The Supreme
Court of Appeal (“SCA”) in South Africa recently deliberated over a Western Cape High
Court decision in favour Pepkor Retail Limited (“Pepkor”) who had succeeded in
defending infringement and passing off claims by Adidas AG and Adidas
International Marketing BV (“Adidas”) in respect of their famous 3 stripe
device and related footwear get up. The SCA decision is recorded as Adidas AG & another v Pepkor Retail Limited (187/12) [2013]ZASCA 3 and the earlier decision summarised on Afro-IP here.
Facts
Adidas has
its three stripe trade mark registered as the subject of several trade mark
registrations covering footwear. It was also not disputed that its trade mark
and related footwear get up have a significant reputation in South Africa. Pepkor
is a large retail organisation in South Africa that caters for the low to
middle class market. The offending footwear complained of by Adidas bear two
and four stripe devices. Apart from
denying any deceptive similarity between the two and four stripes applied to
Pepkor’s footwear and Adidas’ trademarks, Pepkor raised a number of other
defences or contentions, namely that:
1. The stripes featuring on their
footwear were not trademarks but decorations or embellishments;
2. The protection afforded by Adidas’
registered trademarks is limited to three parallel stripes (and not to any other
number of parallel stripes) configured in terms of its trade mark
registrations. The first appellant has impermissibly sought to expand the scope
of the protection afforded by its registered trademarks by claiming generic
features of shoes as constituent elements of its trademarks;
3. The Adidas three stripe trade mark
is so notorious, recognisable and distinctive that there is no likelihood that
a consumer of the goods concerned would, when confronted with trainers
featuring two or four parallel stripes in a decorative fashion, be confused
into believing that they are the goods of, or are associated with, the
appellants; and
4. Adidas’ reliance on previous South
African judgments and foreign judgments is misplaced and of extremely limited
assistance, since those cases cannot assist the factual enquiry and comparative
analysis the SCA is enjoined to make on the facts of the case.
Decision
Acting SCA
Judge Southwood held that:
1. There was no evidence that the marks
would be perceived as pure embellishment or decoration. The fact that other
marks appear on the footwear is irrelevant;
2. The registered marks are to be
considered as they appear on the register and their scope of protection
considered accordingly;
3. Fame is to be considered as part of
the overall assessment when one considers whether a likelihood of confusion
takes places. The more distinctive a trade mark the more likely confusion will
occur when the mark is used on competing products; and
4. Adidas
is entitled to rely on South African (and other) judgments, as persuasive, if
not decisive precedents, if they were decided by applying the same principles
(as he felt were now involved) to the same or similar facts.
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| afraid this may open the floodgates |
On the
question of trade mark infringement, Southwood held that on four of the six
offending shoes the marks as used were not sufficiently similar to give rise to
a likelihood of confusion and hence there was no infringement. For the
remaining two offending shoes, he felt that the marks created the same general
impression:
“The likelihood of at
least momentary deception or confusion where the purchaser must select the
goods from those on display was therefore shown.”
Hence there was infringement of Section 34(1)(a) of the
Trade Marks Act 194/93.
Turning to
the claim of passing off, Southwood acknowledged previous decisions that, when
comparing the overall get up of the products and considering whether confusion
is likely, one must appreciate that the appearance of wording on the products
may not avoid a likelihood of confusion because there people in RSA who are
illiterate. Further, that the law of passing off does not confer monopolies to
successful get-ups. People are generally free to copy provide they do cause
confusion.
Applying
these principles to the offending shoes, Southwood found the Pepkor was guilty
of passing off in respect of certain of the shoes but not others. The relevance
of prominent third party trade marks helped avoid a successful claim against
two of the shoes.
The judge (supported
by a full bench of five judges) granted the interdict accordingly, and awarded
costs and an enquiry into damages to Adidas.
Comment
The
judgement provides welcome clarification on the tests for infringement, in
particular that the more distinctive a trade mark is the greater the likelihood
of confusion. It also illustrates that a defence based on ornamental or
decorative will only work in limited circumstances. It is also interesting that
Adidas was successful against a larger number of shoes in the passing off
claim.
