets throughout the Republic
of South Africa.  It, inter
alia, imports, stocks and sells footwear.
3]
Crocks Inc  (the fourth respondent), a company incorporated in
Delaware in the United States
of America and with its principal place
of business in Colorado, is a manufacturer and distributor of
footwear under the trade mark
Crocs.  A style of shoe so
manufactured and marketed is described as the Crocs Beach Model shoe
(the Beach Model shoe),
the strapless portion whereof is based on a
design originally conceived by one Ettore Battiston  (Battiston)
a citizen of Italy
whilst employed by a company incorporated in that
country namely,  L’Artigiana Stampi di Battiston Ettore e C
S.n.C. (L’Artigiana).
That design enjoys copyright protection
locally by virtue of the fact that South Africa and Italy are members
of the Berne Convention.
It is common cause that the aforesaid
company as the holder of the copyright in the drawing(s) embodying
the design of the
Beach Model shoe duly assigned the copyright
therein to Finproject N.A. Inc  -  which later changed its
name to Foam Creations
Inc  -  and that the latter in turn
assigned such rights to the fourth respondent.
4]
The fourth respondent has appointed Tidal Trade CC  (Tidal
Trade), a close corporation incorporated
in the Republic of South
Africa, as the sole distributor of its products in the Republic of
South Africa and it has since May 2005
been responsible for the
importation, distribution, marketing, advertising and sale of the
Crocs Beach Model shoe.  Tidal Trade
has established in excess
of 340 retail stockists throughout the Republic of South Africa and
avers that as a result of its marketing
efforts approximately 175000
pairs of genuine Crocs Beach Model shoes were sold during 2006.
The fourth respondent contends
that as a result of the exposure of
the Beach Model shoe to a substantial number of members of the public
they have come to know
the Crocs trade mark and more in particular
the Beach Model shoe design well.  The fourth respondent also
contends that the
shape, configuration, pattern and/or ornamentation
of the Beach Model shoe  (which for the sake of brevity shall
hereinafter
be referred to as  “the shape”)  is so
distinctive that it has, by reason thereof alone, become immediately
recognisable
and that its distinctive features have served and still
serve to distinguish it from other shoes in the South African
market.
In view of what has been set out above the fourth
respondent claims that the intellectual property rights subsisting in
the Beach
Model shoe vest in it.  In addition to the copyright
in the original design drawings thereof the fourth respondent asserts
that
the shape of the Beach Model shoe constitutes a trade mark under
the Trade Marks Act, No 194 of 1993  (The TMA) and that it
as a
well-known trade mark, qualifies for protection under section 35 of
that act.
5]
After three dimensional reproductions of the Beach Model shoe had
been introduced to the market by
the fourth respondent its popularity
served as a catalyst for the copying of the design by unscrupulous
manufacturers worldwide,
particularly China, for their  own
financial gain.  Such conduct has obliged the fourth respondent
to be involved in litigation
in different parts of the world in an
attempt to thwart the sale of unauthorised reproductions of the Beach
Model shoe.  That
state of affairs prompted the fourth
respondent to instruct its South African attorneys Messrs Adams &
Adams  (Adams &
Adams) to submit an application in terms of
section 15 of the CGA  (the section 15 application) to the
Commissioner for Customs
and Excise  (the third respondent) for
the seizure and detention of all goods which are suspected of being
counterfeit in that
they feature, bear, embody or incorporate the
subject-matter of the intellectual property rights vesting in it in
respect of the
Beach Model shoe or goods to which the subject-matter
of such rights have been applied, if imported into the Republic of
South Africa.
That application was approved for a period that
expired on 30 April 2007, but another was submitted on 28
August 2007.
Despite the fact that the period for which it had
been granted had lapsed, all the information contained in the section
15 application
remained on the internal data base of the Commissioner
of the South African Revenue Services  (the first respondent).
It needs to be noted however that no reference was made to the second
of the bases on which the fourth respondent in these proceedings
claims to be entitled to intellectual property rights in the Beach
Model shoe.
6]
On 31 July 2007, the second respondent, for primarily customs
purposes, examined the containers in
which, it is now common cause,
the seized goods were imported into the Republic of South Africa by
the Applicant.  He during
such examination noticed that the
shoes in 1627 cartons in the containers resembled the Crocs Beach
Model shoe.  That conclusion
was based on his awareness of the
information contained in the original section 15 application as well
as knowledge gleaned in the
past because of his involvement in other
instances where shoes which prima facie infringed the fourth
respondent’s intellectual
property rights in the Beach Model shoe
had been imported.  He on the basis of his knowledge of the
shape of the genuine Beach
Model shoe identified the shoes which are
the subject-matter of this application as possible counterfeit
goods.  He sorted and
counted them;  prepared an
inventory;  and on the same day forwarded samples thereof to the
fourth respondent’s attorneys.
The second respondent
thereafter reviewed samples of the said shoes and, on the basis
thereof as well as the facts in the first respondent’s
internal
data base with regard to the shoes manufactured and marketed by the
fourth respondent, entertained what he considered were
reasonable
grounds for suspecting that they were counterfeit.  Having come
to that conclusion he on 8 August 2007 issued a detention
notice in
terms of section 113A(1)(a) of the CEA in respect of the seized goods
and provided copies thereof to the clearing agents
and the
applicant.  He on 23 August 2007, received an affidavit attested
to by one Emil Olsen (Olsen), the Director of Product
Development of
the fourth respondent, from Adams & Adams which confirmed that
he, after having studied and examed digital images
of the samples
which had been forwarded to him, had come to the conclusion that they
were  counterfeit and provided details
of the grounds upon which
that conclusion was based.  The second respondent accentuated
that although the granting of the section
15 application had lapsed
by the time the aforesaid detention notice was issued, he in issuing
it had acted in terms of the provisions
of section 3(4) as read with
section 4(1) of the CGA, because he at the time entertained
reasonable grounds for suspecting that an
offence contemplated in
section 2(2) of that act had been, was being, or was likely to be
committed by the applicant.
7]
As a consequence the first- to third respondents brought an
application in terms of section 6(1)
of the CGA before the fifth
respondent in chambers and on an ex parte basis for the issuing of a
warrant for the seizure, removal,
detention and collection of the
detained goods as well as for authority to exercise in relation
thereto those powers contained in
sections 4 and 5 of the CGA if
deemed necessary  (the warrant application).  That
application was duly granted on 5 December
2007 and the warrant
issued pursuant thereto was executed on 10 September 2007.
