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[1987] ZASCA 33
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Protective Mining and Industrial Equipment Systems (Pty) Ltd. formerly Hampo Systems v Audiolens (Cape)(Pty) Ltd. (282/85) [1987] ZASCA 33; [1987] 2 All SA 173 (A) (30 March 1987)
282/85/AV
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter between:
PROTECTIVE MINING AND INDUSTRIAL
EQUIPMENT SYSTEMS (PTY)
LIMITED
formerly
HAMPO SYSTEMS (PTY) LIMITED
Appellant
and"
AUDIOLENS (CAPE)(PTY) LIMITED
Respondent
CORAM
: CORBETT, HOEXTER, GROSSKOPF,NESTADT, JJA et NICHOLAS, AJA
HEARD
: 23 February 1987
DELIVERED
: 30 March 1987
JUDGMENT GROSSKOPF, JA
This is an appeal from a judgment by SCHOCK J in
the . ',
2
the Cape Provincial Division, reported
sub
nom
.
Hampo
Systems (Pty) Ltd v Audiolens (Cape)(Pty) Ltd
1985(4) SA
257 (C). Subsequent to the hearing in the Court a quo
the appellant
changed its name from Hampo Systems (Proprietary)
Limited to Protective Mining and Industrial Equipment Systems
Proprietary) Limited,and this latter name has accordingly
been substituted on the record. At the commencement of the -hearing on appeal
the appellant applied for, and was granted, condonation
of the late provision of
security for costs.
I turn now to the relevant facts in this appeal. They are briefly as
follows.
A Japanese company,Asahi Kogaku Kogyo Kabushiki Kaisha (hereinafter called
Asahi),is the manufacturer of,
inter
3
inter alia
, photographic and
optical products, which are sold under the name Pentax in many parts of the
world, in-cluding South Africa. Asahi
is the proprietor in the Republic of South
Africa of the trade mark "Pentax" regis-tered pursuant to the Trade Marks Act,
No 62 of
1963, in
Part A,class 9,of the register, in respect of "photo-
graphic, cinematographic, optical, measuring and surveying machines,
apparatus and instruments; parts, fittings and accessories for
all the
aforegoing goods". The marketing, distribution, export and licensing arm of
Asahi is a wholly owned subsidiary called Asahi
Optical Corporation. The latter
company appointed the appellant as the exclusive distributor in South Africa and
certain adjacent
territories
of
4
of all single-lens reflex cameras, lenses, photographic accessories,
binoculars and telescopes manufactured by Asahi, and sold under
the trade mark
Pentax. In the argu-ment on appeal nothing turned on the difference between the
two Asahi companies, and in what follows
I shall treat them as a single entity.
The appellant's exclusive distri-
butorship commenced in 1956 and has continued ever since.
When proceedings were instituted in the present matter a distributorship
agreement of 19 October 1981 was in force, but prior to the
hearing in the Court
a
quo
this had been superseded by one dated 25 September 1984. Both these
agreements were placed before the Court.
Towards the end of 1982 the appellant became aware that the respondent, a
Cape Town company selling
inter alia
cameras
5
cameras and other optical equipment by retail, was importing or about to
import and sell Pentax-brand products in South Africa. This
import, it
transpired later, was of genuine Asahi products purchased in Hong Kong. These
articles could be sold profitably by the
respondent at prices lower than those
charged in the retail trade for similar articles im-
ported by the appellant. On 4 November 1982 the appellant
and Asahi wrote a letter of demand through their attorneys to the respondent.
This letter is quoted fully in the judgment of the
Court a
quo
at pp. 259
to 260 of the report, and need not be repeated herein. Briefly, it sets out the
relation-ship between Asahi and the appellant;
refers to the "conside-rable
reputation" of the mark Pentax; stresses the measures taken
by
Asahi
6
Asahi and the appellant to
safeguard and promote this re-
putation; and records that the importation or
sale by the
respondent of Pentax-branded products was unauthorised.
Paragraphs 11, 12 and 13 of the letter then read as follows:
"11. Inasmuch as the use of the trade mark is
unauthorised, this constitutes an infringe-ment of the rights of our client's
afore-mentioned trade mark, particularly in the light
of s 44(1)(b) of the Trade
Marks Act.
12. Now that the rights of our clients have
been drawn to your attention, we
would
like to mention that a repetition by you
will constitute an
infringement of our
client's rights.
13. May we, therefore, have your assurance that
you will not import or sell
'Pentax'
branded goods into South Africa. You are,
of course, perfectly
free to obtain the
goods from the authorised dealer in
South
Africa."
By letter dated 15 November 1982 the
respondent, through its
attorneys
7
attorneys, declined to give the assurance requested in para-graph 13
quoted above. This letter is quoted at pp. 260-1 of the reported
judgment of the
Court a
quo
. As appears from the letter, the respondent's attitude was
that it had "obtained the Pentax cameras through a legitimate and re-liable
source" and that "the articles concerned (were) genuine Bentax cameras,
manufactured by your client in Japan". The respondent could
not see how the
relationship between Asahi and the appellant, and the measures taken to protect
the reputation of the trade mark,
were of any concern to the respondent. It
had"legitimately obtained the articles for re-sale, and (would) proceed to
re-sell them
accordingly". The respondent denied that in doing so it would in
any way be infringing Asahi's trade mark.
Almost
8
Almost a year later, on 22 October 1983, Mr. B
Bacon,
a partner in the firm of attorneys acting for the appellant, purchased
a Pentax ME Super camera from the respondent. It is common
cause that this
camera had not been supplied by the appellant but had been imported by the
respondent from Hong Kong as explained
above. The salesman was Mr. H. Wertheim,
a director of the respondent, who deposed to the opposing affidavit in this
matter. I shall
at a later stage have to deal in greater detail with what passed
between Mr. Bacon and Mr. Wertheim.
Thereafter, by Notice of Motion dated 3 April 1984, the appellant (not joined
by Asahi) applied for various or-ders against the respondent
substantially in
the terms set out at p. 258 of the judgment a
guo
. The relevant
claims
for
9
for present purposes were those for orders interdicting
the
respondent from unlawfully competing with the appellant in
two
respects, viz., first, by selling foreign products under
the trade mark
Pentax; and, second, by informing purchasers
that such foreign products were
warranted against defects and
that such warranty would be honoured by the
appellant or its
agents or distributors. The Court a
quo
dismissed the ap-
plication with costs, and, with its leave, the matter now
comes on appeal before us.
On appeal, the appellant's contentions in support of
the above-mentioned claims were succinctly formulated as fol-
lows in its heads of argument:
"That the Respondent is misrepresenting to the public that the Appellant will
honour a
guarantee ....
10
guarantee in respect of the product sold by
it (the Respondent) and is thereby passing-
off its business as being connected in the
course of trade with the business of the
Appellant;
and
That the Respondent is unlawfully competing
with the Appellant by infringing ASAHI's
trade mark PENTAX."
I propose dealing with these contentions in turn.
The first cause of action relied upon by the appellant
is based on the factual allegation that the respondent is mis-
representing to the public that the appellant will honour a
guarantee in respect of Asahi products sold by the respondent.
On this basis the applicant contends that it is entitled
to a final interdict prohibiting a repetition of the mis-
representation. The legal ground for this claim is
said in the above-quoted passage to be passing-off, but in
argument
11
argument before us Mr. Plewman, who appeared for the
appel-lant, submitted that a more satisfactory ground would be the general law
of unlawful competition. Before it becomes necessary to enter into these legal
questions I must how-ever first determine what the
relevant facts are.
It is
common cause that all Pentax cameras enjoy a twelve months' warranty against
defective material or work- manship. It is, however,
not always easy to
determine the exact document in which this warranty is embodied. It ap-pears
that all products in the Pentax range,
whether distri-buted by the appellant or
not, are accompanied by operating manuals which contain Asahi's so-called
"warranty policy".
This warranty policy commences wíth the sentence:
"All
12
"All Pentax cameras purchased through authorized
bona fide photographic dis-tribution channels are guaranteed against defects of
material
or workmanship for a period of twelve months from date of
purchase."
The warránty policy then continues by defining the ambit of
the
guarantee. Thereafter, under the heading "Procedure
during 12-month warranty
period", it reads:
"Any Pentax which proves defective during the 12-month warranty period should be
re-turned to the dealer from whom you pur-chased
the eguipment or to the
manufac-turer. If there is no representative of the manufacturer in your
country, send the equipment to the
manufacturer, with postage
prepaid."
Later it continues:
"To prove the date of your purchase when required, please keep the receipts
or
bills
13
bills covering the purchase of your equip-
ment for at least a year. Before sending
your equipment for servicing, please make
sure that you are sending it to the manu-
facturer's authorized representatives or
their accredited repair shops, unless you
are sending it directly to the manufacturer."
The warranty policy concludes with the following sentences:
"This warranty policy does not apply to Pentax products purchased in the
U.S.A., U.K. , or Canada. The local warranty policies available
from Pentax
distributors in those countries supersede this warranty policy."
