Who says IP doesn’t happen in the Cape! In an
intriguing High Court judgement, the court
considered an issue one often encounters in practice but which hasn’t, as far
as I know, been fully ventilated in our courts - that of the registrability of limping
trade marks. Jacobs J (as he then was) coined the phrase “limping trade mark”
in the Philips v Remington UK case. The term denotes a mark that is weak in
distinctiveness which is always used together with another, stronger mark, very
often a house mark, so that the weaker mark relies on the strength of the stronger
mark in order to act as a trade mark.
Unusually, the judgement is littered with
references to American sources, which is a refreshing change from the usual
Discovery, the well-known
financial services and insurance provider, owns a registration for ESCALATOR
FUNDS covering insurance and financial services, and has used the mark in
relation to constant proportion portfolio insurance (“CPPI”) share trading products. Sanlam, another well-known
provider in the same industry, has been using the mark SANLAM ESCALATING FUND
in respect of its own CPPI products.
Discovery sued for infringement of its
registered mark as well as passing off. Sanlam
counter-claimed for revocation of Discovery’s registered mark on the basis that
it is not capable of distinguishing and is entirely descriptive and in common
usage. Ultimately, the court found that
Discovery’s mark was liable to revocation on this basis, but still saw fit to consider
the infringement issue nonetheless, finding that confusion or deception was unlikely. Furthermore, given the descriptiveness of the
mark, Discovery could not show a reputation in the mark and its claim of
passing failed accordingly.
A few points are worth noting here. Firstly, in determining whether the Discovery
ESCALATOR FUNDS mark had acquired distinctiveness through use (so called secondary
meaning), the Court found that the mark was always used along with Discovery’s
house mark – DISCOVERY. The court found
that the failure to use the ESCALATOR FUNDS mark (product mark) in isolation
from its house mark effectively meant that the consumer was not given an
opportunity to disassociate the product mark from the house mark, and that the
public cannot be said to recognise the product mark as an independent mark as a
result. The Court therefore refused to
spare the registration for the product mark on the basis of acquired
distinctiveness. It should be noted that the judgement contradicts that of the then European Court of Justice
(ECJ) in Nestlé v Mars in which it was held that use of a mark as part
of or in conjunction with another mark is not a bar to the mark acquiring
distinctive character in its own right.
Owners of limping marks in SA should take heed and should use the weaker mark
independently of the stronger mark, lest it suffers the same fate.
Secondly, the Court did not
follow the reasoning of the Supreme Court of Appeal in the ZETOMAX case, where it was
held that patients’ involvement in choosing medicines should be given due
weight (thereby increasing the likelihood of confusion) despite the fact that prescription
medicines reach patients via medical professionals who are less likely to be
confused. Here, the Court found that, because
the CPPI products are usually sold via brokers having intimate knowledge of the
products, the likelihood of confusion is diminished.In other words, the involvement of the end
user was not given much weight, as in ZETOMAX.I wonder whether the Court got this right – individual traders are
becoming increasingly less dependent on brokers through online share trading
platforms and the like.
Finally, and importantly, the
Court confirmed that simply adding a house mark to an earlier mark will not necessarily
suffice to avoid confusion between the two (in line with the well-known Mediondecision of the ECJ).However, the Court found that if the common
element between two marks is weak in distinctiveness, it is unlikely that
consumers will be confused unless there are other commonalities.The addition of the dominant SANLAM element
was therefore found sufficient to avoid confusion.
Afro-IP was voted top 25 foreign and international legal blogs by LexisNexis in 2011, is listed on Managing Intellectual Property's guide to IP blogs worldwide, is listed on IPKat's blogroll and was nominated on Nigerian Law Intellectual Property Watch's guide to African IP resources.