IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES:
YES / NO
(3) REVISED
DATE : 18 May 2026
SIGNATURE:
CASE NO: 037824/2023
JUDGMENT HEARD ON: 4 March 2026
JUDGMENT: 18 May 2026
In the matter of:
RAGE DISTRIBUTION (PTY) LTD PLAINTIFF
AND
RAGE FOOTWEAR 1999 CC FIRST DEFENDANT
THE REGISTRAR OF TRADEMARKS SECOND DEFENDANT
AND
RAGE FOOTWEAR 1999 CC FIRST PLAINTIFF
GARY LAWRENCE FLAKS SECOND PLAINTIFF
AND
RAGE DISTRIBUTION (PTY) LTD DEFENDANT
JUDGMENT
________________________________________________________________
Strijdom, J
INTRODUCTION
1. Two consolidated actions serve before the court.
2. A first action was instituted by Rage Distribution (Pty) Ltd against Rage Footwear
1999 CC in 2020 under case number 20/28983 in the Johannesburg High
Court. It seeks, as relief, the removal from the trade mark register of two
trademarks registered in the name of Rage Footwear CC: namely registration
number 1999/13342 RAGE in class 25 and 1999/13039 RAGE KIDS LOGO in
class 35.
3. On 30 March 2021 Rage Distribution obtained the aforesaid relief by way of
default judgment. Rage Footwear applied for the rescission of this judgment,
and rescission was granted in June 2022.
4. After default judgment had been granted and before rescission was obtained,
Rage Footwear instituted action proceedings against Rage Distribution in the
Pretoria High Court under case number 20676/21. In that action Rage Footwear
contended that Rage Distribution was infringing its rights in the two
abovementioned trademarks and sought relief from trade mark infringement.
Flaks, the second plaintiff in that action and a member of Footwear, contended
that Distribution had infringed his copyright in the artistic work embodied in the
Rage Kids logo. He sought relief from copyright infringement.
5. The copyright claim was, however, abandoned prior to trial and Footwear
proceeded to trial on the trade mark claims alone.
6. Rage Distribution’s action was transferred to the Pretoria High Court, and the
two actions were consolidated for joint hearing.
7. Rage Footwear’s prayer for damages flowing from the alleged trade mark
infringement was separated out by order of this court for determination after a
determination has first been made as to whether the trademarks have been
infringed.
8. The primary questions the court is called upon to determine are thus whether
Rage Footwear’s trademarks fall to be removed from the register for non -use
and whether they have been infringed by Distribution.
THE PLEADINGS IN THE ACTIONS
9. Rage Distribution carries on the business of selling clothing and footwear in
South Africa and it does so under the trade mark RAGE.
10. It registered the trade mark RAGE under trade mark number 2004/00754 in
class 35 and this mark remained on the trade mark register until 3 December
2020 when it was removed by the Registrar of Trade Marks. Distribution has
applied for the restoration to the trade mark register of this mark, and that
application remains pending.
11. According to Footwear, the application for the registration of RAGE in 2004 was
erroneously made in Distribution’s name; Distribution had no bona fide claim to
the proprietorship of that mark and it ought to have been applied for in
Footwear’s name. Distribution denies those allegations.
12. Rage Footwear 1999 CC is a close corporation. It was deregistered from 24
June 2011 to 30 September 2019.
13. Distribution contends that Footwear has not used its two trade marks in a five-
year period, concluding three months before the institution of Distribution’s
expungement action and, therefore, the marks fall to be removed from the
register in terms of section 27(1)(b) of the Trade Marks Act 94 of 1993.
14. Footwear alleges that it is an intellectual property holding company and that it
licenced the trade marks to Distribution.
15. It pleads as follows:
“15. On or about May 2000 and from its incorporation or immediately
thereafter and at Johannesburg [Rage Distribution], represented by
Flaks and/or Louis Joffe and [Rage Footwear], represented by Flaks
and one or both of Louis Joffe and Anthony Wolpe entered into an
oral alternatively a tacit licence agreement the material terms of which
were:
15.1 [Rage Footwear] would licence its trade marks to [Rage
Distribution] on an exclusive and royalty-free basis;
15.2 [Rage Distribution] would be permitted to use the trade marks in
connection with the sale of clothing, footwear and the conduct of
retail services;
15.3 All goodwill generated in respect of the trademarks would accrue
to [Rage Footwear]; and
15.4 The licence was terminable by [Rage Footwear] on reasonable
notice.”
16. The facts and circumstances on which Rage Footwear pleaded it would rely for the
existence of a tacit agreement were:
16.1. That Distribution operated retail outlets under the name and style RAGE at
which and from which it sold clothing and footwear under and bearing the
trade mark RAGE and/or RAGE KIDS;
16.2. From May 2000 Distribution commenced using the trade marks in
connection with clothing, footwear and retail services; and
16.3. As in May 2000 some or all of the members of Footwear were also directors
of Distribution.
17. Distribution denied the licence agreement contended for by Footwear. It further
alleged that in about July 2000 there had been an oral sale of business agreement in
terms of which Distribution had purchased all of the assets and liabilities of Footwear
and it had consequently “acquired a bona fide claim to proprietorship over the RAGE
trade mark.” It had therefore, since July 2000, used the mark in its own name, in its
own right and for its own benefit. Thus, while it admitted use of the RAGE mark in
relation to clothing, footwear and retail services, it contended that this was use in its
own right. It denied that as of May 2000 there was an overlap in membership between
Distribution and Footwear.
