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[2003] ZAWCHC 100
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South African Breweries International (Finance) B.V. t/a Sabmark International v Laugh It Off Promotions (3271/2002) [2003] ZAWCHC 100; [2003] 2 All SA 454 (C); 2003 BIP 83 (C) (16 April 2003)
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
Case
no.: 3271/2002
In
the matter between:
SOUTH
AFRICAN BREWERIES INTERNATIONAL
Applicant
(FINANCE)
B. V. t/a SABMARK INTERNATIONAL
and
LAUGH
IT OFF
PROMOTIONS
Respondent
JUDGMENT
GIVEN THIS WEDNESDAY, 16 APRIL 2003
CLEAVER
J:
[1]
This is an application which is based on the provisions of section
34(1)(c) of the
Trade Marks Act 194 of 1993 (‘the act’).
[2]
The applicant is the registered proprietor of the following South
African trade marks
in class 32:
2.1
No. 79/3675
CARLING BLACK LABEL
in class 32 in respect of
alcoholic brewery beverages, including beer, ale, lager, porter and
stout; shandy; non-alcoholic drinks;
preparations for making all such
drinks, dated 19 July 1979; and
2.2
No. 91/9236
CARLING BLACK LABEL
neck and body label (colour)
in class 32 in respect of beer, ale and porter, dated 1 November
1991; and
2.3
No. 91/9237
CARLING BLACK LABEL
neck and body label (1991) in
class 32 in respect of beer, ale and porter, dated 1 November 1991;
The
applicant is a company registered in Rotterdam, The Netherlands, and
trades in and controls the trade in a large range of products,
largely alcoholic and non-alcoholic beverages. It also functions as a
trade mark holding company which manages, maintains and controls
the
use of a range of trade marks throughout the world. It acquired
ownership of the trade marks in issue and the marks were assigned
to
it with effect from 31 December 1997. After the institution of these
proceedings the applicant changed its name to SABMiller
Finance B.V.
The respondent is a close corporation and offers for sale T-shirts
bearing marks which are similar to a number of
well-known trade
marks, including those of the applicant. It does so through
advertising on the internet.
[3]
A copy of the applicant’s mark, is attached hereto marked ‘A’,
while
a copy of the mark used on the respondent’s T-shirts is
attached marked ‘B’. From the two marks it will be seen
that
·
The words ‘
BLACK LABEL
’ have been replaced in the
respondent’s mark by the words ‘
BLACK LABOUR
’.
The lettering of the script is the same. The words ‘
CARLING
’
and ‘
BEER
’ above and below the applicant’s
mark have been replaced by the words ‘
WHITE
’ and
‘
GUILT
’ respectively.
·
The words in the applicant’s
mark, at the top of the mark,
namely ‘
AMERICA’S LUSTY, LIVELY BEER
’ have
been replaced in the respondent’s mark by the words ‘
AFRICA’S
LUSTY, LIVELY EXPLOITATION SINCE 1652
’.
·
The words ‘
BREWED IN SOUTH AFRICA
’ at the foot of
the applicant’s mark have been replaced by ‘
NO REGARD
GIVEN WORLDWIDE
’ on the applicant’s mark.
The
lettering containing these words in both marks is similar and in each
case is in black on a yellow background.
[4]
The applicant contends that the respondent’s mark infringes the
provisions of
section 34(1)(c) of the act and accordingly applies for
an interdict restraining the respondents from using the offending
mark.
The section reads as follows:
“
34.
Infringement of registered trade mark.—
(1)
The rights acquired by registration of a trade mark shall be
infringed by—
(a)
…
(b)
…
(c)
the unauthorised use in the course of trade in relation to any
goods or services of a mark which is identical or similar to a trade
mark registered, if such trade mark is well known in the Republic and
the use of the said mark would be likely to take unfair advantage
of,
or be detrimental to, the distinctive character or the repute of the
registered trade mark, notwithstanding the absence of
confusion or
deception: Provided that …”
(The provisions of the
proviso are not relevant to this application.)
