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Reference Book on Trade Mark Litigation

HH Reference1.     Sources of Law

1.1 What are the principal sources of law and regulation relating to trade marks and trade mark litigation?

The principle sources of trade mark law are the Trade Marks Act of 1993 (“the Act”) and the common law which is rooted in Roman Dutch Law. Other statues having a  bearing on the operation of trade mark law include the Counterfeit Goods Act of 1997, the Merchandise Marks Act of 1941, the Intellectual Property Laws Amendment Act of 1997, the Competition Act of 1998 and the Constitution of the Republic of South Africa Act of 1996.  South Africa was a signatory to GATT and became a member of the World Trade Organisation with effect from the 31st January 1995.  Although the agreement on Trade Related Aspects of Intellectual Property Rights was ratified by Parlament in April 1995, unfortunately the Treaty has not yet been made part of South Africa’s domestic law.

1.2 What is the order of priority of the relevant sources, i.e. which take precedence in the event of a conflict?          

In general, the Constitution would take precedence over the Trade Marks Act and its related laws.  In terms of case law, the Supreme Court of Appeal decisions will take precedence over High Court decisions which in time turn take precedence over the decision of the Registrar of Trade Marks.

 

2.     Court and Administrative System

2.1 Can third parties oppose / request cancellation of a national or supranational (e.g. Benelux, Madrid Agreement and Protocol, Community Trademarks) trademark application / registration in your country? If so, on what grounds? Please briefly describe the opposition / cancellation procedure(s). 

2.1.1 Opposition Proceedings

The Act provides that any interested person may oppose the grant of a trade mark within 3 months of its date of advertisement in the South African Patent Journal which term may be extended by a further 3 months on request by the Opponent.  Thereafter, the term may be extended by agreement between the parties or by the Registrar on application.

Although not exhaustive, Section 10 of the Trade Marks Act provides the following grounds for opposition, namely that:-

a. the mark is not inherently capable of distinguishing;

b. the mark consists exclusively of sign or an indication which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or other characteristics of the goods or services, or the mode of time of production of the goods or rendering of the services; 

c. the mark consists exclusively of a sign or an indication which has become    customary in    the current language or in the bona fide and established practices of the trade;

d. the applicant for registration has no bona fide claim to proprietorship;

e. the applicant for registration has no bona fide intention of using it as a trade mark;

f. the mark consists exclusively of a shape, configuration, colour or pattern of goods where such shape, configuration or pattern is necessary to obtain a specific technical result or results from the nature of the goods themselves where the mark institutes a reproduction, imitation or translation of a mark which is         entitled for protection under the Paris Convention as a well known trade mark and which is used for goods and/or services identical or similar to the goods and/or services in respect of the well known trade mark where such use is likely to cause deception or confusion;

g. the application was made malle fide;

h. the mark falls tail of any Heraldic Act of signatories to the Paris Convention;

i. a mark consists of a container for goods or the shape configuration, colour or pattern of goods where the registration of such mark is or has become likely to limit the development of any art or industry;

j. the mark is inherently deceptive or which would be likely to deceive or cause confusion, be contrary to the law, be contra bonos mores or be likely to give offence to any class of person;

k. the mark, as a result of the manner in which it has been used, would be likely to cause deception or confusion;

l. the mark is identical or similar to a previously registered mark or a mark which has an earlier application date.

As far as the opposition procedures are concerned, the respondent will have 1 month from the formal lodging of the opposition application to notify the opponent if he intends defending the opposition.   Within 2 months thereafter, the applicant for registration must deliver his answering evidence whereafter the opponent would have a month to deliver his replying evidence.  The matter would thereafter be set down for hearing by the Registrar of Trade Marks and who enjoys powers equivalent to those of a judge of the High Court.  Alternatively, the Opposer could launch the opposition directly before the High Court if he so elects.

2.1.2 Expungement/Cancellation

Apart from the conventional 5 year non-use ground, any interested party may at any time after the registration of a trade mark, apply for the expungement of such trade mark on the basis of any of the grounds for opposition and which further includes the registrant’s bona fide intention to use the trade mark. The application procedure is similar to that for opposition proceedings.

2.2 In which courts are trademarks enforced? Are they specialised trademarks courts? If not, what level of expertise can a trademark holder expect from the courts?

Enforcements of trade marks i.e. infringement, is effected by all High Courts of South Africa and thereafter by the Supreme Court of Appeal in the event of a decision being appealed from one of the High Courts.  The courts are not specialised trade mark courts although the judges seized with hearing the matters are High Court judges.  A litigant can expect a high level of competence before a High Court judge.       

