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Luster Products Inc v Magic Style Sales CC (232/95) [1996] ZASCA 146; 1997 (3) SA 13 (SCA); [1997] 1 All SA 327 (A); (29 November 1996)

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Intellectual Property
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Brief Summary

Trade Marks — Infringement — Appeal against dismissal of interdict application — Appellant, Luster Products Inc, sought to restrain respondent, Magic Style Sales CC, from using a mark alleged to infringe its registered trade mark — Respondent countered with an application for expungement of the appellant's mark and a disclaimer — Court a quo dismissed the interdict application but ordered the entry of a disclaimer — Main issue was whether the respondent's use constituted infringement — Appeal upheld, finding that the respondent's use did infringe the appellant's mark and that the disclaimer was improperly granted.

Comprehensive Summary

Summary of Judgment


Introduction


The proceedings concerned a dispute about trade mark infringement and the continued validity and scope of a registered South African trade mark. The matter reached the Supreme Court of Appeal (then the Appellate Division) as an appeal and cross-appeal arising from motion proceedings determined on affidavit.


The appellant was Luster Products Incorporated, a United States corporation and the proprietor of South African Trade Mark 84/6404 registered in Part A in Class 3 in respect of hair-care and cosmetic products. The respondent was Magic Style Sales CC, a South African close corporation trading in the same commercial field.


The procedural history was as follows. After the appellant became aware during December 1990 that the respondent was marketing products bearing a mark the appellant considered infringing, correspondence and demands to desist followed without resolution. The appellant then launched an application on motion (dated 9 December 1992) seeking an interdict restraining infringement. The respondent opposed the application and, in addition, brought a counter-application (filed 9 February 1993) seeking, primarily, expungement of the appellant’s mark from the register and, alternatively, an order compelling the entry of a disclaimer. The Registrar of Trade Marks was joined but took no part and abided the outcome. The matter was argued on the papers without referral to oral evidence.


In the court a quo (Du Plessis J), the respondent’s expungement claim was refused, but the alternative claim for a disclaimer was granted, and the appellant’s main infringement application was dismissed. The appellant appealed against the dismissal of its infringement application and against the disclaimer order. The respondent cross-appealed against the refusal of expungement. Leave to appeal was granted in both instances.


The general subject-matter of the dispute was whether the respondent’s “S curl” presentation on hair-care goods infringed the appellant’s registered mark and whether the appellant’s registered mark could be removed from the register or reduced in scope by a further disclaimer, particularly in light of alleged post-registration usage of “S-curl” in a descriptive or generic sense.


Material Facts


The appellant manufactured and distributed hair-care products and cosmetics aimed mainly at black consumers. Since approximately 1980, it distributed such products in South Africa through representatives and used its trade mark on those goods locally. In July 1984, the appellant’s trade mark was registered in South Africa as Trade Mark 84/6404 in Part A in Class 3, covering (in substance) soaps, perfumery, cosmetics, hair lotions, shampoos, conditioners, creams, and other hair-care preparations, including professional-use products.


The registered mark, as depicted in the registration certificate, consisted of a stylised large “S” used together with the word “CURL”. The registration was subject to an existing disclaimer to the effect that registration conferred no exclusive right to use the word “CURL” and the alphabetical letter “S” separately from each other and apart from the special representation depicted in the mark.


The respondent, incorporated in 1988, conducted business in the same field. The appellant complained that the respondent marketed products using a sign that prominently featured a large stylised “S” in combination with the word “curl”, in a manner that mirrored the relationship of the components in the registered mark. The judgment treated the resemblance between the respondent’s presentation and the registered mark as central and, on the infringement enquiry, regarded the similarity and likelihood of deception or confusion as effectively beyond serious dispute.


The respondent’s challenge to the appellant’s mark relied substantially on the contention that the term “S-curl” had come to denote a particular hair style and was used by multiple traders descriptively in relation to products and advertisements aimed at black consumers. A temporal aspect to this allegation appeared from the respondent’s own version, namely that “S-curl” became generic at approximately the end of 1989 or beginning of 1990, meaning that the alleged genericness was post-registration (the mark having been registered in 1984).


While the court noted disputes about the evidentiary foundation for certain examples relied upon in the court a quo, it proceeded on the basis that, subject to an important qualification regarding timing, the appellant’s counsel was prepared to accept that the term “S-curl” had been used descriptively on a significant scale. The dispute was therefore approached primarily as raising legal consequences flowing from alleged post-registration descriptive usage, rather than turning on fine-grained evidentiary disputes.


The motion proceedings involved two separate applications argued together: the appellant’s infringement application and the respondent’s counter-application for expungement or, alternatively, a disclaimer. The Supreme Court of Appeal noted that the court a quo had approached disputes of fact as though there were a single application and had applied the Plascon-Evans approach against the appellant across the board. The Supreme Court of Appeal held that this was incorrect because the main application and counter-application were independent proceedings, so the ordinary motion rules would apply differently depending on which application was under consideration. However, the Supreme Court of Appeal indicated that this misdirection was not decisive to the ultimate resolution.


Legal Issues


The central questions were legal and involved the application of statutory provisions to largely common-cause features of the marks and the procedural setting.


The first set of issues concerned the respondent’s counter-application. The court had to decide whether, given the mark’s age (more than seven years on the register), the respondent could obtain expungement under section 16(1) read with section 33(1) of the Trade Marks Act 62 of 1963, bearing in mind the conclusiveness provision in section 42. This included the question whether post-registration facts (such as later generic or descriptive usage by others) could be relied upon to challenge a registration, and if so, on what basis and subject to what limitations.


A further counter-application issue was whether, after seven years, the court could order the entry of a further disclaimer under section 18(b) (relating to matter common to the trade or otherwise non-distinctive), or whether section 42 precluded such relief (save for the stated exceptions).


The second set of issues concerned the appellant’s infringement claim. The court had to determine whether the respondent’s use of its “S curl” presentation amounted to infringement under section 44(1)(a) (unauthorised use as a trade mark of a nearly resembling mark likely to deceive or cause confusion) or alternatively section 44(1)(b) (unauthorised use otherwise than as a trade mark, but in relation to registered goods, likely to cause injury or prejudice). A related issue was whether the respondent could rely on the defence in section 46(b), permitting bona fide descriptive use of the character or quality of goods.


