INTELLECTUAL

Facts: Casadobe is a South African company which owns and operates the Canto Wines boutique wine estate in the Durbanvillle wine valley, Western Cape. It uses the unregistered trade mark CANTO to market its wine. Fratelli is an Italian company with its principal place of business in Cossano Belbo, Italy. It is the registered proprietor of a South African trade mark registration CANTI in class 33 wines and sparkling wines. Casadobe conducted a trade mark search for CANTO in relation to wine. The search revealed “various” cases in class 33 but the Registrar of Trade Marks did not regard the numerous trade marks incorporating CANT as relevant. Fratelli’s registration of CANTI was not cited. Casadobe proceeded with its application for registration of the mark CANTO in various classes including class 33.

Appeal: Casadobe (appellant) appeals a decision of the High Court which granted Fratelli (respondent) an interdict restraining Casadobe from infringing Fratelli’s rights acquired by the registration of the trade mark CANTI in class 33, by using the mark CANTO or any other mark nearly resembling or so similar thereto as to be likely to cause deception or confusion in terms of section 34(1)(a) of the Trade Marks Act 194 of 1993 (the Act) in the course of trade and in relation to wines and sparkling wines.

Discussion: In granting the interdict, the High Court found that the trade marks CANTO and CANTI are visually, aurally and conceptually similar. It considered that both trade marks consist of five letters with the first four letters overlapping directly, and they have syllables CAN-TO and CAN-TI which look and sound the same. Another similarity that the High Court found was that the trade marks have a similar meaning which is associated with a song or the act of singing. Consequently, the High Court held that the single letter difference of the single letters “O” and “I” did not sufficiently distinguish the trade marks from each other and that there was therefore a high likelihood that the marks may confuse customers.

Findings: Consumers of wines, including sparkling wines, are quite discerning. They are likely to exercise circumspection and a greater degree of care in making a purchase. The notional consumer would in no way be confused on encountering the two marks in the market place as the CANTO mark would be found on South African wines or MCCs while Fratelli’s CANTI mark would be found on the imported (Italian) wine section of the store. Even though CANTO and CANTI are both five letters long and have the same first four letters, the “I” and “O” at the end of the marks make a huge difference. They determine the different visual cues, tones and senses of the two marks. It is improbable that consumers would be deceived or confused. The finding of the High Court that the two marks are closely similar, and their pronunciation sounds similar, is incorrect. The conclusion that trade marks CANTO and CANTI are visually, aurally and conceptually similar and that there exists a likelihood of confusion or deception among consumers is wrong. Therefore, the appeal must succeed.

Order: The appeal is upheld with costs, including the costs of two counsel. The order of the High Court is set aside and replaced with the following: “The application is dismissed with costs.”

MOKGOHLOA JA (DAMBUZA JA, NICHOLLS JA, DOLAMO AJA and NAIDOO AJA concurring)

Facts: The patent in issue is held by the patentee (the applicants are referred to as UC) and concerns a pharmaceutical compound which has been marketed and sold in South Africa under the name Xtandi since March 2017 and which is used for treating prostate cancer. Eurolab is a generic oncology company conducting business in South Africa and is the holder of generic registration for a product known as Enzutrix which is also used for treating prostate cancer. Enzutrix has recently been launched in South Africa by Eurolab and is distributed by Dis-Chem.

Application: This special motion comprises of three applications: (i) an application for an interim interdict brought by UC to restrain Eurolab and Dis-Chem from infringing the South African patent; (ii) an application for groundless threats of infringement regarding the patent brought by Eurolab against UC in terms of section 70 of the Patents Act 57 of 1978; and (iii) a counter-application in the interim interdict application, brought by Dis-Chem for the revocation of the patent.

Discussion: Neither Eurolab nor Dis-Chem seriously disputes that the making, using, importing, marketing, distributing, and selling of their product, Enzutix, constitute an act of infringement of the patent in South Africa. However, they justify their actions by claiming that the patent is invalid on two main grounds: (i) that the patentee was not a person entitled to apply for the patent in terms of section 27, which makes the patent liable to be revoked under section 61(1)(a) of the Act; and (ii) that there had been a material misrepresentation regarding the priority date in applying for the patent, which makes the patent liable to be revoked under section 61(1)(g) of the Act. Eurolab claims that the patentee (UC) was not entitled to apply for the patent because UC (not being the inventor) had not acquired the right to apply for the patent from the inventors of the patent at the date on which the patent was filed i.e., 29 March 2006.