On the face of it, this warranty policy applies to all
sold through authorized channels Pentax cameras, and would therefore cover
cameras sold
by the appellant. It is therefore not surprising that, in
terms of the 1981 distributorship agreement, the appellant
undertook the following obligation (clause 2(d)(iv)):
"In accordance with the warranty policy
and
14
and procedure detailed in the operating manual for the
Products, HAMPO warrants the Products against material and work-manship defects
and performs the servicing of the Products. HAMPO, being a member Distributor of
the Pentax International Warranty Service Organization,
agrees to service the
Products, whether in-warranty or out-of-warranty, originally, sold out-side the
Territory in accordance with
the provisions of the Organization. HAMPO shall
render in-warranty services free of
charge, and out-of-warranty services at
fair and reasonable prices."
It would thus seem that clause 2(d)(iv) of the distributor-
ship agreement
imposed only an obligation to honour the war-
ranty contained in the
operating. manual. However, in his
founding affidavit Mr. P Carpenter, the
appellant's managing
director, stated that all Pentax equipment sold by the
appel-
lant was, in terms of the exclusive distributorship agreement,
sold
15
sold together with an additional international
guarantee
reading as follows:
"The above-mentioned equipment is guaran-teed against material or workmanship
defect for 12 months after date of purchase. In case
of need, free in-warranty
service shall be rendered by any one of the autho-rized service stations listed
in this guarantee card,
according to the warranty
policy and procedure explained in the operating manual for your Pentax,
pro-vided the equipment has not been abused, altered, operated
contrary to
instructions, or repaired by unauthorized repair shops. This international
guarantee supersedes part of the warranty
policy and procedure limiting the
in-warranty service only in the country of original purchase or by Asahi Optical
Corporation."
It is not clear to me whether, and if so, to
what
extent, this warranty differs from that contained in the operating manual, or
whether it is intended to replace it.
But the matter does not end there. The
appellant ....
16
appellant also includes a further guarantee document with
all Pentax equipment sold by it. This is in the form of a
document with an attached (or accompanying) "Camera Guaran-
tee Card", which contains particulars of the article sold,
the names of the dealer and purchaser, and the date of the
sale. Although Mr. Carpenter refers to this document as
the appellant's "own guarantee", the only contractual term
in it is the
following:
"
YOUR PENTAX PRODUCT WILL NOT BE GUARANTEED
unless this reply paid
registration card is completed and mailed within 14 days of date of purchase,
which will entitle you to 1 YEARS
GUARANTEE."
This seems to
comprise a restriction rather than an
extension of the guarantee.
The
17
The combined effect of these documents is by
no
means clear, but I do not consider it necessary to attempt to
interpret them. What seems important for present purposes
is not what I think the documents mean, but how the parties
viewed them at the relevant time before proceedings were in-
stituted. In the letter of 4 November 1982, the appellant's :
attorneys had this to say about the guarantee:
"5. In particular, we refer to the guarantee
which is sold with every 'Pentax' camera
throughout the world. Part of the South
African company's obligations relate to
the fact that they are to honour the
conditions and terms of the guarantee
in connection with any 'Pentax' product
which has been sold, irrespective of
whether that sale occurred in South
Africa, or not.
6. It should, therefore, be specifically re-
corded that our clients are responsible for ensuring that guarantees are met and
adhered to."
Although
18
Although this is not ideally clear, it does suggest
that
the appellant and Asahi (on whose combined behalf the
letter was written)
were of the view that the appellant could
be saddled with responsibility in
terms of the warranty in
respect of cameras sold by the respondent. The
respondent's
attorneys' reply (in their aforementioned letter) was:
"Regarding the guarantee obligations, a
material reason for our client purchasing the camera for resale,was the
guarantee which came with the article and our client assumes
that the guarantee
obligations will be met by your clients or their agents, as warranted in the
guarantee."
The appellant apparently did not respond to this let-
ter prior to the institution of proceedings. This correspond-
ence accordingly suggests that both parties were ad
idem
,
when
19
when these letters were written, that the appellant would
honour the warranty in respect of cameras sold by the respon-dent. In view
of
the content of the relevant guarantee do-cuments which I have discussed above,
and particularly clause 2(d)(iv) of the distributorship
agreement, this attitude
is quite understandable.
It is against this background that the appellant's
evidence concerning misrepresentations to the public about
the warranty should be considered. The only instance of
misrepresentation relied upon was that allegedly made to Mr.
Bacon when he bought a Pentax camera from Mr. Wertheim in
October 1983, to which I referred above. Mr. Bacon deposed
on affidavit to what passed between him and Mr. Wertheim.
In his affidavit Mr. Wertheim, although not remembering the
incident, questioned the likelihood of some of Mr. Bacon's
assertions. In reply
Mr
20
and confirmed Mr. Bacon submitted a memorandum
dictated by him on 24
October 1983 (i.e. two days after the sale) in which he had
set out the circumstances of the sale. His initial affi-
davit had been prepared from this memorandum. The memo-
randum clearly provides the more reliable account of the
transaction. It
records that Mr. Bacon first made
enquiries about the purchase of a Pentax camera at the re-
spondent's shop on Priday evening, 21 October 1983. The
next morning he returned. After some discussion about
the Pentax ME Super, the conversation proceeded as follows
(it will be recalled that "the salesman" was Mr. Wertheim):
"I then told the salesman that my ex-perience in Cape Town had always been that
service was extremely difficult to ob-tain. He said
that the main agents
for
Pentax
21
Pentax had been the same for the last
20 years and were a company called
Hampo. I told him that I was familiar
with the company because, at least until
recently, they had the agency for the
Dictaphone brand of dictating machines.
He then said that the camera has a one
year international guarantee. I asked
him what that meant. He said that what
he meant by an international guarantee
was one that would be honoured overseas.
Without being prompted, he said that there
used to be a local guarantee. This, how-
ever, no longer existed. I asked him
to confirm how long the guarantee lasted.
He said that it was a one year guarantee."
Mr. Bacon recorded that he then "started fiddling in the box
that the
camera came out of" and found various documents.
He then continued:
"I asked the salesman whether there was a guarantee card that I had to fill
in. He said no. Again without being prompted
he
22
he said that he would give me a cash sales slip. I could
present this and the camera at any time within one year at any shop which
sold
Pentax cameras and this would enable me to make use of the guarantee. The cash
sales slip I have designated BB7 on the reverse.
It is noted that on the front
of this the salesman has written 'one years full guarantee'."
The first question to be answered in the light of the evidence is whether Mr.
Wertheim represented to Mr. Bacon in this conversation
that the appellant would
honour a guarantee in respect of the camera sold by the respondent. If this
question is answered in the
affirmatiye the further question will arise whether,
regard being had to the relevant docu-ments discussed above, such representation
was false.
The learned judge a
quo
dealt in the following terms
with
23
with the question whether Mr. Wertheim made the alleged re-
presentation (at p. 262 B-C):
"...on
the papers applicant has not, in
my judgment, proved that respondent
made
any such representation. At most respon-
dent represented to Bacon
that the cameras
were guaranteed for a year but it did not-
aver that it
would be applicant who would
honour the guarantee. I do not think that
the mere fact that respondent's represen- tative said that applicant was the
main
agent for Pentax cameras implied any such representation. What is most
significant is that the one thing respondent's repre- sentative
is not alleged
to have said is that applicant would honour the guarantee."
Mr. Plewman argued that, although there was no ex-press representation that the
appellant would honour the guarantee, such a representation
could be implied
from the first two sentences of the above passage from the memorandum,
read
24
read with the subsequent discussion about an "international
guarantee". Now it must be noted that the appellant's name was expressly
mentioned only in relation to service generally. The suggestion that the
appellant could be expected to pro-vide "service" does not
appear to have been
in any way false -- there is no reason to suppose that the appellant would have
refused to repair or service any Pentax camera because
of its origin. Regarding the guarantee, Mr. Wertheim is alleged to have said
only that there was a one year interna- tiónal
guarantee - "one that
would be honoured overseas" -but no "local guarantee". The suggestion here seems
to be that the guarantee was
only enforceable overseas and would not be honoured
in South Africa (if so, neither the appellant
nor
25 nor the respondent would have been bound to honour it).
This could hardly have be.en what Mr. Wertheim meant, however, and the
intehdëd purpose of the remarks eludes me. Then he stated that the
guarantee could be exercised "at any shop which sold Pentax
cameras" -
presumably within and outside the Republic. It is difficult to reconcile this
with what had
preceded it
.
The general impression which I gain is that the
conversation, if fully and correctly recorded, was disjointed, confusing and
inconclusive. One must bear in mind that the whole purpose
of Mr. Bacon's visit
was to obtain evidence concerning the sale by the respondent of Pentax cameras.