Court’s Reasoning


Statutory framework and the effect of registration


The court began by emphasising what the registration represented under the 1963 Act. A trade mark is defined in the statute as a mark used or proposed to be used in relation to goods or services to indicate a trade connection and to distinguish the proprietor’s goods from those of others. A mark registered in Part A must be distinctive within the meaning of sections 10 and 12.


On that basis, the court treated the registered mark as the mark as depicted, namely the combination of the stylised “S” with “CURL”, and as having been accepted for registration as distinctive of the appellant’s goods and indicative of a trade connection. The court approached the dispute on the footing that registration conferred statutory rights to restrain infringement under section 44, subject to statutory limitations and defences.


Motion proceedings and factual disputes (Plascon-Evans)


The Supreme Court of Appeal held that the court a quo had misapplied the approach to factual disputes by treating the matter as a single composite application and applying the Plascon-Evans rule against the appellant in respect of disputes arising on the counter-application as well. Properly analysed, the infringement application and the counter-application were separate, even if heard together, and the motion rule would operate differently depending on which party bore the burden in the specific application. The court considered, however, that this misdirection was not central to the ultimate outcome.


Expungement: post-registration evidence and “wrongly remaining” on the register


Because the proceedings had commenced under the 1963 Act, the court confirmed that the matter was governed by that statute by virtue of section 3(2) of the Trade Marks Act 194 of 1993, which preserved the old-law regime for pending proceedings.


In relation to expungement under section 33(1), the court noted the breadth of that provision but held that, in a case involving a Part A mark older than seven years, section 42 was decisive in narrowing the available grounds. After seven years from registration, the original registration must be taken as valid in all respects unless one of the section 42 exceptions applied: fraud, contravention of section 16, or contravention of section 41. Fraud was not alleged, and reliance on section 41 had been abandoned, leaving only section 16.


The respondent’s essential theory was that, because “S-curl” had allegedly acquired a descriptive meaning after registration, continued registration and use of the mark would be likely to deceive or cause confusion within section 16. The court addressed whether facts arising after registration could be considered for this purpose. It held that there was no justification for a blanket exclusion of post-registration evidence and that to exclude it would improperly read a limitation into section 33(1). To the extent that Adcock-Ingram Laboratories Ltd v SA Druggists Ltd and Another 1983 (2) SA 350 (T) held that post-registration facts could not be relied upon, the Supreme Court of Appeal held that it was wrong and overruled it on that point.


Expungement: supervening confusion and the requirement of proprietor blameworthiness


Having accepted that post-registration developments could be relevant, the court then considered the more fundamental question: whether a trade mark may be expunged because other traders have used the same or similar matter in a way that produces confusion, thereby undermining the mark’s distinguishing function.


The court noted that the problem had not been addressed in South African case law, and then adopted the reasoning developed in other jurisdictions with closely comparable statutory schemes. The judgment relied particularly on GE Trade Mark [1973] RPC 297 (HL) and New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Limited 18 Intellectual Property Reports 385.


From those authorities, the court accepted the proposition that a lawfully registered mark is not to be removed merely because a likelihood of deception or confusion supervenes after registration due to market developments, unless the supervening confusion is attributable to some blameworthy act of the registered proprietor (or predecessor in title). The court endorsed the underlying policy concern that a contrary approach would allow “the assiduous efforts of a misappropriating user” to erode a proprietor’s statutory rights and would, in effect, make the statutory protection self-defeating.


Applying that approach, the court held that, on the facts, the respondent had not attempted to show blameworthiness on the part of the appellant, and therefore the respondent could not succeed in expungement under section 16 read with section 33(1) in circumstances of post-registration generic or descriptive usage by others. The court deliberately refrained from attempting to define the limits of “blameworthiness”, noting that no case on blameworthy conduct had been advanced.


Disclaimer under section 18(b) and the effect of section 42


The court then considered the court a quo’s order compelling the entry of a further disclaimer. It observed difficulties in identifying what the contemplated disclaimer would mean, given the nature of the registered mark and the disclaimer already endorsed on the register.


The court also accepted that there were procedural difficulties: the further-disclaimer issue was not raised in the notice of counter-application and there had been no amendment. Nonetheless, because the point was argued below and the court regarded it as a simple question of law, it addressed the merits.


The key reasoning was that section 42 renders a Part A mark, after seven years, valid “in all respects” save for the stated exceptions. The court held that this conclusiveness necessarily precluded the later cutting down of the registration by compelling an additional disclaimer under section 18(b). It considered it would be anomalous if section 42 permitted the rigid exception in section 41 to be raised but also permitted a less stringent, unmentioned route through section 18. On this reasoning, the court held that Federation Internationale De Football and Others v Barlett and Others 1994 (4) SA 722 (T) was wrong to the extent it held that section 42 was not a bar to section 18 relief, and it overruled that decision on the point. Accordingly, the disclaimer order could not stand.


Infringement under section 44 and rejection of the section 46(b) defence


Turning to infringement, the court compared the respondent’s use with the registered mark. It held that the respondent used a large stylised “S” combined with the word “curl” in substantially the same positional and visual relationship as the registered mark. The court regarded it as incontestable that the respondent’s sign so nearly resembled the registered mark as to be likely to deceive or cause confusion, and it was common cause that the use was unauthorised.


The respondent contended that its use was not use “as a trade mark” because its containers also bore the words “Magic Style”. The court rejected this, reasoning that the presence of one mark on goods does not exclude the possibility that another sign on the same goods is also being used as a trade mark. On this basis, the court held that the use fell within section 44(1)(a).


The court further held that, even if the use were not “as a trade mark”, it would necessarily constitute use in the course of trade “otherwise than as a trade mark” within section 44(1)(b). On the additional requirement in section 44(1)(b) that the use be likely to cause injury or prejudice, the court considered that, in the context of the respondent’s use (which resembled the trade mark presentation rather than, for example, a mere comparative reference), injury or prejudice would be inevitable, whether through loss of sales or dilution of the registered mark.


