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[1994] ZASCA 43
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Victoria's Secret Inc v Edgars Stores Ltd. (428/92) [1994] ZASCA 43; 1994 (3) SA 739 (AD); [1994] 4 All SA 307 (AD) (28 March 1994)
Case No 428/92 /MC
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matter between
VICTORIA'S SECRET INC
APPELLANT
- and -
EDGARS STORES
LIMITED
RESPONDENT
CORAM
: CORBETT CJ, E M GROSSKOPF, GOLDSTONE et HARMS JJA et NICHOLAS
AJA.
HEARD
: 8 March 1994.
DELIVERED
:
28 March 1994.
J U D G
M E N T
NICHOLAS AJA,
2
NICHOLAS AJA
:
This appeal is against a decision of the assistant
registrar of trade marks. S 17(3) of the Trade Marks Act 62 of 1963 ("the Act")
provides :
"17(3) where separate applications are made by different persons to be
registered as proprietors respectively of trade marks that
so resemble each
other that the use of such trade marks in relation to goods or services in
respect of which they are respectively
sought to be registered would be likely
to deceive or cause confusion, the registrar may refuse to register any of them
until the
rights of those persons have, upon application in the prescribed
manner, been determined by him, or have been settled by agreement
in a manner
approved by him."
Edgars Stores Ltd ("Edgars"), a
South African company, and Victoria's Secret Inc. ("VS inc"), a corporation
organized and existing
under the laws of the state of Delaware in the United
States of America, each made a
3
number of applications to be registered as proprietor of the trade mark
Victoria's Secret ("VS"), namely,
Applicant
Date
No
Class
Edgars 7 February
1986 86/0772 25
11 August 1986 86/5207 3
17 June 1987 87/4324 42
VS Inc 14 September 1987 87/7083 3 14 September 1987 87/7084 25 14 September
1987 87/7085 42
The trade marks for which Edgars and VS Inc applied were substantially
identical.
Acting in terms of s.17(3), the registrar of trade marks refused to register
any of the marks until the rights of the competing applicants
had been
determined by him, and under regulation 22(1) of The Trade Mark Regulations,
1971 he called upon them to apply on Trade
Mark Form TM 41 for their rights to
be determined.
4
The competing applicants duly filed applications on Form TM 41 and
subsequently filed statements of case and supporting affidavits,
and ultimately
affidavits in reply. The deponent to the affidavits filed on behalf of Edgars
was George Henry Beeton, a director
of Edgars. The deponent to the main
affidavits filed on behalf of VS Inc was Howard Gross, the president and chief
executive officer
of VS Inc, which is the registered proprietor of a number of
VS trade marks in the United States.
The applications for a determination of
rights were in due course argued before the assistant
registrar of trade marks. On 28 April 1992 she made an
order that -
" trade mark applications No 86/0772 in
class 25, 86/5207 in class 3 and 87/4324 in class 42 may proceed to
registration, subject to the disclaimer of the word 'secret' and
the association
of the marks with each other. Trade mark applications No 87/7083-5 in
5 classes 3, 25 and 42 are refused."
VS Inc was
directed to pay the costs.
The parties having lodged with the registrar of
trade marks their consent thereto in terms of s.63(5) of the Act, VS Inc now
appeals
direct to this Court against the decision of the assistant registrar of
trade marks.
THE LAW.
Under s.17(3) of the Act read with regulation 22 the registrar was called
upon to determine the rights of the competing applicants.
Having done so he was
empowered by sub-regulation (4) to "direct that one or more of the applications
shall be accepted without limitation,
as he may think fit, and that one or more
shall be refused." The first and main enquiry is one into the proprietorship of
the trade
mark VS.
S.20 of the Act provides in ss (1) and (4) -
6
"20. (1) Any person claiming to be the proprietor of a trade mark used or
proposed to be used by him and who is desirous of registering
it, shall apply to
the registrar in the prescribed manner for registration and the application
shall be accompanied by the fee prescribed.
(4) Subject to the provisions of this Act, the registrar may refuse the
application or may accept it absolutely or subject to such
amendments,
modifications, conditions or limitations, if any, as he may deem
fit."
S.20(l) has given rise to problems of
interpretation which have been discussed in a number of cases, namely, Broadway
Pen Corporation
v Wechsler & Co (Pty) Ltd 1963(4) SA 434(T) at p 444; Oils
International (Pty) Ltd v Wm Penn Oils Ltd 1965(3) SA 64(T) at p 70/1,
and on
appeal, Wm Penn Oils Ltd v Oils International (Pty) Ltd 1966(1) SA 311(A) at p
317 F-G; and P Lorillard Co v Rembrandt Tobacco
Co (Overseas)
7
Ltd 1967(4) SA 353(T) at p 356 D-F. These cases were referred to by the
Honourable W G TROLLIP, a distinguished member of this Court
between 1969 and
1982, in the written statement which was attached to the "DETERMINATION" under
s.17(3) of the Act which he made
as hearing officer appointed under s.6(2A) of
the Act in the contested matter between Moorgate Tobacco Company Limited &
Philip
Morris Incorporated, and which was delivered on 21 May 1986. I shall
refer to the written statement as "the Moorgate judgment".