18. The infringement action is the opposite of the non -use action: Footwear pleaded that
while Distribution had been using the RAGE trademarks under licence, that licence
had been terminated on 31 March 2020 and, notwithstanding termination, Distribution
had continued to use the marks. Distribution admitted use but denied that its use was
in terms of any licence agreement with Footwear, for the same reasons as had been
pleaded in the non-use action.
THE LAW PERTAINING TO NON-USE OF TRADE MARKS
19. Section 27(1) of the Trade Marks Act1 provides as follows:
“Subject to the provisions of section 70(2), a registered trade mark may, on
application to the court, or, at the option of the applicant and subject to the
provisions of section 59 and in the prescribed manner, to the Registrar by any
interested person, be removed from the register in respect of any of the goods or
services in respect of which it is registered, on the ground either:
(1)(a) …; [or]
(1)(b) that up to the date three months before the date of the application, a
continuous period of five years or longer has elapsed from the date of issue of the
certificate of registration during which the trade mark was registered and during
which there was no bona fide use thereof in relation to those goods or services by
any proprietor thereof or any person permitted to use the trade mark as
contemplated in section 38 during the period concerned; …”
20. Section 38 of the Act provides in relevant part as follows:
“38. Permitted use and registered users.
(1) Where a registered trade mark is used by a person other than the
proprietor thereof with the licence of the proprietor, such use shall be
deemed to be permitted use for the purposes of subsection (2).
1 Act 194 of 1993
(2) The permitted use of a trade mark referred to in subsection (1) shall be
deemed to be use by the proprietor and shall not be deemed to be use by a
person other than the proprietor for the purposes of section 27 or for any
other purpose for which such use is material under this Act or at common
law.”
21. In other words, where a trade mark holder establishes use of their mark by a licencee,
that use is treated as use by the proprietor themselves.
22. Section 27(3) of the Act places the onus on Footwear to demonstrate use of its trade
mark.
THE LAW PERTAINING TO THE LICENCING AND TRANSFER OF TRADE MARKS
23. To quote the learned authors of the leading South African Text on trade mark ,2 “a
licence is no more than an authorisation given by one person to another to invade a
monopoly right. A licence may be written, oral or inferred by conduct.”
24. There is no requirement that a licence agreement be in writing. 3 The facts from which
the existence of a licence is to be inferred must be pleaded and proved by evidence. 4
Ordinary contractual rules apply to the termination of a trade mark licence. If no notice
period is stipulated, the licence is terminable on reasonable notice.5
25. The ownership (or proprietorship) in marks is transferred by way of assignment and
no assignment of a registered mark is of any force and effect unless it is in writing and
is signed by or on behalf of the assignor. 6 A person who becomes entitled to the
assignment or transmission of a trade mark must apply to the Registrar of trade marks
for the registration of their entitlement and must satisfy the Registrar of their
entitlement to the mark. 7 Where a mark has been applied for but registration remains
pending, it may nevertheless be assigned.8
2 South African Law of Trade Marks Webster and Morley, LexisNexis South Africa
3 South African Law of Trade Marks at 11.4
4 AM Moolla Group Ltd and Others v The GAP Inc and Others 2005 (6) SA 568 (SCA) at para 31-34.
4 AM Moolla Group Ltd and Others v The GAP Inc and Others 2005 (6) SA 568 (SCA) at para 31-34.
5 LA Sport 4x4 Outdoor CC and Another v Sergio’s Electrical CC and Others 2011 BIP 124 (NWM) at paras 31-34
6 Section 39(7) of the Trade Marks Act
7 Section 40(1) of the Trade Marks Act
8 Section 39(5) of the Trade Marks Act
THE LAW ON THE CONCLUSION OF TACIT AGREEMENTS
26. A tacit contract arises by way of an inference from the proven facts.9 That inference
must be consistent with all the proven facts and must be the most natural or plausible
inference of the potential options when measured against the probabilities.10 A court
must consider the conduct of both parties and the general circumstances of the case.
27. In order to establish such a contract a party must show, on a balance of probabilities,
unequivocal conduct which gives rise to an inference of consensus in respect of the
alleged contract.11
28. In Buffalo City the Supreme Court of Appeal, per Lewis JA, summarised the approach
as follows:
“This appeal is about an alleged tacit agreement. As in all such cases, the
court searches the evidence for manifestations of conduct by the parties
that are unequivocally consistent with consensus on the issue that is the
crux of the agreement and, per contram, any indication which cannot be
reconciled with it. At the end of the exercise, if the party placing reliance
on such an agreement is to succeed, the court must be satisfied on a
conspectus of all of the evidence, that it is more probable than not that the
parties were in agreement, and that a contract between them came into
being in consequence of their agreement.”
29. Before a court can find that there is a tacit contract it must be satisfied that:12
29.1 The person with whom it is proposed to fix a tacit contract must be fully
aware of all the circumstances connected with the transaction.
29.2 The act must be unequivocal.
29.3 The tacit contract must not extend to more than what the parties
contemplated.
9 Buffalo City Metropolitan Municipality v Nurcha Development Finance (Pty) Ltd 2019 (3) SA 379 (SCA), para 18.
10 South African Post Office v De Lacy 2009 (5) SA 255 (SCA), para 35
11Buffalo City Metropolitan Municipality v Nurcha Development Finance (Pty) Ltd 2019 (3) SA 379 (SCA), para 22
12 Hermanus Beach Club Homeowner’s Association 2018 JDR 1479 para 41.
30. By agreement between the parties’ evidence in chief was adduced by way of written
witness statements and the relevant witnesses testified on consecutive days.