Findings: It is not in dispute that UC is not the inventor and thus falls within the category: “any other person acquiring from [the inventor] the right to apply”. For UC to have had the right to apply for the patent, it needed to have acquired from all the inventors the right to do so before 29 March 2006. The phrase “any other person acquiring from [the inventor] the right to apply” in section 27, properly interpreted provide that such person applying for the patent must have already acquired the right to apply from the inventor prior to filing the patent application, be that through an assignment, agreement, or another legal mechanism. The time to consider whether a patent is liable to be revoked under section 61(1)(a) read with section 27 must be determined at the time that the application for a patent was made. The court finds that no assignment existed at the time specified, the patent is invalid, and stands to be revoked.

Order: The application by UC is dismissed. The application by Eurolab is granted to the extent that the threats of infringement proceedings made by UC in relation to the South African patent are found to be unjustifiable. The UC applicants are interdicted and restrained from a continuance of these threats. The counter application by Dis-Chem is granted to the extent that the patent is revoked in terms of section 61(1)(a) as read with section 27 of the Patents Act 57 of 1978.

LE GRANGE AJ

Facts: The applicant, Gruma, is a company that exists under the laws of Mexico. Gruma is the parent company of the Gruma Group of companies. Azteca Milling is a limited partnership under the laws of the State of Texas, United States of America, and a member of the Gruma Group of companies. Azteca Milling manufactures and distributes flour and other products made from corn, including corn-based snacks, such as crackers. Gruma claims to be one of the world's leading producers of corn-based foods. Gruma avers that, since 2021, almost a quarter of all tortillas sold throughout the world are produced by it and members of the Gruma group of companies. Grupo Bimbo, the first respondent, manufactures and distributes bakery products, including breads, crackers, cookies, pies, pastries and sweet rolls. Grupo Bimbo, through its various divisions, manufactures and distributes the product Sanissimo Salmas Oven Baked Corn Crackers (SSO-cracker), the product relevant to the trade mark application. Gruma and Grupo Bimbo are direct trade competitors. One of the products sold by Gruma, its Mission Planitas product, is a product with an almost identical cracker shape, pattern and ornamentation to that of Grupo Bimbo's SSO-cracker.

Application: The applicant opposes the registration and seeks an order refusing trade mark application “Corn Cracker Shape” under class 30 in the name of Grupo Bimbo, on the grounds of sections 9, 10(1), 10(2)(a), 10(2)(b), 10(4), 10(5) and/or 10(11) of the Trade Marks Act 194 of 1993. Gruma furthermore seeks that the court directs the second respondent, the Companies and Intellectual Property Commission (CIPC), to remove the application from the register.

Discussion: Grupo Bimbo, among others, challenged Gruma's locus standi to object to the trade mark application. Grupo Bimbo is correct in its submission that the principle of territoriality applies in trade mark law. The principle restricts the legal operation and effect of a trade mark to the territory for which it is to be registered. An applicant opposing the registration of a mark must first show that it is an "interested person". Gruma competes with Grupo Bimbo in several jurisdictions, but not in South Africa. Its trading interest consists not of actual trade, but an alleged intention to trade its product in South Africa. Gruma will only have standing in the proceedings as an "interested person" if it succeeds in making out a case that it has a substantial interest in the mark. Reliance is placed on the parties being trade rivals, and the possible effect that the registration of the trade mark might have on Gruma if it decides in future to expand its business to South Africa. While the parties might be trade rivals in other jurisdictions, Gruma is, at most, a potential trade rival of Grupo Bimbo in South Africa. It is, however, not sufficient to regard oneself theoretically as a potential trade rival.

Findings: To have standing on the basis that it is a potential trade rival, Gruma must establish at least a reasonable possibility that it is a potential trade rival in the sense of having at the time of registration some definite and present intention to deal in certain goods or description of goods, and not a mere general intention of extending its business at some future time to anything which it may think desirable. Gruma did not explain why it had not extended its business to South Africa to date. Neither did it provide a proposed timeline for any foreseen or planned entry into the South African market. Gruma made a bold averment but did not substantiate it with facts. The remark made in passing that Gruma reasonably wishes to distribute its product in South Africa in the future, is not sufficient to establish that a reasonable possibility existed that Gruma had and has the intention of expanding its business to South Africa in the foreseen future. Gruma failed to establish that it has a definite, genuine and present intention of becoming a trade rival of Grupo Bimbo in South Africa. Gruma lacks the necessary locus standi.

Order: The applicant's opposition is dismissed with costs.

