Monday, 4 October 2010

Has the The Gap highlighted a gap?

The Constitutional Court (right) has issued a caution to judges who take shortcuts in delivering decisions by, for example, cutting and pasting heads of argument. This latest decision has bubbled up from that potjie (cauldron) of disputes over rights to The Gap trade mark in South Africa - click here and here for a refresher. Afro Leo questions whether this decision is just symptomatic of a greater challenge in the dispute resolution system in RSA.

The decision is over an application for leave to appeal to the Constitutional Court to contest an order against the refusal by a High Court judge (Basson J) to recuse himself after he had handed down judgment in 2007.

"The recusal application was based on the contention that the main judgment exhibited little or no sign of any original or independent application and reasoning, that it essentially copied the written heads of argument of Salt’s counsel and, consequently, created a perception of bias in favour of Salt. Basson J refused to recuse himself. The Full Court dismissed the appeal against his refusal. The present application seeks to have the recusal issue reconsidered on appeal by this Court."

The 9! judge bench refused the application because they felt that it would have no practical effect (see the peculiar facts at para 7) but not before quoting former Chief Justice Corbett:

“The true test of a correct decision is when one is able to formulate convincing reasons (and reasons which convince oneself) justifying it. And there is no better discipline for a judge than writing (or giving orally) such reasons. It is only when one does so that it becomes clear whether all the necessary links in a chain of reasoning are present; whether inferences drawn . . . are properly drawn; whether the relevant principles of law are what you thought them to be; whether or not counsel’s argument is as well founded as it appeared to be at the hearing (or the converse); and so on.

The very act of having to summarize in one’s own words what a witness has said, or what is stated in an affidavit or what a document says or provides, is in itself a very good discipline and is conducive to a better and more accurate understanding of the case.”

As astute as these comments are, the reality is that judgements can take a significant amount of time to be handed down in the High Court and the reason oft cited is the enormous workload on the judges. It is also somewhat ironic (and appropriate too) that this decision arises from The Gap litigation which has itself worked through South African courts for almost 15 years, with numerous delays along the way. This judgement, for example, is three years post the original decision.

Afro IP has illustrated, for example, how the ASA has begun to usurp the Court as a forum for trade dress disputes because it is accessible, relatively inexpensive (but not cheap) and above all, quick. On the other hand speed cannot be dispensed with at the expense of quality. In 2009, 3 out of 4 High Court decisions on IP were reversed on appeal to the SCA and in Afro Leo's opinion a number of others would have too, had they gone on appeal.

Is it too that the very fact that The Gap litigation has been ongoing for as long as it has, also symptomatic of a system that does not appear do enough to incentivise settlement at an early stage? Why is it that it is more beneficial to litigate for over a decade in our courts than to settle? Why is it beneficial for The Gap to take this matter to a 9 judge sitting in the Constitutional Court when, according to the CC, a decision would have no practical effect?

In my experience, it is often the delay and risk that accompanies litigation that encourages litigants to settle rather than any positive dis-incentives (eg high cost orders) or incentives (mediation or arbitration) in legislation designed to avoid litigation. Cost can be a deterrent too but RSA is still a relatively cheap place to litigate especially when compared to the UK and USA and there is a need to ensure that litigation is not only for big brand owners by making litigation accessible to SME budgets. The situation is complex.

To be fair to those litigating over the Gap trade mark, earlier judgements have not created sufficient clarity over the respective rights and the very nature of a user rights system is that rights ebb and flow with reputation and goodwill. It is also not uncommon for intense litigation over trade mark rights to extend over long periods of time, as illustrated by the Bud wars.

Trade mark oppositions can also be a very effective "alternative dispute resolution" forum to full scale litigation in the High Courts because they deal with similar issues to trade mark infringement and are generally cheaper. In the UK for example, brand owners frequently push disputes (where appropriate) into the opposition forum for this very reason. For CIPRO this is a big opportunity because there is a market that will pay for the effort in creating a quick and effective opposition dispute resolution centre.

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