8]
As a result thereof the applicant launched an application in this
court on 18 October 2007, on notice
to the first to fifth
respondents, in which the following relief was claimed on an urgent
basis: -
8.1]
An order –
8.1.1]
directing that the warrant issued by the fifth respondent on 5
September
2007 in terms of Section 6(1) of the CGA be set aside;
8.1.2]
directing that the detention, seizure and removal of the 19 524 pairs
of plastic shoes pursuant to the said warrant be declared wrongful
and that they should be released to the Applicant immediately;
8.1.3]
in terms of section 7(4)(a) of the CGA directing that the offending
goods
are not counterfeit.
8.2]   Subject
to the relief sought in paragraph 8.3 below, an order directing that
the First to Third and Fifth Respondents
jointly and severally
(or so many of them as this court may deem fit) pay the Applicant’s
costs;
8.3]
Only in the event of the Fourth Respondent opposing the application,
an order directing that it be ordered to be
jointly and severally
liable for the Applicant’s costs;
8.4]
An order granting the Applicant such further and/or alternative
relief as the court may deem fit.
9]
Save for the fifth respondent, who abides the decision of this court,
all the other respondents are
opposing the application and have filed
answering affidavits to which the applicant has filed a reply.
10]
It would appear that the relief in paragraph 8.1.2 above is claimed
merely as a corollary to the relief in paragraph
8.1.1 so that its
fate is dependent upon whether or not the warrant issued on 5
September 2007 is set aside.
The
setting aside of the seizure warrant
:
11]
Mr Sholto-Douglas SC, who with Ms Vaughan appeared for the applicant,
assailed the granting of the said warrant
on a number of grounds.
The
first
is that the second respondent, because of an absence of reasonable
grounds for an assumption that they were counterfeit, failed to
apply
his mind properly or at all to whether the offending goods were in
fact counterfeit.  The
second
is that the applicant had not been afforded an opportunity to be
heard before the application in terms of section 6(1) of the CGA
for
the issuing of a warrant was granted.  The
third
was that the first- to third respondents in the said application
failed to divulge all material facts to the fifth respondent.
The
fourth
was that the first- to third respondents in the warrant application
failed to make out a prima facie case that the fourth respondent
enjoyed any of the intellectual property rights  “in the three
dimensional footwear” contemplated by the CGA and/or that
such
rights had been infringed by the applicant.
Each of those grounds
will be considered below.
The
first ground
:
12]
The first ground fails to recognise the dichotomy between the
detention
of the seized goods by the second respondent and the
seizure
and detention
thereof pursuant to the warrant issued by the fifth respondent.
It is apparent that subsequent to the issuing and execution
of the
warrant on 10 September 2007, the offending goods were being seized
and detained pending finalization of the criminal and
civil
proceedings envisaged in section 9(1) of the CGA and no longer for
the purpose of determining whether the provisions of the
ECA or any
other law have been complied with or in order to ascertain whether
they are counterfeit or not.  Sight seems to have
been lost
thereof that prior to 10 September 2007 the seized goods were being
detained pursuant to the provisions of the CEA and
that in terms of
section 107(2)(a) thereof the third respondent was precluded from
allowing them to pass from his control until the
provisions of that
act or any other law relating to, inter alia, the importation of such
goods had been complied with, except on
such conditions as determined
by him.  Section 4(8A) of the CEA, in terms whereof a customs
officer is empowered to stop, detain
and examine the goods
contemplated in section 107(2)(a) thereof in order to determine
whether the provisions of that act or any other
law have been
complied with, appears to me to be the only basis on which the
offending goods could have been lawfully detained until
such time as
the second respondent, on 8 August 2007, issued a notice of detention
pursuant to the provisions of section 113A(1)(a)
of the CEA.
Unlike section 4A(c)(i) of the CEA which provides that the goods
referred to in section 4(8A)(ii) may be detained
for a reasonable
period, section 113A(1)(a), which provides that an officer may detain
any goods for the purpose of ascertaining
whether they are
counterfeit as contemplated in the CGA, is silent thereanent, but
there, in my view, is no reason why a similar
limitation should not
be read into it  (Cf:
Commissioner,
South African Revenue Services  v  Trend Finance
(Pty) Ltd and Another
2007(6)
SA 117  (SCA) at paragraphs 28, 29).  That the second
respondent detained the offending goods for the purposes envisaged
by
the CEA, more in particular whether the provisions of the CGA had
been offended against, can reasonably be inferred from the fact
that
he forwarded samples thereof to the fourth respondent’s attorneys
with a view to obtaining their and/or their client’s input
in
regard thereto; compared samples thereof against the data on the
first respondent’s data base;  and after he had received
an
affidavit on 23 August 2007 which confirmed the correctness his own
suspicions in that regard, took the initiative in bringing
the
warrant application in conjunction with the first- and third
respondents.
13]
Irrespective of what the second respondent has said in the
application for a seizure warrant  as well as
in the opposing
affidavit filed in these proceedings, neither subsection 4(8A)(a)(ii)
nor subsection 113A(1)(a) of the CEA required
him  “to apply
his mind properly or at all” to whether or not the offending goods
were counterfeit.  He was statutorily
empowered to detain them
simply in order to determine whether or not the provisions of the CEA
or any other law had been complied
with or to ascertain whether or
not they were counterfeit.  By contrast:  the powers vested
in the second respondent by
section 4(1) of the CGA, other than in
the circumstances referred to in section 4(2) thereof, could not be
exercised lawfully without
the authority of a warrant issued in terms
of section 6(1) of the CGA.  The existence of reasonable grounds
for believing that
an act of dealing in counterfeit goods has taken
or is likely to take place is a jurisdictional requirement for the
granting of such
a warrant, and the decision whether that requirement
had been shown to be present was for the fifth respondent to decide
on the basis
of the evidence placed before her independently of the
requirements enumerated in section 4(1).
14]
In the premises I incline to the view that the first ground lacks any
merit.  That conclusion appears to
be consonant with the view
expressed in
The
Commissioner for the South African Revenue Services and Others
v  Sterling Auto Distributors CC
in re:
Bayerische
Motoren Werke and Another  v  Sterling Auto Distributors CC
and Others,
Case No A1796/04  (an unreported judgment of the Transvaal
Provisional Division) to the effect that it is not the role of the
customs authorities to make decisions on whether goods are
counterfeit or not but that it is a matter for resolution in later
litigation
between an intellectual property rights owner and the
importer of the goods in question.