VAN DER SCHYFF J

Facts: The applicant is a producer of alcoholic beverages including the AMARULA Cream Liqueur. The respondent trades in the liquor and retail products industry, including cream liqueur. The respondent intends to commence the production of a marula cream liqueur under the trade mark AFRULA and utilizing the AFRULA getup. The respondent has indicated that the product is currently not available in the South African market. As a result of the respondent having filed its application for the registration of the trade mark AFRULA, this forced the applicant to seek interdictory and ancillary relief. It is the applicant’s case that the trade mark AFRULA is confusingly or deceptively similar to the applicant’s registered trade marks AMURULA and AMARULA, and is likely to result in deception and confusion amongst members of the public, between goods bearing the parties’ respective trade marks. On both products, the parties’ respective trade marks AMARULA and AFRULA appear prominently.

Application: The applicant, as the proprietor of multiple trade mark registrations for the mark AMARULA or marks incorporating AMARULA, seeks the intervention of this court to restrain the respondent from infringing its rights, which have been acquired through statutory provisions and the common law.

Discussion: On the AMARULA product, the elephant themed device appears directly below the AMARULA trade mark. On the respondent’s label, there appears to what the applicant sees as a side profile of an elephant head or as respondent puts it, an “African woman”. This would not be immediately apparent to the consumer upon encountering the respondent’s product. The applicant contends that a consumer will upon first impression be confronted with the mark AFRULA, combined with an elephant device used in relation to a liqueur product, against a background of a distinctly African motif. As a result of this impression the applicant’s case is that the respondent has essentially replicated the primary components of the applicant’s African-themed AMARULA get-up, namely the AMARULA mark and the ELEPHANT device. The respondent’s belief is that that there can be co-existence in the market place for both marks. The similarities in the marks of the parties are sufficiently alike under the provisions of section 34(1)(c) of the Trade Marks Act 194 of 1993. Not only are the marks similar, it is a fact that the mark is intended to be used in relation to the same goods in respect of which the mark AMARULA has achieved recognition and has become well-known.   Therefore, the test of an easily recognisable similarity between the two marks is met.

Findings: The applicant has established the likelihood that the respondent's use of the mark AFRULA is in direct competition with it in the same market. The respondent's mark AFRULA bears a striking resemblance to the applicant's mark AMARULA. In assessing both parties' get-ups, these marks constitute the most prominent element. What the respondent does not appear to accept is that the applicant “Amarula” is a brand in South Africa and reported as market leader with its award winning “Amarula Cream Liqueur” and presently holds a dominant share in the market. In the minds of the reasonable consumer, the respondent’s conduct in making use of the AFRULA get up does not overcome the general visual impression of similarity. The nature of the confusion or deception is likely to divert business away from the applicant, which could potentially result in a loss of its market share. The applicant has satisfied the requirements that it has a clear right, and that the infringement of such right causes it potential harm. Therefore, the applicant has met the test for reasonableness of the apprehension of prejudice or harm.

Order: The respondent is interdicted and restrained from infringing the applicant’s registered trade marks.

PARKER AJ

Facts: Phillips, an author of mathematics textbooks and teaching aids, collaborated with Basson and Odendaal (co-authors) to create a series of educational materials known as the "Mind Action Series" (MAS). Phillips entered into a distribution agreement with Allcopy Publishers in 2016, allowing Allcopy to publish and distribute the works. The agreement was extended in 2020, permitting the authors to publish their own works in competition. However, by 2023, Phillips decided not to renew the agreement, leading to a dispute. Phillips sought an interdict to prevent Allcopy and the co-authors from publishing or distributing the works after the agreement's expiration on 29 February 2024. Allcopy and the co-authors opposed the application and sought a stay of proceedings pending an application to the Copyright Tribunal for a compulsory license.

Issue: The main issue was whether the court should grant Phillips’s application for an interdict to prevent Allcopy and the co-authors from publishing the works after the agreement’s expiration, or whether the proceedings should be stayed pending the outcome of the compulsory license application before the Copyright Tribunal.

Discussion: Phillips argued that he was entitled to an interdict as the copyright owner, preventing Allcopy and the co-authors from continuing to publish the works after the agreement expired. Allcopy and the co-authors contended that the application was defective because Phillips failed to show he lacked an adequate alternative remedy, such as damages or royalties under the Copyright Act. They also argued that the matter was exceptional due to the availability of a compulsory license remedy, which could override Phillips’s refusal to grant further licenses. The court noted that an interdict is a discretionary remedy and requires the absence of an adequate alternative remedy, which Phillips did not establish. The court also considered the potential impact on educational authorities and learners, who relied on the materials.