By the words "claiming to be the proprietor of a trade mark" in s.20(l) is
meant "asserting a claim to be the proprietor of a trade
mark". The word
"proprietor" (which is not defined in the Act) is not here used in relation to a
common law right of property. Nor
does it import ownership of the "mark" as
such. In terms of the definition in s.2(l) of the Act
8
" 'mark' includes a device, brand, heading, label, ticket, name, signature,
word, letter, numeral or any combination thereof or a
container for
goods."
Some of the things included are not new
coinages but are part of the common currency. It follows that it is not a
prerequisite to
a claim to proprietorship that the mark should be an "invention"
(as under the Patents Act) or "original" (as under the Copyright
Act). The mark
may be a well-known word or phrase. (Cf the observation of Colman J in Oils
International (supra) at 71A.)
One of the dictionary meanings of "proprietor" is "one who has the exclusive
right or title to the use ... of a thing" (The Shorter
Oxford English
Dictionary, sv Proprietor 2.) It is in that sense, I think, that the word is
used in the Act. Thus s.44 provides that
the rights acquired by registration of
a trade mark
9
shall be infringed by unauthorized use as a trade mark. S.2(l) of the Act
provides that
" 'trade mark';.. means 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 proprietor
or as a
registered user, to use the mark, whether with or without any indication of the
identity of that person; and
(b)
distinguishing the goods or services in relation to which the mark
is used or proposed to be used, from the same kind of goods or
services
connected in the course of trade with any other
person."
In terms of s.20(l) one can claim to be the
proprietor of a trade mark if one has appropriated a mark for use in relation to
goods
or services for the purpose stated, and so used it. (I use the verb
appropriate
in
10
its meaning of "to take for one's own". It is a compendious expression which
comprehends the words favoured by Mr Trollip in the Moorgate
judgment, namely
originate
,
acquire
and
adopt
.)
S.20(l) applies not only to a person claiming to be the proprietor of a trade
mark
used by him
, but also to a person claiming to be the proprietor of a
trade mark
proposed to be used by him
.
The meaning of the verb
propose
which is relevant in the context is
that given by The Shorter Oxford English Dictionary in definition 3b,
namely,
"To put before one's own mind as something which one is going to do; to
design, purpose, intend."
The word was introduced into English trade marks legislation in s. 3 of the
Trade Marks Act 1905. (See Kerly's Law of Trade Marks
& Trade Names 12th
ed., para
11
2-04, p.7.)
(The question does not now arise whether an uncommunicated
proposal to use a trade mark can be said to amount to a proposal in the
context
of s.20(l).)
In Imperial Group Ltd v Philip Morris & Co Ltd
[1982] 8 FSR 72
(C.A.)
Shaw LJ observed at 82 that
"Where the mark for which registration is sought is one not already in use
but '
proposed
to be used in relation to goods for the
purpose of indicating a connexion in the
course of trade between the goods and some person having the right ... to use
the mark,' the existence of this element has to be taken
on trust when the
application for registration is put forward."
Where however the question of proprietorship is in issue, there must be borne
in mind the guidelines to the meaning of "proposed to
be used" which were given
in the judgment of Lord Hanworth MR in In re Ducker's Trade
12 Mark
[1929] 1
Ch 113
(C.A.) at 121, namely,
" ... a man must have an intention to deal, and meaning by the intention to
deal some definite and present intention to deal, in certain
goods or
descriptions of goods. I agree that the goods need not be in being at the
moment, and that there is futurity indicated in
the definition; but the mark is
to be a mark which is to be definitely used or in respect of which there is a
resolve to use it in
the immediate future upon or in connection with goods. I
think that the words 'proposed to be used' mean a real intention to use,
not a
mere problematical intention, not an uncertain or indeterminate possibility, but
a resolve or settled purpose which has been
reached at the time when the mark is
to be registered."
In the Moorgate judgment Mr Trollip stated that
".... a trade mark is purely a territorial concept; it is legally operative
or effective
13
only within the territory in which it is used and for which it is to be
registered. Hence, the proprietorship, actual use, or proposed
use of a trade
mark mentioned in s.20(l) are all premised by the subsection to be within the
R.S.A."
It follows that the fact that a trade mark
is registered and has been used, even extensively used, by one person in a
foreign country,
does not in itself constitute a bar to its adoption and
registration by some other person in South Africa. It is considered by some
that
any form of copying of another's ideas, devices or trade marks is morally
reprehensible. Thus, in the matter of the Trade Mark
of the New Atlas Rubber
Company Ltd [1918] 35 RFC 269 Astbury J said at 275 :
"It was contended on behalf of the
Respondents, that if territorial, the
same
mark may exist in different countries,
registered in different
people's names. That
is quite true as a bald statement It is
14
certainly not a practice to be encouraged, and very little is required to
prevent such a registration if the facts are known to the
Registrar, from being
permitted."