The
section contains the so-called anti-dilution provisions and was
introduced into the act only in 1993. In “
Misappropriation
of the advertising value of trade marks, trade names and service
marks”
in J Neethling (ed) ‘
Onregmatige
Mededinging/Unlawful Competition; verrigtinge van ´n seminaar
aangebied deur die Departement Privaatreg van Die
Universiteit van
Suid-Africa op 3 November 1989 (1990)
, Prof B R Rutherford
explains the reason for the introduction of anti-dilution provisions
in trade mark legislation as follows:
“
The preservation
of the reputation and unique identity of the trade mark and the
selling power which it evokes is of vital importance
to the trade
mark proprietor in order to protect and retain his goodwill. Other
traders will frequently wish to exploit the selling
power of an
established trade mark for the purpose of promoting their own
products. The greater the advertising value of the trade
mark, the
greater the risk of misappropriation. Any unauthorised use of the
trade mark by other traders will lead to the gradual
consumer
disassociation of the trade mark from the proprietor’s product.
The more the trade mark is used in relation to the
products of
others, the less likely it is to focus attention on the proprietor’s
product. The reputation and unique identity
of the trade mark will
become blurred. The selling power becomes eroded and the trade mark
becomes diluted. The proprietor of the
trade mark usually expends
vast sums of money through advertising in order to build up the
reputation and selling power or advertising
value of his trade mark.
The growth of his business is dependent upon the growth of the
meaning and importance of his trade mark.
It is therefore only fair
that he should be entitled to protect this valuable asset against
misappropriation. Moreover, a misapropriator
should not be allowed to
obtain a promotional advantage for his product at the expense of the
trade mark proprietor. Misappropriation
of the selling power or
advertising value of a trade mark is commercially injurious to the
trade mark proprietor and results in
the impairment of the goodwill
of his business. It is submitted that such conduct is, in principle,
unlawful and constitutes an
infringement of his right to goodwill.”
(Also quoted in Webster
and Page: South African Law of Trade Marks para 12.24 at 12-43.)
[5]
The provisions of section 34(1)(c) have received little attention
from our courts
but in
Bata Ltd v Face Fashions CC and Ano
2001 (1) SA at 844
Melunsky
AJA held at
851E
-G
“
A plaintiff who
relies upon an infringement in terms of s 34(1)(
c
)
needs to establish:
(a)
the defendant’s use of a mark identical or similar to the
plaintiff’s registered
mark;
(b)
that the use –
(1)
is unauthorised; and
(2)
is in the course of trade; and
(3)
would be likely to take unfair advantage of or be detrimental to, the
distinctive character
or the repute of the plaintiff’s
registered mark; and
(c)
that the plaintiff’s registered mark is well known in the
Republic.”
See
also
Triomed (Pty) Ltd v Beecham Group plc and Others
2001
(2) SA 522.
[6]
When dealing with the concept of
“similar”
in
section 34(1)(c), the court in the
Bata
case
held as follows at 852B-D
“‘
Similar’
must obviously be construed in the context in which it appears and,
in my view, it should not be taken too wide or
extensive an
interpretation for the purposes of s 34(1)(
c
).
The section, while seeking to preserve the reputation of a registered
mark, introduces a new concept into South African law.
If the word
‘similar’ is given too extensive an interpretation the
section might have the effect of creating an unacceptable
monopoly to
the proprietor of a trade mark and thus unduly stultify freedom of
trade. I doubt whether the Legislature could have
intended such a
result. I am inclined to hold, therefore, that the section does not
apply if the two marks are similar merely because
they contain
features of the same kind or because there is a slight resemblance
between them. In
The Oxford English
Dictionary
vol XV at 490 one of the meanings given to
‘similar’ is ‘having a marked resemblance or
likeness’. This
seems to be an appropriate meaning to be given
to the word for the purposes of the section.”
In my view, there is a
marked resemblance or likeness between the applicant’s
registered mark and the mark used by the respondent.
The respondent’s
mark is clearly intended to refer directly to the applicant’s
mark. It is similar in colouring, the
lettering is similar and the
overall effect is similar. The respondent does not deny that it is
using a mark which has a marked
resemblance or likeness to the
applicant’s mark. Mr Nurse, the sole proprietor of the
respondent and deponent to the affidavit
filed in answer to the
applicant’s founding affidavit, testified that
“
SAB have objected
primarily to our use of their brand, rather than the social comment
that our T-shirt makes.”
and
“
We have been sued
(effectively) by SAB in respect of our use of the Black Label
design.”
[7]
It is common cause that requirements (b)(1) and (b)(2) set out in the
Bata
judgment have been
complied with. The use by the respondent of the mark is clearly
unauthorised and the respondent makes it clear
that the mark is being
used in order to promote the sale of is T-shirts.
