Monday, 30 June 2014

RSA: Honest concurrent use by a TM licensee rejected

In this trade mark opposition referred to the High Court in Pretoria, local retailer Woolworths opposed an application for the mark JT’S YOUR NAME CAN DEPEND ON IT in class 25 (clothing and the like) by promotions firm KR Agencies.  Woolies relied on confusing similarity with and dilution of its registered marks for JT ONE in class 25, as well as its unregistered rights flowing from its reputation in the JT ONE mark.

It was common cause that the goods were identical and that Woolies’ marks were well-known.  The opposition therefore simply turned on whether the marks were confusingly similar (the court choosing not to address the dilution angle) which the Court found to be the case.

Bread and butter stuff then, until around paragraph 12 when the Court addressed KR’s claim that it had made honest concurrent use (HCU) of its mark in terms of section 14 of the Trade Marks Act and that its mark should be allowed to register accordingly.  For those not familiar with HCU, the provision essentially grants the registry a discretion to register a mark that would otherwise conflict with an earlier mark where the owner of the later mark has been using its mark honestly for a substantial period of time.  For those interested in further reading, Prof. Wim Alberts virtually has the market cornered in relation to HCU discourse – see the articles mentioned in his publications list here for more.

The Court found that KR had not complied with the formalities for HCU applications set out in Regulation 17 in that it had not submitted an affidavit or statement of case.  This is the second time in recent years that an HCU defence has failed on this basis – see the ABEDEX decision reported by fellow Leo Darren Olivier and Katherine Harding here

Nevertheless (and here’s where things get interesting) the court saw fit to consider the HCU defence anyway in case it was wrong regarding the formalities.  The court found that KR could not rely on HCU because KR apparently used its mark under licence from a UK company which had registered the mark with effect from 1997 but who’s registration lapsed before KR filed its own application.  The court relied on sections 38(1) and (2) which essentially provide that use of a mark by a licensee shall be deemed to be use by the owner of the mark.  Accordingly, KR could not claim the benefit of HCU given that, in terms of the foregoing sections, the UK company was deemed to be the user and not KR.

One interesting aspect that the Court did not address but which could possibly also have been raised against the HCU defence is the fact that section 14 (the HCU provision) does not expressly operate against objections based on section 10(12) – unregistered rights flowing from a reputation – which were relevant here.  Section 14 only expressly refers to situations where the earlier rights appear from the register or are well-known marks in terms of the Paris Convention and not section 10(12). 

The authors of Webster & Page (at para 6.17) however feel that the exclusion of section 10(12) from the HCU provision should be of little consequence given that the same factors are considered whereas Prof. Alberts appears to take a counter-view, at least in part (see p 357 of this article).  Given that it’s a Monday morning I'll spare you the tricky details, suffice it to say that it would have been handy to have some judicial guidance on this.

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