Findings: The court found that the existence of the compulsory license remedy made the case exceptional. It concluded that the proceedings should be stayed pending the Copyright Tribunal’s decision on the compulsory license application. The court also noted that Phillips had alternative remedies available, such as damages or royalties, and that the interdict application was not without difficulties, particularly regarding the delivery-up claim. The court emphasized that the Copyright Tribunal’s decision would address the reasonableness of Phillips’s refusal to grant further licenses and the potential impact on third parties, including educational authorities and learners.

Order: The main application was stayed pending the determination of the compulsory license application by the Copyright Tribunal. Phillips was ordered to pay the costs of the stay application.

Facts: The applicant is part of the Jonsson Workwear Group (Jonsson Group). The Jonsson Group manufactures and distributes workwear, clothing, footwear and personal protective equipment under the well-known JONSSON brand in South Africa and in approximate 30 countries worldwide. The applicant has registered JONSSON on its own as a trade mark in class 9 in respect of protective clothing, protective headgear, protective footwear, eye wear, and goods ancillary or related in class 09; and in class 25 in respect of articles of clothing including overalls. The applicant has also registered various logo marks incorporating the JONSSON logo as its dominant feature. The respondent is seeking to register a JONSSON mark in class 7 in respect of screening machines, crushing machines, conveying machines, screening panels, screening media, side liners for screening, crushing and conveying machines, conveyor belts for conveying machines, protective elements for screening, crushing and conveying machines.

Application: This is an opposed trademark opposition by Jonsson Holdings (applicant) to the trade mark application in the name of the respondent. The opposition is based on the provisions of sections 10(12), 10(14) and 10(17) of the Trade Marks Act 194 of 1993. The applicant’s argument of notional use regarding the use by the respondent of its trade mark in the exact same font and colours expects the court to compare the marks with one another.

Discussion: The JONSSON logo has been used continuously in South Africa since 1955 and the applicant has built up a reputation and goodwill in the JONSSON mark. The JONSSON mark is also notionally used by the applicant in the exact same font and colours in various other JONSSON logo trade marks. The respondent has admitted that the opposing mark is identical to the applicant’s JONSSON mark but denies that the use of the logo can cause any confusion in the trade. The JONSSON mark is the dominant feature of the applicant’s logo marks. The applicant’s main objection to the trade mark to be registered in class 7 by the respondent is on similarity to the goods covered by the applicant’s trade mark registrations in classes 9 (protective equipment) and 25 (workwear). This is far-fetched because the applicant’s goods in class 9 and 25 are protective clothing, overalls and footwear, while the respondent’s goods are heavy mining machinery and used for heavy mining works.

Findings: If the goods in question are compared, it is clear that there is no similarity of kind in the goods themselves and the use thereof. The course of trade may overlap in the mining business, but protective clothing and footwear may be used in many other trades and industries such as construction and building and other manufactories of goods. With regard to the requirement of unfair advantage, or detrimental consequences to the applicant, no evidence of any value was produced. The court did not find any evidence suggesting that the use of the trade mark by the respondent will take unfair advantage of the applicant or be detrimental to the distinctive character and repute of the applicant’s trade mark. There is nothing to suggest why the use of the trade mark in respect of specialised mining equipment will be detrimental to the reputation of a trade mark in protective clothing and footwear. The goods are simply too dissimilar. The goods are so dissimilar that the uses do not overlap at all, and it would be exceptional if any passing-off will occur.

Order: The opposition to the trade mark application in class 7 in the name of the respondent is dismissed.

HOLLAND-MUTER J

Facts: The applicant produces and supplies chemical compounds of various applications and has done so since 1997. The applicant's sole director is Mr Overberg. The first respondent is Mr Nolte. He is a chemist of some considerable experience and he and Mr Overberg founded the applicant. The applicant's right to the relief which it seeks is founded on the contention that it developed and manufactured (and still manufactures) Pylene FOO (FOO) which is used to aid the drying of raisins and sultanas. It has supplied Pylene FOO to Safari Dried Fruit for some time. The applicant contends that the formulation of Pylene FOO is proprietary to it and is confidential. It claims that the formulation of Pylene FOO is known only to a handful of people and is of significant economic value to whomsoever is in possession thereof. Mr Nolte developed Pylene FOO whilst a director of the applicant. Mr Overberg enquired from Pepsico whether it intended to place any orders for Pylene FOO for the upcoming year. He was surprised to hear that Pepsico did not require Pylene FOO as it had found an alternative supplier in the form of the third respondent, Southern Oil (SOILL). Ms Ozviti confirmed that SOILL had recently added an FOO to its product offering and that it had sold its first consignment to Pepsico.

