Friday, 22 December 2017

Afro Leo



The legal battle regarding product names in the fencing industry might at last be over. This is the impression one gets from the latest episode in the CLEARVU trade mark war, being the ruling of the Supreme Court of Appeal (SCA) in an opposition matter involving the parties, reported here. 
The order of the lower court was:
1.1. The registration of this mark shall give no right to the exclusive use of the word (sic) “clear” and “view” separately and apart from the mark;
1.2. The trademark registrant admits that the registration of this mark shall not debar others from the bona fide descriptive use in the course of trade of the words “clear view” and “view”.”
Readers will recall that Cochrane Steel had sued M-Systems for unlawful competition for bidding on the mark CLEARVU as an adword. Cochrane Steele lost, setting a precedent that the mere bidding on a competitor's mark as a keyword without more (eg it appearing in the ad text) is not unlawful competition. The High Court case is well covered by this blog and you can view those summaries here, herehere and on CNBC Africa, here.  In the Supreme Court of Appeal, decision here, M-Systems successfully defended the appeal by Cochrane Steel creating clarity that keyword bidding on a competitor's trade mark (on its own) is not passing off or unlawful competition in South Africa.
Cochrane Steel also lodged a complaint before the Advertising Standards Authority, which was rejected on the basis that the adwords do not constitute ”advertisements”, a finding set out here.

The scene then moved back to the High Court, dealing with the registry's acceptance of Cochrane Steel's CLEARVU trade mark without any disclaimers or endorsements in respect of CLEAR, VU and/or CLEAR VIEW. M-Systems also claimed that the mark should not have been accepted because it described the intended purpose of a fence, namely one that provides a clear view, and that the evidence on file did not support a finding that the mark had acquired a secondary meaning.  In the judgment, discussed here, the court ruled in favour of both parties on some aspects, but significantly exclusive rights to “clear” and “vu” had to be disclaimed.  This discussion deals with the appeal on this ruling.
Cochrane Steel applied for the registration of the mark CLEARVU in:
1. Class 6 (in respect of non-electric cables and wires of common metal; metal fences; metal mesh; pipes and tubes of metal)
2. Class 37 (in relation to building, construction, repair and installation services.
The opponent was of course M-Systems.
The ground of opposition was that the mark was not registerable in that:
1.  It consists exclusively of an indication which may serve in trade to designate the kind, quality, intended purpose or other characteristics of the goods or services (s 10(2)(b) of the Trade Marks Act 194 of 1993;
2.  It is not capable of distinguishing the goods and services for which it is to be used (ss 9(1) and 10(2)(a) of the Act).
One question raised is how far the misspelling contained in the CLEARVU mark can go.  The following “view” on the situation in the market is instructive:
“[8] M-Systems, in its objection to the mark, supplied material from websites operated by a number of other companies within the security barrier industry in which they use the words ‘clear’ and ‘view’ in describing their fencing products. One company is called C-Thru Fencing which equates to fencing through which one has a view. Another competitor, Betafence, offers products called ‘Betaview’. Trellidor, also referred to as a competing company produced a product called ‘Trellidor Clear Guard’. Trellidor describes its products as ‘security screens that provide a clear view’. They go on to say that their products enable users to ‘enjoy the view without feeling vulnerable’, ‘allow unobstructed views of the outdoors’, ‘appear to be invisible while helping to protect against unwanted intruders’ and ‘provide security without detracting from the views or aesthetics of the premises’. Clear View Security Solutions, yet another competitor that sells a range of products which they describe as ‘clear security solutions’, including ‘clear bars’, ‘clear armed bars’ and ‘clear gates’. It explains on its website that all of its products ‘ensure that no light or view is lost’.”
To use the word, clearly, the concept of a see-through product is in wide use in the industry. 
The court referred to section 15 of the Act, and various decisions dealing with the issues of disclaimers and admissions.  It was mentioned that the use of disclaimed matter cannot amount to infringement (paragraph 13).  Mention was also made of the unique practice of entering admissions, specifically where misspellings of words were concerned (paragraph 14).
The court found particular guidance in the Distillers case:
“[19] In determining whether a discretion should be exercised in favour of the entry of  a disclaimer and admission, it is necessary to have regard to Distillers Corporation (SA) Ltd v S.A. Breweries Ltd & another; Oude Meester Groep Bpk. & another v S.A. Breweries Ltd 1976 (3) SA 514 (A). There this court was considering, in relation to an application for an entry for disclaimers, the composite trade mark ‘Oude Meester’, which had undoubtedly become distinctive…
The court, whilst acknowledging that the mark ‘Oude Meester’, by its use as a whole had become distinctive, held that such use does not ‘ordinarily or necessarily mean that Meester per se has thereby become distinctive’. It found that the court below had accordingly correctly entered disclaimers.

[20] In Distillers, Trollip JA also had to consider an order similar in form to para 1.2 in the present case. Trollip JA stated that what was there under consideration was not a disclaimer in the usual form. He had regard to the contention on behalf of one of the parties that it was not a disclaimer, but rather an ‘admission’. Noting that the entry of admissions was a peculiarly South African practice, particularly where the trade mark contains words that are regarded as being reasonably required for use in the trade, he stated that the purport or effect of admissions ‘does not appear to be entirely clear; and it is difficult to understand on what basis the distinction between disclaimers and admissions is drawn’. He proceeded to construe the ‘admission’ as a disclaimer and in that regard said the following:

‘That construction does not, in my view, do any violence to the wording or effect of the entry. For by not debarring others from using Meester, the entry in effect disclaims Distillers’ right to the exclusive use thereof.”
Applying these dicta (paragraph 21), the SCA stated that “the “VU” in the composite mark “CLEARVU”, is a deliberate misspelling of the ordinary word “view” and is understandable in light of the nature of the product and what it intends to convey.” The argument of Cochrane that it does not constitute a misspelling of the ordinary English word “view”, but that it is a “coined word which just happens to be the phonetic equivalent of the ordinary English word ‘view’ is to strain to avoid the implication that commonly, admissions are entered when there is a misspelling of a word and to seek a monopoly that extends beyond that which is acceptable.” Also, as per Webster and Page South African Law of Trade Marks para 9.20 at 9-17, service issue 19, “the phonetic equivalent of a non-distinctive word is itself non-distinctive and it would seem to follow that if the word itself is one that ought to be disclaimed then its phonetic equivalent should also be disclaimed.”
In paragraph 22 the court stated that neither Cochrane, nor any other trader, is entitled to appropriate exclusively the ordinary English words “clear” and “view”, which, in effect, constitute the composite mark. In addition, those words are commonly used descriptively in relation to fencing products.
The conclusion of the SCA was to accept the order of the court a quo, but it was stated though that the words “the trade mark registrant admits” must be deleted.
In my next post, I interview fellow blogger Darren who represented M-Systems to find out his thoughts on what this all means, on a practical level.
Prof Wim Alberts

Afro Leo

Afro Leo

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