The
second ground
:
15]
It is common cause that the fifth respondent considered the
application for a warrant of seizure in chambers
and on an ex parte
basis.  Whilst section 6(1) pertinently provides that the
warrant contemplated in section 4(2) as read with
section 5(1) of the
CGA  “will be issued in chambers … by a magistrate” i.e.
in the privacy of his or her own chambers
in contrast to in an open
court to which the general public has access  (See:
Robinson
v  Rossi
[1996]2
All SA 349  (W) at 359 e – f) it, other than specifying that
the information to be taken into account has to
be on oath or
affirmation, is silent as regards the nature and format of the
proceedings.
16]
The applicant contends that the principles of natural justice found
application;  that the warrant should
not have been issued
without it first having been given an opportunity by the fifth
respondent to be heard;  and that the failure
to have done so
constituted a  “
gross
irregularity in the proceedings
”
which would justify the setting aside of the issuing thereof.
Although the underlined words would appear to echo the wording
of
section 24(1)(c) of the Supreme Court Act 59 of 1959 in terms whereof
the proceedings of an inferior court may be reviewed by
a provincial
or local division of the High Court having jurisdiction I have no
intention of approaching this matter on that narrow
basis.  As
in my view the question whether the fifth respondent in issuing the
warrant was performing a judicial or an administrative
function is
not in itself determinative of whether the rules of natural justice
needed to be complied with, it is for the purposes
of this judgment
not necessary to resolve that vexed question  (Cf:
Pretoria
Portland Cement Co Ltd and Another  v  Competition
Commission and Others
2003(2)
SA 381  (T) at 384 A – B;
Pretoria
Portland Cement Co Ltd and Another  v  Competition
Commission and Others
2003(2) SA 385  (SCA) paragraphs  17 – 26;
De
Lange  v  Smuts NO and Others
1998(3) SA  785  (CC) at paragraphs 80 and 161).
17]
What however needs to be resolved is whether or not the rules of
natural justice, more in particular the right
to be heard, found
application in the warrant application.  The general rule in
that regard is that where a statute empowers
a public official to
make a decision which may prejudicially affect the property or
liberty of an individual he or she has a right
to be heard unless the
statute either expressly or by necessary implication manifests an
intention on the part of the legislature
to exclude it  (See:
Attorney-General,
Eastern Cape  v  Blom and Others
1988(4) SA 645  (AD) at 662  G – I).  By contrast
section 7(4)(a) which specifically refers to an application
on notice
of motion and section 11(1) which refers to an ex parte application
on notice of motion, section 6(1) of the CGA merely
provides for the
issuing of a warrant in chambers by a judge or magistrate.  It
is generally accepted that there may be situations
in which an act of
parliament or conduct in terms thereof, because of its nature, would
not be subject to the operation of the rules
of natural justice by
reason of the possibility that, depending on the circumstances,
public policy and interest may, in the interests
of advancing
effective governance, overshadow the rights of individuals
(See:
Deacon
v  Controller of Customs and Excise
1999(2) SA 905 (E)).
18]
A number of considerations have been identified by courts as being
pertinent to the enquiry whether or not the
rules of natural justice
are applicable to a decision taken by a public official in terms of a
statute.  They include:
the object of the statute;
the nature of the statutory power that has been conferred on such an
official;  the nature
of the conduct which is intended to be
controlled thereby;  and also any potential prejudice to the
individual concerned as
well as others who have an interest in the
decision  (See:
Henbase
3392 (Pty) Ltd  v  Commissioner, South African Revenue
Service and Another
2002(2) SA 180  (T) at 190 F – G).  It is also accepted
that the more serious the intrusion and the more far-reaching
the
prejudice, the more readily it will be inferred that the rules of
natural justice are intended to apply  (See:
Deacon’s
case, supra at 917 D).
19]
The applicant’s counsel in order to bolster the submission that the
rules of natural justice found application
accentuated that the
purpose of a warrant issued under section 6(1) of the CGA is to
procure the seizure  -  in contra-distinction
to detention
-  of goods suspected of being counterfeit and called in aid a
dictum of Van der Westhuizen J in the
Henbase
case  (supra) at 191 E to the effect that, whereas it can be
easily understood that the rules of natural justice may or have
to be
applicable to seizure and forfeiture, the same may not necessarily be
true as regards mere detention.  That superficially
alluring
submission, however, fails to have regard of the fact that the
purpose of a seizure under section 88 of the CEA is merely
a
precursor to forfeiture, in the absence of the payment of the
required duties and/or charges and/or penalties;  a direction
by
the third respondent in terms of section 93(1) on good cause shown
for delivery of the seized goods;  and a claim by or on
behalf
of the owner of goods for the return thereof in terms of section
89(1).  The purpose of a seizure in terms of a warrant
issued
under section 6(1), on the other hand, is less incursive in that it
precludes the goods in question from entering  “the
channels
of commerce” pending the resolution of the question whether or not
they are counterfeit in an application for a determination
brought in
terms of section 7(4)(a) or the criminal or civil proceedings
envisaged by section 9 of the CEA.  Pending finalization
of such
proceedings, such goods are stored and kept in safe custody at a
counterfeit goods depot and in terms of section 8(2)
“will be
available” to a complainant or prospective complainant;  the
suspect;  or any other interested person.
20]
As is apparent from the preamble thereto the object of the CGA is the
introduction of measures aimed against
the trade in counterfeit goods
and to  “further protect” the owners of trademarks,
copyright and marks under the Merchandise
Marks Act, 1941 against the
unlawful application of the subject-matter of their respective
intellectual property rights to goods
and also against the release
thereof into the channels of commerce and for that purpose to
prohibit certain acts in relation to such
goods;  the possession
thereof as well as the creation of certain offences in relation
thereto.
The
conduct which the CGA is intended to control is firstly, the
infringement of intellectual property rights by counterfeiting and
secondly, the combating of the perpetration of fraud on the
purchasing public  (See:
Cadac
(Pty) Ltd  v  Weber-Stephens Production Company and Others
2005
BIP
439  (W) at par 17) due to a combination of the distribution of
similar or identical goods and the application thereto of
the
intellectual property rights vesting in others.  To that end,
and because of considerations of policy, provision is made
for
criminal as well as civil sanctions.
21]
Section 6(1) circumscribes the nature of the discretion conferred on
a magistrate or a judge clearly namely,
whether there are reasonable
grounds for believing that an act of dealing in counterfeit goods
has, is or is likely to take place.