The court then considered the respondent’s reliance on section 46(b) (bona fide description of the character or quality of goods). It held, first, that if the respondent’s use was “as a trade mark”, section 46(b) could not assist because a trade mark’s function is to indicate origin and distinguish goods, and trade mark use is not readily reconcilable with descriptive use. It referred in this connection to Standard Bank of South Africa Ltd v United Bank Ltd and Another 1991 (4) SA 780 (T). Secondly, the court held that, in any event, because the respondent imitated the representation/depiction of the appellant’s mark, it could not characterise its use as bona fide; the evidence that other substantial companies had not found it necessary to use the mark supported the inference that the respondent’s use was intended to take advantage of the appellant’s goodwill.


Outcome and Relief


The Supreme Court of Appeal upheld the appellant’s appeal and dismissed the respondent’s cross-appeal. The court set aside the court a quo’s order in its entirety.


Substituting its own order, the court interdicted the respondent from infringing the appellant’s registered trade mark 84/6404. It dismissed the respondent’s counter-application both for expungement and for the entry of a disclaimer.


The respondent was ordered to pay the costs of the application and counter-application in the court a quo, including the costs of two counsel, and was also ordered to pay the costs of the appeal, likewise including the costs of two counsel.


Cases Cited


Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A)


Ngqumba/Damons NO/Jooste en Andere v Staatspresident en Andere 1988 (4) SA 224 (A)


Adcock-Ingram Laboratories Ltd v SA Druggists Ltd and Another 1983 (2) SA 350 (T)


GE Trade Mark [1973] RPC 297 (House of Lords)


New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Limited 18 Intellectual Property Reports 385


Re Bali Brassiere Co Inc's Registered Trade Mark and Berlei Ltd's Application [1968] HCA 72; (1968) 118 CLR 128


Berlei Ltd v Bali Brassiere Co Inc [1973] HCA 43; (1973) 129 CLR 353; 1 ALR 443


Bayer Pharma Pty Ltd v Farbenfabriken Bayer Aktiengesellschaft [1965] HCA 71; (1965) 120 CLR 285


Federation Internationale De Football and Others v Barlett and Others 1994 (4) SA 722 (T)


Standard Bank of South Africa Ltd v United Bank Ltd and Another 1991 (4) SA 780 (T)


Legislation Cited


Trade Marks Act 62 of 1963 (sections 10, 12, 16(1), 18(b), 33(1), 41, 42, 44(1)(a)–(b), 45, 46(b))


Trade Marks Act 194 of 1993 (section 3(2))


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The court held that, in an application under section 33(1) read with section 16(1) concerning a Part A mark older than seven years, section 42 renders the registration conclusively valid except for the specified statutory exceptions. It held further that post-registration evidence is not automatically excluded from consideration in rectification proceedings; to the extent that Adcock-Ingram Laboratories Ltd v SA Druggists Ltd and Another 1983 (2) SA 350 (T) held otherwise, it was overruled on that point.


However, the court held that a mark that was validly registered does not become liable to expungement merely because, after registration, confusion or descriptiveness arises through the conduct of third parties. Expungement on that basis would require that the supervening likelihood of deception or confusion be attributable to blameworthy conduct by the registered proprietor (or predecessor), and no such case was made out on the facts.


The court held that, after seven years, section 42 precludes compelling the entry of a further disclaimer under section 18(b); to the extent that Federation Internationale De Football and Others v Barlett and Others 1994 (4) SA 722 (T) held otherwise, it was overruled on that point.


On infringement, the court held that the respondent’s “S curl” presentation so nearly resembled the appellant’s registered mark as to be likely to deceive or cause confusion, constituting infringement under section 44(1)(a), and in any event satisfying section 44(1)(b) with the likelihood of injury or prejudice established by the nature of the use. The respondent’s reliance on section 46(b) failed because the use was not bona fide descriptive use, particularly given the imitation of the mark’s representation.


LEGAL PRINCIPLES


A Part A trade mark that has been registered for more than seven years is, by virtue of section 42 of the Trade Marks Act 62 of 1963, to be taken as valid in all respects unless one of the enumerated statutory exceptions applies. The conclusiveness conferred by section 42 prevents collateral reduction of the mark’s scope outside those exceptions, including by compelling a further disclaimer after the seven-year period.


In rectification proceedings, post-registration facts are not, merely by reason of their timing, inadmissible or irrelevant to the enquiry whether an entry is “wrongly remaining” on the register. The statute’s structure contemplates that subsequent events may be considered, and a blanket exclusion of post-registration evidence would be inconsistent with the breadth of section 33(1).


Where supervening market developments create a likelihood of deception or confusion in relation to a lawfully registered mark, expungement is not justified solely on the basis that third parties have used the matter in a confusing or descriptive way. The court adopted the principle that rectification on this basis requires blameworthy conduct by the registered proprietor (or predecessor in title) as a causal explanation for the supervening deception or confusion, thereby preventing the erosion of registered rights through the conduct of misappropriating users.


For infringement, the use on goods of a sign that so nearly resembles the registered mark as to be likely to deceive or cause confusion constitutes infringement under section 44(1)(a) where used as a trade mark, and may also fall under section 44(1)(b) where used otherwise than as a trade mark in connection with registered goods and likely to cause injury or prejudice. The presence of another mark on the same goods does not preclude the conclusion that the impugned sign is being used as a trade mark.


The defence of bona fide descriptive use under section 46(b) does not assist where the impugned use is, in substance, trade mark use, or where the user imitates the registered mark’s representation so that the use cannot be characterised as bona fide description of character or quality.