2.3 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?

South Africa has a precedent system.  Consequently a Supreme Court of Appeal judgment will hold sway over any High Court judgment, which will in turn hold sway over any judgment of the Registrar of Trade Marks who is deemed by the Act, to be a High Court judge.  Although not binding, foreign decisions will be considered by the courts.

2.4 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or national or supranational government agency should they be brought (e.g. the national Trademark Office or the OHIM in Alicante)?

The High Court can and often does deal with infringement and invalidity simultaneously.  

2.5 Who can represent parties before the courts handling trademark litigation and/or the national or supranational government agency dealing with trademark validity issues?

Although a party can represent himself, it is strongly recommended that any trade mark matter be handled by a registered trade mark attorney.   

2.6 What is the language of the proceedings? Is there a choice of language?

Although most hearings are conducted in English, South African law provides that a litigant be allowed to conduct a matter in any of South Africa’s 11 official languages.  In such instance, translators will be provided by the court.

 

3.     Substantive Law

3.1 To what extent are unregistered trademarks protected under your country’s laws?

Unregistered marks are protected under the common law and by way of Section 35 of the Act which provides for the protection of well-known marks under the Paris Convention. 

3.2 How is trademark infringement assessed? Does protection extend to translations or to conceptually identical but graphically different trademarks?

Assessment of trade mark infringement is best summarised by Plascon – Evans Paints Ltd vs Van Riebeeck Paints (Pty) Ltd which stated:-

The determination of these questions involves essential comparison between the mark used by the defendant and the registered mark and having regard to the similarities and differences in the two marks and the assessment of the impact which the defendant’s mark would make upon the average type of consumer who would be likely to purchase the kind of goods to which marks are applied.  The notional customer must be conceived of as a person of average intelligence, having proper eyesight and buying with ordinary caution.  The comparison must be made with reference to the sense, sound and appearance of the marks.  The marks must be viewed as they would be encountered in the market place and against a background of relevant surrounding circumstances.  Marks must not only be considered side by side, but also separately.  It must be borne in mind that the ordinary purchaser may encounter goods, bearing the defendant’s mark with an imperfect recollection of the registered mark and due allowance must me made for this.  If each of the marks contain a main or dominant feature or idea, the likely impact made by this on the mind of the customer must be taken into account.  As it has been put, marks are remembered rather by general impression or by some significant or striking feature and by photographic recollection of the whole.  And finally, consideration must be given to the manner in which the marks are likely to be employed as, for example the use of name marks in conjunction with a generic description of the goods.

In general however, the test can be applied to any one of the visual, aural and/or conceptual similarities between the marks and depending on the facts, could extend to translations or to conceptually identical but graphically different trade marks. 

3.3 Are there other causes of action for trademarks (e.g. dilution)?

Section 34(1)(c) of the South African Trade Marks Act relating to dilution provides that the rights acquired by registration of a trade mark shall be infringed by the unauthorised use in the course of trade in relation to any goods or services of a mark which is identical or similar to a trade mark which is identical or similar to a trade mark registered, if such trade mark is well known in the Republic and the use of said mark would be likely to take unfair advantage of, or be detrimental to the distinctive character or the repute of the registered trade mark, notwithstanding the absence of confusion or deception.

3.4 Can a trademark be enforced against a domain name, a trade name, a pseudonym or other distinctive signs?

A registered, well-known and/or common trade mark can be enforced against a domain name, a trade name, a pseudonym or other distinctive signs.   

3.5 On what grounds can a trademark be invalidated?

Grounds of invalidation are set out in paragraph 2.1 above. 

3.6 Must use requirements be satisfied to maintain the trademark registration? If so, is there any definition of what constitutes use?

Whilst there are no specific use requirements for the maintaining of a trade mark registration, the provisions relating to the 5 year non-use and intention to use are applicable.  The authorities have indicated that any use, albeit a scintila thereof, must be bona fide. 

3.7 What other defences, if any, are available to an alleged infringer? Does your country’s law provide for prior user rights?