And in Greaterman's Stores (Rhodesia)
Ltd v Marks and Spencer (Southern Rhodesia) (Pvt) Ltd 1963(2) SA 58
(FC), counsel had submitted that the appellant's use of the trade mark "St
Michael" was contrary to morality. Quenet FJ said at 67
E-F :
"In considering the question whether the appellant' s use of the mark was
contrary to
morality it should be remembered the
enquiry concerns morality in the use of trade marks. In that field,
immorality shows itself in the pirate, in the person who in disregard
of a
confidential relationship attempts to appropriate another's mark and generally
in those who seek to reap where others have sown.
It has been said the Court
frowns on the practice of borrowing marks
15
(The last sentence is presumably a reference to a passage in the judgment of
Williams J in the Seven Up case which is quoted below.
) But it is not the law
that copying of another's ideas, devices or trade marks is per se illegitimate.
In Pasguali Cigarette Co
Ltd v Diaconicolas and Capsopolus
1905 TS 472
(a
passing off case) Solomon J said at 479 :
"A certain amount of imitation in these matters is perfectly legitimate. If
one manufacturer sees that another manufacturer gets up
his wares in a form
which attracts the public, he is entitled to some extent to take a lesson from
his rival and to copy the get-up
provided that he makes it perfectly clear to
the public that the articles which he is selling are not the other
manufacturer's, but
his own articles, so that there is no probability of any
ordinary purchaser being deceived. So long as it does that a certain amount
of
imitation is legitimate."
16
Similarly, Russell J said in Dunhill v Bartlett and Bickley
[1922] 39 RPC 426
at 438 :
"Now the principles which govern passing off cases are clear. Apart from
monopolies conferred by Patents, and apart from protection
afforded by
registration, it is open to anyone to adopt the ideas or devices of his
neighbours and apply them to his own goods provided
he clearly distinguishes his
goods from those of his neighbour."
In the case of a
foreign trade mark, there is no legal bar to its adoption in South Africa unless
it is attended by something more.
Thus in delivering the unanimous judgment of
the full Court in P Lorillard and Co (supra) 1967(4) SA at 356 G-H, Boshoff J
said :
"The basis of the challenge on this ground is that the objector was to the
knowledge of the applicant the proprietor of such a trade
mark in the United
States of America and that the applicant improperly appropriated the mark.
17
In the present state of the law a trade mark is a purely territorial concept and
there is, generally speaking, nothing to prevent
a person from asserting a
proprietary right in a trade mark in relation to which no one else has in the
same territory asserted a
similar right."
See also
Lorimar Productions Inc v Sterling Clothing Manufacturers (Pty) Ltd 1981(3) SA
1129 (T) at 1156 A-B; and Impex Electrical
Ltd v Weinbaum
[1927] 44 RPC 405
(Ch).
The principle has been recognized also in Australia. In a passage in his
judgment in The Seven Up Company v OT Ltd
[1947] HCA 59
;
[1947] 75 CLR 203
, Williams J said at
211 :
"In my opinion the effect of these cases is that in the absence of fraud it
is not unlawful for a trader to become the registered
proprietor under the Trade
Marks Act of a mark which has been used, however extensively, by another trader
as a mark for similar
goods in
18
a foreign country, provided the foreign mark has not been used at all in
Australia at the date of the application for registration.
But the position is
different if at that date the mark has become identified with the goods of the
foreign trader in Australia because
those goods have been brought into Australia
by the foreign trader himself or by some importer or in some other manner. The
court
frowns upon any attempt by one trader to appropriate the mark of another
trader although that trader is a foreign trader and the
mark has only been used
by him in a foreign country. It therefore seizes upon a very small amount of use
of the foreign mark in Australia
to hold that it has become identified with and
distinctive of the goods of the foreign trader in Australia. It is not then a
mark
which another trader is entitled to apply to register under the Trade Marks
Act because it is not his property but the property of
the foreign trader. The
registrar is entitled to refuse to register the mark for such goods. If it has
been registered the court
may rectify the register on the ground that the mark
is wrongly entered on the register."
19
In the appeal in The Seven Up case, loc. cit Latham CJ said at 215-6 :
"The use of the trade mark elsewhere than in Australia is not in itself a
relevant matter, nor is registration of the trade mark
abroad
in itself a relevant matter In my
opinion the knowledge that a trade mark is registered in another country or used
in another country is irrelevant in considering
whether or not the registration
of a mark would be likely to cause deception in Australia or in considering
whether the mark is otherwise
disentitled to protection in a court of justice.
