Tuesday, 2 June 2015

Guidance on trade mark prior use defence - Etraction v Tyrecor on appeal

Just over a year ago, we reported on a rather confusing trade mark infringement and expungement judgement of the Western Cape High Court in Etraction v Tyrecor. I also promised to report the appeal judgement once delivered, which I now regret just a little given that it meant I had to compile this report on the appeal in the early hours of a freezing Cape Town winter’s morn.
 
Nevertheless, the SCA’s appeal judgement was an interesting read, mostly for the things it did not decide, but also because of Judge Wallis’ apparent fondness for the phrase “There is not a jot or tittle of evidence…” which he’s used not once but twice in the space of two months.

Briefly, the appellant had claimed that the respondent was infringing its registration for INFINITY in respect of tyres and wheels.  The respondent relied on the section 36 “prior use” defence but also counter-claimed for expungement of the mark on the basis of, amongst others, section 27(1)(a) of the Trade Marks Act.

The most significant points to take from this judgement are:

1.   It appears to be the first time the SCA has weighed in on the debate about whether an unregistered mark is assignable separately from the goodwill of the business – see para 11.22 in Webster & Page.  The SCA (at para 14) sided with the High court in the Butterworths case where it was held that this is not possible, contra to indications in the Incledon case of the opposite position;

2.   In a footnote (10) the SCA questioned (without deciding) its previous finding in the Caterham case to the effect that only a reputation and not goodwill or custom in South Africa is required to found a claim of passing off. This was in light of the recent ruling of the UK Supreme Court in the Starbucks case reported yesterday on this blog by Ian Learmonth, where the contrary view was taken;

3.   The court gave credence to the statements in Webster & Page at para 15.18.1 to the effect that it is possible for a distributor (as opposed to the manufacturer) to acquire a reputation and goodwill in the name or get-up of the distributed goods in certain circumstances (see para 18);

4.   A broad meaning is to be ascribed to the words “predecessor in title” appearing in section 36. In particular, the SCA was prepared to accept in this case that the respondent was a predecessor in title of the previous user of the mark despite there being no apparent formal assignment of goodwill or sale of business documentation; and

5.   Without deciding the point, the court gave firm support to the view that one is not required to prove prior use giving rise to a reputation in order to rely on the section 36 prior use defence, but merely bone fide and continuous use.

All in all a great read touching on quite a few tricky issues.

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