[8]
The concept of
“well-known”
was
considered by the Supreme Court of Appeal in
McDonald’s
Corporation v Joburgers Drive-Inn Restaurant & Dax Prop CC
1997
(1) SA (A) at 19F
et seq
in
relation to the provisions of section 35 of the act which provides
protection for marks which are well known in the Republic
of South
Africa under the Paris Convention. The court held that in order to be
well-known, the reputation of the mark must extend
to a substantial
number of members of the public or persons in the trade in question
i.e. a test similar to that in the law of
passing off. This test was
accepted in the
Triomed
case
as also being the test to establish whether a mark is well-known for
the purposes of section 34 (1)(c).
[9]
As to the proof of the contention by the applicant that its mark is
well known, the
founding papers reveal that
·
The sale in beer products
under the Black Label trade mark in South Africa is substantial. The
volume of products sold comprises
millions of hectolitres per year.
In the financial year 2000-2001 sales were in excess of 1,4 billion
340 million bottles. Since
1966 more than 55 million hectolitres of
Black Label beer have been sold.
·
Extensive marketing and
advertising campaigns have taken place to promote the Black Label
trade marks. In 1997 in excess of R17
million was spent on
advertising. In 1998 in excess of R17 million; and in each of the
years from 1999 to 2001 in excess of R20
million. This has taken
place in the form of television and radio advertising, newspaper and
magazine advertisements, pamphlets,
brochures, posters, T-shirts and
the like. In addition, major sporting events in South Africa have
been sponsored.
Since a mark’s
reputation may be inferred from evidence such as extensive
advertising, I am satisfied that the applicant has
proved that its
marks are well known. The respondent also does not dispute this.
[10]
That leaves for consideration whether or not the respondent’s
mark is likely to take unfair
advantage of or be detrimental to the
distinctive character or the repute of the applicant’s
registered mark. Mr
Hodes
, who together with Mr
Sholto-Douglas
appeared for the respondent, submitted that
(a)
no proof had been advanced by the applicant that the respondent’s
use of the mark
was likely to take unfair advantage of or be
detrimental to its distinctive character or repute; and
(b)
in any event the respondent’s conduct was not such which would
probably result in
an unfair advantage being taken of the applicant’s
mark or probably be detrimental to him.
[11]
The view generally held is that dilution of a trade mark occurs when
it can be said that blurring
or tarnishing of it occurs. Blurring
takes place when the uniqueness and distinctive nature of a trade
mark is eroded by the use
of the mark in relation to non-competing
goods or services. See in this connection the discussion in Webster
and Page at para 12-24
where the example given by Frank I Schechter
in an article entitled ‘The rational basis of trade mark
protection’ is
cited and in particular the following example:-
“
If you allow Rolls
Royce restaurants, Rolls Royce cafeterias, Rolls Royce pants and
Rolls Royce candy, in ten years you will not
have the Rolls Royce
mark any more.”
In
the
Triomed
case the court
stated
“
Tarnishing occurs
where unfavourable associations are created between the well known
registered trade mark and the mark of the defendant.
It is an
impairment of the well-known mark’s capacity to stimulate the
desire to buy (See
Premier Brands UK
Ltd v Typhoon Europe Ltd and Another
[2000] All ER (D) 52
at
14.)”
[12]
Although no direct evidence was adduced by the applicant as to the
likelihood of dilution occurring,
Mr
Ginsburg
,
who together with Mr
Michau
appeared for the applicant, submitted that the irresistible inference
to be drawn from a simple comparison of the marks, coupled
with
certain statements or admissions made by the deponent of the
respondent, established clearly that the tarnishing of the
applicant’s
mark was likely to occur. In the
Bata
case
the court held that no particulars had been furnished of the respects
in which the use of the mark would be likely to take
unfair advantage
of or be detrimental to the distinctive character or repute of the
appellant’s trade mark and Mr
Hodes
submitted that some form of evidence, similar to that required in the
traditional trade mark infringement cases, ought to have
been
provided from members of the public in order to bring the application
home under this sub-section.
[13]
In a manner similar to the manner in which an innuendo is pleaded in
defamation proceedings,
it was submitted on behalf of the applicant
that the words used on the respondent’s T-shirts will convey
the following messages
to reasonable members of the public and in
particular to purchasers of the applicant’s products:-
13.1
That the applicant has, in the past, exploited and continues
deliberately to exploit black labour and is guilty
of racial
discrimination. The underlying message is likely to be racially
inflammatory.