User in Australia would be relevant. So also would facts establishing a breach
of
confidential relations or any fraud
The desire to use in Australia a
successful trade mark in competition in trade with a person who may come here
and who uses that trade
mark in another country cannot be described as fraud or
as involving any breach of the law
."
(My
emphasis.) Similarly, Rich J said at 216 :
20
"Although the mark '7Up' has been extensively used in the United States, there
has been no user of it in Australia. It is to the
market of this country alone
that one has to have regard. For that purpose foreign markets are wholly
irrelevant unless it can be
shown by evidence that in fact goods marked with the
foreign mark have been imported into this country and the foreign mark thus
acquires this characteristic that it is distinctive of the goods of the
manufacturer."
See also Aston v Harlee Manufacturing
Co
[1960] 103
CLE 391.
I stated above that there is no legal bar to the
adoption in South Africa of a foreign trade mark, "unless it is attended by
something
more".
In the Moorgate judgment Mr Trollip pointed out that factors relevant in the
determination of an applicant's claim to proprietorship
of a trade mark are
-
21
" any factors that may have vitiated
or tainted his right or title to the proprietorship thereof. Those factors would
comprehend dishonesty, breach of confidence, sharp
practice, or the
like."
In P Lorrillard (supra) Boshoff
J referred to
"the present state of the law". Counsel for VS Inc pressed upon us an
argument at considerable length and with a plenitude of citations
that "there
are cogent reasons why the Court should now accept that the concept of strict
territoriality has outlived its usefulness
and that the slavish misappropriation
of well-known foreign trade marks will not be countenanced."
We must decline this invitation. The concern of the Court is de lege lata,
not de lege ferenda. If we were to accede to it we would
be pre-empting s.35 of
the new
Trade Marks Act, 194 of 1993
, which has not yet come into force. That
section provides -
22
"35. (1) References in this Act to a trade
mark which is entitled to protection under the Paris Convention as a
well-known trade mark, are to a mark which is well known in the
Republic as
being the mark of -
(a)
a person who is a national
of a convention country; or
(b)
a person who
is domiciled in, or has a real and effective industrial or commercial
establishment in, a convention country,
whether or not such person carries on business, or has any goodwill, in the
Republic.
(2) A reference in this Act to the
proprietor of
such a mark shall be
construed accordingly.
(3) The proprietor of a trade mark which
is entitled to protection under
the Paris
Convention as a well-known trade mark is
entitled to restrain
the use in the
Republic of a trade mark which
23
constitutes, or the essential part of which constitutes, a reproduction,
imitation or translation of the well-known trade mark in
relation to goods or
services which are identical or similar to the goods or services in respect of
which the trade mark is well
known and where the use is likely to cause
deception or confusion."
Article 6
bis
of the "Paris Convention for the Protection of Industrial Property of
March 20, 1883 as revised ..." provided in Article 6
bis
(1) :
(1) The countries of the Union undertake, ex officio if their legislation so
permits, or at the request of an interested party, to
refuse or to cancel the
registration, and to prohibit the use, of a trade mark which constitutes a
reproduction, an imitation, or
a translation, liable to create confusion, of a
mark considered by the competent authority of the country of registration or use
to be well-known in that country as being already the mark of
24
a person entitled to the benefits of this Convention and used for identical
or similar goods. These provisions shall also apply when
the essential part of
the mark constitutes a reproduction of any such well-known mark or an imitation
liable to create confusion
therewith."
In any event, the facts of this case are not such as to call for a
re-examination of the received wisdom in regard to territoriality.
However
well-known the mark VS may be in the USA, there is no evidence that it is
well-known in South Africa. As will appear, the
issues now to be decided are
issues of fact falling within a narrow compass - namely, whether Edgars/VS Inc
has used or proposed
to use the trade mark in South Africa, and whether the use
by Edgars of the VS trade mark would be likely to deceive or cause
confusion.
25
THE FACTS.
(a)
The facts pertaining to Edgars.
In his affidavit which was filed in support of Edgars' application, Beeton
said that Edgars is a South African company based in Johannesburg
carrying on
business as merchants and retailers, dealing in a wide range of goods (including
clothing, fashion accessories, handbags,
jewellery, cosmetics and textile goods)
which Edgars sells either under the trade marks of the respective suppliers or
under Edgars'
own trade marks.
It was Beeton's custom to make trips overseas about twice a year in order to
observe trends and developments and to pick up new ideas.
In about 1982/3 he
learnt during a trip to the United States of America that there was a
substantial demand in that country for intimate
female wear with a satin or
similar finish
26
which was sold under the trade mark VS. He thought
that
there might be a substantial market in South
Africa for similar products.