RAGE FOOTWEAR’S CASE:
MR DUEK
31. Mr. Duek stated that he is a member of Rage Footwear 1999 CC and held a 33%
membership interest in the close corporation.
32. On 21 January 2002 he entered into a sale agreement in terms of which he purchased
a cumulative 20% membership interest in Rage Distribution CC, a clothing and shoe
retailer and wholesaler, and purveyor of Rage – branded shoes. He bought his
membership interest from both Jeff Gochin and Gary Flaks.
33. In the same year he also became a member of Rage Footwear CC. Rage Distribution
CC later converted into a company. At no time did he agree to or assign the
intellectual property held by Footwear to Distribution. He disposed of his membership
interest in Distribution in July 2009.
34. He learnt in 2018 or 2019, through Flaks, of the de-registration of Footwear. He
assisted Flaks in applying for the restoration of that entity. He did so because it held
the trademarks and Flaks had discussed it with him that Footwear should begin
charging for the use of the Rage trademarks.
35. After further discussion, Flaks suggested to him that the licence agreement simply be
terminated.
MR FLAKS
36. Mr. Flaks had stated in his witness statement that he was involved in the running of
the Rage business from inception until 2007 when he emigrated to the United States.
37. The entity which was carrying out the Rage business (either a close 1997 corporation
called Rage Footwear CC or an entity with Raglin in its name or both) merged with an
entity which listed on the Johannesburg Stock exchange. That entity was liquidated
and Flaks, Louis Joffe and Anthony Wolpe acquired the Rage business during the
liquidation process through a close corporation.
38. Flaks had stated that he believed the juristic entity used to acquire the business “Rage
Footwear CC (a different close corporation to the current Footwear)”. In chief he
corrected his statement, confirming that the entity to which he had referred was Rage
Footwear 1997 CC.
39. As a result of the liquidation, and consequent on advice he received prior to acquiring
the business out of the liquidation, he had become alive to the importance of
separating the intellectual property assets from the trading entity. It was the Rage
brand which he believed was valuable and so, to protect it, he placed it in a separate
entity to that in which the trading occurred. That entity was Rage Footwear 1999 CC.
Footwear 1999 CC never traded. It had no bank account and no income.
40. Rage Footwear 1999 CC was registered on 22 July 1999 with Flaks, Wolpe and Joffe
as members. The day Footwear was incorporated, it applied for the two trade marks
in issue.
41. In about 2000 Wolpe exited the business and Jeff Gochin invested in the business.
A new trading entity, Rage Distribution CC, was acquired as a shelf company, and the
Rage business was transferred out of the trading entity (which according to Flaks was
not Footwear 1999 CC) and into Distribution. This corporation began in May 2000
with, as members, Flaks, Jeff, Gochin, Merle Gochin and Louis Joffe. Merle Gochin
held a 33% interest in Rage Footwear 1999 CC in addition to her stake in Distribution.
When Louis Joffe exited the business, he gave up his stakes in both entities:
Distribution and Footwear.
42. Mr. Flaks had stated that: “The Gochins knew that the trademark applications were in
the name of Footwear. But Distribution was trading using the Rage marks, including
the Rage Kids mark. We never expressly discussed it (as far as I can recall), but
everyone accepted this arrangement. The position in fact was that Distribution was
using the Rage marks with the knowledge and consent of Footwear and without
using the Rage marks with the knowledge and consent of Footwear and without
paying for the privilege of doing so.”13
43. In 2004 Flaks consulted with Adams & Adams and following that consultation,
application was made for the registration of the work mark RAGE in class 35 as well as
the Rage logo in classes 25 and 35 in the name of Distribution, this was an error and
the marks ought to have been in the name of Footwear.
13 Witness statement 16-133/46 and 47
44. Adams & Adams recorded in correspondence in April 2004 that Flaks had agreed that
the marks would be assigned to Distribution so that all of the marks were held in the
name of the same proprietor. According to Flaks, Adams & Adams had it the wrong
way around: the marks were to be assigned from Distribution to Footwear.
45. Application 2004/00754 (the word mark RAGE in class 35) was accepted by the
Registrar of Trade Marks subject to Distribution sending the notice of advertisement to
Footwear. The other two marks were not accepted. The prior Footwear marks
blocked the way. The prosecution term for these marks was extended from time to
time by Adams & Adams to allow for an assignment of the Footwear marks to
Distribution. Flaks never signed a deed of assignment transferring the Footwear
marks to Distribution.
46. Flaks further stated that Distribution continued trading using the RAGE marks while
knowing that Footwear was the proprietor of RAGE trademarks.
47. Around November 2007 Jeff Gochin, without the authority to do so, signed a deed of
assignment purporting to assign the marks from Footwear to Distribution, and in
doing so represented himself as a member of Footwear, in an attempt to have the
marks transferred from Footwear to Distribution.
48. On 18 December 2008 trade mark 2004/00754 was registered. Distribution
abandoned the applications for the other marks.
DISTRIBUTION’S CASE
49. Distribution led the evidence of Jeff Gochin, Merle Gochin and Doron Myers.
50. Jeff Gochin stated as follows in chief:
50.1 In 2000 he met with Flaks and decided to invest R3 million in
the Rage business. The agreement was reached by March
2000 and the payment was made in instalments onto a Rage
Footwear bank account. Part of the amount paid Wolpe’s
creditor account, the remainder funded the business. Mrs.