If the appellant wanted to determine
whether it was being
represented
26
represented as the party responsible for honouring the
guarantee, one wonders why Mr. Bacon did not ask a specific guestion in this
regard. He did not however do so, and in the result the Court is asked to imply
a representation from material which is far from
clear.
By reason of the aforegoing it seems, at best for the appellant, uncertain
whether the representation upon
which.it
relies
can be implied from the conversation between Mr. Bacon and Mr. Wertheim.
On behalf of the appellant it was contended that there was a likelihood that
Mr. Wertheim would have made the re-presentation in question,
because, as I have
shown, the re-spondent believed that the appellant would in fact be required
to
27
to honour the guarantee. The existence of this belief seems, however, to be a
double-edged weapon. On the one hand it would tend to
give credence to evidence
that the alleged representation was made. Little, if any, weight can, however,
be attached to this consideration
where the undisputed evidence does not with
any clarity show the making of the alleged representation.
On the other hand, the belief held by the respondent that the appellant would
honour the guarantee tends to work against the appellant's
case in the following
way. It will be recalled that the belief was tenable in the light of the
provisions of clause 2(d)(iv) of the
1981 distributor-ship agreement, which I
have quoted above. The 1984 Agree-
ment
28
ment is, however, completely different. In terms of clause
7.01 of the latter agreement the appellant is required only to "warrant
the
Products to
its customers
against defect in material and workmanship" in
accordance with the warranty in the operating manual (emphasis added).
Accordingly
the respondent can no longer assume that the appellant would honour
warranties in respect of cameras sold by the respon- dent, and
the respondent's
case on the papers is that it has made arrangements with a photographic repair
business in Cape Town to enable the
respondent itself to honour the guarantee.
In these circumstances there is no reason to think that the respondent would in
future
falsely represent to its customers that the appellant would honour the
warranty.
I
29
I consider therefore that the appellant has not shown either that the respondent
made the alleged representation to Mr. Bacon or
that it is likely to make such a
representation to its customers in future. I need therefore not consider whether
such a representation
would have been false. I also need not consider whether
the making of such a misrepresenta-
tion, if proved, would have amounted to passing-off in ac-
cordance with the principles discussed in recent
English cases | such as
H P Bulmer Limited and Showerings Limited v J
Bollinger SA& Another
(1978) RPC 79
and
Erven Wamink B V v J Townend
and Sons (Hull) Limited
(1979) FSR 397
upon which the appellant relies, or
would have amounted to unlawful competition under our law. Nor is it necessary
to consider whether
the extension of the principles
of
30
of passing-off which is reflected in the above-mentioned
English cases accords with the South African law on the subject.
The second cause of action relied upon by the appellant is that respondent is
unlawfully competing with the appellant by infringing
Asahi's trade mark Pentax.
It should
be stressed at the outset that the appellant is neither the
proprietor nor a registered user of the trade mark, and it does not claim any
right to restrain the infringement of the trade mark
as. such, i.e. simply
because there is an in-fringement. Its case is that the infringement of Asahi's
trade mark by the respondent
does not only constitute a wrong against Asahi, but
also amounts to unlawful competition actionable at the suit of the appellant.
Two questions
consequently
31
consequently arise ïn this branch of
the appeal, viz., whether the respondent has been guilty of infringing Asahi's
trade mark,
and, if so, whether this constitutes unlawful competition
vis-á-vis the appellant.
I deal first with the question of trade mark
infringe-ment. The appellant contends that the respondent has com-mitted an
infringement
of the trade mark pursuant-to section — 44(1)(a) of the Trade
Marks Act, no. 62 of 1963. This sec-tion lays down that the rights
acquired by
registration of a trade mark shall be infringed by "unauthorized use" of a mark
"as a trade mark". The expressions "unauthorized
use" and "use as a trade mark"
are, however, by no means self-explana-tory. In my view they can only be
properly understood in
the
31 A the light of the historical development of this branch
of the law, to which I now turn.
In
Policansky Bros Ltd v L & H Policansky
1935 AD
89 at p. 97 WESSELS CJ said the following: |
law "The Roman-Dutch was well acquainted with
the general principle that a person cannot,
by imitating the name, marks or devices
of another who had acquired a reputation
for his goods, filch the former's trade
(
Ned. Advies Boek
, vol. 1. adv. 68, p.161).
This class of tort had not reached, by the
end of the eighteenth century, the im-
portance that it has today."
Later
32
later, he said (at p. 98):
"As our Roman-Dutch authorities do not deal with the various aspects of
passing-off actions that modern conditions have evoked, we
in South Africa have
followed the principles enunciated by the English and American courts where such
principles are not in conflict
with either our com-mon law or our statute
law."
WESSELS CJ was talking here about the law of passing-
off in which the law
of trade marks had its origin. I
should add that our statute law concerning trade marks has
also followed English patterns, so that it is appropriate to
commence this historical introduction with a summary of the
English law on the subject. My main source in this regard
is the speech of LORD DIPLOCK in the case of the
G E Trade
Mack
(1973) RPC 297
(HL)("the G E case").
The use by manufacturers of distinctive marks upon
goods which they have made is of very ancient origin, but
legal
33
legal recognition of trade marks as a species of
incorpo-real property was first accorded by the Court of Chancery in the first
half
of the nineteenth century. The right of property in a trade mark had
special characteristics. One, which it shared with patents and
with copyright,
was that it was a monopoly, that is to say, it was a right to restrain other
persons from using the mark. To be capable
of being the subject-matter of
property a trade mark had to be dis-tinctive, that is to say, it had to be
recognisable by a purchaser
of goods to which it was affixed as indicating that
they were of the same origin as other goods which bore the same mark and whose
guality had engendered goodwill. Property in a trade mark could therefore only
be acquired
by
34
by public use of it as such by the proprietor and
was lost
by disuse.
I have stated above that the right in a trade mark
was a right to restrain
other persons from using the mark.
What types of use could be thus restrained
at common law?
The answer to this question appears from the following
dis-
cússion by LORD CRANWORTH in
Farina v Silverlock
(1857 ) 26 -
LJ (NS) Eq. 11. LORD CRANWORTH was dealing with "the
right to have a particular trade-mark to designate a com-
modity" (ibid., p. 12). The right, he said, was of this
nature:-
"It is not properly described as a copy-rlght, because it is no right at all,
un-less it is a right which can be said to
exist
35
exist only, and to be tested only by its violation. The right
is a right on the part of any person designating his wares or commodities
by a
particular trade-mark, as it is called, to prevent anybody else from selling
wares, which are not those manufactured by the
plaintiff, with that trade-mark,
in order to mislead the public, and so incidentally to injure the person who is
owner of the trade-mark.
... I apprehend the law is perfectly clear, that anybody, who has acquired
a
particular mode of designating his parti-
cular manufacture, has a right to say, not that other persons shall not sell
exactly the same article, better or worse, or looking
exactly like
it
36
it, but that they shall not so sell it as to steal the
plaintiff's trade-mark, and make purchasers believe it is the manufacture of
somebody else."
(ibid., pp. 12-13).
The first legislation on trade marks in England was
the Registration of
Trade Marks Act,1875. The purpose of
this Act was to remedy certain defects
in the common law,
described by LORD DIPLOCK as follows (in the
G E
case at p.
327 lines 7 to 15):
"The principal defects in the law of trade marks as it had developed by 1875
were: first, that in any action which he brought for
infringement of his trade
mark the proprietor had to prove his title to the mark afresh by adducing
evidence of his public use of
it; and, secondly, that there was no easy way in
which a trader who wished to adopt a particular mark to distinguish
his
37
his own products could find out whether its use
would infringe proprietary rights in that mark already vested in some other
trader
by virtue of his public use of it. The evident purpose of the Act of 1875
was to provide a practical remedy for these de-fects without
changing the main
characte-ristics of trade marks at common law."
The Act of 1875 made provision for the registration
of trade marks in
respect of particular goods or classes of
goods (secs land 2). Pursuant to
sec 3, the registration
of a person as proprietor of a trade mark "shall be
prima
facie
evidence of his right to the exclusive use of such
trade-mark"; and after the expiration of five years, would
be "conclusive evidence of his right to the exclusive use
of such trade-mark" (subject to irrelevant exceptions).
Section 1 laid down that in future a person would not be
entitled
38
entitled to institute any proceedings to prevent
the in-fringement of a trade mark unless and until the mark was registered in
pursuance
of the Act. However, the Act did not lay down what constituted
infringement otherwise than by inference from the provision that the
próprietor had the right to the exclusive use of the mark.
The question whether the Act of 1875 had altered the
pertinently law as set out in
Farina v Silverlock
(
supra
) first
arose in
1929 in the case of
Champagne Heidsieck et Cie Monopole Societe
Anonyme v Buxton
(1930) 1 Ch 330.
At that stage the Act of
1875 had been superseded by the Patent, Designs and Trade
Marks Act of 1883, which in turn had been superseded by the
Trade Marks Act of 1905. The last mentioned two statutes
were also considered in the
Champagne Heidsi
eck
case
39
case, but, for reasons which will appear later,
the court's decision turned on the effect of the 1875 Act.