Edgars accordingly set in
train the necessary trade investigations into
the
feasibility of launching in South Africa its own range
of such
products. At the beginning of February 1986,
Edgars took a decision to launch
a new range of ladles'
intimate wear, and to use therefor the trade mark
VS
which, it was felt, conveyed the image which it would
like to project
for these goods. Beeton said that at
that time Edgars did not know of any use
of the trade
mark VS in South Africa, or of any advertising
material
including the trade mark which had reached South
Africa or which
promoted the trade mark in South
Africa. Edgars assumed that any business
which used
the trade mark in the USA would be a USA company with no
ties
in South Africa and no real prospect of using it in
South Africa.
27
Edgars instructed its attorneys to conduct a
search at the trade marks office in order to ascertain whether the trade mark
VS could be registered in South Africa in respect of
clothing. Having been
advised that the register of trade marks did not reveal any existing
registration of the trade mark, Edgars
filed trade mark application No 86/0072
on 7 February 1986 for the registration of the trade mark VS in class 25 in
respect of clothing,
including boots, shoes and slippers. At the date of the
application Edgars had the definite intention to use the trade mark in relation
particularly to ladies' intimate wear, and in April 1986 Edgars initiated
preparations for the use of the trade mark on such goods.
In July/August 1986 Edgars had under consideration a proposal to sell
cosmetics and similar personal products under the trade mark
VS. After it had
been ascertained the trade mark had not previously
28
been registered in class 3, trade mark application No 86/5207 in Edgar's name
was lodged on 11 August 1986 for the registration of
the trade mark VS in class
3 in respect of bleaching preparations and other substances for laundry use;
cleaning, polishing, scouring
and abrasive preparations; soaps, perfumery,
essential oils, cosmetics, hair lotions; dentifrices.
As Edgars did not itself have the facilities for the development and
manufacture of cosmetics, it entered into an arrangement with
Avroy Shlain
Cosmetics (Pty) Ltd, under which the latter would develop a range of cosmetics
for Edgars, which would market them under
its own trade mark. Edgars would also
be responsible for the design of packaging. Over the ensuing months steps were
taken to produce
designs which would be suitable for the packaging and bottling
of Edgars' VS cosmetic range and would be compatible with the marketing
image of
the lingerie ranges. In this
29
connection market research was undertaken and particular packaging was
selected in April/May 1987. In May/June 1987 there were designed
and produced
swing tickets, shopping bags, tissue paper, labels, invitations and envelopes,
in-store display boards, colour container
design, adhesive tabs and other
related materials.
Edgars envisaged marketing merchandise under the mark VS in free-standing
specialty stores and/or in shops within shops. In June 1987
it was decided to
lodge a trade mark application in respect of the relevant services. Trade mark
application No 87/4324 in Edgars'
name was lodged on 17 June 1987 for the
registration of the trade mark VS in respect of retail, wholesale, mail order
and merchandising
services.
For the first time in August 1987 Edgars sold ladies' intimate wear under the
trade mark VS. For commercial and technical reasons,
it did not then proceed
with its launch of cosmetic products, mainly
30
because of its concern about control of the ownership and exclusivity of the
formulas. It was however ready to proceed with such launch
as soon as the
technical difficulties had been overcome.
For the purpose of launching its VS clothing range in August 1987, Edgars set
up seven shops operating under the trade name Victoria's
Secret which were
formed to promote, display and market products bearing the mark VS. These stores
have operated continuously under
the name Victoria's Secret, selling goods
bearing the trade mark VS. These shops are situated within Edgars' stores in the
main commercial
centres of South Africa. In addition 31 other Edgars stores
throughout South Africa have since August 1987 been selling intimate
wear for
ladies bearing the trade mark VS.
Edgars' business in products bearing the trade mark VS has continued to
expand and the products and
31
stores have become increasingly well-known in South Africa. Edgars have
advertised extensively in South Africa goods sold under the
trade mark VS in
various periodicals, in circulars sent to Edgars' account customers and in
brochures.
In applications Nos 86/0772, 86/5207 and 87/4324 Edgars claims to be the
proprietor of the trade mark VS.
The application to register trade mark 86/0772 VS in class 25 was accepted on
29 April 1987 and the advertisement of the acceptance
appeared in the Patent
Journal dated 24 June 1987.
On 14 September 1987 VS Inc. filed trade mark applications Nos 87/7083-5 VS
in classes 3, 25 and 42.
Beeton stated that as at the respective dates of Edgars' trade mark
applications, and also at the date of Edgars' first use of the
trade mark VS in
respect of the goods falling in class 25 and the services falling
32
in class 42, VS Inc
had not used the trade mark VS in South
Africa;
had no reputation in respect
of the trade
mark in South Africa; and
had no
pending trade mark application in
respect of the mark.
(b)
The facts pertaining to
VS Inc.
In his affidavit in support of VS Inc Howard Gross stated that VS Inc owns
and operates a chain of more than 300 retail clothing stores
located throughout
the United States of America. VS Inc is a speciality retailer in the clothing
field, concentrating on a specific
product and a specific market. One of its
features is "house-brand" merchandise. Instead of buying from "name" designers
and manufacturers
such as Daniel Hechter, Pierre Cardin and Calvin Klein, it
uses its own trade marks.