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[1996] ZASCA 146
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Luster Products Inc v Magic Style Sales CC (232/95) [1996] ZASCA 146; 1997 (3) SA 13 (SCA); [1997] 1 All SA 327 (A); (29 November 1996)

CG
CASE NUMBER: 232/95
TN THE SUPREME COURT
OF SOUTH AFRICA (APELLATEDIVISION)
In the matter between:
LUSTER PRODUCTS INC
Appellant
(Applicant in court a quo) and
MAGIC STYLE SALES CC
Respondent
BEFORE: CORBETT CJ, NESTADT, HARMS, SCHUTZ
and PLEWMAN JJA
HEARD ON:
19 NOVEMBER 1996
DELIVERED ON:
29 NOVEMBER 1996
JUDGMENT
2
PLEWMAN TA
This appeal concerns a trade mark. The appellant, Luster Products Incorporated, a corporation registered according to the laws of
the State of Illinois in the United States of America, is the proprietor of South African Trade Mark 84/6404 registered in Part A
of the register in respect of goods in Class 3. The respondent is a South African close corporation, Magic Style Sales CC, which
has its registered office in Sandton, Gauteng. Appellant manufactures and distributes hair care products and cosmetics for use mainly
by black persons. There is a large market for these products in America. Since 1980, appellant has distributed its products in South
Africa through representatives in this country, and has used its trade mark (which then was registered in America but not in South
Africa) on such goods. In July 1984 the appellant's mark was registered locally.
The respondent carries on business in the same field as the appellant. It
3
was incorporated in 1988. The dispute arose in December 1990. At that time the appellant became aware of the fact that respondent
was marketing certain of its products using a mark thereon which appellant considered an infringement of its registered mark. It
accordingly caused a letter of demand to be addressed to the respondent calling upon it to desist from using this mark. Correspondence
passed between the parties. The details are not relevant. The upshot was a refusal by the respondent to comply with appellant's demands
(though it did, it seems, slightly modify the mark it used on its goods; the details will be given later). As a result the appellant
applied for an interdict restraining the respondent from infringing its mark. The notice of motion is dated 9 December 1992. The
application was opposed. Respondent in addition launched a counter-application filed on 9 February 1993. An enthusiastic paper chase
ensued. Initially relief was also sought on the ground of passing off. This has not been pressed on appeal. The papers rapidly became
voluminous. The counter-
4
application (in so far as is now relevant) was a double-barrelled attack. Respondent sought the expungement of appellant's mark under
the provision of s 16(1) read with s 33(1) of the Trade Marks Act 62 of 1963. This Act applies to the proceedings by reason of the
provisions of s 3(2) of Trade Marks Act 194 of 1993 (which came into operation on 1 May 1995). S 3(2) provides that proceedings commenced
under the 1963 Act are to be dealt with in accordance with that Act as if it had not been repealed. The respondent's second barrel
was an application (made in the alternative) for an order directing the entry of a disclaimer, of "any right to the exclusive
use of the term 'S-CURL' apart from the special representation as depicted in the mark". The counter-application necessitated
the joinder of the Registrar of Trade Marks. The Registrar has, however, taken no part in the litigation and abides the result. The
matter was argued on the papers and without either party seeking a reference to evidence. The Court a quo dealt first with the counter
application (and I propose to
5
do likewise). It held against the respondent on expungement but ordered the entry of the disclaimer sought. It dismissed the main
application. What is before this Court is an appeal by the appellant against the dismissal of the main application and against the
grant of the alternative counter-application - that is the order directing the entry of the disclaimer. The respondent, for its part,
cross appeals against the refusal of the (main) counter-application. Leave to appeal was granted by the Court a quo in both cases.
It is necessary, in order that the contentions and counter contentions can be understood, that I describe the mark and its effect
and explain the manner in which the respondent has marketed its goods.
First the mark. This was (as already stated) granted on 18 July 1984. It is depicted in the certificate of registration in the following
representation:
6
The registration is subject to the following disclaimer:
"Registration of this trade mark shall give no right to the exclusive use of the word 'CURL' and the alphabetical letter 'S'
separately from each other and apart from the special representation as depicted in the mark."
Class 3 (in which the registration falls) covers goods in the following
categories:
"Soaps, perfumery and essential oils; cosmetics; hair lotions, hair care products, shampoos, conditioners, creams, creme perm
and styling lotions, hair pressing preparations, hair setting preparations, all the aforegoing including those for professional use
only."
Neither in counsels' written heads of argument nor in the judgment is there any discussion of the effect of the grant. In my view
a clear understanding of this is of fundamental importance.
In terms of the 1963 Act ("the Act" for the purposes of this judgment) a "trade mark"
"
means a mark used or proposed to be used in relation to goods
7
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."
A registered mark must also satisfy the requirements of s 10 and s 12 of
the Act and it is accordingly also necessary to quote the relevant portions of s
10 and s 12. In terms of s 10, in order to be registerable in part A of the
register, a trade mark -
"
shall contain or consist of a distinctive mark".
In terms of s 12(1) "distinctive" means
"adapted, in relation to the goods ... in respect of which a trade mark is registered ..., to distinguish goods ... with which
the proprietor of the trade mark is or may be connected in the course of trade from goods ... in the case of which no such connection
8
subsists, either generally or, where the trade mark is registered ... subject to limitations, in relation to use within those limitations.
(2) In determining whether a trade mark is distinctive as aforesaid regard may be had to the extent to which -
a)
the trade mark is inherently adapted to distinguish; and
b)
by reason of the use of the trade mark or of any other circumstance the trade mark is or has become adapted to distinguish."
The mark then is the mark as depicted - that is the large or bold stylized alphabetical letter S in combination with the word curl
in capital letters. It is a "goods mark". The mark must also be accepted as meeting the requirements of s 10 and s 12 -
in particular as distinguishing the goods upon which it is used from the goods of other persons and as indicating a connection in
the course of trade with appellant. It conferred on appellant the right to restrain infringement of the mark under the provisions
of s 44(1) (a) and (b) of the Act (to which I will presently refer more fully).
The manner in which the respondent marketed its goods - that is the use
9
complained of - is illustrated in the document I annex hereto. What is of course significant is the bold S, in each case, combined
with the word curl.
It is convenient here to discuss also the use of the term s curl by other persons - which is what respondent largely relied upon for
its attack on the mark. The respondent's contention was that the term s-curl had come to denote a particular hair style and that