The only prescribed
requirements are that the discretion has to be exercised in chambers
and on the basis of information on oath
or affirmation.  Such a
belief must not only exist in fact but must furthermore be based on
the existence of objective facts
consistent therewith   (Cf:
R
v  Ismail & Another
1958(1) SA 206  (AD);
O’Hara
v  Chief Constable of the Royal Ulster Constabulary
[1996] UKHL 6
;
[1997] All ER 129
(HL) at 138 j – 139 a;
Vumba
Intertrade CC  v  Geometric Intertrade CC
2001(2) SA  1069  (W) at 1071 g).
22]
The following considerations, in my view, favour the inference that
the legislature did not envisage that the
power to issue a warrant in
terms of section 6(1) had to be exercised pursuant to proceedings of
a formal nature.  Firstly,
the reference in section 6(1) of the
CGA to a magistrate or a judge respectively, rather than the
institutions in which they do service
(See:
Briel
v  Van Zyl
1985(4) SA 163  (T) at 168  G – H and  Cf:
Pretoria
Portland Cement Co Ltd and Another  v  Competition
Commission and Others
(SCA)  (supra) at paragraph 39);  secondly, the requirement
that the discretion is to be exercised in chambers and
not in an open
court;  thirdly, the absence of any indications that proceedings
of an adversarial nature are envisaged;
and finally there are a
number of pointers in the act itself which are consistent with a
recognition of the need for an expeditious
resolution of matters
relating to counterfeiting:
23]    An
unavoidable consequence of the seizure of goods suspected of being
counterfeit is the immediate impairment
of the ability of those
lawfully entitled to deal freely therewith.  As has been pointed
out above when dealing with the fundamental
differences between
detention, seizure and forfeiture, such an impairment in the case of
a seizure pursuant to a warrant issued under
section 6(1) of the CGA
does not amount to a complete deprivation but merely an impairment of
limited duration pending the finalization
of a section 7(4)(a)
application or the criminal or civil proceedings envisaged in section
9, in which proceedings the issue of any
violation of the provisions
of the CGA are to be fully ventilated and resolved.  What has to
be weighed against thát is the
possibility of immediate and
irreversible detrimental consequences on the interests of
intellectual property holders if such goods
were to be released into
the  “channels of commerce” without a full prior enquiry and
it should later transpire that they
are counterfeit.  A further
factor to be weighed, having regard to the prominence in our present
constitutional dispensation
of the over-arching principle of
legality, is the undesirability, from a public policy point of view,
of releasing such goods prior
to the resolution of the proceedings
envisaged by section 9 and thereby increasing the risk of furthering
the commission of one or
more of the offences enumerated in section
2(2) of the CGA.
I,
in view of the aforegoing, incline to the view that there are cogent
indicators that the legislature did not envisage compliance
with the
rules of natural justice as a prerequisite for the granting of a
warrant under section 6(1) of the CGA.  That conclusion
appears
to be fortified by the fact that any order made ex parte is by its
very nature provisional and open to challenge  (See:
Ghomesh-Bozorg
v  Yousefi
1998(1) SA 692 (W) at 696 D – E  -  approved of by the
Supreme Court of Appeal in the
Pretoria
Portland Cement
case  (SCA) (supra) at paragraph 45) and possibly is the raison
d’etre for the remedy provided for in section 7(4)(a)of the
CGA
which can be invoked at any time by a person prejudiced by a seizure
of goods in terms of section 4(1) i.e. pursuant to a seizure
warrant
issued under section 6(1) of the CGA.
In view of the
aforegoing, I am of the opinion that the legislature, by necessary
implication, did not intend that the rules of natural
justice would
need to be complied with as a prerequisite to the issuing of a
seizure warrant under section 6(1) of the CGA.
24]
Should I be erring in that regard, I in any event, am of the view
that the requirements of such rules relating
to an opportunity for
the making of representations, have been substantially complied
with.  The particular manifestation of
the applicant’s
entitlement to fair procedure which had allegedly been violated is
its right to a hearing.  Assuming that
it was thereby intended
to refer to the failure by the fifth respondent to have allowed the
making of oral submissions by the applicant’s
legal
representatives, my understanding of the legal position is that no
right
of that nature exists.  That, in my view, is apparent from not
only the case law  (See eg:
Bam-Mugwanya
v  Minister of Finance and Provincial Expenditure, Eastern Cape
and Others
2001(4) SA 120 (Tk) at paragraph 24) but also the provisions of
section 3(3) of the Promotion of Administrative Justice Act,
3 of
2000  (Paja) which makes the making of oral representations
dependent upon the favourable exercise by an administrator
of his or
her discretion (See:
Cora
Hoexter:  Administrative Law in South Africa
at 334;
J.R.
de Ville:  Judicial Review of Administrative Action in South
Africa
at 254/5).  By contrast, section 3(2)(b) of Paja, which
recognises the right of a reasonable opportunity to make
representations
as an element of procedurally fair administrative
action  -  failing an opportunity to make oral
representations
-  inferentially permits written
representations.
25]
Although the second respondent in a letter addressed to the
applicant’s attorneys on 30 August 2007 stated
that it was not
intended to deprive the applicant of  “the right” to be
heard and that its  “rights” in terms of
section 3 of Paja
would be respected, there could not have been any room for doubt that
the second respondent was persisting with
the contention that all
that section 6(1) of the CGA envisaged was an ex parte  “seizure
warrant application”.  The
said letter had been written in
response to the applicant’s attorney’s letter of 24 August 2007
wherein the broad bases on which
it was being contended that the
offending goods could not be detained and seized, were set out.
Paragraph 5(d) of that letter
contained the following passage:
“
To the extent that you
may be of the view that our client has no right to be heard prior to
the issue of a warrant we demand that
you place the contents of this
letter before the judge in chambers or the magistrate hearing such
application.”
The first- to second
respondents duly acceded to that request and included the said letter
as an annexure to the founding affidavit
deposed to by the second
respondent in the warrant application.  It has not been
suggested, and there is no basis for accepting
that the fifth
respondent failed to take cognisance thereof before she decided to
issue the said warrant, I have come to the conclusion,
on the basis
of the immediately preceding facts, that there was substantial
compliance in the warrant application with the rules
relating to fair
procedure as regards the right to have made representations.
