Golf wars
24/11/2009

The Western Cape High Court has recently handed down judgment in South African Junior Golf Association and another v The Registrar of Companies and South African Golf Association (case no. 7187/2008).

The South African Golf Association (“SAGA”) had filed an objection with the Registrar of Companies in terms of Section 45 of the Companies Act requesting that The South African Junior Golf Association (“SAJGA”) be ordered to change its name on the basis that the name was confusingly similar to SAGA, was calculated to cause it damage and was undesirable. The Registrar granted the order and SAJGA then made application to the High Court in terms of Section 48 of the Companies Act to set the Registrar’s order aside.

SAJGA’s application was met with a counter-application by SAGA for the cancellation of its trade mark registration SOUTH AFRICAN JUNIOR GOLF ASSOCIATION and for an interdict to restrain SAGJA from using this trade mark or any other mark which was confusingly similar to the registered trade marks SOUTH AFRICAN GOLF ASSOCIATION and SAGA SOUTH AFRICA.

SAJGA is a Section 21 company which directs its focus on underprivileged youths. SAGA, on the other hand, is a national umbrella body whose members consist of provincial golf unions to which golf clubs are affiliated.
Company name objection
Section 48 of the Companies Act provides that any person aggrieved by any decision or order of the Registrar under Section 45 may, within one month after the date of such order, apply to the High Court for relief. The Court has the power to consider the merits of any such matter, to receive further evidence and to make an order as it deems fit.

The Court commenced with the warning that the use of ordinary English words or descriptive words in company names may result in such names not being distinctive of any particular business. The mere fact that such a name is similar to another does not, on that ground alone, justify a finding that the name is undesirable under Section 45.

The evidence, significantly, showed that there are other names used by organizations involved in the sport of golf which include the common terms “South African”, “Golf” or “Association”, such as “The South African Disabled Golf Association” and “The South African Senior Amateur Golf Association”. The Court held that, just as the addition of the word “Disabled” sufficiently distinguished the South African Disabled Golf Association from SAGA, the addition of the word “Junior” sufficiently distinguished the name of SAJGA from that of SAGA, particularly if regard was had to the many differences in the business of the two bodies.

SAGA had placed reliance on the Registrar’s directive which states:


“In particular a name will be considered undesirable if –
1.1 it is identical or very similar to a name already registered.

1.5 words pertaining to a trade mark are contained in a name which will be used in regard to a business which relates to the class of goods or services in which the trade mark is registered while the Applicant has no proprietary rights in respect of such trade mark, nor the consent of the said proprietor to use such words in a name”

The Court stated that the directive had no statutory force and held that SAGA could, in any event, not rely on the directive as SAGA’s name (as an unincorporated association) was not registered.

Finally, the Court held that the fact that SAGA was unable to produce any evidence of actual public confusion demonstrated that there was no likelihood of public confusion. Over the years the golfing fraternity has been able to distinguish between the activities of SAGA and other golfing bodies and the names merely indicated the particular target market of each body within the wider world of golf.


The Registrar’s decision ordering SAJGA to change its name was therefore set aside.
Cancellation and interdict counter-application
SAGA is the proprietor of, inter alia, the registered trade marks SOUTH AFRICAN GOLF ASSOCIATION and SAGA SOUTH AFRICA, also in class 41. It claimed that the registered trade mark SOUTH AFRICAN JUNIOR GOLF ASSOCIATION was wrongly entered in and wrongly remained on the Register in terms of Section 24(1) read with Sections 10(12) (based on common law rights) and 10(14) (based on registered rights) of the Trade Marks Act.

In reviewing whether the use of SAJGA’s trade mark was likely to cause confusion, the Court held that, to rely successfully on Section 10(12) or 10(14), SAGA had to show that it had a reputation in the trade mark SOUTH AFRICAN GOLF ASSOCIATION.

SAGA relied on its long history, the large number of golf players who are affiliated to it and its constitution in its contention that is had acquired a protectable reputation. The Court was not convinced by this evidence and held that SAGA had failed to show that it had a protectable right.

In arriving at this conclusion, the Court said that what had become clear from the evidence was that the two bodies (SAGA and SAJGA) did not render the same service. Although they both served the golfing community, they served different sectors of it.

In the circumstances, the application for cancellation failed and, although SAGA did not pursue the relief for an interdict against SAJGA, this was also refused.
Comment
The finding that no evidence of actual confusion demonstrated that there was a likelihood of confusion can be seriously questioned in light of the recent decision of the Supreme Court of Appeal in Polaris Capital (Pty) Ltd v The Registrar of Companies and Polaris Capital Management, Inc (Appeal Case 595 of 2008).

In the Polaris case, the SCA held that public uncertainty, as opposed to actual confusion in the true sense, is undesirable and is one factor that needs to be taken into account in determining undesirability of a name under the Companies Act. The SCA further took note of the possibility of future confusion and public interest. That was not done in this case.

Turning to the cancellation application, two further aspects of concern arise. The first is the Court’s finding that SAGA had to show that it had a reputation in its trade mark to rely successfully on Section 10(14) of the Trade Marks Act. Section 10(14) provides a ground of refusal in relation to:

“a mark which is identical to a registered trade mark belonging to a different proprietor or so similar thereto that the use thereof in relation to goods or services in respect of which it is sought to be registered and which are the same as or similar to the goods or services in respect of which such trade mark is registered, would be likely to deceive or cause confusion, unless the proprietor of such trade mark consents to the registration of such mark”.
The existence of a reputation in a mark is clearly not a requirement of Section 10(14) and it seems that the Court erred in this respect.

The second concern is whether the Court can be understood to have said that services rendered in different sectors of the same industry are not identical or sufficiently similar for purposes of an enquiry under Section 10(14). Services relating to fast food outlets as opposed to upmarket restaurants come to mind. It seems that a passing-off test was applied instead of one under the Trade Marks Act.

However, in light of the descriptiveness of both the company names and trade marks in issue, it seems that the outcome is correct.

Chris Job
Partner
ckj@adamsadams.co.za

Werina Griffiths
Professional Assistant
werina-g@adamsadams.co.za

24 November 2009