BMW AG succeeds against replacement parts supplier
7/09/2007

In the Supreme Court of Appeal of South Africa: Commercial Auto Glass (Pty) Limited (Appellant) v Bayerische Motoren Werke Aktiengesellschaft (Respondent): Case No. 331/06

Commercial Auto Glass (Pty) Limited has been unsuccessful in its appeal against a judgement of the Transvaal Provincial Division of the High Court interdicting it from infringing the registered trade marks BMW, BM and 3-SERIES, and the unregistered well-known trade marks E30, E36 and E46, of BMW AG.

The appellant is in the business of supplying and fitting accessories and spare parts for all types of vehicles, including windscreens. In its advertisements in the media, its product labelling, written quotations and invoices, it uses trade marks such as "BMW E36 3-SERIES" in referring to windscreens which it supplies without any qualification or explanation as to the precise nature or origin of the goods.

BMW AG had successfully instituted proceedings based on infringement of its registered and well-known unregistered trade marks in terms of the provisions of Section 35(1)(a) and/or 34(1)(b), and also Section 35 of the Trade Marks Act. On appeal, the appellant argued that is was simply using the trade marks to inform the public that it was selling windscreens that fit BMW cars, and not that the windscreens were original BMW windscreens. Such use, it alleged, was not "trade mark use", did not mislead the public and, in any event, was a constitutionally protected form of commercial speech. It also argued that such use fell within the scope of the defence in Section 34(2)(c) of the Trade Marks Act which provides:

"A registered trade mark is not infringed by … the bona fide use of the 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, and such services, … provided that the use contemplated … is consistent with fair practice."

The Supreme Court of Appeal rejected all these arguments, holding that a substantial number of persons would be deceived by interpreting the actions of the appellant as representing that the windscreens in issue were genuine BMW parts. It confirmed the view taken by the court in an earlier (unreported) South African case, Bayerische Motoren Werke AG v Autostyle Retail (TPD case 5887/2005), where it was held:

"Use will not be bona fide, however, if the user does not unequivocally make it clear that his goods are not connected in the course of trade with the proprietor of the trade mark. It follows that bona fide use in Section 34(2)(c) means honest use of a trade mark, without the intention to deceive anybody and while unequivocally making it clear that the goods are not connected in the course of trade with the proprietor of the trade mark."

The SCA also referred, with approval, to the approach taken by the European Court of Justice in the Gillette case to the effect that account should be taken of the overall presentation of products marketed by third parties and the effort made by that third party to ensure that consumers distinguish its products from those of which it is not the trade mark owner.

The SCA did uphold the appeal to a very limited extent for technical reasons, but granted substituted orders interdicting the appellant and awarding BMW AG the costs of the hearing in the court a quo and the costs of appeal.