33
The parent company of VS Inc is The Limited Inc which is a group of companies
which operates 2 600 clothing stores throughout the
United States of America.
The Limited Inc acquired the business named Victoria's Secret in 1982 which then
operated primarily in
San Franscisco, where it sold a large selection of
"romantic intimate apparel", much of it by means of mail order catalogues. After
it was acquired by Limited Inc, the business expanded into a country-wide chain
of stores.
VS Inc's marketing plan is to create, develop, promote and sell high-fashion
women's intimate apparel, toiletries, fragrances, accessories
and related
products for the contemporary woman at moderate prices. The stores project a
uniform image of Victorian/Old English country
life, and have a decor which is
consistent with this image. Various accessories having this theme, such as "Rose
English Drawer Liners"
and "Romance" dried flowers are displayed and offered at
the stores.
34
VS Inc has expended a vast amount of money and effort and utilized
considerable expertise in building up and developing the successful
formula of
its Victoria's Secret business. The "house-brand" of the company is VS; its
stores trade under this name and use the service
mark VS to identify and
distinguish its retail store services - virtually all the merchandise sold in
the company's stores is sold
under the VS trade mark. VS Inc also publishes a
catalogue, which enables purchases to be made through the mail, both by American
and overseas customers. Howard Gross furnished figures showing progressive
increases in the sales of VS goods over the years between
1984 and 1988. In the
fiscal year 1988 sales of VS goods falling under class 3 of the international
trade marks classification were
approximately $286 397 000. Gross stated that VS
goods have been widely promoted and advertised both within the USA and overseas.
Overseas advertising has
35
been mainly in the form of advertisements in leading international fashion
magazines which, he has been informed, circulate in South
Africa.
Gross stated that VS Inc has at all material times intended that its VS goods
should be sold throughout the world including South
Africa.
He said that even though VS Inc does not now trade in foreign countries its
VS goods are known to foreigners by virtue of the activities
described and also
because VS stores in the USA are frequented on a regular basis by foreign
visitors to the USA, including South
Africa.
In keeping with VS Inc's policy and purpose of selling VS goods
internationally, it decided in mid-1988(?) to register its trade mark
VS in
South Africa in classes 3, 25 and 42 and trade mark applications Nos 87/7083-5
were accordingly filed on 14 September 1987.
Gross referred to an affidavit by Suzanne
36
Rene Grant, an employee of VS Inc's Pretoria attorneys which dealt with an
investigation which she made in September 1989. He said
that it was apparent
from this affidavit that -
"12.3.1 Edgars are depicting the trade mark VICTORIA'S SECRET on their labels
and in their advertising material in a manner which
is substantially identical
to the manner in which my company depicts that mark.
12.3.2
Edgars are using the
trade mark VICTORIA'S SECRET in relation to exactly the same types of apparel as
my company has over the years
used the mark. Indeed, leaving aside questions of
quality, Edgars' VICTORIA'S SECRET goods are identical to my company's
VICTORIA'S
SECRET goods and indeed in essence amount to counterfeits of my
company's VICTORIA'S SECRET goods.
12.3.3
Edgars' advertising and promotional material is substantially
identical
37
to my company's catalogues and advertising material. 12.3.4 By creating
VICTORIA'S SECRET departments or stores within stores in their
retail outlets,
and in particular by means of the decor and decoration of such departments,
Edgars are imitating my company's stores
or the VICTORIA'S SECRET departments of
The Limited Stores."
Gross concluded by saying :
"To sum up, I say that Edgars' adoption and use of the trade mark VICTORIA'S
SECRET was and is deliberately and intentionally designed
to appropriate and
trade upon the international goodwill and reputation of my company's VICTORIA'S
SECRET trade mark, service mark
and trading style and that they are not entitled
to claim to be the proprietor of or to register the trade mark VICTORIA'S
SECRET.
By contrast, my company has honestly adopted the trade mark VICTORIA'S
SECRET and has used it extensively in the United States of
America and elsewhere
for
38
many years. My company has used and intends to use the trade mark VICTORIA'S
SECRET in respect of the goods and services in respect
of which we are seeking
registration, and we can rightly and truthfully claim to be the proprietors of
the mark in South Africa."
APPLICATION OF THE LAW
TO THE FACTS.
In determining which of competing claimants should prevail, the guiding
principle is incapsulated in the maxim
qui prior est tempore potior est
jure
: he has the better title who was first in point of time. In the
Moorgate judgment Mr Trollip said :
"In a situation in which competing applications for the registration of the
same or similar marks are filed in the R.S.A. the general
rule is that, all else
being equal, the application prior in point of time of filing should prevail and
be entitled to proceed to
registration. In a 'quarrel' of that kind 'blessed is
he who gets his blow in first'."
39
The crucial date in this case is 7 February 1986 on which Edgars filed trade
mark application No 86/0772.
