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[1990] ZASCA 149
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Mars Incorporated v Candy World (Pty) Ltd. (265/89) [1990] ZASCA 149; 1991 (1) SA 567 (AD); [1991] 2 All SA 25 (A) (28 November 1990)
Case No. 265/89
MARS INCORPORATED
APPELLANT
and
CANDY WORLD (PROPRIETARY) LIMITED RESPONDENT
Judgment by: NESTADT JA
Case No 265/89 /CCC
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE DIVISION)
In the matter between
MARS
INCORPORATED
APPELLANT
and
CANDY WORLD (PROPRIETARY) LIMITED
RESPONDENT
CORAM
: BOTHA, NESTADT, KUMLEBEN, GOLDSTONE JJA
et
NICHOLAS, AJA
DATE HEARD
: 8 NOVEMBER 1990
DATE
DELIVERED:
28 NOVEMBER 1990
JUDGMENT NESTADT, JA
:
Appellant ("Mars") is a company incorporated in the United States of America.
It is the proprietor of a
2/
2. trade mark "Chappie". The mark is registered in terms of
the Trade Marks Act 62 of 1963 under No 1608/36 in class 31 in respect
of "food
for animals". Chapelat Industries (Pty) Ltd ("Chapelat") was formerly the
respondent in the appeal but Candy World (Pty)
Ltd, to which Chapelat has
transferred its business and assets and assigned its trade marks, was at the
hearing substituted as respondent.
Chapelat applied in terms of sec 36(1)(b) of
the Act for an order expunging Mars's mark from the register. This section
empowers
the court or registrar of trade marks, on the applicatlon of "any
person aggrieved", to order the removal of a registered trade mark
which has not
been
bona fide
used for a continuous period of five years or longer prior
to one month before the date of the application. In its application, which
was
made to the registrar, Chapelat alleged such non-user. Mars did not dispute that
it had not used its mark. The ground on which
Mars
3/
3.
opposed the application was that Chapelat was not a person
aggrieved. The registrar upheld this defence and accordingly refused the
application. Chapelat successfully appealed to the Transvaal Provincial
Division. That court held that Chapelat was a person aggrieved.
The dismissal of
the application was therefore set aside. An order removing "Chappie" from the
register was substituted. Mars now
appeals against that order.
In summary, Chapelat's allegation that it is a person aggrieved under sec 36
is based on the fact that the presence of Mars's trade
mark on the register is
an obstacle to an application which Chapelat made in terms of sec 53(1) of the
Act for the defensive registration
of a trade mark in class 31. Let me explain
this. Chapelat had for many years been the proprietor of certain trade marks
consisting
of or featuring the name "Chappies". They are registered in Part A of
the
4/
4. register in respect of goods falling under class 30, viz,
"sweets, chewing-gum, chocolates and confectionary". From about 1948
it has used
the mark on a type of chewing-gum called bubble gum. According to Chapelat's
evidence in the sec 36 proceedings, "Chappies"
as used in this manner "is
undoubtedly not only a household word but probably one of the best known trade
marks in the country".
The further allegation is made that the mark has a "very
substantial reputation". In support of this, details of annual sales and
amounts
spent on advertising over a number of years are given. It is said that Chapelat
feared that in these circumstances confusion
could arise in the market-place if
"Chappies" or a similar name were to be used by other parties on products other
than bubble gum.
Chapelat therefore decided to and did file an application
(under No 81/1127) in terms of sec 53(1) for the defensive
5/
5. registration of "Chappies" in class
31. Sec
53(1)
provides
inter alia
that where the registrar is of opinion that,
by reason of use or any other circumstances, a trade mark registered in Part A
would
if used in relation to goods other than the goods in respect of which it
is registered, be likely to be taken as indicating a connection
in the course of
trade between the first-mentioned goods and the proprietor of the registered
mark, the mark may, on application
by the proprietor, be registered defensively
in respect of such first-mentioned goods. The section therefore provides for the
extention
of the protection afforded the registered proprietor of a trade mark.