Gochin took up a one third membership in Footwear 1999 CC
as his nominee.
50.2 Footwear 1999 CC was the trading entity and employed Flaks,
Mrs. Gochin and Louis Joffe. Mrs. Gochin, Flaks and Helen
Joffe had signed as members of Footwear by 15 May 2000.
50.3 In about May 2000, when a further investment of R2 million
was required in Rage, and it looked like more investment
would be needed in the future, Gochin and Flaks agreed that a
new entity, Distribution, would be created and the business
migrated to this new entity with Gochin holding 50% of it.
Distribution was thus incorporated in July 2000 and the
transaction implemented.
50.4 In 2004 Gochin was informed by Flaks of Flaks’s meeting with
Adams & Adams and in particular, that there were trade marks
in the name of Footwear which would in due course be
transferred to Distribution. Gochin believed that Distribution
was using its own marks.
50.5 He signed the deed of assignment purporting to transfer the
Footwear marks to Distribution, believing that it would not be
controversial.
50.6 He denied the existence of the licence agreement contended
for by Footwear on the bases that:
50.6.1 It was inconceivable that he would not have been
informed of the licence agreement during the
negotiation with him prior to the investment in
Distribution. Had he been aware of the licence
agreement, he would not have invested in Rage.
50.6.2 What Flaks advised Gochin concerning his meeting
with Adams & Adams in 2004 was incompatible with
the existence of a licence.
50.6.3 Footwear ceased to be of any relevance after
Distribution began operating, except to obtain
registration of the Footwear marks and then transfer
them to Distribution.
50.6.4 The sale of business agreement was incompatible with
the licence contended for.
50.6.5 Footwear represented to SARS that it was dormant and
had no assets.
MRS. GOCHIN
51. Mrs. Gochin stated that she was not personally involved in the negotiation of the
agreements. She claimed to know nothing about company structures or the “technical
stuff”. She said she was a salesperson.
52. She confirmed that her understanding was that she and her husband had acquired a
membership stake in Footwear from Louis Joffe upon his exit from Distribution.
53. She claimed to have no memory of and no understanding of the legal action instituted
by Distribution against Footwear in 2020 for the removal of the Footwear trademarks.
54. She became involved in footwear during April 2000 and was involved in arranging for
the move to the Kramerville offices which happened on 1 May 2000. She maintained
that Footwear was the trading entity.
55. She claimed to have signed the documentation pertaining to Footwear (after May
2000) without any knowledge of what she was signing, because she trusted Flaks and
acted on good faith. She had no knowledge of the fact that her husband had signed a
deed purporting to assign the Footwear marks to Distribution.
DORYN MARK MYERS
56. She stated that she is a registered patent attorney and the owner of the law firm
Kantor Myers and Pavlovsky Attorneys (KMP). She is the attorney responsible for the
restoration of the Rage Distribution Mark.
57. She stated that the circumstances which led to the Restoration application are as
follows:
57.1 The Rage Distribution Mark was due for renewal on 21 January 2014.
57.2 On 25 February 2014 the Registrar of Trade Marks was updated to reflect
the Rage Distribution Mark as being renewed by DM Kisch. However, that
seems to have been an error, and it appears that DM Kisch had attempted
to renew a mark described as Gold Container CAP in the name of
Douglasdale Dairy (Pty) Ltd, but inadvertently used the registration
number of the Rage Distribution Mark.
57.3 Rage Distribution learnt of this error in August 2020.
57.4 On 16 September 2020, she wrote to the Registrar of Trade Marks:
explaining this error; enclosing a correct renewal form, and requesting the
renewal of the mark.
57.5 On 17 September 2020 the Registrar of Trade Marks respondent:
expressing a view that, if the renewal was defective, then the Rage
Distribution mark will be removed from the Register.
57.6 On 27 October 2020, Rage Distribution formally applied for the
condonation of the late renewal of the Rage Distribution mark.
57.7 On 3 December 2020, the Registrar of Trade Marks refused to grant
this application and instructed that the Registrar of Trade Marks be
amended to reflect the Rage Distribution mark as having been
removed with effect from 21 January 2014.
57.8 On 6 January 2021, Rage Distribution applied to the Registrar of
Trade Marks requesting the restoration of the Rage Distribution mark.
57.9 The Registrar of Trade Marks accepted the Restoration Application
and this was advertised in the Patent Journal on 30 June 2021.
57.10Rage Footwear 1999 CC opposed the restoration application and
delivered an “opposing affidavit” on 30 December 2021.
57.11Rage Distribution filed an answering affidavit in response to this
opposition in March 2022 Rage Footwear filed a replying affidavit on
21 June 2022.
EVALUATION OF THE EVIDENCE
58. Stellenbosch Farmers Winery Group Ltd v Martel & Cie SA and Others14 and National
Employers General Insurance Company Ltd v Jagers,15 sets out principles of evidence
to determine whether the party bearing the onus has discharged it on a balance of
probabilities.
59. Factors to consider to be the following:
59.1 Credibility of a witness;
59.2 Reliability of the evidence;
59.3 Probabilities;
59.4 Onus of proof;
59.5 Corroboration (or lack thereof)
59.6 Mutually destructive versions principle
59.7 Evaluation as a whole.
60. In dealing with the probabilities, a court often weighs probabilities of a version along
the lines of whether the version accords with common sense or is it consistent with
the facts.