I propose dealing
with the
Champagne Heidsieck
case at some length since it is important
for the purposes of this appeal. The facts were briefly as follows. The
plaintiffs were
producers of champagne in France. They prepared a special type
of champagne with a view to its sale on the English market, and another
type of
sweeter quality for the French market. Both types were sold under the same label
which was registered as a trade mark in
England. The wine destined for the
French market had the additional word "Brut" printed on the label, and there
were other minor
differences between the contents of the labels and the
general
get-up
40
get-up of the bottles. The plaintiff wished to prevent the
sale of the "Brut" wine in England. Such wines were never-
theless
imported and sold by the defendant. The plaintiff
instituted action claiming,
inter alia
, an injunction to re-
strain the defendant from infringing its registered trade mark.
The plaintiff's case was that, although the common J
law was correctly-set out in
Farina v Silverlock
(
supra
),the
Act of 1875 had changed the nature and effect of a trade mark.
This argument is reflected as follows in the judgment of
CLAUSON J at p. 338:
"It was, however, contended that the effect of s. 3 of the Act of 1875 (which
énacted that the registration of a trade mark,
prima facie, gave the
registered proprietor the
right
41
right to the exclusive use of such trade
mark) was, not
merely to give that pro-
prietor by virtue of registration a
statutory
title in respect of his
mark to the same rights which, before the
Act, he
could have obtained only by proving
that the mark had become his trade mark
but had the further effect of
vesting in
the owner of a trade mark the right to
object to any person selling or dealing
with goods produced by the owner of the
trade mark with the trade mark affixed,
except on such terms and subject to such
conditions as to resale, price, area of
market, and so forth, as the owner of the
trade mark might choose to impose. It
was, in effect, suggested that, whereas
before 1875 a trade mark, if established
as a trade mark, was a badge of the origin
of the goods,the effect of s. 3 of the
Act of 1875 was to make a registered
trade mark a badge of control, carrying
with it the right in the owner of a
registered trade mark to full control'
over his goods, into whosesoever hands
they might come, except in so far as he
might expressly or by implication have
released this right of control."
This
42
This contention was rejected in the following
words
(pp. 338-9):
"I do not so read the section. Nor am I
aware that, until the present
case, any
such construction of the section or of
corresponding sections in
subsequent Acts
has been adopted by any tribunal; or indeed that, until very
recent times, any such
construction has been propounded to any tribunal. It would be astonishing, if
in an Act to establish a register of trade marks, such
a remarkable extension of
the rights of owners of trade marks were intended to be enacted by the use of
such terms as appear in the
section.
The section
appears
to me to mean
that the proprie
tor of a
registered trade mark is to have th
e right
exclusively to
use
such t
rade mark in the
sense of preventing
other
s from selling
wares which are not his marked with
the
trade
mark
. I do not believe that the . legislature intended to say, or can fairly
be held to have said, that the registration of a trade mark
had the wide
consequences suggested by the plaintiffs." (emphasis added)
CLAUSON
43 CLAUSON J concluded by holding (at p. 341)
"... that the use of a mark by the defen-dant which is relied on as an
infringement. must be a use upon goods which are not the genuine
goods, i.e.,
those upon which the plaintiffs' mark is properly used, for any one may use the
plaintiffs' mark on the plaintiffs'
goods, since that cannot cáuse the
deception which is the test of in-fringement."
I return now to the legislative history. The Act
of 1875 was amended in
1876 and 1877. These amendments are
not relevant for present purposes. In
1883, as noted above,
it was superseded by the Patents, Designs and Trade Marks
Act. This Act also effected no change which is material for
present purposes. Section 76 of the 1883 Act merely re-
peated s. 3 of the 1875 Act with variations which do not
affect the present issue.
The
44
The next relevant statute was the Trade Marks Act
of 1905. This statute deflned "trade mark" as "a mark used or proposed to be
used
upon or in connexion with goods for the purpose of indicating that they are
the goods of the proprietor of such trade mark by virtue
of manufacture,
selection, certification, dealing with, or offering for sale".
The basic rights of the proprietor of a trade mark
were defined in terms which did not differ materially from those of the
previous Acts. Thus sec. 39 provided, subject to immaterial
qualifications, that
"the registration of a person as proprietor of a trade mark shall, if
valid
45
valid, give such person the exclusive right to
the use
of such trade mark upon or in connection with the goods in
respect of which it is registered ...".
The 1905 Act was considered in the
Heidsieck
case
(supra
) at p. 339,to determine whether the plaintiff's
case could be supported by reference to it. CLAUSON J said:
"It was, indeed, at first suggested that
this remarkable alteration in the
law (i.e.,
the alteration contended for by the plain-
tiff - see the above
quotation from p. 338)
took place when s. 39 of the Act of 1905 was enacted,
but a comparison of the language of that section with s. 3 of the Act of
1875 led at once to a recognition of the fact that, if the change in the law did
take place, it must have taken place in 1875 and
not in 1905. Indeed, in my
view,
if there had been any possible doubt as
to the construction of s. 3 of the Act of
1875, the doubt must necessarily vanish when
the Act of 1905, which supersedes that
of
46
of 1875 and the intermediate Acts, is examined.
In the Act of 1905 the word 'trade mark' is defined as a mark used upon goods
for
the purpose of indicating that they are the goods of the pro-prietor of the
mark, and reading this definition into s. 39
it appears to me quite clear
that the exclusive right to use the mark conferred on the registered proprietor
by that section is the
right
to use the mark as a trade mark - i.e.
,
as indicating that the goods upon which
it is placed are his goods and to ex-
clude others from selling
under the mark wares which are not his
. " (emphasis added)
The final English statute to which I intend to refer
is the Trade Marks
Act of 1938, which superseded the 1905 Act.
The 1938 Act not only broadened
the definition of "trade mark"
(sec. 68(1)) but introduced in sec. 4(1) elaborate provisions
regarding
infringement. See
Shalom Investments (Pty) Ltd
and
47
and Others v Dan River Mills Incorporated
1971(1) SA
689
(A) ("The
Dan River
case") at 701 H in
fin
. The effect
of
these changes was considered in
Bismag Ld. v
Amblins
(Chemists) Ld
.
(1940) 57 RPC 209
, which is discussed in
the
Dan River
case at p. 702. Among these changes was
a substantial expansion of the rights of proprietors of trade marks. The
purpose of this was to remedy defi-ciencies in the law which
had been exposed by
the judgment in the case of
Irving's Yeast-Vite Limited v Horsenail
(1934) 51 RPC 110
(HL). As I shall show later,this judgment also gave rise to
changes in the South African legislation. However, the manner in which
this
problem was dealt with in Britain differed entirely from that adopted by the
South African
legislature
48
legislature. It would accordingly serve little
purpose to
consider the effect of the 1938 British Act on the
principles
enunciated in the
Champagne Heidsieck
case. I would
only
note in passing that the decision in the
Champagne
Heidsieck
case was still regarded as good law in 1979 in
Revlon
Inc
.
and Others v Cripps & Lee Ltd and Others
(1980) FSR 85
(CA)
at p. 108 (BUCKLEY LJ, with whom BRIDGE LJ concurred) and
pp. 113-4 (TEMPLEMAN LJ).
I turn now to the law of trade marks in the Netherlands
and South Africa. In the passage which I have quoted from
the judgment in
Policansky Bros. Ltd. v L H Policansky
(
supra
)
van den Berg's WESSELS CJ referred to an opinion quoted in Ned. Advijs
Boek
vol. 1, adv. 68, p. 161. The facts in that opinion were
that one Pieter Meffert was a "Caartemaker" (apparently a
manufacturer
48 A manufacturer of playing cards - see van Zurck, Codex
Batavus, sub voc. Wapenen, para 4 note 1, which refers to the same case)
who,
during his lifetime, printed certain "teekens,
merken en namen" on his cards
and their covers. After his death his
widow ..
49
widow and heirs continued the business, and also continued
using the same "teekens, merken en namen" on the cards pro-
duced by them. Other manufacturers of cards then commenced
using the same distinctive words and marks on their own
cards. The advice given to Meffert's widow and heirs was
that it was impermissible to use such names, marks and signs-
as another person had previously used and was still using
on similar articles, if the infringing use would enure to the
loss or disadvantage of the first inventor or user of the
names, marks or signs. The death of Meffert had not altered
this situation, since his widow and heirs, so they were ad-
vised, were entitled to the benefit of the names, marks and
signs which the deceased had used in his lifetime. This
opinion
50 opinion was given on 15 January 1667. The widow and heirs
instituted proceedings and on 1 February 1667 an infringer was ordered
by the
schepenen of The Hague to pay "een amende van 60 ponden" and furthermore "om in
het toekomende naar te laten het drukken ende
gebruyken van sodanige teekens,
merken ende namen,op haare Caarten, als Pieter Meffert,zoo lang voor haar eerst
heeft gevonden ende
gebruykt welke hem en zyne Erfgenamen alleen toekomen" . The
ground for this decision was stated to be "
ratione falsi commissi utendo
signis et nomine Petri Meffert in suis mercibus
".