The
third ground
:
26]
The gravamen of this grounds is that the first- to third respondents,
acted in conflict with the uberrimae fides
rule, which requires an
applicant in an ex parte application to disclose all material facts
that might influence a court in coming
to a decision  (See:
Schlesinger
v  Schlesinger
1979(4) SA 345  (W) at 349 A – B;
Mv
Riscun Trader(4):  Mv Riscun Trader  v  Manly
Appledore Shipping Ltd
2000(3)
SA 776  (C) at 793 I – J).  The submission that the
first- to third respondents violated that rule in the warrant
application is limited thereto that Mr Jodysveran Pillay, who is a
legal consultant in the employ of the first respondent and who
represented the respondent’s therein, had reached an agreement with
the applicant’s attorneys to the effect that the application
would
not be dealt with on an ex parte basis.  There is a dispute
between the applicant’s attorneys on the one hand, and the
second
respondent and Mr Pillay on the other hand, as regards whether the
latter two had given an undertaking of that nature and
whether Mr
Pillay had prior to the reaching of a decision on whether the warrant
should be issued, failed to inform the fifth respondent
of the
request for a hearing.  I am in disagreement with the submission
in applicant’s counsels’ heads of argument that
the three factors
enumerated in paragraph 7.9 thereof tilt the probabilities in favour
of the acceptance of the applicant’s version
in preference to that
of the respondents as regards whether such an agreement had been
reached or not.  On the contrary.
The passage quoted in
paragraph 14 above as well as the following statement in the ultimate
paragraph of the second respondent’s
letter of 30 August 2007 to
the applicant’s attorneys would seem to point the other way.
“
It is not our
intention to deny your client the opportunity to be heard but aver
that this is an ex parte seizure warrant application
and no service
of the application is provided for in terms of the Counterfeit Goods
Act”
27]
The applicant was unable to challenge the second respondent’s
averment  -  confirmed by Mr Pillay
on oath  -
that he informed the fifth respondent of the applicant’s request
for a hearing but that she decided to dispose
of the matter on an ex
parte basis despite the fact that it should have been apparent to her
from the contents of the first of the
aforementioned letters that the
applicant desired such an opportunity.  As the applicant is
seeking relief which is final of
nature on notice of motion, material
disputes of fact must be resolved on the basis of the approach
enunciated in
Plascon
Evans Paints Ltd  v  Van Riebeeck Paints  (Pty) Ltd
1984(3) 623  (A) at 634 H – I  (the
Plascon-Evans
rule), namely, that the claimed relief can be granted only if the
facts in the applicant’s affidavit which have not been placed
in
issue, together with the facts alleged by the first- to third
respondents, justify it.  If that approach is followed in the
instant matter there, on the papers, in my view, is no basis
upon which it could be
found that the first- to second respondents violated the uberrimae
fides rule.
28]
What needs be considered next is whether the procedural fairness of
the warrant application was fatally flawed
because the fifth
respondent failed to afford the applicant’s legal representative(s)
a hearing.  In my view not.  Not
only would it be contrary
to the proper administration of justice to permit the emasculation of
a magistrate’s powers to control
the proceedings in his or her
court  (See:
The
Civil Practice in the Magistrates’ Courts in South Africa,
9
th
Edition, Volume II, 39-3)  by extra-curial arrangements entered
between parties and/or their legal representatives but
-
as is apparent from what has already been found above  -
the applicant’s legal representatives did not have
the
right
to make oral representations.  There furthermore is nothing to
suggest that the fifth respondent had not exercised her discretion
against permitting such representations.  In any event the
written representations embodied in the applicant’s attorneys’
letter of 24 August 2007 had been placed before the magistrate and
nothing suggests that she had not considered the contents thereof.
I
accordingly incline to the view that also the third of the
aforementioned grounds is devoid of merit.
The
fourth ground
:
29]
It is apparent from paragraph (a) of the preamble to the seizure
warrant issued by the fifth respondent, that
she on the basis of the
facts which had been placed before her was satisfied that reasonable
grounds existed for believing that an
act of dealing in counterfeit
goods had taken or was likely to take place.  The thrust of this
ground was that the first- to
third applicants had failed to make out
a prima facie case that the fourth respondent enjoyed any of the
intellectual property rights
referred to in section 1 of the CGA
“in the three dimensional footwear” or that such rights had been
infringed.  The
Counsel for the applicant;  Advocate De
Villiers Jansen for the first- to third respondents;  and
Advocate Michau who with
Advocate Joubert appeared for the fourth
respondent, were in agreement that the applicable criterion of proof
in the warrant application
was one of prima facie proof.  If
that concept is being used in the sense of untested facts which on
their face and when viewed
objectively  (See:
United
Democratic Front and Another  v  Acting Chief Magistrate,
Johannesburg
1987(1) SA 413  (W) at 421 A – B;
Highstead
Entertainment (Pty) Ltd  v  Minister of Law and Order and
Others
1994(1) SA 387  (C) at 392 I – 393 A) are sufficient to
engender a reasonable belief,  either directly or inferentially,
that the required factum probandum namely, an act in dealing in
counterfeit goods has taken place or is likely to take place, I am
in
full agreement therewith.  What the fifth respondent had to be
reasonably satisfied of before issuing the warrant was that
“an
act in dealing in counterfeit goods” was taking place or was likely
to take place.  Support for an evidentiary burden
of a less
demanding norm than a balance of probabilities is to be found not
only in our case law  (eg:
LA
Group and Others  v  B & J Meltz Limited and Others
[2005]
JOL 15756
(T) but also in the architure of the CGA which envisages
that the question whether goods are counterfeit or not is to be
determined
subsequently in the proceedings provided for in sections
7(4) and 9(1) of the CGA.  The concept  “an act in
dealing in
counterfeit goods” is in section 1 of the CGA defined as
any act or conduct which is referred to in section 2(1).  That
subsection
provides that goods that are counterfeit goods may, inter
alia, not be imported into the Republic except for the private and
domestic
use of the importer.  It is not in issue that the
applicant was an importer as defined in the CGA.  The concept
“counterfeit
goods” is in the CGA defined as meaning goods that
are the result of counterfeiting and includes any means used for the
purpose
of counterfeiting.  The concept  “counterfeiting”
in turn is defined as meaning –
“
(a)
without the authority of the owner of any intellectual  property
right subsisting in the Republic
in respect of protected goods, the
manufacturing, producing or making, whether in the Republic or
elsewhere, of any goods whereby
those protected goods are imitated in
such manner and to such a degree that those other goods are
substantially identical copies
of the protected goods;
means, without the
authority of the owner of any intellectual property right subsisting
in the Republic in respect of protected
goods, manufacturing,
producing or making, or applying to goods whether in the Republic or
elsewhere, the subject matter of that
intellectual property right,
or a colourable imitation thereof so that the other goods are
calculated to be confused with or to
be taken as being the protected
goods of the said owner or any goods manufactured, produced or made
under his or her licence; or
where, by a notice under
section 15 of the Merchandise Marks Act, 1941  (Act No. 17 of
1941), the use of a particular mark
in relation to goods, except
such use by a person specified in the notice, has been prohibited,
means without the authority of
the specified person, making or
applying that mark to goods, whether in the Republic or elsewhere”.