various manufacturers of hair products intended for use by black persons had used the term descriptively on containers of their products
and in advertisements. These are the propositions from which the learned judge's reasoning proceeded. The evidentiary foundation
for both, as I shall presently show, is questionable but for reasons which I later give this is not of great importance. Du Plessis
J in his judgment cites exhibits RW 17 to RW 20 as the evidential basis for his finding. In these exhibits what is significant is
the depictions of the reverse face of the containers consisting, for the most part, of directions for the use the contents.
10
Annexure RW 17 may be taken as an example. The directions for use commence with the words "DO NOT WASH THE HAIR - USE ON DRY
UNWASHED HAIR. Apply SOF 'N EASY HAIR BALM to the hair line covering ears and neck. Apply 'S' CURL RELAXER CREAM starting at the
back of the head ..." The directions continue in like vein referring also to " 'S' CURL RELAXER CREAM, 'S' CURL NEUTRALIZING
SHAMPOO, 'S' CURL DEEP CONDITIONER, 'S' CURL GEL AND 'S' CURL MOISTURISING."
Du Plessis J did not refer in the judgment to the appellant's answering affidavit in which it is said of annexure RW 17 that it was
a product of American Hair Products (Pty) Ltd and American Hair Care CC. Letters of demand had been sent in 1991 to both with the
result that the product was removed from the market. Broadly similar answers were given in respect of the other exhibits referred
to by Du Plessis J. His acceptance of the respondent's evidence in this respect no doubt flowed from his incorrect appreciation of
the
11
operation of the Plascon-Evans rule, a matter to which I presently refer. However little of this matters because there is other evidence
of various concerns having used the term "S curl" in advertisements. A good deal of this evidence consists of photographs
of bill-boards used by "informal hairdressers" on which various cuts or styling for hair are advertised. An example is
exhibit RW 6 on which, in the left hand comer photograph, nineteen cuts or styles (somewhat crudely written) are advertised. Those
most relevant read BLOW R15, CUT R15, S CURL R45, PRINCIPAL RELAX R35. This is typical of many such boards. The use of S curl in
exhibit RW 6 seems to be as a description of a service and not goods. But there are other exhibits which would suggest that the term
is being used descriptively or at least adjectivally in relation to certain products. Much of the evidence was in fact of no great
relevance. Where the term is used as indicating a service to be provided this use can have no bearing on the fate of a goods mark.
Some of the evidence furthermore related only to
12
use which was permissible in terms of the (original) disclaimer. However, since
Mr Puckin, who appeared for the appellant, was, subject to an important
qualification, prepared to accept that the term S-curl had been used in a
descriptive sense on a significant scale it is unnecessary to elaborate on the
exhibits or to analyse the precise usage demonstrated thereby. Mr Punckri's
qualification related to the time when such use was made of the term S-curl.
The facts in this regard are not discussed in the judgment of the Court below.
Mr Puckin's qualification was that all this was to be read with the respondent's
statement (in the affidavit of its principal deponent Willison) to the following
effect, namely:
"It has been the respondent's contention that S-curl became generic towards approximately the end of 1989 or the beginning of
1990."
It is thus clear that the respondent's case is based on what may be called
"post registration facts". What the consequence of this is I will discuss later.
13
While the matter can then be considered on the basis of Mr Puckrin's
concession it is, I think necessary to refer to the Court below's approach. The
learned judge, in considering the evidence, applied (as he put it) the guide-lines
laid down in Plascon-Evans Paints Ltd v Van Riebeek Paints(Pty) Ltd
[1984] ZASCA 51
;
1984 (3)
SA 623
(A) as explained in Ngqumba/Damons NO/Jooste en Andere v
Staatspresident en Andere
1988 (4) SA 224
(A) at 259C-263C. In so doing
however the learned judge accepted or assumed (as counsel also seem to have
done) that he was dealing with a single comprehensive application. He thus
accepted the dictum of Corbett JA at p 634-5 in the Plascon- Evans case, as
operating against the appellant and that it was the respondent's version (subject
to the recognised qualifications) which had to be accepted. In this he erred. The
present proceedings consist of separate applications, having a certain overlap and
being argued at a combined hearing, but separate and independent applications
nonetheless. The proper approach in these circumstances is that while the
14
respondent's version must be looked to in so far as the main application is concerned, the reverse is the case with the counter-application.
For reasons which follow this too plays no great part in the resolution of the dispute.
With that preamble I turn to the counter-application.
S 16(1) provides:
"It shall not be lawful to register as a trade mark or part of a trade mark any matter the use of which would be likely to deceive
or cause confusion ... or would otherwise be disentitled to protection in a court of law."
S 33(1) provides:
"Any person aggrieved by the non-insertion in or omission from the register of any entry or by any entry made in the register
without sufficient cause or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register,
may apply to the court ... for the desired relief and thereupon the court ... may make such order for making, expunging or varying
the entry ..."
It will be seen that s 33(1) is in very wide terms. In the present case
however it must be read with s 42 which provides:
15
"In all legal proceedings relating to a trade mark registered in part A of the register (including applications under section
thirty-three), the original registration of the trade mark in part A of the register shall, after the expiration of seven years from
the date of that registration, be taken to be valid in all respects, unless -
(a)
that registration was obtained by fraud; or
(b)
the trade mark offends against the provisions of either section sixteen or section forty one."
S 42 applies in all proceedings and, in consequence, only the exceptions
therein provided, namely fraud (which was not contended for) or s 41 (which
had been expressly abandoned) or s 16, could be raised. What then arises is
whether respondent made out a case on the basis of an objection framed in terms
of s 16 of a likelihood of deception or confusion. Mr Bowman's contention on
behalf of the respondent (as I understood it) was that because the term S-curl
had acquired a descriptive connotation, albeit some time after the original
registration, the continued registration of the mark and its use as such would be
likely to cause deception or confusion.
16
On the facts of this case it is somewhat difficult to appreciate why the acts of others which would cause confusion in relation to
their products should render the mark confusing. This aspect need not be pursued. The first question is whether in the light of the
decision in Adocock-Ingram Laboratories Ltd vs SA Druggists Ltd and Another
1983 (2) SA 350
(T) the post registration evidence can be relied upon. (See the judgment of Nicholas J at p 354 G and H and 355A.) The authorities
I discuss presently hold that equivalent sections in the English and Australian Acts have a secondary application after the initial
registration and that these sections refer not only to the act of making an entry on the register but also to permitting the continuance