61. Mr Duek did not impress me as a reliable witness. He was a volatile and combative
witness. He oscillated between explosive interchanges with counsel and averring that
questions should rather be put to Mr Flaks. He contradicted numerous aspects of Mr
Flak’s evidence.
62. In cross-examination Mr Duek testified:
14 2003 (1) SA 11 (SCA) (6 September 2002)
15 1984 (4) SA 437 (E)
62.1 that he, together with Mr Flaks, held a 40% interest in both Rage Distribution
and Rage Footwear;
62.2 that he looked at the Rage business as one business;
62.3 he thought he was involved in Rage Distribution at the commencement of its
life because he heard everything from Mr Flaks;
63. After consulting his witness statement during cross-examination, he testified that:
63.1 he and Mr Flaks each held 33% in Rage Footwear;
63.2 that the trademark was divided into three and it was Mr Gochin who had
implemented that;
63.3 Footwear and Rage Distribution were the same company, but the trademark
was handled differently.
64. In respect of his exit from Rage Distribution, he testified during cross -examination as
follows:
64.1 He said that he had invested a lot of money in Rage Distribution but got
nothing for it.
64.2 When confronted with the proposition that Mr Flaks was not happy that Mr
Duek had sold his interest without his consent, he responded that he
(meaning Mr Duek) was not happy at the time.
65. Mr Duek testified that he was aware of Mr Flaks’ witness statement says that Mr Du ek
did not get Flaks’ consent to sell his interest in Rage Distribution.
66. He conceded during cross -examination that he could not contradict Mr Gochin’s
evidence, that agreement was ultimately reached once Mr Gochin agreed to increase
the price by R500 000 (to R19 million), because he had no recollection of the events.
He indicated the question should be put to Mr Flaks. Neither Mr Flaks nor Mr Gochin
contend that Mr Flaks was involved in those negotiations.
67. Mr Flaks’ evidence under cross -examination was characterised by evasion, a
multiplicity of versions, and a tendency to refuse to make obvious concessions. His
version is undermined by repeated inconsistencies and shifting accounts in evidence.
68. On material points he changed his version or alleged that he could not remember,
which diminishes the reliability of his testimony and prevents his version from being
preferred on a balance of probabilities.
69. The most relevant topics from Mr Flak’s evidence can be summarised as follows:
69.1 The identity of the trading entity before July 2000.
69.2 Whether Rage Footwear was an intellectual property holding company and
had concluded a tacit trademark licence agreement with Rage Distribution.
69.3 Mr Flake’s interactions with Adams & Adams relating to the RD mark.
THE IDENTITY OF THE TRADING ENTITY
70. In its initial particulars of claim, Footwear pleaded that it had used the Rage
trademark since 1996 and that it initially used the marks itself and later via a licence
to Rage Distribution. While this allegation was amended, Footwear retained the
allegation that it had for the period July 1999 to May 2000 “used and reproduced
the artistic work as a trademark in connection with clothing, footwear and retail
services.”16
71. Both of these pleaded allegations are consistent with:
71.1 The Witz Inc letter of 13 May 2020, which contends that Footwear made use
of the Rage mark until Rage Distribution was established.
16 Final POC O7B – 108 para 6.10; RF Plea O7A 20 para 24.2
71.2 The founding statement for Footwear dated 22 July 1999, which records its
principal business as “retailers in footwear and all matters related.”
71.3 The first amended fou nding statement of 15 May 2000 which in Mr. Flak’s
handwriting described the business as “distribution of footwear and allied
products.”
71.4 The third amended founding statement of 22 November 2000 which again in
Mr Flak’s handwriting, describe the business as “retailers in footwear and all
matters related.”
72. Mr Flak’s witness statement contends that Footwear had never traded but rather the
trading entity was a different close corporation called Rage Footwear CC (not
Footwear). This contention was made without providing any details related to the
entity or discovering of any documents relating to this entity.
73. When confronted with his witness statement during cross -examination Mr Flaks
indicated that this part of his witness statement was not correct. He testified that the
correct entity was called Dollirene Lingerie. His explanation was that in preparing for
the trial and reading his witness statement he realised that it could not be Rage
Footwear CC because that entity had been rolled up into the ETS listed entity. He
further explained that after discussions with an unidentified accountant, he came to
realise that the Rage business had been conducted through Doll irene. Dollirene had
its own business trading in lingerie. Mr Flak’s memory on this issue was unreliable.
Whether Footwear was an IP holding company and concluded a trademark licence with
Rage Distribution
74. Mr Flaks contends that Footwear was created in July 1999 as an intellectual property
holding company because, following the liquidation of ETS, he had been advised on
the importance of separating the Rage brand from the trading business.
75. During cross -examination it emerges that Mr Flak’s contentions are premised to a
large degree on the assertion that Rage Footwear did not have a bank account.
large degree on the assertion that Rage Footwear did not have a bank account.
76. Mr Flak’s witness statement contended that Footwear then instructed Adams & Adams
to apply for the Footwear Registrations. When called to confirm this statement, he
corrected this to record that the applications were made by Mr Wol pe. His explanation
for why he needed to make this correction was that in preparing for trial he realized
that it was Mr Wolpe who applied.
77. Mr Flaks contends that Footwear and Distribution concluded a trademark licence
agreement but conceded that such an arrangement was never discussed with the
Gochins. He confirmed this concession in re -examination, albeit that during cross -
examination he sought to distance himself from this concession.