The jurists who gave the above opinion relied mainly on a passage from the
Tractatus de Insigniis et Armis
by Bartolus (1314-1357). The full passage
reads as follows:
"... pone
51
"... pone fabrum quendam esse doctissimum, qui
in gladiis, et aliis suis operibus facit certa signa, ex quibus opus ipsius
magistri
esse cognoscitur, et per hoc tales merces melius venduntur, et avidius
emuntur, tunc puto quod si alius faceret tale signum, possit
prohiberi quia ex
hoc populus lederetur, acciperetur enim opus unius pro opere alterius."
These authorities leave no doubt that in our com-
mon law a trade mark
served the same purpose as in England,
viz. to identify the goods of the
trade mark owner and to
distinguish them from the goods of others. A trade mark was considered to be
infringed if it was used on goods which were not those
of the person whom we
would call the trade mark proprietor. This was regarded as a form of deception
where-by the goods of the infringer
were passed off for the goods of the trade
mark proprietor, and was punishable under the
crimen falsi
(see also
Voet, Commentaries, 48.10.6; v. Zurck, op cit, sub voc
Falsiteit
52
Falsiteit, para 10; Garen, para 1; Messen, para
5; Papieren, para 2; Thee, para 1; and also Carpzovius, Praxis Rer. Crim.
2.93.89
and 90. It should be noted, however, that many of these passages refer
to specific enactments on trade marks in respect of particular
articles.) .
In our case law there appear to be few reported
cases of trade mark infringement prior to the enactment of— trade marks
legislation. The most important one is
Rose & Co. v Miller
(1891) 4
SAR 123. In that case the plaintiffs were the manufacturers "of a certain
limejuice cordial well known upon the market".
The defendant, Miller of
Johannesburg, made limejuice and sold it in bottles of Rose & Co. and in
others similar in shape, and
labelled these with an almost
exact
53 exact imitation of plaintiif's label. Rose & Co. claimed a
perpetual interdict prohibiting such conduct. On behalf of the defendant
it was
argued that "there is no protection in this country for trade marks". KOTZe CJ
(with whom DE KORTE J concurred) did not agree.
His iudgment reads (at p.
125):
"I am of the opinion that Rose & Co. have
an exclusive right to the use of a certain label for the sale of 'Limejuice
Cordial', and that Miller has infringed such right by
imitating the label of
Rose & Co. in such a way that the public may easily be deceived thereby to
the damage and incon-venience
of Messrs. Rose & Co. To allow such a practice
is to countenance a fraud both on Rose &. Co. and the public. It is a case
of
injuria
or infringement of right. A perpetual interdict must be
granted a-gainst Miller, with costs."
Although no authorities
were quoted in the judgment,
the
54
the report (printed in 1908) contains a footnote
mentioning
Roman-Dutch authorities on the subject of trade marks.
These
appear to have been derived from an anonymous note in the
Cape Law
Journal of
1892 (9 CLJ 127)
and include the autho-
rities which I have
discussed above. See also
Mills v Salmond
(
1863) 4 Searle
230.
The pre-Union trade mark legislation in South Africa closely followed the
British Act of 1875. The first statute was the Trade Marks
Registration Act, no
22 of 1877, of the Cape Colony. According to the preamble, the object of this
enactment was to "establish in
this Colony a register of trade marks". Such
register was to be kept by the Registrar of Deeds. Section 3 of this Act copied
section
3 of the British
Act
55
Act of 1875, i.e., it laid down that registration
of a trade mark provided, at first,
prima facie
evidence of the
pro-prietor's right to the exclusive use of the trade mark, and, after five
years, conclusive evidence of this right.'
Although the Act was amended on a few
occasions, none of the
amendments bears on the present enquiry.
In Natal, Law 4 of 1885 was enacted "to establish a register of trade marks
in Natal" (see the long title). In that Colony the register
of trade marks was
kept by the Registrar of the Supreme Court. Section 16 of the Act cor-responded
to section 3 of the British Act
and section 3 of the Cape Act (save for an
apparent misprint: the section laid
down ...
56
down that after five years, registration would
be conclusive
evidence of the proprietor's "right to the exclusive right"
(sic - instead of "use") of a trade mark).
In the Orange Free State trade marks were governed
by Chapter CXIII of the
Wetboek, entitled "De Wet over het
Registreeren van Handelsmerken". Here
again the Registrar
of Deeds was charged with keeping the register. Sec 3 of
the statute was, for present purposes, a direct translation of
sec 3 of the British Act and its colonial counterparts. The
amendment of this statute by Law no 13 of 1893 is irrelevant
for present purposes.
The first legislation in the Transvaal was Law 6 of
1892, the long title of which indicated that it contained
"bepalingen op de handels- en fabrieksmerken in deze Republiek".
Section
57
Section 1 laid down that a person or firm "die zich het recht
wil verzekeren tot uitsluitend gebruik van een merk, hetwelk ter onderscheiding
zijner handels- of fabriekswaren van die van andere, op de waren zelve of op
hare verpakking word _ _' geplaatst",should have such
mark registered with the
State Attorney. Although the formulation of this section
differed somewhat from the corresponding provisions in the
other territories, it was substantially to the same effect. Thus it stated in
terms that the purpose of registration was
to ensure the proprietor's right of exclusive use of the mark
incidentally, a right which KOTZé CJ had the year before recognized
also
under the common law in the case of
Rose & Co
. (
supra
).
The
Transvaal Law 6 of 1892 was repealed by Proclamation 23 of
1902, which copied the British Act of
1875. Sec. 11
of the
Proclamation
58
Broclamation was, for present purposes, identical
to sec. 3 of the British Act of 1875. and the corresponding sections of the
other
pre-Union statutes to which I have referred. The subsequent amendment of
the proclamation by Ordinance no 3 of 1904 does not affect
the issue.
These pre-Union statutes continued in force until
repealed by the
Patents, Designs, Trade Marks and Copyright
Act, no 9 of 1916, of the Union
of South Africa.
Before I turn to this Act, it will be convenient to summarize what the
relevant legal position was before its promulgation. At common
law, both here
and in England, a trade mark served to indicate the origin of goods in the
proprietor of the trade mark, and infringement
occurred when
the
59
the trade mark was used in respect of goods which were not
those of the
proprietor of the trade mark. There is nothing
in our common law or that of
England to suggest that the pro-
prietor of a trade mark was entitled by
virtue of trade mark
law to control the sale or distribution of his goods
which he
had marked with his trade mark.
The British Act of 1875 introduced a system of regis
tration of trade marks. The purpose of the Act, according to the
G E
case (
supra
), was to make it easier for the pro-prietor of a trade mark
to prove his ownership, and to enable interested persons to find out
whether a
particular trade mark was in use and by whom. Its purpose was not to change the
main characteristics of trade marks at
common law. And
in
60 in the
Champagne Heidsieck
case (
supra
) the
Court held that the proprietor's "exclusive right" of which the 1875 Act spoke,
was the right which had existed at common law
to prevent others from selling
wares which were not his marked with his trade mark.
In the
Dan River
case (supra, at p. 700 H to 701 A) this Court
expressed doubt whether the
Champagne Heidsieck
case could be regarded as "settled law" in England. I do
not think that there is room for doubt any longer. The
by the Court of Appeal
Champagne Heidsieck
case has been
expressly:approved in the
Revlon
case (
supra
) as I have indicated. Moreover, the House
of Lords has, in the
G E
case (
supra
), affirmed that the
1875
Act served only a limited purpose, and was not intended to
change
61
change the main characteristics of trade marks.
And the principle that a trade mark is essentially a "badge of origin" has been
con-firmed
also in other contexts. See, eg.,
Aristoc Ld. v Rysta Ld
.
(1945) 62 RPC 65
at p. 82 lines 26 to 37. See also
Esquire Electronics Ltd v
Executive Video
1986(2) SA
576 (A)at p.587 E-F. The correctness of the
Champagne
Heidsieck
case has been accepted by leading textbook authors -see,
e.g., Kerly's Law of Trade Marks and Trade Names, 12th
ed., para 14-29; and Halbury's Laws of England, 4th ed., vol
48, para 94 which refers to "the self-evident principle that there should be
no infringement by use on the 'genuine goods'". It may
be as well also to
remember 'that' the
Champagne Heid
-
sieck
case was by no means an isolated one. Although
there was no previoue case directly in point, the judgment
in the
Champagne Heidsieck
case
62
case followed the general trend of English law as repre-sented by the
authorities quoted in the judgment at pp. 340-1, viz.,
Singer Manufacturing
Co. v Loog
(1880) 18 Ch D 395
at 412;
Edwards v Dennis
(1885) 30 Ch.