of the entry on the register. The same applies in my view to s 16(1). I can see no justification for the total exclusion of evidence
merely because it relates to subsequent events. Such a reading would, so it seems to me, write a limitation into s 33(1) which is
contrary to the entire tenor of the section. To the extent to which it was held
17
in the Adcock-Ingram case that post registration facts cannot be relied upon the decision is in my view wrong and must be overruled.
Of course, there are then other difficulties, which must now be considered. What the debate really raises is the question whether
a mark is rendered confusing because other persons have, perhaps assiduously, used it in a manner which is contrary to the interests
of the trade mark proprietor. This is a problem which has been directly addressed in other jurisdictions but which has not been dealt
with in our courts. The leading authority on the question has, for many years, been the decision of the House of Lords in the GE
Trade Mark case
[1973] RPC 297.
The matter is dealt with in the speech of Lord Diplock. The case concerned a mark consisting of the letters GE in script enclosed
in a circle (referred to as the Rondel mark) registered in 1907. There was nothing wrong with the original registration. The question
was whether the mark (which was not, for the purposes of s 32(1) of the 1938 English
Trade Marks Act, an
"entry made in the register, without sufficient
18
cause") had, as a result of events which occurred after 1907, become an entry "wrongly remaining on the register",
within the meaning of that section, in 1967 when proceedings to expunge it from the register had been commenced. The similarity between
the English section and our
s 33(1)
and of the factual situation is apparent. Lord Diplock proceeded from the point of view that the section clearly contemplated that
an entry, which was lawful at the time it was originally made, may, as a result of subsequent events, become one which "wrongly
remains" on the register. He then examined other sections of the English Act which are closely paralleled in our legislation
namely s 11 and s 13. S 11 is in all material respects our s 16 and s 13, similarly, our s 42.
The two questions which arose were first as to the time to which the prohibition expressed in the words "It shall not be lawful
to register ..." relates and the second, whether a limitation upon the prohibition of the registration of a potentially deceptive
or confusing trade mark is imposed by the requirement
19
that its use "would ... be disentitled to protection in a court of justice". He held
that the words of the proviso in s 13 (that is words which are the equivalent of
the exceptions in our s 42) were of assistance in answering the first question as
to the construction of s 11 but threw no light on the second. Neither question,
it was said, could be answered by linguistic analysis alone. I would quote the
following from p 324 from Lord Diplock's speech:
"The first depends upon whether, in the context of section 11, the verb 'to register' refers only to the act of making an entry
on the register or whether it refers also to the retention of an entry on the register after it has been made. As a matter of ordinary
useage of the English language either is a permissible meaning.
With regard to the second question, as a matter of syntax the dominant phrase in the relevant description of the disqualified matter
is:- matter 'the use of which would be disentitled to protection in a court of justice'. The words 'by reason of its being likely
to deceive or cause confusion or otherwise' constitute a subordinate clause of which the syntactic function is to restrict the amplitude
of the disqualified matter. This it does by reference to the reasons for the disqualified matter's being disentitled to protection
in a court of justice. But the inclusion in the subordinate
20
clause of the words 'or otherwise', if they are to be given a literal interpretation, has the consequence that the clause is wide
enough to embrace any reason for the matter being disentitled to protection in a court of justice, and the clause thus becomes devoid
of any restrictive effect and therefore performs no function at all. Furthermore, the use of the subjunctive mood in the dominant
phrase gives rise to ambiguity as to the time to which the test of disentitlement to protect relates. Is the critical time at which
the use of the mark would be disentitled to protection before it is entered on the register or after it has been entered on the register?
Finally, whichever is the time to which the test relates, what meaning is to be ascribed to the words 'disentitled to protection
in a court of justice'?
My Lords, the meaning of particular sections in the Act of 1938 can, in my view, only be ascertained by applying a purposive construction
to the Act as a whole, and construing the actual words used in particular sections (unless it is linguistically impossible), so as
to achieve and not so as to thwart the underlying policy to which the Act was intended to give effect."
Lord Diplock then proceeded to a review of the legislative history of the
English trade mark legislation (which I do not quote but which I would adopt).
Given the close parallel between our trade mark legislation and that of England
21
and recognising the degree to which our legislation has followed English trade mark legislation this history is, in a direct sense,
also the history of the South African legislation. In so far as the remarks made (at p 326) in the speech (which I also do not quote)
concerning the rights of the proprietor of a trade mark and the allowance made for those who can show honest concurrent use are concerned,
these are considerations which apply with equal force to the South African legislation.
Lord Diplock's conclusion, in relation to the situation which obtained under the 1938 English Act, is summarised in the speech (at
334) as follows:
"(1) The fact that the mark is entered upon the register is prima facie evidence of the validity of the original registration
and of the right of the registered proprietor to the exclusive use of the mark, subject however to the rights of concurrent user
by any registered proprietor of an identical mark or one nearly resembling it.
(2) If the mark was likely to cause confusion at the time when it was first registered it may be expunged from the register as 'entry
made in the register without sufficient cause' unless the
22
proprietor of the mark at that time would have been entitled to have it entered on the register by reason of his honest concurrent
use of the mark as a trade mark before the original registration of the mark.
(3)
If the likelihood of causing confusion did not exist at the time when the mark was first registered, but was the result of events
occurring between that date and the date of application to expunge it, the mark may not be expunged from the register as an entry
wrongly remaining on the register, unless the likelihood of causing deception resulted from some blameworthy act of the registered
proprietor of the mark or of a predecessor in title of his as registered proprietor.
(4)
Where a mark is liable to be expunged under (2) or (3) the Court has a discretion whether or not to expunge it and as to any conditions
or limitations to be imposed in the event of its being permitted to remain on the register."
An equally persuasive judgment is to be found in the Australian case of
New South Wales Dairy Corporation v Murray Goulburn Co-operative Company
Limited in 18 Intellectual Property Reports 385. It will suffice to quote from the
judgment of Mason CJ at p 400. For the purposes of this quotation it should be
noted that s 28 of the Australian Act is for all practical purposes the same as our
23