Mr Flaks’ interaction with Adams & Adams
78. Mr Flaks contacted Mr Tr iebel in January 2004. Mr Tr iebel conducted preliminary
trademark searches, located the Footwear Registrations, and met with Mr Flaks.
79. Mr Flaks signed a power of attorney in the name of Rage Distribution, and instructed
Mr Tr iebel to file the RD Registration. Mr Tr iebel advised that the Footwear
Registrations should be assigned to Rage Distribution, but that this should only be
done once the marks were registered.
80. Mr Seymour replaced Mr Tr iebel. He advised Mr Flaks that the time had come to
assign the Footwear Registration to Rage Distribution and provided Mr Flaks with a
draft deed of assignment for his signature. Mr Flaks exchanged a series of emails and
telephone calls with Mr Seymour. None of these included an instruction that Adams &
Adams were mistaken and that the assignment should have been the other way
around. Mr Flaks contends that all of this was a mistake.
Mr Flaks’ exit from 2009
81. Mr Duek and Mr Flaks exited Rage Distribution in terms of a sale of equity agreement
dated 27 July 2009.
82. In his witness statement, Mr Flaks testifies that:
82.1 He did not sign the sale agreement, and he did not authorize Mr Duek
or Mr Lapedus to sign on his behalf.
82.2 He only learnt of this disposal later, and although unhappy with it,
acquiesced to it.
83. During cross-examination he was asked whether he had authorised the conclusion of
the agreement. He answered that he cannot recall what was discussed during
telephone conversations, but that he did not recall giving consent. When asked to
confirm whether it was his version that he had or had not given consent, he said that
he did not recall.
84. Mr Gochin throughout his evidence, was truthful and offered a clear explanation of
events. His version, as pleaded and as testified to, was the same and never changed.
His evidence regarding the incident was credible and free from contradictions and
discrepancies concerning the details. Under cross-examination, he was able to
logically substantiate his evidence thereby reinforcing it.
85. The Gochin’s version does not have any of the procedural or factual problems
associated with Mr Flak’s version and is consistent with the probabilities. There are no
inherent improbabilities in their version. They impressed me as reliable witnesses and
there is nothing to cast doubt on their veracity concerning this matter.
86. In my view, the Gochin’s version must prevail on the basis that they are more credible
and reliable witnesses, and their version is more probable.
Distribution’s case of non-use
87. Footwear contends that there can be little doubt that from at least 2004 when Flaks
relayed his conversation with Adams (advised to get Gochins), Distribution was using
Footwear marks under licence based on the following facts:
87.1 It knew that the trademark applications were in Footwear’s name.
87.2 It wanted them transferred into its (Distribution’s) name. On its
version Footwear was going to transfer the marks into Distribution’s
name but ultimately never did so.
87.3 Distribution continued to make efforts from 2007 to obtain transfer of
the marks.
87.4 It used the marks continuously from 2004 without complaint from
Footwear, to Footwear’s knowledge.
88. It was argued by Footwear that this evidence is incapable of any construction other
than the existence of a tacit licence agreement which was operative between these two
entities. It may not be the licence agreement which Footwear contended for in its
pleadings, but it is nevertheless a complete defence to Distribution’s non -use action
because it is proof of authorised use of Footwear’s marks through Distribution.
89. Footwear alleges that a tacit licence agreement exists from the following three
elements:17
89.1 Footwear was at all relevant times the proprietor of the Footwear
Registrations.18
89.2 Rage Distribution operates stores which sell clothing and footwear
under the brand “RAGE” and has done so since May 2000.19
89.3 As at May 2000 some (or all) of the members of Footwear were also
directors of Rage Distribution.20
90. Mr Gochin’s evidence is that Rage Distribution was always using the Rage trademark
as its own mark and he was not aware of the specifics of the RD Registration at the
time it was filed. Following Mr Flaks procuring advice from Adams & Adams, he
informed Mr Gochin that they had advised that:
90.1 Certain trademark applications were still in the name of Footwear and
should, in due course, be assigned to Rage Distribution.
90.2 In the interim Rage Distribution had applied to register the mark RAGE
in its own name.
91. Mr Gochin’s evidence is that he does not believe the alleged licence was concluded,
in part , because it is inconceivable that Mr Flaks and Mr Joffe would not have
informed him of the alleged licence during their negotiations. That is consistent with
Mr Flaks’ evidence that he never expressly discussed the alleged licence with the
Gochins. Mr Gochin contends that if the licence had been brought to his attention he
would not have pursued the investment in Rage Distribution.
92. The version of Footwear licence agreement contradicts the pleaded agreement which
is premised on Footwear and Distribution being represented by combinations of Mr
Flaks, Mr Wolpe and Mr Joffe, to the exclusion of Mr and Mrs Gochin . N either
17 RF Plea CLO7 A-17 para 14
18 RF Plea CLO7 A-18 para 16
19 RF Plea CLO7 A-18 para 16.2
20 RF Plea CLO7 A-18 para 16.3
Footwear’s pleading nor its witness statements contend that the alleged licence was
concluded solely by Mr Flaks. The sole member of Rage Distribution in May 2000
was Mr Gouws. Mr Flaks, Mr Gochin, Mrs Gochin and Mr Joffe all became members
on 26 July 2000 (having signed the relevant amended founding statement on 12 July
2000).
93. Mrs Gochin acquired a member’s interest in Rage Footwear. It does not evidence
knowledge of the Footwear Registrations.