However, the relevant act
of counterfeiting must also have infringed the intellectual property
right in question.”
Paragraph
(c) of the above definition clearly does not find application in the
present case.
30]    The
concept  “intellectual property right” in the above
definition encompasses  a)  rights
in respect of trade
marks conferred by the TMA;  b)  copy-right subsisting in
any work in terms of the Copyright Act 98
of 1973  (the CRA);
and  c)  the exclusive use of a specific mark in relation
to goods pursuant to a notice
issued in terms of section 15 of the
Merchandise Marks Act, 17 of 1941.  The concept  “protected
goods” is defined
as meaning goods featuring, bearing, embodying or
incorporating the subject of an intellectual property right; goods to
which such
subject-matter has been applied by or with the authority
of the owner thereof;  and goods which may legitimately embody,
incorporate
or have the subject-matter of an intellectual property
right applied to them only by or with the authority of the owner
thereof.
The
predominant feature of the definition of counterfeiting appears to be
that the infringing goods, if considered objectively, are
imitations
of the protected goods in that they are substantially identical
thereto or are a colourable imitation thereof by reason
of the
application thereto of another’s intellectual property rights and
are calculated to be confused with or taken as being protected
goods
or goods manufactured, produced or made under licence of the owner of
such rights.  Mere proof of cloning or impersonation
is not
sufficient.  The proviso to the aforementioned definition in
addition requires proof that the relevant act of counterfeiting
has
infringed the intellectual property right in question.  The need
for that proviso is lucidly explained as follows by
O.H.
Dean
:
Handbook
of South African Copyright Law
at 1 – 124/5:
“
It was essential for
the legislature to provide that the goods must infringe an
intellectual property right otherwise legitimate products
which are
copies of other products could be caught up in the net which is
intended to snare counterfeit goods.  For instance,
suspect
goods bearing a South African registered trade mark, where the
registration was acquired by honest concurrent use, or with
the
consent of the proprietor of an earlier trade mark, and where that
mark is substantially identical to the claimant’s registered
trade
mark, could on the face of it appear to be  ‘counterfeit
goods’, but this is not so because the use of the mark in
question
would not infringe the claimant’s registered trade mark.
Similarly suspect goods which have been made by a process
of reverse
engineering as contemplated in s 15(3A) of the Copyright Act
(see para 9.15 above), would not constitute  ‘counterfeit
goods’ because their manufacture would not have constituted an
infringement of copyright;  this despite the fact that they
may
be identical to, or  ‘impersonate’ the claimant’s goods.”
31]    In
view of the restricted ambit of the attack on the issuing of the
warrant namely, the absence of a prima facie
case that the fourth
respondent enjoyed any of the intellectual property rights enumerated
in section 1 of the CGA  “in the
three dimensional footwear”
or that such rights have been infringed, it is not necessary to
consider any other aspects relevant
to the question whether the fifth
respondent justifiably entertained a reasonable belief that an act of
counterfeiting was taking
place or was likely.  The fifth
respondent was provided with affidavits by the second respondent;
Olsen the Director of
Product Development of the fourth respondent
since 24 October 2005;  Balliston;  and Godfrey Edward
Starke  (Starke)
the holder of a member’s interest in
Tidal Trade.  Olsen stated that as a result of his extensive
involvement in the design
and development of new products whilst
being employed by the fourth respondent be possessed an intimate
knowledge of the designs
of shoes and sandals manufactured by or on
behalf of the first respondent and for that reason is qualified to
identify authorised
products incorporating, inter alia, the original
copyright protected design drawings of the Crocs Beach Model shoe as
well as its
design trade mark.  He also averred that he is able
to identify goods which constitute reproductions or imitations of the
Crocs
Beach Model shoe design trade mark but have not been
manufactured by the fourth respondent or under licence from it.
He also
stated that he is qualified to distinguish authorised
products incorporating the copyright protected drawings and/or the
Crocs Beach
Model shoe design trademark from unauthorised products
incorporating the same or similar designs.
32]
As is apparent from the affidavits of Olsen and Balliston the design
drawings of the strapless portion of the
Beach Model shoe was
generated by the latter whilst he was being employed by L’Artigiana
and that the fourth respondent has acquired
ownership thereof by
assignment.  Olsen, supported by Starke, also averred that
authorised reproductions of the Croc’s Beach
Model shoe has been
extensively marketed in South Africa since 1994  (Starke says
since May 1995) and that as a result thereof
the shape of that shoe
is so distinctive that it has become immediately recognizable by
reason thereof alone.  As a result,
such shape has served and
still serves in trade to distinguish the Crocs’ Beach Model shoes
from other shoes on the South African
market and as a consequence has
become such a well known trade mark in the relevant sector of the
market and qualifies for protection
in terms of section 35 of the
TMA.
Olsen further averred
that he had examined digital images of samples of the shoes imported
by the applicant carefully and that as
a result of his knowledge of
the original Crocs products confirmed that the imported shoes,
digital images of the samples whereof
were examined by him, have not
been produced by the fourth respondent or with its permission.
He
also expressed the opinion that they are reproductions, alternatively
adaptations of the Crocs Beach Model shoe design which infringes
the
fourth respondent’s copyright in the strapless shoe design,
alternatively reproductions or imitations of the Crocs Beach Model
shoe design, alternatively substantially identical copies or
colourable imitations thereof.  He concluded that the imported
shoes were counterfeit and that they had not been produced by or with
the permission of the fourth respondent or any of its affiliates
and
licensees and in his opinion were –
a]
reproductions, alternatively adaptations, of the copyright protected
design drawings;
b]
reproductions, alternatively imitations of Crocs Beach model shoe
design trade mark;
c]
substantially identical copies alternatively colourable imitations of
the Crocs Beach model
shoe.
Also
the second respondent expressed the view that he, on the information
at his disposal, had come to the conclusion that the offending
shoes
are substantially identical copies of the Crocs Beach Model shoe
alternatively, colourable imitations thereof to such an extent
that
they are calculated to be confused with or taken as being original
Crocs Beach Model shoes and that the fourth respondent’s
intellectual  property rights therein were, prima facie, being
infringed.
