Monday, 16 November 2009

SAGA is teed off

On Monday, the Western Cape High Court handed down a judgment on the interface between company names and trade marks (they are making rather a habit of it – one of the only two reported decisions last year, Cape Town Lodge CC v Registrar of Close Corporations and another [2008] 2 All SA 34 (C), also from this court, dealt with similar issues.)

The South African Golf Association (SAGA) objected to the name South African Junior Golf Association (SAJGA) registered as a s.21 company name. The Registrar of Companies held that the name was undesirable, but the court set aside this decision, first on the basis that SAGA itself is an unincorporated association as so could not rely on the Registrar’s directive that a name would be undesirable if very similar to an already registered name, and secondly because SAGA could not produce proof of actual public confusion.

Once again, the Western Cape High Court illustrated the common warning given by trade mark practitioners – ‘if the name contains descriptive words this may result therein that they are not distinctive of any particular business’ (para 9 - compare Cape Town Lodge above where the court held that general words in current use, which are descriptive of the goods or services provided under the mark, will not be afforded protection in terms of company legislation or trade mark and passing off principles (para [48])).

SAGA also filed a counter application for expungement of SAJGA’s trade mark (consisting of the word mark South African Junior Golf Association) in class 41 on the basis of its existing registrations in the same class, relying on s 10(12) and 10(14) of the SA Trade Marks Act. The Court’s reasoning here is, with respect, unfortunate. It held that SAGA had to prove reputation to rely on either s.10(12) or s.10(14). This is not correct; the cases referred to by the court both refer only to the precursors of s 10(12). Section 10(14), its precursors and UK equivalents have never required proof of reputation as precondition for success. The existence of the SAGA registrations should have acted as complete bar to the SAJGA mark. It is quite incomprehensible that the SAJGA mark was ever allowed on the register – not only is it in the same class as that of SAGA (one of its marks being the word mark South African Golf Association) but the specification is not limited to junior golf (neither does it refer to any charitable, or Christian activities).

The court’s argument that the two bodies do not render the same service is irrelevant for infringement proceedings; the specification for SAGA’s marks is sufficiently broad to cover that for the SAGJA mark.

Hopefully SAGA will take the matter on appeal, if only to clarify this court’s interpretation of the test for expungement in terms of s 10(14).

But, in the light of this judgment, I wonder what the chances are of a successful opposition by SAIIPL (Southern African Institute of Intellectual Property Law) to the newly formed SAAPIL (South African Association of Personal Injury Lawyers)? Probably not good!

1 comment:

Anonymous said...

This judgement from the Western Cape High Court applies a clear no-nonsense approach to company name objections, but it appears not to follow the recent decision of the SCA in Polaris v The Registrar of Companies (595/08) [2009] ZASCA 131 (30 September 2009).
The test for undesirability of a company name in cases based on confusion is practically identical to that in passing-off, i.e. that the objector must have a reputation and there must be a likelihood of confusion. In the SAJGA case, Traverso, DJP found confusion unlikely and relied on the absence of any evidence of actual confusion to demonstrate that public confusion is unlikely.
However, the SCA found in the Polaris case, that the objector provided sufficient proof of its reputation when it merely alleged that it had exposure in the media and in the distant past, it did some business in South Africa and met with a number of South African busness people, without a single corroborating affidavit. As proof of confusion, the objector merely alleged that it receives enquiries from South Africans about whether or not it is associated with the Appellant. The Appellant filed several affidavits from experts in the relevant industries who confirmed that they have never hear of the objector - including one from the objector's alleged business contacts. Despite this clear evidence that the objector had no reputation in South Africa and that confusion was ulikely, the SCA applied the Plascon-Evans rule to the extent that it accepted the objector's allegations of its reputation as fact and accepted the objector's allegations that it receives enquiries as proof that actual confusion is likely.
If Traverso DJP followed the Polaris judgement (as I believe she was bound to do), should she not have accepted a mere statement by SAGA that confusion had occured or was likely, as sufficient evidence of confusion and ordered the SAJGA to change its name?
It appears that the evidentiarry burden on company name objectors has become significantly lighter after the Polaris case and given the similarity of of test, this lightening of the evidentiary burden should spill over to passing-off cases - which means that all traders should beware of the lurking objector!
Some of the gravity-defying gems in the Polaris judgement include: If the experts have never heard of the objector, it does not follow that there could not be someone who has hear of it.[12] The objector was not aware of anyone who was confused, but that does not mean that no-one could be confused.[27]