Application: On hearing of Chemtoll's involvement in the process and because he assumed that Chemtoll was using the applicant's formulation to produce an FOO for SOILL without the applicant's consent and in contravention of its non-disclosure agreement, Mr Overberg met with Mr Theunissen of Chemtoll. During that meeting Mr Overberg was told, for the first time, that Mr Nolte was involved in what Mr Overberg referred to as "the scheme" and that Mr Nolte was "an agent or consultant of some sort" to SOILL. The applicant seeks an interim interdict restraining the respondents from using its formulation for a fruit drying oil known as Pylene FOO.

Discussion: Mr Overberg concluded that SOILL was using the applicant's FOO formulation to produce its competing product and that it did so with the assistance of Mr Nolte and Baychem. The applicant relies on its claim to own the formulation of the FOO being produced by Chemtoll on behalf of SOILL for the relief sought by it against all the respondents. In relation to Mr Nolte, the applicant also relies on Mr Nolte's breach of his fiduciary duty (as a previous director of the applicant) not to use information confidential to the applicant for his own benefit. This duty remains with a director after his resignation and is breached if it involves the use of confidential information that is worthy of protection. While it is correct that SOILL has been in the process of developing an FDO since 2015 it was unable to do so effectively until it engaged the services of Mr Nolte and Baychem. What gave the applicant its competitive advantage enabling it to be the only local manufacturer of an FDO capable of competing with Victoria Chemicals for price and quality was its formulation for Pylene FDO. Mr Nolte admitted that he is one of only a handful of people who know the formulation of Pylene FDO. This admission is sufficient to establish, prima facie, that the applicant's formulation of Pylene FDO is confidential to the applicant.

Findings: Whilst Mr Nolte may have subjectively believed he owned the technology, prima facie the technology is owned by the applicant. The applicant has established, prima facie, that Mr Nolte disclosed the applicant's formulation of Pylene FOO to SOILL and that such conduct is a breach of his ongoing fiduciary duty not to disclose information confidential to the applicant and which is worthy of protection in the hands of the applicant. The applicant has established, prima facie, that it owns the formulation of Pylene FOO, and that the formulation thereof is confidential to it. Those rights of ownership and confidentiality are being infringed by Mr Nolte, Baychem and SOILL. The loss of turnover caused by the production of the SOILL FOO and the sale thereof by SOILL is very significant, amounting to almost half of the applicant's business. A small enterprise such as the applicant will not be able to sustain such losses for any period and without interim interdictory relief there is a very real prospect that it will close with devastating effects for all concerned including its employees.

Order: The interim interdict is granted.

MANCA AJ

Facts: The applicant (Solo Foods) has obtained registration of the mark VITA NUT in terms of a trade mark registration. One of the goods classified under Class 29 is peanut butter and it is this product which Solo Foods manufactures and in relation to which it uses the mark. Solo Foods’ rights in its registered trade mark date from 16 May 2018, which is when it filed its application for registration. The respondent (Kalinda Trading) also produces peanut butter and it has been making use of the mark VITA NUTS in relation to that product prior to 16 May 2018. Kalinda Trading does not dispute that the mark VITA NUTS is, at the very least, confusingly or deceptively similar to Solo Foods’ registered trademark. Solo Foods alleges that it has been operating a peanut butter manufacturing mill since 2003. Its primary business has been to supply peanut butter to underprivileged school children and mines. It also claims that its peanut butter products have been, and continue to be, sold to various outlets. It also alleges that it has been using the VITA NUT trade mark for its peanut butter and paste products since at least 2003 and that, over the years, it has built significant goodwill and reputation in the market for these products.

Application: In the primary application, Solo Foods, relying on its trade mark registration, seeks an interdict in terms of the Trade Marks Act 194 of 1993 to prevent Kalinda Trading and the remaining respondents from using the mark VITA NUTS, as well as ancillary relief. Kalinda Trading seeks to defeat the main application with a counter application for the cancellation of Solo Foods’ trade mark registration. Kalinda Trading alleges that it has made extensive use of the trade mark VITA NUTS, and has therefore acquired a reputation and goodwill associated with the mark. On this basis, it contends that the entry of Solo Foods’ VITA NUT mark on the register of trademarks was wrongly made by the Registrar of Trade Marks.

Discussion: On 27 November 2019, the applicant's trade mark application was advertised in the Patents Journal in terms of section 17 of the Trade Marks Act. Following the advertisement, interested persons had three months to oppose the registration. Somewhat surprisingly, notwithstanding their knowledge of Solo Foods’ application, the respondents did not oppose the registration. As there was no opposition at the end of the three months, the Registrar of Trade Marks granted registration on 12 May 2020. On 3 June 2020, Solo Foods became aware that its trade mark application had been successful. Kalinda Trading’s marks, used in connection with their peanut butter products, are at the very least confusingly similar to the applicant's registered trade mark VITA NUT. Kalinda Trading accepts that, applying the relevant tests, the marks VITA NUT and VITA NUTS used by the respective parties in this case, in connection with their peanut butter products, is reasonably likely to cause deception and confusion.