33]    In
the face of the submissions in paragraph 5(b) of the applicant’s
attorney’s letter of 24 August 2007
could the fifth respondent, on
even a prima facie basis, have been satisfied that the fourth
respondent enjoyed intellectual property
rights in the Crocs Beach
Model shoe design or that such rights had been infringed?
The
submissions made in the said paragraph were firstly, that there was
no infringement of copyright in that in terms of section 15(3)(A)
of
the CRA as the copying of three dimential utilitarian goods by means
of an industrial process was lawful as well as a denial that
any
drawings that enjoyed copyright protection had been used and
secondly, that to the extent that reliance is placed on the shape
of
the Crocs Beach Model shoe as constituting a trademark, it was
disputed because shoes similar in shape to those detained by the
second respondent and emanating from many different traders and
manufacturers were ubiquitous in the South African market.
As
is apparent from the facts in the remainder of that letter, the
applicant was merely the importer of goods manufactured by a foreign
third party and for that reason could not have been in possession of
first hand knowledge of the facts required to substantiate the
successful invocation of the defence of reverse engineering of the
Crocs Beach Model shoe.  If the reference of the ubiquitousness
of shoes of a similar shape was intended to show that the shape of
the Crocs Beach Model shoe no longer serves as a badge of origin,
it
flies in the face of the following statement of Olsen
(confirmed by Starke) in paragraph 6.3 of his affidavit:
“
The shape,
configuration, pattern and/or ornamentation of the Plaintiff’s
BEACH model shoes is so distinctive that CROCS BEACH model
shoes have
become immediately recognizable by reason of this shape,
configuration, pattern and/or ornamentation alone.  As a
result
this shape, configuration, pattern and/or ornamentation, has served
and serves in trade to distinguish the Crocs’ BEACH
model shoes
from other shoes on the South African market”.
Accepting,
as one must, that the fifth respondent was obliged to have taken the
submissions in the said letter into account they,
for the reasons
already set out above, in my view were not of sufficient cogency to
have thrown serious doubts on the conclusion
reached by the fifth
respondent.  I accordingly incline to the view that the fifth
respondent, on the facts that were placed
before her, correctly
concluded that there were reasonable grounds for believing that an
act of dealing in counterfeit goods had
taken, was taking or was
likely to take place.
I
take comfort in the fact that my colleague Zondi J in
Shoprite
Checkers (Pty) Ltd  v  The Commissioner of the South
African Revenue Services and Others
(Case No 1460/06, an unreported judgment handed down on 5 February
2008) came to a similar conclusion in respect of imported
shoes which
for all intents and purposes were identical to those that feature in
the instant case.
The
section 7(4) application
:
34]    In
view of the finding that the grounds on which the applicant sought to
have the seizure warrant set aside
are devoid of merit, it needs to
be considered whether the applicant has made out a sufficient case
for the granting of the relief
envisaged by section 7(4) of the CGA
namely a determination that the seized goods are not counterfeit.
That
subsection provides that any person prejudiced by a seizure of goods
in terms of section 4(1) of the CGA may at any time on notice
of
motion apply to the relevant court for a determination that such
goods are not counterfeit and are to be returned to him or her.
Although on a superficial reading thereof it may appear that
prejudice is a prerequisite for the institution of such proceedings
it, for the reasons that follow, cannot be so.  It
self-evidently would be prejudicial to any person entitled to deal
with goods
which are not counterfeit if they should be seized:
not so in the case of goods which in fact are counterfeit.  It
would
appear that the question whether prejudice is present or absent
will of necessity be  dependent on the outcome of the same issue
that is required to decided later in the proceedings namely whether
the goods in question are counterfeit or not.  That to me
appears to be another example of inept draftmanship in this oft
criticised piece of legislation.
35]
To the extent that the applicant is seeking a determination that the
seized goods are not counterfeit it, as
dominus
litis,
seeks relief in proceedings totally separate of the proceedings
before the fifth respondent who is functus officio.  Accordingly
the applicable evidentiary criterion appears to be proof on a balance
of probabilities and not prima facie proof.  As the applicant
claims relief which is final of nature, any material disputes of fact
on the papers must be resolved by applying the
Plascon-Evans
rule so that the claimed relief may be granted only if it is
justified on the basis of the facts averred in the applicant’s
affidavits
which have been admitted by the respondents together with
the averments made in their own affidavits.
36]
The applicant endeavoured to show that the seized goods are not
counterfeit by having challenged the fourth
respondent’s
contentions that such goods firstly, constitute a reproduction or
adaptation of the Crocs Beach Model shoe design
drawings of which it
is the copyright owner and infringes of its copyright therein; and
secondly; that they incorporate and embody
the shape of that shoe,
and that such shape constitutes a well-known trade mark in terms of
section 35 of the TMA which is being
infringed.
37]
The applicant challenged an infringement of the claimed copyright by
questioning the originality of the design
drawings in respect of the
strapless part of the Beach Model shoe because it did not constitute
an original artistic work that vested
in L’Artigiana and that, in
any event, the copyright therein had not been properly assigned to
the fourth respondent.  On
an application of the
Plascon-Evans
rule
the version of Balliston, in my view, is decisive not only of those
issues but also whether the design was based on other designs
that
were generic and common-place.  A further basis on which any
infringement of the fourth respondent’s copyright in the
said
design drawings was challenged was that it failed to present any
evidence to the effect that the seized goods were reproductions
made
from the said design drawings, coupled with a disavowal that the
manufacturer of the seized goods ever had sight of such drawings
or
had used them in the creation thereof.  It cannot be disputed
that the fourth respondent has failed to make any averments
of that
kind.  But, copying like any other fact may be proved
inferentially and it is accepted that a striking similarity of
the
absence of a cogent explanation  -  which in my view is the
situation in the instant case  -  may support
a compelling
inference of copying  (Cf:
Marick
Wholeslaers  (Pty) Ltd  v  Hallmark Hemdon  (Pty)
Ltd
707  JOC  (T).  The applicant, who was in a more
favourable position to have done so than the fourth respondent
not
only failed to obtain first- hand information from the manufacturer
as regards the origin of its design, but also did not provide
any
explanation for its not having done.  It instead preferred to
rely on conjecture based on speculation.