Before the introduction of sec 53 in the 1963 Act, the use
of or intention to
use a trade mark was essential to procure and retain its registration. Now, even
if the proprietor of a registered
trade mark does not use or propose to use it
for certain goods, he
6/
6. can procure and retain its registration as a defensive
trade mark for such goods (cf
Distillers Corporation (S A) Ltd vs S A
Breweries Ltd and Another
1976(3) S A 514(A) at 541 H - 544). The registrar
accepted the application but following on representations by Mars, based on the
presence of its mark (1608/36) on the register, he provisionally refused
Chapelat's application as being contrary to sec 17(1) of
the Act. This section
prohibits registration of a trade mark (even defensively) if it so resembles the
registered trade mark of another
proprietor that the use of both such marks
would be likely to deceive or cause confusion. It was in these circumstances
that Chapelat,
wishing to pursue the defensive registration of "Chappies", made
application for expungement of Mars's mark under sec 36(1)((b).
This is a novel case. In most of the reported judgments (and there are many)
the question whether an
7/
7.
applicant for expungement is a person aggrieved
has
depended on actual or intended participation by him in the
trade concerned. Here, having regard to the nature of a
defensive
registration, this is not so. Nevertheless,
the issue is readily susceptible of resolution. Though
the Act does not
define "person aggrieved", its meaning is
by reason of judicial
interpretation now reasonably clear.
It was considered by this Court in
Ritz Hotel Ltd vs
Charles of
the Ritz Ltd and Another
1988(3) S A 290(A) at
307 H - 308 E. Applying the criteria there stated, and
dealing with the matter initially in principle only, I am
of the opinion that Chapelat is capable of qualifying as a
person aggrieved and thus having
locus standi
. NICHOLAS
AJA cites the
Apollinaris
case
[1891] 2 Ch 186
(CA) in
which PRY LJ says (at 225):
"A man in the same trade as the one who has wrongfully registered a
trade-mark and who desires to deal in the article in question
is
prima
facie
an 'aggrieved person'."
8/
8. This includes a person whose application to register a
trade mark is blocked by the presence on the register of an allegedly unused
mark (
Kodiak Trade Mark
[1987] RPC 269
(CA) at 273). It is but a small
step to conclude that, in similar circumstances, an applicant for a defensive
registration is also
a person aggrieved. His motive is not merely mischievous or
fanciful or sentimental. He would have a substantial interest in having
the
offending mark removed from the register. As appears from the
Ritz Hotel
case (at 308 B), a person over whom an advantage is gained by a rival trader who
is getting the benefit of a registered trade mark
to which he is not entitled,
is aggrieved. Even though Chapelat is not a trade rival in the normal sense, the
principle is applicable.
The consideration by the registrar of Chapelat's
application under sec 53(1) is being blocked by the presence of Mars's trade
mark.
9/
9.
It was contended, however, that on the
facts
Chapelat had failed to sufficiently establish that its
application
for a defensive registration under sec 53(1) would succeed. Counsel for Mars
submitted that the quantum of proof required
was what he termed a
prima facie
case and that in judging whether this had been made out, account had to be
taken of Mars's opposing affidavits. The argument, founded
on a detailed
criticism of Chapelat's evidence, was that it fell short of this standard and
that Chapelat's
locus standi
had, in respect of the sec 36 proceedings,
therefore not been proved. It was said that the bubble gum on which "Chappies"
was used
was so remote from any goods in class 31, that it would be difficult to
infer a common origin; this was especially so because Chapelat's
trade mark was
neither an invented nor an unusual word; no weight could be attached to its
sales and advertising figures; the allegations
relating
10/
10. to the reputation of "Chappies" were bald and
unsubstantiated; in the result there was an inadequate basis for finding the
likelihood
of the type of trade connection referred to in sec 53(1); and the
application for expungement should therefore have been refused.
The court a
quo
rejected a similar argument. KIRK-COHEN J (with whom BOTHA J and
JOFFE AJ concurred) held that it sufficed for Chapelat to establish
that there
was "some prospect of success" in its application under sec 53(1) and that this
Chapelat had done. I am inclined to agree
that on the facts Chapelat had
(reasonable) prospects of success. It is, however, unnecessary to pursue this
aspect of the matter.
This is because I am of the view that Chapelat had
locus standi
in the sec 36 proceedings simply on the basis that Mars's
trade mark constituted an obstacle to the defensive registration of "Chappies".
That in itself,
prima facie
,
11/
11.
established its interest. It was the fact of Chapelat's sec
53(1) application which determined whether Chapelat was a person aggrieved.