Findings: To establish the existence of the reputation claimed, it is necessary for Kalinda Trading to show that the mark and reputation is associated in the minds of the public with the business in question, being Kalinda Trading’s peanut butter products. Although the respondents have not provided the sales figures for the period being the effective date of the registration of Solo Foods’ trade mark, it was in all likelihood significantly less than the amount earned in the full year. Kalinda Trading had not developed a sufficient reputation with its VITA NUTS products within the relevant period. Its sales do not point to that conclusion at all. Another consideration is that the period during which Kalinda Trading’s VITA NUTS products were visible and available to consumers was brief, lasting no more than eight months. This is hardly adequate time to build up a significant brand reputation. Solo Foods has proven that it commenced using the mark many years before Kalinda Trading. Solo Foods established a reputation or goodwill associated with its use of the mark.

Order: The first and second respondents, in terms of section 34(1)(a) of the Trade Marks Act 194 of 1993, are interdicted and restrained from infringing trade mark VITA NUT in class 29 by using, in the course of trade, any mark, including the mark VITA NUTS, identical to, alternatively, deceptively or confusingly similar to, this registered trade mark in respect of goods for which the applicant’s trade mark is registered.

GOTZ AJ

Facts: The applicant is the proprietor of two registered POLO device trade marks. They are described as pictural devices of single polo players each astride a pony engaged in play. The respondent is the proprietor of the MARK ANTHONY word mark. The respondent applied for registration of its device, called "the racer and horse device". The device depicts a jockey sitting on a horse in full gallop. The article of clothing which informs the application is socks and thus the device when applied to this article of clothing is very small. The respondent's get-up includes the word MARK ANTHONY as well as the racer and horse device. The applicant's device trade marks are used on its goods and are used both alone or with the POLO word trade mark and the latter is also used alone.

Application: The applicant seeks to interdict the respondent from infringing its two trade marks and seeks further trade mark infringement relief. It bases its application on section 34(1)(a) and section 34(1)(c) of the Trade Marks Act 194 of 1993. The court is required to exercise a value judgment on the question of the likelihood of deception or confusion.

Discussion: The evidence adduced by the applicant as to its background, distinctiveness, goodwill and reputation informs its case that the POLO mark has earned, and still enjoys, an immense goodwill and reputation and that the POLO trade marks have become firmly established in South Africa for more than 40 years. The sale of the applicant's socks alone equates to almost R20,9 million for the period 2013 to 2022, and in 2021/2022 financial year to R2,8 million alone. The applicant says it has created a strong reputational link and association between it, its trade marks and its products and services. The respondent takes issue with this. It argues that most of the evidence that has been attached amounts to hearsay evidence, which is inadmissible and does not justify the conclusion that the applicant's device is well-known. The respondent offers no cogent evidence to demonstrate that the applicant's device and mark is not well-known in the market or that they have become distinctive in their use. The respondent's case is that one cannot claim simply that because the device depicts or incorporates a horse and rider feature that it is similar and therefore the objectives of section 34(1)(a) or section 34(1)(c) are achieved by that fact alone. This, it argues, will allow the applicant to enforce a monopoly over every depiction of a horse and/or horse and rider.

Findings: What lends credence to the applicant's case is the argument that there is confusion or deception in the market: in October 2022, Mr Guldenpfennig visited PK Outfitters in Fordsburg. He asked for polka dotted POLO socks. The sales assistant gave him polka dotted socks manufactured by the respondent and insisted that they were POLO socks. Given that the device marks are not enunciated, there is no aural comparison to be made to further remove any deception or confusion, thus the deception or confusion arise from the visual and conceptual differences between the applicant's and the respondent's devices. The parties are direct commercial competitors. Their goods compete in the market in the same class. The evidence of Mr Guldenpfennig cannot be either understated or ignored. Given what occurred, the point is that the respondent would significantly benefit in the consumer's association of its goods with the applicant's, given the distinctive character and repute of the applicant's marks and device. This association would therefore result in the loss or diminishment of advertising value and selling power of the applicant's marks and the resultant enhancement of the respondent's. 

Order: The application succeeds.

