Trade mark infringement, passing off and unlawful competition proceedings

Proceedings can be brought by way of application, on notice of motion, when there is no dispute of fact (motion proceedings), or by way of action, by the issuing of a summons, when there is an anticipated dispute of fact (trial proceedings).

Trade mark infringement in South Africa

A trade mark registration is a prerequisite for the institution of trade mark infringement proceedings in South Africa.

The proprietor and, in certain circumstances, the registered user of a registered trade mark may institute infringement proceedings, provided that nothing in the Act shall affect the rights of any person, at common law, to bring any action against any other person.

Types of trade mark infringement

The Act provides for four types of infringement:

• infringement limited to the exact goods or services for which the trade mark has been registered, where there is unauthorised use in the course of trade in relation to goods or services in respect of which the trade mark is registered, of an identical mark or of a mark so nearly resembling it as to be likely to deceive or cause confusion (Section 34(1)(a));
• unauthorised use of a mark which is identical or similar to the trade mark registered, in the course of trade in relation to goods or services which are so similar to the goods or services in respect of which the trade mark is registered, that in such use there exists the likelihood of deception or confusion (Section 34(1)(b));
• unauthorised use in the course of trade in relation to any goods or services of a mark which is identical or similar to a registered trade mark, if the registered trade mark is well known in the Republic and the use of such mark would be likely to take unfair advantage of, or be detrimental to, the distinctive character or repute of the registered trade mark, notwithstanding the absence of confusion or deception (Section 34(1)(c)). This type of infringement recognises the concept of “dilution”, which is the gradual erosion or diminution of the distinctiveness, commercial magnetism or selling power of a trade mark.
• the fourth category of infringement relates to unregistered well-known marks (Section 35).

Defences to trade mark infringement proceedings

A registered trade mark is not infringed by:

• the bona fide use by a person of his own or his predecessor’s name or the name of his or his predecessor’s place of business with fair practice and provided further that this defence shall not apply in respect of the name of a juristic person which was registered after the date of registration of the trade mark concerned, provided that such use is consistent;
• the use by any person of any bona fide description or indication of the kind, quality, quantity, intended purpose, value, geographical origin or other characteristics of his goods or services, or the mode or time of production of the goods or rendering of the services, provided that such use is consistent with fair practice;
• the bona fide use of a trade mark in relation to goods or services where it is reasonable to indicate the intended purpose of such goods, including spare parts and accessories or the rendering of services, provided that the aforegoing use is consistent with fair practice;
• the importation into or distribution, sale or offering for sale in the Republic of goods to which the trade mark has been applied by or with the consent of the proprietor thereof;
• the bona fide use by any person of any utilitarian features embodied in a container, shape, configuration, colour or pattern which is the subject of a trade mark registration;
• the use of a trade mark where such use is within the scope of a limitation entered in the register against the registered trade mark;
• the use of any identical or confusingly or deceptively similar trade mark which is registered.

Trade mark infringement relief

A successful plaintiff is usually entitled to the following relief:

• an interdict (an injunction) ordering the defendant to refrain from further infringement. If the defendant ignores the interdict, he or she may be committed for contempt of court. Application to court may also be made by the trade mark proprietor before or after the issue of summons for an interim interdict, that is a temporary order restraining the defendant from infringing the trade mark while the infringement action is pending;
• an order for removal of the infringing trade mark from all material and, where the infringing mark is inseparable or incapable of being removed from the material, an order that all such material be delivered up to the proprietor;
• damages, which may only be claimed in proceedings brought by way of action. The measure of damages is the same as for any other delict (tort), that is compensation to the plaintiff for patrimonial loss, actual or prospective, sustained through the infringement. Under the Act damages include those arising from acts performed after advertisement of acceptance of an application for registration, which if performed after registration, would amount to infringement of the rights acquired by registration;
• in lieu of damages, a reasonable royalty, which, similarly, may only be claimed in proceedings brought by way of action. This remedy is only available for trade mark infringement under the Act and not in cases only involving passing off. The plaintiff may claim a reasonable royalty which would have been payable by a licensee for the use of the trade mark concerned, including any use which took place after advertisement of acceptance of an application for registration and which, if taking place after registration, would amount to infringement of the rights acquired by registration. In terms of the Act, an enquiry into the amount of any damages or reasonable royalty to be awarded may be ordered and the court may prescribe the procedures for conducting such enquiry.