13.2
The words used conjure up South Africa’s racist past by falsely
attributing to the applicant the
“Lusty”
and
“lively exploitation of Black Labour since 1652”.
Mr
Ginsburg
submitted
that these contentions were supported by the respondent’s own
evidence and pointed to the following extracts from
the affidavit of
the respondent’s deponent:-
·
Respondent’s purpose is
to challenge the enforceability of the applicant’s intellectual
property rights;
·
The method employed by the
respondent is to appeal to or attract the attention of consumers who
use the trade mark which is being
attacked by the respondent; and
·
The respondent’s target
market is primarily the black working class South African. The
respondent targets these people because,
in the words of the
respondent’s deponent,
“the Black Label brand is
and has been used on an extensive scale to market Black Label beer,
primarily to black working class
South Africans…”.
Furthermore, the deponent states
that it is a widely known fact that Black Label beer is targeted at
the largely uneducated black
mass market.
·
The respondent’s
deponent states –
“…Laugh It Off has used
the force of a massive entity (namely, the Black Label brand) back on
itself. Seeing as we
don’t have the money or the marketing
clout to defeat them on their playing fields, we have invented our
own.”
·
According to the respondent,
“Undisputably too, is the fact that SAB
(i.e.
South African Breweries)
and Black Label have profited and fed
off this exploited black market, by using the misery of the working
class to drive product.”
·
The applicant
“unethically
feeds off apartheid’s legacy”.
In
holding the view that
“while it ought to be relatively
easy to identify dilution where the use is obviously offensive”
,
the authors of Webster & Page (para 12.24 at p-44) refer to their
discussion of the meaning
“likely to give offence”
in the context of section 10(12) of
the act. That subsection prohibits the registration of a mark which
is,
inter alia
,
“likely
to give offence to any class of persons”
.
In considering this provision the authors suggest that the words
refer to marks which
ex facie
offend
because of their content.
In my view it is clear
from a comparison of the marks and respondent’s understanding
of as well as its purpose in using the
applicant’s marks, that
the applicant has established that such use would be likely to take
unfair advantage or be detrimental
to the distinctive character or
repute of the plaintiff’s registered marks.
[14]
Mr
Hodes
endeavoured to make something of the fact that the target of the
respondent’s innuendoes in its papers is SAB and not the
applicant. As mentioned previously the applicant is the registered
holder of the trade marks in question which are used by SAB
in this
country under licence. Since the case of the applicant is that the
respondent’s actions are likely to dilute the
value of the
trade marks, it is clearly only the holder of the trade marks who can
institute infringement proceedings. Furthermore,
the applicant makes
it clear in its papers that it controls the trade in the products
sold under its label and that it has in association
with SAB worked
extremely hard to avoid racial discrimination in its labour
practices. For the purposes of the present application,
I consider
the applicant and its licensee to have a common identity with the
result that the
“attack”
on
SAB by the respondent must, of necessity, filter through to the
applicant.
[15]
It is clear from the respondent’s papers that it is in effect
using the applicant’s
mark for commercial gain. The
respondent’s deponent admitted in an interview with a Cape
Radio station (a transcript of the
interview being attached to the
papers) that it has to use the applicant’s trade mark in order
to sell its T-shirts and that
the use of the applicant’s trade
mark is the medium that affords the respondent the ability to make
money. The deponent also
acknowledged that the respondent’s
T-shirt would have no commercial value if they were not sold by
making use of the brand
or trade mark of the applicant.
[16]
The respondent does not raise any of the statutory defences set out
in section 34 (2) of the
act, but instead Mr
Hodes
submitted
that the mark used by the respondent amounted to nothing more than
social commentary in the form of lampooning or satire
which the
respondent was entitled to make by virtue of the provisions of the
Constitution which guarantee freedom of speech. This
brings to the
fore what is sometimes referred to as the tension between the common
or statute law on the one hand and the Constitution
on the other and
ultimately the issue must be resolved by careful balancing of the
provisions of section 34 (1)(c) of the act against
the provisions of
section 16 of the Constitution, which reads
“
Freedom
of Expression
16.
(1) Everyone has the right to
freedom of expression, which includes,
(a)
freedom of the press and other media;
(b)
freedom to receive or impart information or ideas;
(c)
freedom of artistic creativity; and
(d)
academic freedom and freedom of scientific research.