As at that date Edgars had not used the trade
mark, but it was clear from evidence from Beeton which is not disputed, that
Edgars
then had a resolve or settled purpose to use the trade mark VS in the
immediate future upon or in connection with its goods.
It was submitted by VS Inc that Edgars' claim to proprietorship of the trade
mark was vitiated by its conduct in deliberately copying
VS inc's entire
marketing programme and each and every aspect of the trading activities. Edgars'
conduct in connection with that
use of the trade mark VS was deserving of
censure on the following counts :
"18.1 Edgars have directly or indirectly represented that their
goods and/or
40
services are those of my company or are connected in the course of trade with my
company. This is factually incorrect. Their conduct
is calculated to deceive or
cause confusion.
18.2 Edgars have taken undue advantage of the original concept and theme of
VICTORIA'S SECRET clothing developed by my company at
considerable effort and
cost and utilizing our particular expertise, which amounts to a parasitic
exploitation of the investment
and ideas of another.
18.3 The fact that Edgars have reproduced and imitated my company's VICTORIA'S
SECRET trade mark and are using and attempting to
register it, is at variance
with the principles embodied in Article 6 bis of the Convention at Paris for the
Protection of Industrial
Property, to which South Africa has subscribed and by
which South Africa is bound.
18.4 Their conduct in
counterfeiting my
41
company's goods and imitating their trading practices under the trade mark
VICTORIA'S SECRET is unfair and offends against the boni
mores and general sense
of justice of the community." Such allegations might be relevant in
a
passing off action between VS Inc and Edgars, but
they
are not matters which vitiated or tainted Edgars' right
or title to
the proprietorship of the trade mark in
February 1986. Whatever a moralist
might say, Edgars'
proposal to use in South Africa the trade mark VS in
competition with VS Inc which owns and uses it
extensively in the USA and which might come here cannot
be described a fraud or as involving any breach of the
law.
Gross alleged that VS Inc had used the trade
mark VS in South Africa. He relied on the placing of
advertisements in leading international fashion
magazines such as Glamour, Vogue, Mademoiselle, Elle,
42
Harper's Bazaar and Cosmopolitan. In support of his
allegation that these
magazines circulate in South Africa he referred to the annexed affidavit of
Bernard Patrick Courtney. In that
affidavit Courtney said that he was the
News-stand Manager of International Magazine Distributors (Pty) Ltd, a division
of CNA Limited,
Johannesburg. He was responsible for buying local and overseas
magazines on behalf of CNA and placing them on the news-stands of
all CNA
outlets and other newsagents.
He said that over the last four years (1986, 1987, 1988 and 1989 (January to
September)) International Magazine Distributors had imported
quantities, which
he set out, of Vogue (the English edition), Harper's Bazaar, Glamour,
Mademoiselle and Elle. He did not mention
Cosmopolitan.
The figures in respect of the years 1987, 1988 and 1989 are irrelevant as
being subsequent to the
43
crucial date. The figures for 1986 do not specify the
quantities imported
before the crucial date of 7 February 1986.
Gross annexed to his affidavits "specimens of advertisements which have
appeared from time to time in the aforementioned magazines".
These were
advertisements from Harper's Bazaar - February 1985, Vogue - August 1985, Vanity
Fair - November 1989, and Vogue -November
1989. In his affidavit Courtney did
not mention Vanity Fair, nor did he say that the February 1985 issue of Harper's
Bazaar or the
August 1985 issue of Vogue was imported into South Africa. The
November 1989 issue of Vogue is irrelevant and in any event is not
referred to
in Courtney's affidavit. The "specimens" constitute the only evidence that VS
Inc's advertisements did appear in magazines.
Even if it be assumed that the
advertising of goods constitutes a use of the trade mark, there is in my view no
evidence
44
that VS Inc used the trade mark in South Africa before the crucial date of 7
February 1986.
Then it was submitted that it had been proved that VS Inc
proposed to use the trade mark. Gross's evidence in this regard was the
following :
(a) "9. My company has at all material
times intended that its VICTORIA'S SECRET goods should be sold throughout the
world, including in South Africa. To this end the applicant
has registered its
VICTORIA'S SECRET trade mark on a wide scale internationally. I am annexing
hereto, marked 'HG 8', a schedule
of my company's worldwide registrations of the
trade mark VICTORIA'S SECRET."
(b) "10.1 At the present time my company has
not itself established any retail stores outside the United States of
America, but it proposes to do so in the future and/or enter
into
45
licensing agreements whereby VICTORIA'S SECRET goods are imported into and
sold in foreign countries or are made in such countries
under licence from the
applicant. The applicant proposes to give effect to its aforementioned
objectives in South Africa."
(c) "11 In keeping with my company's policy and purpose of selling VICTORIA'S
SECRET goods internationally, my company decided in
mid-1988 (sic) to register
its trade mark VICTORIA'S SECRET in South Africa in classes 3, 14, 25 and 42.