38]
The applicant’s counsel in argument raised the possibility that the
manufacturer of the seized goods could
have copied any one of a
number of similar items of available footwear or could have copied
three dimensional reproductions of the
Crocs Beach Model shoe design,
in contending that neither would have been unlawful by virtue of the
provisions of section 15(3A)
of the CGA.  That subsection
provides that if three-dimensional reproductions of an artistic work
made by or with the consent
of the copyright-owner have been made
available to the public, either in or outside the Republic of South
Africa, copyright therein
is not infringed if someone without the
consent of such owner makes or makes available to the public three
dimensional reproductions
or adaptations of authorised reproductions
thereof, provided that such reproductions primarily have a
utilitarian purpose and are
made by means of an industrial process.
Assuming, without deciding, in favour of the applicant, that the
seized goods have
a utilitarian purpose and that they were made by an
industrial process, no evidence that either of the postulated
scenarios prevailed
in the instant case have been placed before this
court.
Whilst
the fourth respondent’s counsel submitted that the evidentiary
burden as regards whether the seized goods are counterfeit
or not
rested on the applicant, the applicant’s counsel propounded a
contrary view.  No decided cases were referred to by
counsel,
and none could be found by me, in which the incidence of the burden
of proof in an application in terms of section 7(4)
of the CGA has
been authoritatively  determined.  In view thereof and
because no exceptional circumstances that militate
against it appear
to be present, I am of the opinion that the  “underlying
principle that the plaintiff or applicant has to
prove all the
requirements for his remedy”  (See:
CWH
Schmidt & H. Rademeyer:  Law of Evidence
at 2 – 28) finds application.  The applicant who is merely the
importer of the seized goods and for that reason could not
have
possessed first-hand knowledge of the circumstances surrounding the
copying and manufacture of the seized goods, failed to provide
any
evidence thereanent when it was in a more favourable position to do
so than the fourth respondent or to provide an acceptable
explanation
for its non-availability.  I accordingly, incline to the view
that the applicant has failed to discharge the onus
of showing that
the fourth respondent does not enjoy copyright in the design drawings
of the Beach Model shoe design and that such
copyright has not been
infringed in the manufacture of the seized goods.
39]
In addition to asserting such copyright, the fourth respondent relies
on the shape of the Crocs Beach Model
shoe as constituting a
well-known trade mark which enjoys protection in terms of the
provisions of section 35 of the TMA despite
the fact that it has not
been registered thereunder.  The applicant in an endeavour to
discharge the evidentiary burden of showing
that the seized goods are
not counterfeit challenged the validity of that contention
vigorously.  The thrust of the challenge
appears to be that as a
result of the proliferation of almost identical shoes in the South
African market the shape of the Crocs
Beach model shoe no longer
serves - as required by section 2(1) of the TMA - to distinguish it
from such shoes in a trademark sense
namely, as identifying the
fourth respondent as the source of their origin  (See:
Beecham
Group PLC and Another  v  Triomed  (Pty) Ltd
2003(3) SA 639  (A) at 646).  Counsel for the applicant,
whilst alluding to the considerations which militate against
the
shape of goods being generally accepted as a trademark  (See
eg:
Die
Bergkelder Bpk  v  Vredendal Ko-öp Wynmakers and Others
2006(4) SA 275 SCA at 280), in my view correctly accepted, that the
shape of goods is capable of constituting a trademark but
that the
fourth respondent did not solely rely on the shape of the Beach Model
shoe to serve as a badge of origin  -  rather
than being
the result of its intended function or serving a merely decorative
function - because it did not have the shape thereof
registered it as
a trademark;  did not in the section 15 application refer to it
as a protectable intellectual interest;
and by having relied on
its registered trademarks to indicate the origin thereof did not
trust its shape on its own to identify its
trade source.   I
am in full agreement with the applicant’s counsels’ submission
that proof that the shape of the Beach
Model shoe is well-known and
easily recognisable, does not suffice to show that its shape in
itself performs a trademark function.
Whether the shape of the
Beach Model shoe  performs that function is a factual enquiry
the outcome whereof is dependent upon
whether members of the
purchasing public rely thereon as a guarantee of its provenance
(See:
The
Beecham Group Plc
case  (supra) at 646 A – C).  The applicant saw fit not
to adduce any direct evidence of customers’ perceptions regarding
whether or not the shape of the Beach Model shoe is considered to
signify its origin.  It instead preferred to rely on a number
of
pictorial representations of almost every sandal type of shoe that
vaguely resembles the Crocs Beach Model shoe as well as an
alleged
abundant availability of almost identical shoes throughout the
Republic of South Africa for inferring that the shape, thereof
no
longer serves as a badge of origin.  I find the logic behind
that approach challenging.  I do so because the pivotal
enquiry
is whether in the eyes of purchasers the shape of the Beach Model
shoe conveys its provenance.  Surely the only purpose
of
imitating the shape of the Beach Model shoe as painstakingly as has
been done in the case of the seized goods must have been to
induce an
unfounded belief in the minds of the purchasing public that they were
manufactured by the fourth respondent!  The
fourth respondent,
by contrast, adduced the direct evidence of Starke which was to the
effect that the shape of the Beach model shoe
has become well-known
among members of the South African public and that it has, and still
serves in the trade to distinguish it
from other shoes in the market
and that he has observed,  whilst being involved in marketing
events, that members of the public
immediately recognised the shoes
worn by him as Crocs Beach Model shoes even when his trousers
concealed the Crocs trademark on the
back of the strap or the Crocs
device trade mark on the buttons on the sides.  Bearing in mind
that the applicant, in my view,
carries the evidentiary burden of
showing that the seized goods are not counterfeit and that any
factual conflict relating to whether
the shape of the Crocs Beach
Model shoe is in the eyes of consumers considered to signify its
provenance, must on the basis of the
application of the
Plascon-Evans
rule be decided in the fourth respondent’s favour, I incline to the
view that the applicant has failed to discharge the onus of
showing
that the shape of the Beach Model shoe does not enjoy trademark
protection in terms of the provisions of section 35 of the
TMA.
40]
As in my view the applicant has failed to show the existence of
adequate grounds for the setting aside of the
seizure warrant issued
by the fifth respondent and as the applicant has furthermore failed
to discharge the evidentiary burden of
showing that the seized goods
are not counterfeit as is required by section 7(4) of the GCA,  the
relief claimed in prayers
1, 2 and 3 of the Notice of Motion are
refused.
The
applicant is further ordered to pay the respondents’ costs of suit
on a party and party basis but excluding the wasted costs
occasioned
by the appearance on 18 October 2007.  The respondents are
jointly and severally ordered to pay, the one paying the
other to be
absolved,  the applicant’s wasted costs of 18 October 2007 as
a result of their failure to have filed their answering
papers
timeously.
_______________
D.
VAN REENEN