D 454
at 478 and
Bow v Hart
(1905) 1 KB 592
at 593 and 594 (questions put
during argument by ROMER L.J.).
The authority of the
Champagne Heidsieck
case ac- cording to the law
of England, must therefore, in my view, be accepted. Moreover, the reasoning and
conclusion of CLAÚSON
J seem to me, with respect, lucid and convincing.
In South Africa the common law and pre-Union statute law did not differ in any
material respect from that of England. I consider, therefore, that the judgment
in the
Champagne
Heidsieck
63
Heidsieck
case also correctly
reflects the law in all the provinces of the Union of South Africa prior to the
pro-mulgation of Act 9 of 1916.
The South African Act of 1916 followed British models in many respects. Thus
the definition of a trade mark in sec. 98 of the Act
of 1916 is practically
iden-tical to that in the 1905 British Act which I have quoted above, and which
was considered in the
Champagne Heidsieck
case (
supra
) in a
passage which I have also quoted. Con-cerning the rights of the proprietor, the
South African Act followed the 1905 British
Act and previous legislation by
providing that registration would be
prima facie
evidence of the
proprietor's right to the exclusive use of the trade mark,
and
64
and, after a period (in this case seven years),
conclusive
evidence of such right (sec 123).Where the Act broke new
ground
was by making specific provision for infringement.
This was done in sec. 125 which originally read as follows
(in so far as relevant for present purposes):
"The rights acquired by registration of a trade mark shall be deemed to be
infringed
by the use, in respect of the goods in
respect of which it is registered, of a mark substantially identical with the
trade mark or so nearly resembling it as tó be
likely to deceive."
It will be convenient to defer discussion of this provision until I have
completed my survey of the relevant ' legislation.
The next statute to be dealt with requires some ex-
planation ......
65
planation, but has no direct bearing on the present issue.
This
was the Patents, Designs and Trade Marks Amendment Act, no
19 of 1947, which introduced the concept of a"registered user"
of a trade mark. For this purpose it inserted,
inter alia
,
a new sec. 131
bis
into the 1916 Act. In terms of sec. 131
bis
(2) the expression "permitted use" was defined, broadly,
as the use of a trade mark by a registered user. The defi-
nition of infringement in sec. 125 was correspondingly amended
by inserting the expression "(other than permitted use)" so
that the section read:
"...shall be infringed by use, (other than permitted use) ..."
"Permitted use" thus had a technical meaning, but I
should emphasize that consent was always a good defence to
an
66
an action for infringement, i.e., it was a good
defence to show that the act which was alleged to constitute infringe-ment, was
done
with the consent of the trade mark proprietor. This was not stated in the
various statutes, but followed from the general principle
of law expressed in
the
maxim volenti non fit iniuria
. (See Kerly's Law of Trade Marks and
Trade Names, 12 th ed., para 15-44; Webster and Page, South African Law of Trade
Marks, 3rd
ed., p. 271; Halsbury's Laws of England 4th ed., vol. 48, para 94).
Since we are not concerned in this appeal with registered users,
the amend-ment
in 1947 takes the matter no further.
Before coming to the 1963 Trade Marks Act I have to
mention the English case of
Irving's Yeast-Vite Limited v F.A
.
Horsenail
(1934) 51 RPC 110
(HL) to which I made passing re-
ference earlier in this judgment. In that case the defendant
had used the plaintiff's registered trade mark Yeast-Vite by
stating that the defendant's product was "a substitute for
'Yeast-Vite'". This
was
67
was held by the House of Lords not to be an
infringement
under the 1905 British Act because the mark was not used as a trade
mark,
i.e., it was not used upon or in connection with goods
for the purpose of indicating that they were the goods of the
proprietor of the trade mark. This decision showed that a
trade mark proprietor needed protection not only where his
mark was
unlawfully used as a trade mark, but also where it
was used for other purposes such as comparison.
To meet this need the South African Trade Marks Act
no 62 of 1963, provided a new extended definition of infringe-
ment. Sec 44 (1), as originally promulgated, read as fol-
lows(in so far as relevant):
"... the rights acquired by registration of a trade mark shall be deemëd
to be infringed by -
(a) .
68
(a) unauthorized use as a trade mark upon or in
relation to goods in respect of
which the trade mark is registered, of the
identical
trade mark or of a trade mark so nearly
resembling it as to be likely to deceive or
cause confusion; or
(b) unauthorized use in the
course of trade,
whether as a trade mark or not, of the iden-
tical trade mark or of a trade mark so nearly re-sembling it as to be likely to
deceive or cause confusion, if such use is in relation
to or in connection with goods for which the trade mark is registered and is
likely to cause injury or prejudice to the proprietor
of the trade
mark."
It seems clear that sub-sec. (b) was inspired
by the
Yeast-Vite
case, and served to extend the concept of in-
fringement beyond the mere use of the mark as a trade mark.
The effect of sub-sec. (b) in its original formulation was,
however, that trade mark infringement could be committed in
this extended sense by the use of a mark "whether
as
69
as a trade mark or not". Unlawful use of a mark as a
trade
mark could thus fall under either sub-sec. (a) or (b). See
the
Dan River
case (
supra
) at pp. 703 C - 704 A. After the
decision in the
Dan River
case, and presumably as a result
thereof, the section was amended by Act 46 of 1971 to make it
clear that sub-sec. (a) applied to the use of a trade mark as
a trade mark, and sub-sec. (b) only to use otherwise than as
a trade mark. The section then read as follows (I quote it
in full because it is the relevant text for purposes of the
present appeal):
"...the rights acquired by registration of a trade mark shall be infringed by
-(a) unauthorized use as a trade mark in relation to
goods or services in
respect of which the trade mark is registered, of
a
70
a mark so nearly resembling it as to be like- ly
to deceive or cause confusion; or (b) unauthorized use in the course of trade,
otherwise
than as a trade mark, of a mark so nearly resembling it as to be
likely to deceive or cause confusion, if such use is in relation
to or in
connection with goods
or services for which the trad'e mark is
registered and is likely to cause
injury or prejudice to the proprietor of the trade mark."
In passing it should be noted that the reference to
the "identical mark"
was also removed by Act 46 of 1971 from
sub-secs. (a) and (b). Mr. Hodes, who
appeared for the re-
spondent in the present case, contended that, as a
result of
this deletion, unlawful use of the identical trade mark (as
distinct from use of a colourable imitation) would no longer
constitute infringement. In order not to extend an already
long
71 long judgment I would say only that I agree entirely with
the
following passage from the judgment of this Court in
Berman
Brothers (Pty) Ltd v Sodastream Ltd & Another
1986(3) SA
209 (A) at p 232 H to 233 A:
"Originally s 44 (1) spoke of:
'the unauthorized use ... of the identical
trade mark or of a trade mark so nearly
resembling ...
This was the wording in paras (a) and (b). For some reason, obscure tome, the
words 'of the identical trade mark or' were de-leted
in both paragraphs by s
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 be a mark so nearly
resembling as to be likely to deceive or confuse. Obviously it was never the
intention
to exclude from the ambit of infringement the use of the iden-tical
mark (cf remarks of Chowles and Webster
The South African Law of Trade Marks
2nd ed at 98). I think that this amendment
is
72
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 all events, the unauthorized
use of the identical mark must, in my view,
be regarded as falling under s 44(l).(a)."
I cannot accept Mr Hodes's contention that this passage L ,.
was wrong and
should be reconsidered.
I revert now to the distinction between use of a mark as a trade mark, and
use of a mark otherwise than as a trade mark. "Trade mark"
is defined in sec. 2
of the 1963 Act as: .
:.... a mark used or proposed to
be used in relation to goods or services for the purpose of -
(a)
indicating a connection in the course of trade between the goods or services
and
some person having the right, either as pro-prietor or as a registered user,
to use the
mark
73
mark, whether with or without any indi-
cation 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 the present case it is clear that the mark Pentax
was placed on the
cameras in guestion for the purpose of
indicating a connection between the cameras and the proprietor
of the mark, Asahi, and to distinguish these cameras from
those connected in the course of trade with any other per-
son. The respondent, on the face of it, is by selling
cameras bearing the mark Pentax using the
mark for the same purpose , i.e., of indicating a connection
between the cameras and Asahi, and distinguishing them from
cameras
74
cameras manufactured by others. This appears to be
the
literal meaning of sub-sec.(l). I return later to certain
contentions
adduced in this respect. So as not to inter-
rupt my chain of reasoning I
would emphasize at this stage
that the type of use with which we are here
concerned is
use "as a trade mark". Even if it were held that use of a
trade mark on "genuine goods" could not amount to infringe-
ment, such use would still, as a matter of language, be use
as a trade mark, and could not constitute use "otherwise than
as a trade mark". We are accordingly dealing with the use
to which reference is made in sub-sec. (a), and not with 'the
extended type of infringement dealt with in sub-sec. (b).
