The practical effect of the ClearVu SCA disclaimer decision

The practical effect of the ClearVu SCA disclaimer decision

By Anonymous   Wednesday, December 27, 2017   No comments:

Last week I posted on the Supreme Court of Appeal's decision that is likely to firm up South Africa's approach to disclaimers and their unique endorsement known as an admission.

The reasoning of the SCA is, with respect, convincing, and might now bring down the curtain on the long-running CLEARVU dispute.  What does the judgment mean practically?  I asked fellow blogger Darren Olivier who acted for M-Systems and has worked in countries with vastly different approaches to disclaimers, what he thought this all means, and whether he still prefers the UK system where the Registry does not routinely call for disclaimers:

WA: Naturally “clear” and “view” separately were disclaimed, but does this also mean that no one may use the composite mark CLEAR VIEW?

DO: My reading of the judgment is that only genuine descriptive use of “clear view” e.g to describe the intended purpose of a fence in a way that is not unlawful (e.g passing off) is covered by the admission endorsement. In other words only such use of CLEAR VIEW would not clearly be an infringement of the registered mark.

WA: If one applies the above exposition of Webster & Page, if VU is the phonetic equivalent of “view” and CLEAR is disclaimed, the use of CLEAR VIEW is in fact also disclaimed in practical terms?

DO: Yes, that is correct if you apply the logic in Webster & Page and it would mean in practical terms that any use of CLEAR VIEW could not be tolerated i.e. not just genuine descriptive use. My sense though is that there remains a practical distinction between an admission and a disclaimer and therefore one should not equate a disclaimer with an admission.

However, if one concludes that CLEAR VU or CLEARVU is a composite mark consisting merely of descriptive words or their phonetic equivalents, then the logic in Webster & Page means that CLEAR VU or CLEARVU should have been rejected as a trade mark. This is what we argued in the lower court but since the M-Systems went in liquidation, we were not able to argue it before the SCA.

WA: You mean that Cochrane Steele should not have been able to then register its CLEAR VU/CLEARVU trade mark at all?

DO: Yes, unless, of course, they could establish a secondary meaning though use of the mark as a trade mark. Our argument was that they failed to establish this on the papers. The lower court disagreed.

WA: So, any combination of a word – except “clear” – with VU is thus permissible?

DO: Yes, that is correct, provided the use is not passing off or unlawful in some other way. The rights to CLEARVU are therefore quite narrow which is communicated by the endorsements.

WA: In applying the above propositions practically sight should not be lost of the decision in Slavin's Packaging (Pty) Ltd v Space Case Products (Pty) Ltd where SPACEY was held to infringe the disclaimed SPACE and CASE components of the mark. Do you agree with that?

DO: I do, when comparing the marks, the entire marks should be compared taking into account the disclaimed elements. This is what will give the CLEARVU mark its strength as a registered mark. However, the endorsement are not insignificant for they seek to limit and more clearly define scope of protection of the registered mark.

WA: Having worked in the UK system and after being involved in this case, do you prefer a system including disclaimers or one without?

DO: This case has changed my view on disclaimers. I held the view that disclaimers and admissions were rather cumbersome, unnecessary and often created more uncertainty in the scope of the protection of a registered trade mark. They also made the registration process more expensive and lengthy. The UK system took this all into account and all but abandoned the practice in the late 90s. The EU did the same although it is still possible to endorse trade marks under both systems. Both systems are however, very efficient and I enjoyed working with them.

This case could have provided a moment to argue that disclaimers/admissions should only be called for in very limited circumstances (disclaimers are discretionary and S15 of the Act is clear on that) and bring our practice more in line with Europe. The case was not argued in this way but it would have made for interesting debate. 

I think what swings it for me in supporting disclaimers now, is that in a developing country like South Africa where access to IP is still limited, unfortunately, to those in the know and often those with means, the upshot is that the SME may be prejudiced. Put differently, those with means would more easily be able to exploit the scope of protection in a registered mark made up of descriptive components, relative those without means. In this case for example, M-Systems (sadly in liquidation) has done a favour for other competitors which is arguably good for competition and the consumer. The flip side is that the registration process does take longer and can be more expensive.

WA: Cochrane’s case was that this opposition was vexatious, prompted by the earlier adwords case and to prevent them from using the trade mark to sue M-Systems for infringement (which may have been easier to show in the adwords case). How do you respond to that?

DO: I do not believe that mere bidding on an identical trade mark without more is trade mark infringement so I do not believe that Cochrane would have prevailed in an adwords case based on a registered trade mark. I am sure that they feel differently, perhaps some of my colleagues do as well.

It is probable that this opposition may not have occurred had the adwords case not commenced but that does not mean it is vexatious, and the judgment shows that. M-Systems was a genuine competitor to Cochrane Steele in a highly competitive industry.

WA:……yes, in conclusion it seems disclaimers and admissions will form part of our system for some time. The legislation is, after ‘a deal’ between the registrar of trade marks and the applicant, without which there would be no trade mark [where trade marks are formed of descriptive components].  As long as the deal is balanced.

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THE CLEAR VU TRADE MARK SAGA: THE FENCING ENDS IN BLOEMFONTEIN

THE CLEAR VU TRADE MARK SAGA: THE FENCING ENDS IN BLOEMFONTEIN

By Afro Leo   Friday, December 22, 2017   No comments:

 

BACKGROUND

 

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, here, here 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.

 

 

THE SCA OPPOSITION JUDGMENT

 

 

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

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Roses, Cheetahs and Gandalf – The SCA

Roses, Cheetahs and Gandalf – The SCA

By Darren Olivier   Wednesday, November 18, 2009   No comments:

On Monday Afro Leo had occasion to visit the Supreme Court of Appeal which is situated in a grand but compact building in Bloemfontein. Readers of this blog have asked for a piece on the experience.

Whilst it is overwhelmingly apparent why Bloemfontein is known as the “city of roses", especially at this time of year, Bloemfontein’s other symbol – the cheetah – was (fortunately) only represented on vehicle number plates, by the quick minds of those presenting and hearing argument, and by the way in which five judges play with an argument as if it were captive prey. The bench prod from all angles as they seek to test whether appeal submissions are indeed, alive. Arguments are generally allowed to run but always under a watchful eye. Quality time is of the essence in appeals. Occasionally arguments are dragged back by the tail, sometimes reluctantly and other times without fuss. Every now and again they are picked up, examined, turned around and upside down and then returned, but not always gently. It is in these forums that Counsel’s abilities are really tested and judges' ability to hone in on key aspects, remarkable.

Under RSA law an appeal in IP matters is normally made out on the papers and in the heads of argument, filed well in advance. The appeal is therefore relatively quick and judges play an active role. We have come to expect wise words from Bloemfontein - after all the creator of Gandalf the Grey was born there. Perhaps that is why Bloemfontein is also South Africa’s judicial capital?

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