94. In his replying affidavit in the rescission application, Mr Flaks averred:
94.1 That Mr Gochin had no personal knowledge of the Rage business
before July 2000.
94.2 That Mrs Gochin had no personal knowledge of the affairs of the Rage
business before June 2000.
94.3 On that basis, the Gochins could not contest the existence of the
alleged licence agreement.
95. A tacit contract must be established through unequivocal (i.e. positive and
unambiguous) conduct which gives rise to an inference of consensus being reached.
96. None of the alleged conduct that Footwear relies on is an unequivocal indication of
consensus being reached in respect of a trademark licence. This conduct is
ambiguous and does not meet the required threshold. The conduct is equally
consistent with:
96.1 The majority of the members of Rage Distribution not being aware of
the Footwear Registrations.
96.2 The members of Rage Distribution believing that they had purchased
the business and assets of Footwear and that this vested them with
ownership of the Rage brand.
96.3 The members of Rage Distribution being hypothetically aware of the
Footwear Registrations but also being aware that the Footwear
Registrations were pending applications and thus did not pose any
impediment to the use of the Rage brand.
97. Mr Gochin’s evidence is that the sale of business agreement between Footwear and
Rage Distribution was an oral agreement following various discussions between May
and July 2000.
98. Mr Flaks contends that the agreement was between D ollirene and Rage Distribution.
He cannot recall how the transfer of business was done but assumed there was a
transfer of assets to Rage Distribution. Mr Gochin’s evidence of express negotiations
taking place between him and Flaks during the course of May to July 2000 is
uncontested.
99. This renders the alleged tacit licence agreement improbable. The parties were
involved in express negotiations relating to the precise business in question. Tacit
consensus is incompatible with contemporaneous express negotiations.
100. On 13 September 2019, Mr Flaks applied to register the mark RAGE in his own name.
This is contrary to the pleaded licence agreement which Footwear contends granted
an exclusive licence to Rage Distribution.
101. Mr Flaks’ explanation for this is that this was done while Footwear was deregistered
and with the intention of assigning it to Footwear once it was restored to the Register.
On 29 November 2020 Footwear consented to Mr Flaks using and registering the
mark RAGE in his own name. Thus, this conduct is incompatible with the alleged
licence agreement.
102. Footwear’s case was that by virtue of the conduct between the parties, one can infer
the existence of a tacit licence agreement.
103. In my view, Footwear has failed to demonstrate on a balance of probabilities that its
trademarks
were being used by Rage Distribution under licence.
104. Rage Distribution contends that even if Footwear and Mr Flaks could establish a basis
for a tacit
agreement, such an agreement is not legally competent for the following reason:
104.1 Footwear alleges a trademark licence agreement concluded in May
2000. However, at that
point the Footwear registrations were pending applications which had
2000. However, at that
point the Footwear registrations were pending applications which had
neither been accepted nor registered. Therefore, Footwear did not
have the right to prevent others from using the RAGE trademark.
Accordingly, it did not have any right to licence to Rage Distribution.
105. The nature of unregistered trademarks renders a licence, and particularly the licence
alleged by Footwear, impossible in May 2000.
106. In Butterworths Publishers (Pty) Ltd,21 the Court, per Southwood J, held that an
unregistered trademark may not be transferred separately from the goodwill of the
business to which it is attached.
107. That ratio of the decision does not consider a licence of an unregistered trademark. It
does establish
a clear principle which limits the ability to transfer goodwill.
108. The impact of the nature of goodwill on licences of unregistered trademarks was
considered by the Privy Council in Star Industrial Company Limited,22 which accepted
that:
108.1 The right protected by passing off is not a right of property in the
mark at issue, but rather a right of property in the business in respect
of which that mark is used.
108.2 Goodwill has no independent existence from the business to which it
attaches, and is incapable of existing by itself.
108.3 It should not extend the common law to recognise that an
unregistered trademark could be licenced in the same manner as a
registered trademark.
109. This outcome is consistent with the provisions of the Trademarks Act. Permitted use
is contemplated
by section 27(1)(b) and section 38 of the Trademarks Act, as both of those sections
contemplate
a registered trademark.
21 2005 BIP 152 (T) para 12
22 Star Industrial Company Limited v Yap Kwee Kor Trading as New Star Industrial Company
(Privy Council Appeal No. 11 of 1974), also reported as
[1976] FSR 256 (PC). Kerly’s Law of Trade Marks
and Trade Names, 17th Edition (2024), Sweet & Maxwell.
110. A common law licence agreement would not trigger the application of section 38; Any
reputation or goodwill developed in an unregistered trademark used by a third-party
vests in that party.
111. One of the characteristics of a trademark licence agreement, and one of the pleaded
terms of the alleged licence agreement, is that the goodwill arising from the use of
the licenced mark vests in the licensor.23 In the case of an unregistered trademark,
that characteristic is not possible. It required goodwill generated by Rage
Distribution to be transferred to Footwear without transferring Rage Distributions
underlying business.
112. The alleged licence in any event was legally impossible at the time it is alleged to
have been concluded. An agreement which is impossible at the time of conclusion
is void ab initio. Even if Footwear had established a basis for the alleged licence,
the licence would have been void.
The Infringement Action
113. Footwear contends that on 15 December 2019 it notified Distribution that:
• The Trademark Licence Agreement would terminate on 31 March 2020; and
• Following termination, Distribution would not be permitted to continue using
the trademarks.