In short, the question before us is whether the concept of
infringing use of a trade mark as a trade mark has been ex-
tended in South African legislation beyond that described in
the
Champagne Heidsieck
case (
supra
).
The
75
The most noticeable changes in the South African
legislation were, for present purposes, the following. The 1916 Act, while
retaining
the provisions recognizing the pro-prietor's exclusive right to the
use of the trade mark, added a provision deeming the use of the
mark (or a
colourable imitation thereof) to be an infringement. The Act of 1963
went further by deleting reference to the proprietor's ex-clusive right
altogether, and limiting itself to defining infringement as
unauthorized use of
the mark (or a colourable imitation thereof) as a trade mark. These changes do
not appear to be of significance
- the legislature has continued to use
expressions which have been current in this branch of the law for a long time to
express substantially
the same
concepts
76 concepts. Even before the British Act of 1875 it was
recog-nized that the right of a trade mark proprietor was essentially a right
to
prevent "anybody else from selling wares, which are not those manufactured by
the plaintiff, with that trade mark". (
Vide
the passage quoted from
Farina v Silverlock
(
supra
). This position remained unchanged
after the British
Act of 1905, as appears from the italicized portion of the above quotation
from the
Champagne Heidsieck
case (
supra
), at pp. 338-9, where the
proprietor's right of exclusive use is defined as "the right ... of preventing
others from sel-ling wares
which are not his marked with the trade mark."
Notionally it does not therefore seem to matter whether the trade mark
proprietor's
right is described as the right to
the
77
the exclusive use of the mark as a trade mark, or whether it
is described as the right to prevent others from using it as a trade
mark. It
has also been recognized in our case law that the trade mark proprietor's
exclusive right to the
use of the trade mark is still implicit in the 1963
Act, al-though explicit reference to it has been deleted. See the
Dan River
case (
supra
)at p. 706 D and
John Craig (Pty)
Ltd
v Dupa Clothing Industries (Pty) Ltd
1977(3) SA 144 (T) at p. 150
B.
The essential question then remains: what is meant by the words "use" of a
mark "as a trade mark" in the context of sec. 44(1)(a)
of the Act? In their full
and literal meaning it seems to me, the words "use as a trade mark" would
be
78
be wide enough to cover the facts of the present case. As I have indicated
above, a trader who advertises and sells goods marked
with their trade marks
clearly, in my view, makes use of the trade mark as a trade mark. On a literal
meaning of the words used in
sec.(l)(a) of the Act, this use (if unauthorized, a
matter to which I return later) would
then
constitute an infringement even if the trade marked goods
emanated from, and were marked by,or with the consent of, the trade mark
proprietor himself. If this were its correct interpretation,
the 1963 Act(or,
possibly, the 1916 Act) would have effected a dramatic change in principles of
trade mark law which had been long
established in this country
and
in
79
in England. And, what is more, it would have effected
such
a change by using language which is not notionally dis-
tinguishable from
that found in earlier legislation, both
here and in England; and which had
been interpreted to em-
body only the traditional concept of
infringement.
The onlý substantial change in sec. 44(1)(a) was the
introduction of the word "unauthorized". This change also
must be seen in its historical context, which I repeat
briefly. It will be recalled that, according to common
law, the consent of the trade mark proprietor was a good
defence to an action for infringement, and earlier legisla-
tion took this for granted, making no specific provision
for it. When the concept of a "registered user" was intro-
duced
80
duced into the 1916 Act, "permitted use", being use by a
registered user, was excluded from conduct which would other-wise have
constituted
an infringement. This did not, how-ever, derogate from the defence
of consent. In the 1963 Act use by a registered user was expressly
dealt with in
sec 48 (see particularly sub-sec. (2)) and there was no need to make provision
for it in sec. 44. One must therefore
accept that the word "unauthorized" in
sec. 44(1)(a) was not intended to cater specifically for use by a registered
user, although
it might cover it. Why then was it introduced? In argu-
ment the following suggestion was made. Use of a trade mark
in terms of sec. 44(1)(a) included, so it was said, use by a
trader who sold genuine goods with the trade mark properly
affixed
81 affixed to it. The word "unauthorized" then serves to
mitigate the unwelcome results that would ensue if such use were
prima
facie
to be regarded as an infringement, by recognizing that, if the
proprietor authorized such use, no infringement would result. Indeed,
it was
argued, by in- ferring implied authorization on the part of the proprietor
in various circumstances, many anomalies
would
be
avoided
which would otherwise flow from the recognition of this ex-tended view of
infringing use,(cf.Webster and Page, op
cit
, at p. 274).
In my view this argument cannot prevail. The word "unauthorized" in its
ordinary meaning does not add anything to what was the common
law, except that
it might affect the
onus
82
onus of proving authorization or lack thereof.
Whatever the kind of use might be which would
prima facie
amount to
in-fringement, authorization would serve to render it lawful. , The introduction
of the word "unauthorized" can, therefore,
throw no light on what the conduct is
which would be unlawful in the absence of authorization, except possibly in one
type-of case.
This would be where there are two or more possible types of
conduct which could be covered by the prohibition in the section, but
for some
reason there is only one which is capable of authorization. If this were so, the
use of the word "unauthorized" might suggest
that the prohibition related to the
conduct which was capable of authorization ra-ther than to conduct which was not
so capable.
This situation
does
83
does not, however, obtain in the present case. It is true that at one
stage there was a view current that the granting of permission
to another to use
(otherwise than as a registered user) a trade mark on his goods would vitiate
the trade mark on the grounds that
public deception would result. Even if this
were correct, of course, the fact that permission
had been granted would nevertheless still have been a good de-
fence to an action for infringement, and the reference to "unauthorized" in
sec. 44(1)(a) would not be a dead letter. However, the
law was clarified in the
case of the "
Bostitch
"
Trade Mark
(1963) RPC 183
(Ch.), from which
it appears that the test whether the proprietor of a trade mark has affected its
validity by authorizing its use
by another person is the
following
84
following, whether or not such other person is a
registered
user (p. 197 lines 11-13):
"The test ... is ... this:
has he authorized such use of the mark as to deprive it of its very
existence, namely, as a mark which should distinguish his goods
from the goods
of the makers."
If this is good law (and it has been accepted as correct in
England - see
Webster and Page
(
supra
), at p. 225,
Kerly's
Law of Trade Marks and Trade Names
(
supra
) para 13.24)
there
would be greater scope for the word "unauthorized" in sec.
44(1)(a).
To sum up, there does not appear to be any obvious
reason
85 reason why the word "unauthorized" was introduced in sec. 44 (l)(a) (see
also the
Dan River
case (
supra
) at p. 705 E-P) but whatever the
reason may be, its introduction does not create any redundancy or absurdity,
nor, in my view, does
it throw any light on the meaning of the rest of the
section. And the consideration that one might, by an interpretation or
application of the word "unauthorized" remove some of the
anomalies which would follow from the interpretation of sec. 44 (l)(a)
espoused by the appellant, would fall away if an inter-
pretation consonant with the judgment in the
Champagne Heidsieck
case
were
accepted
since this interpretation would not give rise to the anomalies
in the first place. Moreover, if the legislature's purpose
had been to change the very nature of trade mark infringement
by
86
by sec. 44(1)(a), the legislature would hardly
have done so by introducing the word "unauthorized", which on the face of it
does no
more than express a well established rule of law.
The appellant
placed some reliance on the
Dan River
case (
supra
), and I must now
deal with it. In that case the respondent was a textile manufacturer in the
United States of America. It sold its
materials in many parts of the world to
manufacturers. When doing so it also provided tags and labels bearing the "Dan
River" trade
mark for use in connection with garments made from Dan River
materials. This trade mark was registered both in respect of materials
and in
respect of garments. In South Africa, Dan River
materials
87
materials were sold to only two wholesale merchants and only
selected manufacturers were allowed to obtain Dan River fabrics. The
appellants,
who were not on the re-spondent's selected list of manufacturers, managed to
obtain Dan River fabrics and labels. They
then manufactured gar-ments from the
Dan River materials and sold them with the . Dan River labels sewn into them. It
was clear that
the re- spondent had not agreed to this, but, in fact was
strongly opposed thereto. The question was whether this was an in-fringement
of
sec. 44(1) of the 1963 Act. In its judgment (at pp. 703-4) this Court stressed
that sec. 44(1) of the 1963 Act had deliberately
departed from the earlier view
as exemplified by the
Yeast-Vite
case (
supra
), that there could be
no infringement unless the infringer used the mark "as
a
88
a trade mark".. The legislature consequently designedly |
distinguished, in relation to infringement, between use
"as a trade mark" and other uses. This distinction was reflected in secs.
44(1)(a) and 44(1)(b) and was "underscored by the specific
inclusion in the
latter section of the ex-pression 'whether as a trade mark or not " (p. 704 A).
This
expression, it will be recalled, no longer appears in the
Act. Sec. 44(1)(b) now applies to use "otherwise than as a trade mark".