s 16 - the separate requirements of our section have been enacted as the subparagraphs (a), (b), (c) and (d). Mason CJ said:
"As I have already noted, in 'GE' Trade Mark Lord Diplock (with the concurrence of Lord Simon of Glaisdale and Lord Kilbrandon)
concluded that a lawfully registered trade mark is only liable to be expunged under s 11 of the Trade Marks Act 1938 (UK) by reason
of supervening likelihood of deception or confusion if that likelihood is the result of some blameworthy conduct on the part of the
registered proprietor. In reaching that conclusion his Lordship regarded the counterpart of our s 28(a) as being governed by the
equivalent of our s 28(d) so that an applicant seeking removal of a mark on the ground that it infringed s 28(a) would be required
to show not only likelihood of deception or confusion but also that the mark was disentitled to protection in a court of justice.
That interpretation of s 11 depended very largely on the legislative history of the statutory provisions as outlined by Lord Diplock
in his speech, a legislative history which has its counterpart in Australia. But the interpretation also depended on the presence
of the provisions permitting identical or similar marks to remain in the register. The presence of those provisions is inconsistent
with the existence of a statutory intention that likelihood of deception or confusion ipso facto leads to disentitlement to protection
in a court of justice or to liability to expungement. To my mind, those provisions, particularly ss 34 and 58(3), justify an implication
that s 28(a) looks to supervening likelihood of deception or confusion
24
only if that likelihood is the result of blameworthy conduct on the part of the registered proprietor. Moreover, as Bowen CJ pointed
out in Riv-Oland Marble (at FCR 573-4), echoing the words of Windeyer J in Re Bali Brassiere Co Inc's Registered Trade Mark and Berlei
Ltd's Application
[1968] HCA 72
;
(1968) 118 CLR 128
at 133 (at first instance - reversed on appeal
[1973] HCA 43
;
(1973) 129 CLR 353
;
1 ALR 443)
, it is legitimate to lean against the literal construction of s 28(a) on the ground that it would not protect the registered proprietor
from 'the assiduous efforts of a misappropriating user'. That consideration, taken in conjunction with the presence of the provisions
permitting identical or similar marks to be entered and to remain in the register, supports the adoption of the interpretation of
s 28(a) favoured by the Full Court of the Federal Court in Riv-Oland Marble and in this case. But I should say that it may not be
necessary to read s 28(a) as though it were governed by s 28(d). So to read s 28(a) is a difficult exercise as a matter of construction.
It may be sufficient to say that in the context of the entire statutory scheme a trade mark is only liable to be expunged under s
28(a) if the use of it becomes likely to deceive or cause confusion and that likelihood is due to the fault or blameworthy conduct
of the registered proprietor. However, for the purpose of this appeal, I am content to accept that the fault or blameworthy conduct
must be such as to disentitle the mark to protection in a court of justice. This conclusion is sufficient to dispose of the appellant's
main argument. Before passing from it, I should point out that the argument excites some unresolved questions. On a literal construction
of s 28(a) what happens in the case of two marks the
25
use of each of which gives rise to the likelihood of deception or confusion? If one only is to be removed, how is the choice to be
made? Is it to be made against that mark which is the later registration? Or are the two marks liable to be expunged? These questions,
in the context of the interpretation of s 28(a) which I favour, are relevant to the appellant's final submission that the Full Court
of the Federal Court misdirected itself in holding that there was an absence of blameworthy conduct on the part of the registered
proprietors of the MOO mark. One aspect of the appellant's submission on this point is that, by reason of non-use, the respondent's
mark has lost its distinctiveness. True it is that there is an element of overlapping in the concept of loss of distinctiveness and
the likelihood of deception or confusion. As Kitto J pointed out in Bayer Pharma Pty Ltd v Farbenfabriken Bayer Aktiengesellschaft
[1965] HCA 71
;
(1965) 120 CLR 285
at 303, 'the questions of distinctiveness and absence of a likelihood of deception tend to run into one another'. However, the Full
Court of the Federal Court was correct in concluding that loss of distinctiveness as such does not fall within s 28 so that the fact
that the MOO trade mark had ceased to be distinctive of the goods of the registered proprietor did not provide a ground for rectification
of the register under s 22. On the other hand, if a mark's loss of distinctiveness leads to the use of the mark becoming deceptive
or a cause of confusion due to the blameworthy conduct of the registered proprietor, then the mark falls within s 28(a) and is liable
to expungement."
I do not think an independent analysis of the South African Act and its
26
predecessors is called for.
The situation described in the GE case and the New South Wales Dairy case obtains under our legislation and I am disposed, by parity
of reasoning, to draw the same conclusion namely that in the absence of blameworthiness on the part of the proprietor no case can
be made out for expungement in the circumstances under consideration. In my view Lord Diplock's conclusion may be adopted by this
Court. If it were otherwise, the Act, by a self-defeating procedure, would (in circumstances such as the present) nullify, in the
hands of a wholly blameless proprietor, the very protection which it seeks to offer.
In so far as the question of what would constitute blameworthiness is concerned I would only say that where no attempt has been made
to show blameworthiness in any respect prudence suggests that no attempt be made to define the precise limits of the concept. I therefore
express no view on what conduct will be held to be blameworthy.
27
On the facts of the case then s 16 does not provide the respondent with a cause of action entitling it to claim expungement of the
mark. That leaves the question of the alternative claim, the one that allowed by Du Plessis J to which I have already referred. S
18(b) provides that if a trade mark contains "matter common to the trade or otherwise of a non-distinctive character" the
Court may require, as a condition of it remaining on the register the entry of a disclaimer.
It is, with respect to the learned judge, difficult to discern precisely what the suggested disclaimer means or, given a proper understanding
of the scope of the registered mark, what the purpose thereof would be. There are however other difficulties to be considered. Mr
Puckrin demonstrated from the papers that, despite the fact that his predecessor in the case apparently allowed the application for
this disclaimer to be argued, no such issue was raised in the notice of counter-application. The notice bears him out in this regard.
Furthermore no notice of amendment of the counter-application was ever moved.
28
In addition, it seems clear, that in the appellant's answering affidavits the matter was dealt with on a basis that directed attention
only to the expungement application under s 16 read with s 33(1) and the abandoned application under s 41(1). Mr Punckrin's objection
would provide adequate grounds for holding that the order made was incompetent. However since that matter was argued in the Court
below and seemingly without objection a preferable course would seem to be to enquire whether, in any event, the order should have