Chapelat did not have to go further. It did not have to show in
initio
that there was merit in its application. Its allegations in this regard were
really superfluous. The issue in the sec 36 application
was not whether Chapelat
was entitled to a defensive registration in terms of sec 53(1), but whether the
registration of Mars's mark
should be expunged (cf B
roadway Pen Corporation
and Another vs Wechsler & Co (Pty) Ltd and Others
1963(4) SA 434(T) at
439 E - F). Chapelat had the right to apply for a defensive registration under
sec 53(1). It was entitled to
have such an application considered. The presence
of "Chappie" on the register in class 31 prevented this. In the words of TROLLIP
J in
De Hart NO vs Klopper and Botha NNO and Others
1969(2) SA 91 (T) at
100 A (the learned judge was
12/
12. dealing with the meaning of "person aggrieved" in
sec
151
of the
Insolvency Act 24 of 1936
), "he would ... be wrongfully deprived of
his legal right to assert his claim ..." It must be assumed, in considering
locus standi
, that Mars's mark was wrongly on the register. Chapelat
therefore had a legitimate grievance and was, in the sense of the Act,
aggrieved.
The
Ritz Hotel
case is not contrary to this approach. It is
true that in relation to the application to remove the class 25 and 26 marks,
the merits
of the claim of the Ritz Hotel that it was a rival trader, or
intended to be one, were investigated (and found wanting). But that
was because
the Ritz Hotel based its claim to be a person aggrieved on these grounds. No
application by it for registration (whether
defensive or otherwise) had been
barred by a mark of Charles of the Ritz. It must, moreover, be remembered that
in terms of sec 53(1)
the jurisdictional f act is the opinion of the
13/
13. registrar. In these circumstances it is inappropriate to
talk about what amounts to an objective assessment of an applicant's
prospects
of success.
It does not follow from what has been said that
the merits
of the application under sec 53(1) were
necessarily irrelevant. If it
appeared that the
application was not
bona fide
or was vexatious or
without
any substance, then, I would have thought, the inference
of an
interest in the applicant for relief under sec 36
would be negated. In
English law it is for the
respondent to raise and demonstrate this
(
Riviere's Trade
Mark
[1884] 26 Ch 48
(CA) at 54;
Powell's
Trade Mark
[1894] 11 RPC 4
(HL) at 8 in
fin
; the
Apollinaris
case at
225). It seems from these cases that this is a
separate
issue the onus of proof whereof rests upon respondent. I
am of
the opinion that in our law there is really only one
issue, viz whether the
applicant under sec 36 is an
14/
14. "aggrieved person". In accordance with the general rule
that it is for the party instituting proceedings to allege and prove that
he has
locus standi
, the onus of establishing that issue rests upon the
applicant. It is an onus in the true sense; the overall onus (
South Cape
Corporation (Pty) Ltd vs Engineering Management Services (Pty) Ltd
1977(3)
SA 534(A) at 548 B). However, if the applicant shows that his sec 53(1)
application is being blocked and that he therefore
has an interest in having the
offending mark expunged, there arises an inference that such application is
bona fide
, not vexatious and not without substance. It is then for the
respondent in the sec 36 proceedings, if he wishes to displace that
inference,
to adduce rebutting evidence. Such evidence having been adduced by the
respondent, the duty of finally satisfying the
court that he is an "aggrieved
person" remains that of the applicant. But Mars has adduced no
15/
15.
evidence to displace that inference.
Chapelat's
application for a defensive registration was obviously
a
genuine one. When it was made, Chapelat was ignorant of
the existence of
Mars's mark in class 31. And, as
regards the merits, it cannot be found that
the
application was in any way frivolous. It was initially
granted by the
registrar. Though perhaps not an invented
word, "Chappies" would seem to be a
particularly
distinctive and well-established mark. And as Mr
Puckrin
, on behalf of
respondent, pointed out, Mars's affidavits do not even deny the mark's alleged
wide-spread reputation.
In the result, therefore, the court a
quo
correctly found that
Chapelat was a person aggrieved. It follows that an order granting the
application under sec 36(1) for the removal
of Mars's mark was correctly
substituted for the registrar's refusal of the application.
16/
16. The appeal is dismissed with costs. Such costs are to
include the fees of two counsel.
NESTADT, JA
BOTHA, JA ) KUMLEBEN, JA ) CONCUR GOLDSTONE, JA ) NICHOLAS, AJA )