Notwithstanding the termination of the agreement, Distribution has continued since 1
April 2020 to operate retail outlets under the name and style of Rage and from which
it sells clothing and footwear under and bearing the trademark “Rage”.
114. It is Footwear’s case that Distribution:
• has either been infringing since 1 April 2020 when the licence agreement
terminated; or
• has been infringing since before 1 April 2020 if no licence agreement was in
place.
That Distribution believed itself to be the owner of the marks is also no defence.
23 RD PLEA CL O7 A-17 para 15.3
115. Footwear argued further that the non-use action, even if successful, does not
provide a defence because:
• while it would result in the marks being removed from the register,
• the removal would not operate retrospectively.
They would be removed with effect from 2 October 2020. Infringement prior to 1
October 2020 would remain.
116. The alleged contract, being a tacit contract, does not prescribe its duration.
Where a contract is for an unspecified duration:24
116.1 It must be construed according to the ordinary principles of construction,
being the intention of the parties.
116.2 The intention of the parties is determined from all admissible evidence.
116.3 There is no presumption either way, and the party alleging the existence of
an unexpressed term must prove it.
117. The central issue is whether the common intention of the parties was that the
agreement could be terminated.
118. During cross-examination, Mr Flaks:
118.1 accepted that at the time Mr Gochin invested in the Rage business,
termination of the alleged licence was never contemplated or even thought
of.
118.2 was asked directly whether his evidence was that nobody could seriously
have contemplated the termination of the licence at that time. His answer was
yes.
119. I conclude that Footwear failed to prove that the alleged licence included a term
permitting it to be cancelled on three months’ notice, and there was no common
intention of the parties that the agreement could be terminated.
24 (Case: Plaaskem (Pty) Ltd v Nippon Africa Chemicals (Pty) Ltd 2014 (5) SA 287 (SCA))
120. Rage Distribution’s counterclaim is that Footwear does not have a bona fide claim to
proprietorship over the Footwear registrations, and they ought to be removed from
the register in accordance with section 10(3) of the Trademarks Act read with section
24.
121. The basis for the counterclaim is that:
121.1 Footwear sold its business and assets to Rage Distribution.
121.2 Rage Distribution has always used the Rage mark in its own name and for its
own benefit.
121.3 Mr Flaks authorised Adams & Adams to apply for the RD mark in the name
of Rage Distribution.
121.4 In 2019 Mr Flaks applied to register the mark RAGE in his own name.
122. It is common cause that there was a sale of business through which Rage
Distribution acquired the Rage assets.
123. Mr Flaks contends that the seller was Dollirine and not Footwear. I have already
indicated that Mr Flaks’ evidence is generally unreliable. His version that Dollirine
was the seller is unsustainable and can be rejected. It was conceded by counsel on
behalf of Mr Flaks that his evidence was unreliable on this issue.
124. I conclude that Footwear has not established that the selling entity was Dollirine as
opposed to Footwear.
125. Section 10(3) of the Trademarks Act provides that a trademark shall not be
registered if the applicant does not have a bona fide claim to proprietorship over the
mark.
126. Section 24 of the Trademarks Act provides for the removal of any trademark which
amounts to an entry wrongly made or wrongly remaining on the Register.
127. In Victoria’s Secret,25 the Appellate Division held that a party has a claim to
proprietorship over a mark where it has appropriated the mark, and that
appropriation includes originating, acquiring, or adapting it.
128. Where a mark was registered despite the applicant not having a bona fide claim to
proprietorship, it is subject to cancellation in terms of section 24 on the basis that it
is an entry wrongly made or wrongly remaining on the Register.
129. A sale of business (including goodwill) confers on the buyer the exclusive right to
use the name of the business, and the seller is precluded from using the name.26
130. Footwear sold its business and assets to Rage Distribution in July 2000.
131. Rage Distribution acquired the right to use the RAGE mark.
132. Footwear divested itself of any claim to proprietorship of the RAGE brand.
133. I conclude that when the Footwear registrations were registered in 2006:
• Footwear did not have a bona fide claim to proprietorship over the relevant
marks; and
• the registration of these marks was precluded by section 10(3) of the
Trademarks Act.
Therefore, their registration constituted entries wrongly made on the register.
The Footwear registrations stand to be removed from the register in terms of section
24 read with section 10(3) of the Act.
134. In the result, the following order is made:
1. Rage Distributions non-use action succeed.
2. Rage Footwear infringement action is dismissed.
3. Rage Distributions counterclaim succeed.
25 (Victoria’s Secret Inc v Edgars Stores Ltd 1994 (3) SA 739 (A), 7441.
26 Niños Coffee Bar & Restaurant CC v Niños Italian Coffee & Sandwich Bar CC 1998 (3) SA 656 (C)) paras 36 to 38.
4. The Trademark registration no. 1999/13342 RAGE in class 25 is removed from
the Register of Trademarks.
5. Trademark registration no. 19991/13039 RAGE KIDS LOGO in class 35 is
removed from the Register of Trademarks.
6. In each instance Footwear must pay the costs on a party and party scale,
including the costs of two counsel (senior and junior). Costs are to be taxed in
accordance with Scale C.
________________________
Strijdom JJ
Judge of the High Court, South Africa
Gauteng Division, Pretoria
Appearances:
For Rage Distribution: Adv A.G Sawma SC
Adv I Learmonth
Instructed by: TWB – Tugendhaft Wapnick Banchetti & Partners
For Rage Footwear and GL Flaks: Adv K.D. Iles
Instructed by: Witz Inc Incorporated