been granted. On the facts of this case this is a simple question of law. Given the applicability of s 42, can a case be made out
under s 18(b)? In the Court below reliance was placed on the decision in Federation Internationale De Football and Others v Barlett
and Others
1994 (4) SA 722
(T) where Joffe J held (at p 743 A) that s 42 was not a bar to relief in terms of s 18. The learned judge seems to have relied for
this view in an extract from Lord Diplock's speech in the GE case. (The quotation at p 742 I-J seems to relate to reasoning which
underlies the third
29
conclusion quoted by me above.) It is, with great respect to the learned judge, difficult to understand how the quote assists. The
terms of s 42 are clear. Save in the three exceptions already discussed a mark in part A is, after seven years, to be taken as valid
in all respects. That must mean that it cannot be cut down or, in effect, amended by the entry of any (further) disclaimer. It would
indeed be surprising if a section permitting, as an exception, an objection in terms of s 41 which lays down a concept which is extremely
rigid in its form, would, without express mention, nevertheless allow an objection with the much less stringent test under s 18 to
be invoked. I am of the view that Joffe J was wrong and to that extent his judgment is overruled. This of course also disposes of
the respondent's case on s 18(b) and the order made in terms thereof in the Court below cannot stand.
What then remains is the main appeal - that is the question of infringement. It is appropriate then to quote the relevant provisions
of s 44.
30
"44. (1) Subject to the provisions of subsections (2) and (3) of this section and of sections 45 and 46, the rights acquired
by registration of a trade mark shall be deemed to be infringed by -
(a)
unauthorized use as a trade mark in relation to goods ..., in respect of which the trade mark is registered, of a mark so nearly resembling
it as to be likely 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 ... for which the trade mark is registered and is likely
to cause injury or prejudice to the proprietor of the trade mark."
I have illustrated the manner in which the respondent has applied its mark
to its goods above. What can be seen is that in all three examples the letter S
is not a simple upper-case letter but a large or bold S and in a stylised form. It
is followed by the word curl in two instances in capital letters and in the other
only with a capital C That this use in all three cases is use of a mark so nearly
resembling the registered mark as to be likely to deceive or cause confusion
seems to me to be incontestable. Respondent uses the same combination of the
31
letter S and the word curl in the same relationship as to position and size as one finds in the registered mark, Mr Bowman's only
argument (subject to a defence based on s 46(b)) was that this was not use as a mark. As I understood him this submission rested
on the statement that in all cases the containers also bore the words Magic Style. This, he said, was a trade mark and it followed
that S-curl was not being used as a trade mark. I find this difficult to follow. I know of no principle that says that the use of
one mark on a product excludes the possibility that any other mark thereon can be a trade mark. The simple fact is that the respondent's
S curl mark is being used upon the goods and in relation to the goods in respect of which the trade mark is registered. That would
seem to me to bring the respondent's use wholly within the terms of s 44(l)(a), it also being common cause that it was unauthorised
use. But again this is indeed not a critical finding. If the respondent's use of its mark is not "use as a mark" it unquestionably
must be "use in the course of trade otherwise than as a mark"
32
and therefore an infringement in terms of s 44(l)(b). In this case too it is
common cause that the use was not authorised. It is also clear that it is used in
relation to or in connection with goods for which the mark is registered. In this
case Mr Bowman argued that appellant had not shown that the respondent's use
was likely to cause injury or prejudice to the appellant (a requirement for the
application of s 44(l)(b)). The issue is addressed in the founding papers but (as
Mr Bowman contends) what is said amounts to little more than an assertion that
this consequence will follow. Given that what is being sought is an interdict it
is very hard to know what more the appellant could do but to establish the
nature of the infringing use and to contend that it is likely in the nature of things
that prejudice will arise. The present case differs from other forms of use
"otherwise than as a mark", say a comparative use. It is to my mind use which
must inevitably result in injury or prejudice either by loss of sales or even,
simply, by the dilution of the registered mark. In my view therefore the
33
likelihood of injury or prejudice was established.
Mr Bowman also argued that the container depicted on the right hand side in the annexure hereto had been replaced in 1992 by the container
on the left hand side. I cannot see that this has any bearing on the matter. All that that would show is that respondent was at that
time infringing while the later products show that it still is doing so. What appellant seeks is an interdict in general terms. The
consequence is, subject only to s 46(b) infringement, has been proved.
S 46(b) provides:
"46. No registration of a trade mark shall interfere with -
(a)
(b)
the use by any person of any bona fide description of the
character or quality of his goods...." If I am correct in holding that respondent's use of its mark was use "as a trade
mark" this defence cannot avail the respondent's. A registered mark is by
34
definition something which distinguishes the goods of the proprietor, connected
with him in the course of trade, from goods with which no such connection in
the course of trade exists. Use as a trade mark is therefore not readily seen as
descriptive use. Standard Bank of South Africa Ltd v United Bank Ltd and
Another
1991 (4) SA 780
(T) at 808G. This would underline that the respondent
is not using its mark as a description of the character or quality of his goods.
To say that S curl spray describes the spray as having a particular quality or
character (as opposed to use) is, I think, fallacious. But quite apart from this,
once the respondent imitates the representation or depiction of the mark, it
cannot be heard to say that its use is bona fide. The evidence established that
other substantial companies had not found it necessary to use the mark and this
leads to the conclusion that the respondent's use was a device to take advantage
of appellant's goodwill. That, in my view, disposes of the argument based on
s 46.
35
In the result the main appeal must be upheld both in relation to infringement and in relation to the order directing a disclaimer.
So too the cross-appeal must be dismissed.
The order which I make is:
1)
The appeal is upheld and the cross-appeal dismissed.
2)
The Court a quo's order is set aside and there is substituted therefore the
following:
"a) The respondent is interdicted from infringing applicant's registered trade mark 84/6404
b)
The respondent's counter-application for expungement of the mark and for the entry of a disclaimer in relation thereto is dismissed.
c)
The respondent is ordered to pay the costs of the application and counter-application including the costs of two counsel."
3)
The respondent is ordered to pay the costs of the appeal including the
costs of two counsel.
C PLEWMAN JA
36
CONCUR:
CORBETT CJ) NESTADT JA) HARMS JA) SCHUTZ JA)
37
ANNEXURE
SEE ORIGINAL JUDGMENT PICTURE

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