(2)
The right in subsection (1) does not extend to -
(a)
propaganda for war;
(b)
incitement of imminent violence; or
(c)
advocacy of hatred that is based on race, ethnicity, gender or
religion, and that
constitutes incitement to cause harm.”
[17]
During the course of argument I was referred to judgments emanating
from the United States of
America and the Court of Appeals in Paris
involving the parodying of trade marks and the freedom of speech.
There have been many
trade mark parody cases in the United States,
but because of the differences between the legislation in that
country and in ours,
and also the distinction made in that country
between commercial speech and non-commercial speech, definitive
guidance cannot be
obtained from these cases. Furthermore the
question of confusion in the minds of the public also plays a role in
the anti-dilution
proceedings in the US, something which does not
apply in this country. The case in the French court of appeals
concerned the parodying
by the Greenpeace organisation of a trade
mark owned by a well known oil company. One of the main grounds for
refusing the interdict
sought by the oil company was that
Greenpeace’s use of the company’s trade mark was not done
for commercial gain, which
is course not the case in the matter under
consideration. However, since the respondent ‘s case that it is
merely lampooning
the applicant’s marks, I consider the
following extract from the judgment of the South District of New York
in
Tommy Hilfiger Licensing, Inc v Nature Labs, LLC No 99
CIV.10713 (MBM)
to be instructive
and apposite.
“
I agree with the
conclusion of the District Court in Jordache: ‘
When
the association is essentially a harmless clean pun, which merely
parodies or pokes fun at the plaintiff’s mark, tarnishment
is
not likely’
.”
[18]
Mr
Hodes
submitted that the use by the respondent of the
applicant’s marks was justified because it was an expression of
the respondent’s
right to freedom of artistic activity, but I
have come to the conclusion that such use exceeds the limits of
freedom of speech
and expression afforded to the applicant by the
constitution and that in the weighing up process, I must favour the
applicant.
The dividing line between the freedom of speech and the
statutory protection afforded the applicant is a thin one, but is
nonetheless
one which has been transgressed by the respondent. My
conclusions are based on the following:
18.1
The respondent is deliberately exploiting the applicant’s marks
for commercial gain.
18.2
It cannot sell its products without using the marks.
18.3
Its lampooning or parodying of the applicant’s marks is not a
“harmless clean pun which merely parodies or pokes fun”
at the respondent’s marks. It
goes further than that by introducing the race factor, something
which our Constitution and
our new democracy are at pains to avoid.
While the respondent’s use of the marks may not amount to hate
speech as contemplated
in sections 16(2)(c) of the Constitution, it
can, I believe, be said to border on hate speech. The provisions of
the
Promotion of Equality and Prevention of Unfair Discrimination
Act, No 4 of 2000
highlight the importance which the legislature
places on eliminating racial friction.
Section 10
of that act
provides that no person may publish, propagate, advocate or
communicate words based on one or more of the prohibited
grounds
against any person that could reasonably be construed to demonstrate
a clear intention to -
a)
be hurtful;
b)
be harmful or to incite harm;
c)
promote or propagate hatred.
The
prohibited grounds are defined
inter alia
as
“
a)
Race, gender, sex, pregnancy, marital status, ethnic or social
origin, colour, sexual orientation,
age, disability, religion,
conscience, belief, culture, language and birth; …”
In my view the use by the
respondent of the applicant’s marks can be said to demonstrate
an intention to be hurtful or harmful
to the applicant inasmuch as
they are based on race, ethnic or social origin, and colour.
[19]
The applicant’s claim accordingly succeeds with costs, which
costs shall include the costs
attendant on the employment of two
counsel and the following order is issued:
The respondent by itself
or through its servants or agents is restrained from infringing the
rights of the applicant acquired by
the registration of trade mark
no. 79/3675 CARLING BLACK LABEL in class 32, no. 91/9236 CARLING
BLACK LABEL neck and body label
(colour) in class 32 and no. 91/9237
CARLING BLACK LABEL neck and body label (1991) in class 32 by using
the mark depicted in Annexure
A7 accompanying the affidavit of Jaap
Romein and Graham Holford or any other mark the use of which takes
advantage of or is detrimental
to the distinctive character or the
repute of the applicant’s trade marks.
R
B CLEAVER