NEUKIRCHER J

Facts: The plaintiff is Technical Systems (TS) which manufactures conveyor-driven feed systems for poultry and other livestock. These consist principally of two products: poultry feed chain and a spiral wire product known as auger. The chain is used as a conveyor belt to transport feed to battery chickens in a trough. Christiaan Kurz (CK) was employed by the plaintiff as a plant engineer from 2001 to 2009, when he resigned, and he trades under Feed Chain Industries and is also the director of CQuiptech and was involved in the establishment of CGC industries (the defendants, with CK’s friend and business partner, Carl William Richter).

Claim: TS sues for damages and claims that the defendants are competing unlawfully with it and have wrongfully misappropriated confidential information and technological “know-how” belonging to it, pertaining to its set-up and process for the manufacturing of feed chain, as well as other trade secrets. It is alleged that they have infringed the copyright which the plaintiff enjoyed in the protected technical drawings of the production process and works of craftsmanship and that the design, set-up and material specifications of the manufacturing process which is utilized by the defendants in their production of feed chain is the same, or substantially the same, as that which is employed by the plaintiff. A total of 23 witnesses, which included several mechanical, process and design engineers, draughtsmen, tool-setters and toolmakers, testified: 16 for the plaintiff and 7 for the defendants.

Unlawful competition: In setting up a competing plant utilising the confidential information to replicate the plaintiff’s confidential processes the defendants acted unlawfully. By the time CK was taken into the plaintiff’s employ it was already producing feed chain utilising the processes it had developed, and these were simply refined during the years that he worked for the plaintiff. As for CK’s purported reliance on the constitutional rights set out in sections 10 (dignity) and 22 (freedom of trade) of the Constitution, neither of these sections grant a licence to an ex-employee to steal or misappropriate valuable confidential information and trade secrets of his employer (on which the heart of his enterprise has been built over many years), and a right to use them.

Copyright: In terms of section 7 of the Copyright Act 98 of 1978, direct infringement occurs when a protected work is reproduced “in any manner or form”. The central issue that requires determination is whether the defendants have wrongfully “reproduced or adapted” the plaintiff’s protected works of craftmanship and drawings. The plaintiff has succeeded, overwhelmingly, in showing that the defendants copied the essential features of the plaintiff’s parts and components, added certain non-material aspects to them and removed or altered others, to produce theirs. In short, they reproduced every material aspect of the works in which the plaintiff enjoyed copyright, and that accounts for the substantial similarity in the parties’ works.

Order: The defendants are interdicted and restrained from infringing the plaintiff’s copyright in the works (including the drawings) listed on annex A. The defendants are interdicted from infringing the plaintiff’s confidential information or trade secrets in those items listed on annex B. The sheriff is directed and authorised to attach the listed items, or components of these items, of the defendants’ feed chain manufacturing line. An enquiry shall be held to investigate and determine the nature and quantum of the damages suffered by the plaintiff as a result of the infringement of its copyright, confidential information and trade secrets, including the amount of punitive damages (if any) which may be payable by the defendants.

SHER J

Facts: Mrs Greyvenstein, an investigator employed at Summit, purchased certain goods from the applicant (My-China Discount Store). This was after Summit had received instructions to conduct a test purchase from Mr Saunders, a senior associate at Eversheds. The test purchase was bagged and sealed at Summit and handed over to Eversheds. Mr Saunders averred that in his assessment the test purchase were counterfeit goods in terms of the Counterfeit Goods Act 37 of 1997. He further stated that he had received brand identification training from the Lego Group. The respondents complained against the applicant to the Directorate of Priority Crime Investigations Serious Commercial Crime Unit. The section 3(1) complaint comprised of the affidavits of Mr Saunders (complaint affidavit), Mr Oumar’s and Mrs Greyvenstein’s. Lego urged the respondents to apply for a search and seizure warrant authorizing the search of the applicant’s premises and the seizure of counterfeit goods bearing Lego’s purported intellectual property rights. On the strength of these affidavits, the third respondent, Januarie, applied for a search and seizure warrant in terms of section 6(1) of the Counterfeit Goods Act.

Application: Following an ex parte application before the magistrate, a search and seizure warrant was authorized in terms of section 6(1) of the Counterfeit Goods Act. With more than 9,500 items seized from its premises, the applicant brings an application to set aside the warrant and prays for an order authorizing the return of the goods seized from its premises.

