SA: Pick ‘n Pay Crocked

The ever alert Msawenkosi Gaxo (Bowman Gilfillan) has brought Afro-Ip's attention to the latest counterfeit goods case reported here as PICK ‘N PAY RETAILERS (PTY) LTD v THE COMMISSIONER OF SOUTH AFRICAN REVENUE SERVICES AND OTHERS. Crocs' lawyers have again been very active and instructed the seizure of 19524 pairs of alleged counterfeit sandals from Pick ‘n Pay, a large South African supermarket chain. The case concerns the procedural and substantive correctness of the detention and if not correct, whether the sandals should be returned to Pick ‘n Pay.

The Court held, in dismissing the application by Pick ‘n Pay, that the Customs and Excise Act did not require an inspector to apply his mind to whether or not the offending goods were counterfeit (which is a decision for the Court in granting the warrant); the legislature did not intend the rules of natural justice to be complied with as a pre-requisite for the granting of the warrant under section 6(1) of the Counterfeit Goods Act; the contention that the first to third respondents failed to divulge all material facts was found to be devoid of merit; and whether the shape of the shoe performs a trade mark function is a factual enquiry the outcome of which is dependent upon whether the members of the purchasing public rely thereon as a guarantee of provenance. All that Crocs need show, to obtain the warrant, is a prima facie case of ownership of the IP rights and reasonable grounds that an act of counterfeiting had taken, was taking or was likely to take place.

Afro-Ip has commented before on the ease in which it is possible to obtain a warrant for counterfeit goods seizures in South Africa. In this case, Crocs (pictured alongside studying for the case) managed to persuade the magistrate that it had a prima facie case based on rights in the shape of its sandals as a well known mark despite it not being registered. Magistrates in South Africa are not specialist IP lawyers and there is considerable jurisprudence on registrability/protection in shape marks to consider (see for instance Ipkat's comments here) as well as the exclusive concept of a "well known" mark. Consequently, one feels that the provisions of the CGA favour rights holders over distributors and consumers who are often not represented when warrants are requested. Perhaps such favour is justified given the huge problem of counterfeiting (and associated health risks) not just in South Africa but on the continent? We would welcome your views.