BE WARY HOW YOU TREAD

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW -

busi­ness propo­si­tion, and it had only started tak­ing is­sue with Tyrecor’s use years later when it had se­cured the reg­is­tra­tion. The court said this: “It is im­pos­si­ble in those cir­cum­stances to come to any con­clu­sion other than that Etrac­tion’s pur­pose in seek­ing the reg­is­tra­tion of the In­fin­ity mark in re­spect of tyres was to stul­tify Tyrecor’s busi­ness. There is not a jot … of ev­i­dence to sug­gest that it gen­uinely in­tended at any stage to trade in tyres un­der the In­fin­ity mark.”

Recog­nis­ing that, even with a reg­is­tra­tion re­stricted to tyre rims, Etrac­tion might still claim in­fringe­ment based on the sim­i­lar­ity be­tween tyre rims and tyres, the court went fur­ther still. It said: “To put the mat­ter be­yond doubt the terms of reg­is­tra­tion of Etrac­tion’s mark should be fur­ther amended by the in­ser­tion of a clear dis­claimer that the reg­is­tered mark does not in­clude tyres.”

So, a rare and welcome de­ci­sion on the prior use de­fence. For those of you who are not out-and-out trade­mark en­thu­si­asts, I strongly rec­om­mend that you stop read­ing here. That’s be­cause the SCA saw fit to cover a lot of other ground too. The Etrac­tion judg­ment is dense and com­plex, and it is as likely to be re­mem- bered for some of the other is­sues cov­ered as it is for prior use.

In or­der to de­cide whether Falck was a pre­de­ces­sor in ti­tle to Tyrecor, the SCA dis­cussed the is­sue of whether a com­pany that merely im­ports or dis­trib­utes goods (in other words plays no role in their man­u­fac­ture) can be said to have used the trade­mark as a pro­pri­etor.

This led the court on to the is­sue of whether it is in fact pos­si­ble to own rights to an un­reg­is­tered trade­mark, or whether the rights are ac­tu­ally in the good­will, an idea that also ex­presses it­self in the no­tion that you can­not as­sign an un­reg­is­tered trade­mark with­out good­will. The court said this: “Un­like a reg­is­tered trade­mark, an un­reg­is­tered mark is not it­self an in­cor­po­real as­set ca­pa­ble of be­ing owned .. .it con­trib­utes to the good­will of a busi­ness by iden­ti­fy­ing a busi­ness... it is in­ca­pable of be­ing alien­ated sep­a­rately from the good­will of that busi­ness.”

This led the court to con­clude that the prior use de­fence isn’t linked to own­er­ship: “It can­not there­fore be the case that in or­der to en­joy the pro­tec­tion af­forded by sec­tion 36(1), it is nec­es­sary to show that the party claim­ing pro­tec­tion owned the mark in is­sue.”

This, in turn, led the court to con­clude that the pur­pose of the prior use de­fence is to pro­tect com­mon law rights. This might sug­gest that the de­fence is avail­able sim­ply to those who are able to sue for pass­ing-off, an ac­tion that the court said is linked to rep­u­ta­tion rather than good­will (as it is in the UK): “The clear pur­pose of sec­tion 36(1) is to pro­tect com­mon law rights aris­ing from con­tin­u­ous and bona fide use of an un­reg­is­tered trade­mark prior to ei­ther the use or reg­is­tra­tion of the trade­mark in is­sue. Con­sis­tent with the pur­pose, any per­son en­ti­tled to bring a pass­ing off ac­tion based on the rep­u­ta­tion they had ac­quired from the use of the un­reg­is­tered mark would be en­ti­tled to in­voke sec­tion 36(1) against a claim from in­fringe­ment by the pro­pri­etor of a reg­is­tered mark.”

But, con­cluded the court, the prior use de­fence should not be con­fined to those with a rep­u­ta­tion. That is be­cause the word­ing of the sec­tion makes it quite clear that the de­fence is avail­able to any­one who can show hon­est, prior and con­tin­u­ous use.

As I said, some fairly deep stuff. This judg­ment is likely to be dis­cussed in many fu­ture court cases.

The court con­cluded that the pur­pose of the prior use de­fence is to pro­tect com­mon law rights

Pic­ture: THINK­STOCK

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