To return to the judgment in the
Dan River
case: the Court then proceeded
to consider whether the respondent had established infringement pursuant to se.
44(1)(b) of the Act.
For this purpose it was unnecessary to decide whether
the
89
the appellants had used the mark as a trade mark or
not, since sub-sec. (b) would have applied in any event. The Court held that
infringement
pursuant to sub-sec. (b) had been established.
For present purposes the importance of the
Dan River
case lay in the
finding that use of a mark as a trade mark fell under sec. 44(1)(b) (as it then
read) even if this entailed a , departure
from the law as laid down in the
Champagne Heidsieck
case (
supra
). The Court was influenced in
reaching this conclusion by the circumstances that sec. 44(1)(b) was designedly
introduced to widen
the concept of trade mark in-fringement, and that it applied
to use whether as a trade mark or not. The latter is no longer true:
use of a
mark
as
90
as a trade mark can now be an infringement only under sec. 44(1)(a) which is
no wider than the previous enactments which it superseded.
It follows that the
Dan River
case (
supra
) is not applicable to the Act as it is now
worded.
To sum up although the expression "use as a trade mark" is, in its ordinary
meaning, wide enough to cover the sale of genuine goods
marked with the trade
mark of the pro- prietor, this expression had a well-established meaning in the
common law and in earlier legislation
in the context of infringement, viz., to
connote only use in respect of goods other than what have been called genuine
goods. If
it had been the intention of the legislature to change the essential
nature of trade mark infringement in this respect,
it
91 it would no doubt have used explicit language in this regard, as
was, indeed, done in the extension of trade mark protectión
by sub-sec.
44(1)(b). And I do not think the introduction of the word "unauthorized" could
have effected such a change.
It is a well established principle of construction that in construing a
statutory provision the object should be to ascertain from
the language employed
the intention which the _ legislature meant to express. See
Ebrahim v
Minister of the Interior
1977(1) SA 665 (A) at 677-8, and authorities there
cited. In ascertaining this intention, regard is to be had both to the language
of the enactment and to the context, using this word in a wide sense
(
ibid
). See also
Jaga v Dönges N O & Another
;
Bhana v
Dönges N 0 and Another
1950(4)
SA
92
SA 653 (AD) at pp. 662 G - 664 H). However, it
has often been laid down that, where the language of a statute is unambiguous,
and
its meaning is clear, the Court may only depart from such meaning "if it
would lead to absurdity so glaring
that it
could
never have been contemplated by the ' ' legislature, or where it would lead to a
result contrary to the intention of the legislature,
as shown by-the context or
by such other considerations as the Court is justified in taking into account".
(
Ibid
.,
Venter v R
1907 TS 910
at 914,
Shenker v The Master
& Another
1936 AD 136
at p. 142). Among the factors which the Court is
justified in taking into account are "the matter of statute, its apparent scope
and pur-pose" (
Jaga v Donges
(
supra
) and the history ,of the
statute,
with ,
93
with particular reference to the presumption against any furhter alteration
of current law than that clearly con-veyed by the statute
under consideration
(
Rose's Car Hire (Pty) Ltd v Grant
1948(2) SA 466 (A) at pp. 471-2;
President
Insurance Co Ltd v Yu Kwam
1963(3) SA 766 (A) at p.
781 B-C;
Estate Agents Board v Lek
1979(3) SA 1048 at p. 1062 D-H;
G.E
.
case (
supra
), at p. 325 line 24-31).
Applying these principles I have no doubt that, in view of the historical
background, the intention of the legislature was that the
expression "use as a
trade mark" in sec. 44(1)(a) of the Act should be interpreted to exclude
usé in respect of so-called
genuine goods. This means that in a case like
the present, the
seller
94
seller of goods is not infringing the
manufacturer's trade
mark for the simple reason that the seller's conduct
is
not covered by sec. 44(1)(a). The lawfulness of the sel-
ler's conduct consequently does not depend on any implied
authority by the trade mark proprietor as was argued on behalf. of the
appellant.
The conclusion reached above concerning the ambit of sec.
44(l)(a) accords with that reached by various other courts in this. country.
Apart from the Court a
quo
in the present matter, substantially the same
view was expressed by O'DONOVAN J in
Sodastream Ltd & Another v Berman
Brothers (Pty) Ltd
1984(4) SA 425 (T) at p. 429 F-I (this point was left
open in the judgment on appeal - vide
Berman Brothers v Sodastream Ltd and
Another
(
supra
) at p. 233 C-D) and by PAGE J in the
unreported
94 A unreported decision of
Frank & Hirsch (Pty) Ltd v
Roopanand Brothers
(D&C) delivered on 21 March 1986, a judgment which I
found very helpful. The judgment in
Sony Kabushiki Kaisha and Another v
Television Radio Centre (Pty) Ltd
, TPD, unre-ported, delivered 20 September
1985, suggests a contrary view. To the extent to which it differs from what I
have said
I think it was wrongly decided.
There
95
There are a few arguments that I must still deal with.
Mr. Hodes, on
behalf of the respondent, contended that use of
a mark as a trade mark necessarily entailed
"... an association with the goods in the course of their production and
preparation for the marKet."
Consequently, he arqued, the sale of trade marked goods by a
trader after the goods had reached the market could not a-
mount to use as a trade mark. For this proposition he re-
lied on the above-quoted words, which may be found in the
speech of LORD MACMILLAN in
Aristoc Ld. v Rysta Ld
(1945) 62
RPC 65 (HL) at 79-80, and which were quoted with approval
by NICHOLAS AJA in
Esquire Electronics Ltd v Executive Video
1986(2) SA 576 (A) at 587 F-H. These words must however be
read
96 read
secundum materiam suam
. In neither case did the
Court consider the question whether a trade mark is "used" by a trader who sells
goods with the mark affixed.
The
Aristoc
case was concerned wi.th a mark
which was affixed to the ar-ticles by the person who repaired them after they
had reached the hands
of the ultimate consumer. such a mark was held not to be a
trade mark. And the passage in question was quoted in the
Esquire
Electronics
case (
supra
) as an illus-tration of the proposition that
a trade mark is a "badge of origin". These cases, and the proposition stated in
them-are
consequently not in point for present purposes.
Then he contended - on the authority of
Wistyn Enter
-
prises (Pty)
Ltd v Levi Strauss & Co. & Another
1986(4) SA
796
97
796 (T) - that to the extent that the
mark is being used as a trade mark when the goods are resold, such use is not
use by the seller
of the goods, but is continued use by the pro-prietor of the
mark.
Wistyn's
case is no authority for counsel's submission. In brief,
the case dealt with the situation where an overseas manufacturer is the
registered proprietor of a South African trade mark, but does not itself trade
in this country, and goods manufactured and marked
by the overseas manufacturer
are imported into South Africa by a middleman and retailed here.
The question which arose was whether in these circum-stances there was
bona fide
use of the trade mark by the proprietor so as to avoid
expungement in terms of sec. 36(1) (b) of the Act. The Court held that there
was. Assuming
that
97 A
that the proprietor does use the trade mark in these circumstances, this
would npt mean that the dealer who sells the marked articles
is not also using
the mark. There is nothing anomalous in recognizing that different persons
may
concurrently
98
concurrently úse the same mark in different
ways.
This concludes my consideration of the contention that the respondent
committed an infringement of Asahi's trade mark by selling cameras
marked with
the mark Pentax. For the reasons I have given I consider that the sale of the
"genuine goods", properly marked by or
on behalf of Asahi with its mark, does
not constitute an infringement of the trade mark. Before leaving the topic, I
must, however,
, emphasize two matters. The first is that the articles (in this
case, cameras) which were sold were in exactly the same condition
as they were
when the trade mark was affixed. I do not express any view on what the position
would have been if the articles had
been altered, damaged, changed or had
depreciated
99
depreciated after the affixing of the trade mark and before
their sale by the respondent.
The second point that I would emphasize is that
in the present case it was the proprietor of the trade mark in South
Africa,Asahi,
which itself had affixed the trade mark to the cameras, or caused
it to be affixed. The cameras. which the respondent sold in this
country were
accordingly cameras to which the South African trade mark proprietor had applied
the mark, and in that sense were "genuine
goods". The result would not
necessarily be the same if the mark had been applied by a person who was not the
proprietor of the mark
in South Africa, such as a foreign licensee (cf. Castrol
Limited v Automotive Oil Supplies Limited
(1983) RPC 315).
I
100
I also expsess no view on the rights of a registered user
in
this context.
In view of my conclusion that the respondent has not
been guilty of trade mark infringement vis-a-vis Asahi it
is not necessary to decide whether, if such infringement had
been shown, this would in the circumstances have amounted to unlawful
competition with the appellant.
The result then is that I agree with the
finding of the Court a
quo
. The appeal is dismissed with costs in-cluding
the costs of two counsel.
E M GROSSKOPF, JA CORBETT, JA
HOEXTER, JA NESTADT, JA Concur
NICHOLAS, AJA