Trade mark applications
numbers 87/7083-5 in classes 3, 15 and 42 respectively
and application number 88/7646 in class 14 were accordingly filed. I am annexing
hereto, marked 'HG 9', a schedule of my company's pending applications to
register the trade mark VICTORIA'S SECRET in South Africa."
46
In regard to (a) , annexe HG 8 reveals that the only-trade mark registrations
of VS prior to the crucial date were in the USA, Austria,
Benelux, Bolivia,
Denmark, France, West Germany, Great Britain, Ireland, Italy, Sweden and
Switzerland. The applications in South
Africa were made only on 14 September
1987, after Edgars' application No 86/0772 appeared in the Patent Journal dated
24 June 1987.
In his affidavit Beeton had stated in paragraph 33 that Edgars
" has no reason to believe that VSI had
any intention to use the trade mark VICTORIA'S SECRET in South Africa at any
time prior to learning of the advertisement of the acceptance
of Edgars' trade
mark application 86/0772 VICTORIA'S SECRET in class 25 or even
subsequently."
One would have expected Gross to provide evidence, if it existed, that VS Inc
did have an intention to use the
47
mark VS in South Africa before learning of the advertisement, but Gross's
answer to this paragraph in paragraph 39 of his replying
affidavit is merely a
bald denial.
Plainly Gross's evidence does not satisfy the test in In re Backer's Trade
Mark (supra). He talks in (a) of an intention to use the
trade mark VS
"throughout the world, including in South Africa". He says in (b) that VS Inc
proposes to sell or licence the sale
of VS goods in foreign countries and that
this applies to South Africa. He does not say what priority, if any, South
Africa will
enjoy. This evidence does not evince a definite intention by VS Inc
in February 1986 to use the trade mark VS in South Africa in
the immediate
future. If it did have any intention, it was a mere problematical intention, an
uncertain or indeterminate possibility.
In my opinion therefore VS Inc did not
48
establish that in February 1986 it "proposed" to use the trade mark VS in
South Africa, in the sense of having a definite intention
(even a private
uncommunicated intention) to use the trade mark in South Africa in the immediate
future.
The last question remaining for consideration relates to VS Inc's contention
that to register the trade mark VS in the name of Edgars
would be likely to
deceive or cause confusion, and that in terms of s.16 of the Act registration
should be refused on that ground.
It is conceded by counsel for VS Inc that it is basic to this contention that
VS Inc should at the crucial date have had a reputation
in South Africa. This is
undoubtedly correct, because without such a reputation there is no possibility
of deceit or confusion between
Edgars' goods and VS Inc's goods.
The difficulty in the way of VS Inc in its
49
endeavour to establish the necessary degree of reputation is that it has
never had a business in South Africa and has never sold any
goods in this
country, or introduced any goods here. VS Inc sought to overcome this difficulty
as follows. They say that the trade
mark VS was well-known throughout the United
States of America, and that large sales of goods were made before the crucial
date.
These two points were not disputed by Edgars, but they do not establish
the necessary degree of reputation in South Africa. VS Inc
says that the mark VS
was extensively advertised in fashion journals which enjoyed an international
circulation, including circulation
in South Africa. Fourthly they said that the
reputation of VS which was well-known in America must also have extended to
South Africa.
Gross said in his affidavit :
"10.2 Even though my company does not directly at the present
time trade
50
in foreign countries, its VICTORIA'S SECRET goods are known to foreigners by
virtue of the activities described above. Furthermore,
my company's stores in
the United States of America are frequented on a regular basis by foreign
visitors to the United States of
America, including South Africans. This is
particularly true of the 'flagship' store on 57th Street, between Park and
Madison Avenues,
in Manhattan, New York, one of the most renowned and
prestigious shopping areas in the world. Other VICTORIA'S SECRET stores operated
by my company are located in areas such as Florida, Boston, Los Angeles and San
Francisco, which are centres widely visited by international
tourists and
business persons."
As regards the third point, even if it be accepted that the mark VS has been
extensively
51
advertised in international magazines, there is no proof of the extent to
which they circulated in South Africa before the crucial
date, or of the extent
to which VS advertisements impinged on readers in this country.
In regard to the fourth point, Gross did not show that he was qualified to
give admissible evidence regarding visits of South Africans
to VS Inc's stores
in the USA.
Any suggestion that VS Inc acquired a reputation among any South Africans,
let alone a substantial number of South Africans, is based
not on direct
evidence or legitimate inference but on speculation. VS Inc has not produced any
affidavit to show that any South African
has ever heard of Victoria's
Secret.
In my view therefore the decision of the assistant registrar of trade marks
was correct.
52
The appeal is dismissed with costs, including the costs of two counsel.
H.C. NICHOLAS AJA.
CORBETT CJ)
E M GROSSKOPF JA)
GOLDSTONE JA)
HARMS JA) Concurred.