Discussion: The powers of search and seizure are only available to the officer following an authorisation by a judge of the High Court or a magistrate who has jurisdiction in the applicable area in terms of section 6(1) of the Counterfeit Goods Act. Thereafter, the provisions of section 7(2)(a) of the Counterfeit Goods Act read with section 9(1)(a) must be complied with. In his affidavit, Januarie wrote that he received an affidavit of complaint deposed to by Saunders in terms of section 3. Importantly, he wrote that “having considered the averments in the complaint made under oath” he was reasonably satisfied that Saunders was prima facie entitled to lay a complaint in terms of section 3. In deciding whether Januarie, prima facie, made out a case which entitled the authorization of the search and seizure warrant, the magistrate of necessity, must have read the three affidavits, namely the complaint affidavit by Saunders, Greyvenstein’s affidavit and Oumar’s affidavit. It is bizarre that Januarie sought a search and seizure warrant for copyrights and trade marks, which were never mentioned in the complaint affidavit. Saunders never mentioned those trademarks in the complaint affidavit.

Findings: Januarie sought a search and seizure warrant for registered copyrights. Saunders’ complaint affidavit made no mention of those registered copyrights. Besides the questionable adjective “registered” copyright, it is unknown from where he got these trade marks and registered copyrights. What is worse is that the magistrate authorized a warrant for the search and seizure of these trademarks and registered copyrights. It is mind-boggling from where the respondents got these trade marks and registered copyright mentioned under annexures “A” and “B”. Inevitably, one asks oneself a rhetorical question whether the magistrate took the trouble to read Saunders’ complaint affidavit or simply followed what Januarie told her. Despite the failure to adhere to the test, the magistrate authorized the warrant. The totality of evidence leads to the ineluctable finding that the magistrate failed to apply her mind or exercise her discretion properly or at all when authorizing the search and seizure warrant. Even on the lowest of thresholds, let alone on prima facie basis, the facts do not pass muster to justify the authorization of a search and seizure warrant.

Order: The warrant is set aside. The respondents are ordered to return the goods they seized to the applicant.

MOTHA J

Facts: The applicant, Bayer, is the proprietor of the registered trade mark XARELTO registered in Class 5 of the trade marks register. This trademark was applied for by the applicant in 2004 and thereupon registered with the Registrar of Trade Marks in 2008 in respect of pharmaceutical preparations and substances, diagnostic preparations and reagents for medical use and which trade mark remains of full force and effect. The respondent, Austel Pharmaceuticals, is the proprietor of trade mark registration REZALTO also registered in Class 5 of the register. That application for registration was filed in 2018 and registered in 2020 in respect of pharmaceuticals, medical and veterinary preparations, and sanitary preparations for medical purposes, among other similar pharmaceuticals. The applicant and the respondent are competitors in South Africa.

Application: This application concerns a trademark infringement and expungement application and wherein the infringement is based on section 34(1)(a) of the Trade Marks Act 194 of 1993, and the expungement or cancellation on sections (10), (12) and (14) of the Act. Reference is also made to section 24 of the Act in contending with the general power to rectify entries appearing in the register by the Registrar of Trade Marks.

Discussion: The respondent is using the trademark REZALTO in marketing and selling a generic version of the applicant’s XARELTO anti-coagulant medication possessing the ingredient rivaroxaban and which the respondent advertises as breaking down clots. REZALTO is the generic equivalent of XARELTO prescription anti-coagulant medication available in South Africa. XARELTO and REZALTO are interchangeable and substitutable with one another and commercially as products are in direct competition with each other. A side-by-side comparison of XARELTO and REZALTO is apt. Both share similar phonetic elements. The trade marks are similar to the extent of being confusingly similar. The trade marks are also similar visually. With the marks being plainly similar visually and phonetically, consumers for their part rely on a holistic comparison of respective trade marks not in the process disseminating or segmenting trade mark words or names. In so doing, there is clearly scope to confuse the XARELTO and REZALTO trade marks and related products marketed and sold under the trademarks.

Findings: The respondent has confirmed that the goods covered, marketed and sold under the REZALTO trademark are for all intents and purposes identical to those covered by the applicant’s registration. The applicant’s XARELTO trademark bears reference to reagents for medical use while that of the respondent incorporates food for babies, dental wax and herbicides. All the above goods are capable of being purchased off the shelf and by ordinary consumers who upon assessment of such goods and related trade mark names may become confused or be deceived thereby. There can be little doubt that consumers are likely to be confused or deceived in believing that products sold under the REZALTO trademark are the same or connected with that sold under XARELTO trademark. In these circumstances, the REZALTO trade mark ought never to have been registered and stands to be removed from the trade marks register and in terms of section 10(14) of the Trade Marks Act.

Order: The trade mark registration REZALTO in Class 5 in the name of the respondent is cancelled and the registrar is directed to remove it from the register of trade marks. The respondent is interdicted from infringing rights of the applicant and its trade mark registration.

MEADEN AJ