Before a person institutes infringement proceedings in terms of the Act, he or she must give notice of the intention to do so in writing to every user concerned whose name is recorded in the register, and any such registered user shall be entitled to intervene in such proceedings and to recover any damages he or she may have suffered as a result of the infringement.

Well-known trade marks

• The Act also offers protection to the owner of a well-known trade mark which may or may not be registered.
• Such person, however, must be a national of a convention country or must be domiciled in or have a real and effective industrial or commercial establishment in a convention country.
• It is not necessary for such person to carry on business or have any goodwill in the Republic.
• The proprietor of a well-known trade mark is entitled to restrain the use in the Republic of a trade mark which constitutes, or the essential part of which constitutes, a reproduction, imitation or translation of the well-known trade mark in relation to goods or services which are identical or similar to the goods or services in respect of which the trade mark is well-known and where the use is likely to cause deception or confusion.
• In determining whether a trade mark is well-known in the Republic, due regard must be given to the knowledge of the trade mark in the relevant sector of the public, including knowledge which has been obtained as a result of the promotion of the trade mark.
• The Supreme Court of Appeal has also considered the scope and meaning of “well-known” (McDonald’s Corporation v Joburgers Drive-Inn Restaurant (Pty) Limited 1997 (1) SA 1(A)) and has held that it means known to a substantial number of persons who are interested in the relevant goods or services.

Passing off

• Passing off occurs where a person intentionally or negligently misrepresents that his goods or services are those of another or are associated with those of another and the public is or is likely to be confused into believing that such goods or services are those of the plaintiff or are connected with them.
• Passing off is a form of unlawful competition (that is, a delict), which is governed by the common law (the lex Aquilia).
• The proprietary right which is protected in an action for passing off is the goodwill which is associated with the name, mark or get-up of the plaintiff. In order, therefore, to succeed with an application or action for passing off, a plaintiff must prove that the following elements are present:

– an existing goodwill or reputation in the name, mark or get-up in question, so much so that the name mark or get-up is associated in the minds of the public with the plaintiff;

– the defendant has made a representation, whether it is direct or indirect which is likely to confuse or deceive the public;

– that the deception has caused or is likely to cause damage to the plaintiff’s goodwill.

• The two principal elements of passing off, therefore, are reputation and confusion or deception.
• The existence of a goodwill can be proved by direct evidence or by the use of market surveys, although the latter must have a valid scientific base. In assessing a goodwill, the court will consider the geographical area or extent of the reputation of the goods or services. It is a factual enquiry and, therefore, is supported by proof of sales figures, merchandising and advertising campaigns in the territorial area concerned.
• In proceedings for passing off, the plaintiff not only has to prove the existence of a reputation and goodwill, but also that the use of the name, get-up or trading style is likely to confuse or deceive the public. The plaintiff does not have to prove that the representation has actually caused confusion but that confusion will probably result. Where there is actual confusion, it will assist a plaintiff in obtaining an interdict and an order for damages.
• In considering whether the alleged infringer’s representation is likely to confuse or deceive, the relevant trade names, trading styles and get-ups must be compared from visual, phonetic and ideological points of view. The trade names, trading styles and get-ups must not only be compared side by side, but provision must be made for a time lapse in between and the average consumer’s likelihood of imperfect recollection. In addition, the products must be considered in the circumstances in which they are used, merchandised or marketed. The extent of deception or confusion required is deception or confusion of a substantial (that is, not negligible), number of consumers.