Defences available to an alleged infringer would include all those sections relating to unregistrable marks as mentioned above in paragraph 2.1.  Further defences set out in Section 34(2) include bona fide use by person of his own name, the name of his place of business, the name of any of his predecessor’s in business or the name of any such predecessor’s place of business.  Further, a registered trade mark is not infringed by the use of any person of any bona fide description or indication of the kind, quality, quantity, intended purpose, value, geographic origin or other characteristics of goods or services, the mode or time of protection of goods or the rendering of the services. A further defence is also provided by the bona fide use of the mark in relation to goods or services where it is reasonable to indicate the intended purpose of such goods and services.  No infringement will take place where goods are imported into South Africa and which are subsequently distributed or sold in the Republic on which the trade mark has been applied with the consent of the proprietor.  Another defence includes the bona fide use by a person of any utilitarian features embodied in a container, shape, configuration, colour or pattern which is registered as a trade mark. Section 34(2)(g) provides a defence on the basis of concurrent registration.  Section 36 provides for the saving invested rights in relation to a person who has made continuous and bona fide use of his mark from a date, both to the registration and to the user by the plaintiff.  It is to be noted that Section 36(2) also serves to indemnify persons who adopted well known foreign trade marks in South Africa prior to the enactment of the South African Trade Marks Act.  Whilst the defences of unclean hands, acquiescence and estoppel are recognised, neither latches nor the exception doli constitute a defence to infringement in terms of South African Law.

3.8 To what extent can enforcement of a trademark expose the trademark holder to liability for an antitrust violation?

The Competition Act defines certain prohibited and restrictive practices as well as the abuse of a dominant position.   Accordingly, where a trade mark has been used without the Competition Commissions exemption in respect of one of the prohibited and/or restricted practices, such practices may well lead to liability for an antitrust violation and which could also result in the expungement of the mark.

3.9 Can a court only partially invalidate a trademark?

From a practical point of view, the partial invalidity generally relates to the partial expungement of the goods and/or services from the specification of a registered trade mark.

3.10 Is it possible to amend a registered trademark during a lawsuit?

It is possible to amend a registered trade mark during litigation. 

3.11 Are there any grounds on which an otherwise valid trademark can be deemed unenforceable, owing to misconduct by the trademark holder, or for some other reason (e.g. expiry of time limit)?

As mentioned in paragraph 3.7 above, a trade mark can certainly be deemed unenforceable on the basis of unclean hands. 

3.12 Can a trademark holder bring a lawsuit claiming both trademark infringement and unfair competition for the same set of facts? Is it possible to bring parallel unfair competition proceedings, whether or not the trademark is registered?

A registrant can simultaneously launch trade mark infringement proceedings under the Trade Mark Act and in terms of the common law actions of unfair competition and passing-off for same set of facts.

 

4.     Parties to Litigation

4.1 Who can sue for trademark infringement (trademark holder, exclusive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?

Only the proprietor and/or registered licensees can sue for trade mark infringement.  In the event that a licensee institutes proceedings wherein a proprietor does not wish to take part, the proprietor will however be named as a co-defendant.

4.2 Under what conditions, if any, can an alleged infringer bring a lawsuit to obtain a declaratory judgement on non-infringement?

Whilst provision is made in the Act for the providing of a certificate of contested validity of a trade mark, the same is not true for a declarator of non-infringement.  In such cases, the alleged infringer would simply have to wait for an infringement action to be brought against it.   

4.3 Who can be sued for trademark infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to trademark infringement by someone else?

Any person who uses the trade mark without the authority of the trade mark proprietor can be sued for infringement.  Depending on the circumstances therefore, company directors could be sued in their personal names.  Whilst there is no case law in South Africa on contributory infringement there does not appear to be any statutory provision preventing same.

4.4 Is it possible to add or subtract parties during litigation?

It is possible to add or subtract parties during litigation respectively by the joinder of a third party or by withdrawal of a claim.  It is generally accepted practice in the case of a withdrawal that a tender be made for wasted costs. 

 

5.     Enforcement Options

5.1 What options are open to a trademark holder when seeking to enforce its rights in your country?

The remedies available to the registrant would include an interdict, an order for the delivery-up for the destruction of goods, order for disclosure, damages, reasonable royalty in lieu of damages including costs occasioned by the institution of the suit.  As far as interdicts are concerned, our courts recognise final interdicts, interim interdicts pending the final determination of infringement and urgent relief which is effectively an interim interdict brought on the basis of urgency.  South African courts are also able to grant “Anton Pillar” orders which are generally made ex parte for the attachment and of articles and inspection of documents, in the possession of the alleged infringer, which constitute evidence of the alleged and unlawful activities.  As such orders are of a fairly draconian nature, a detailed list of requirements and safeguards have been laid down by the courts in order to avoid abuse of such practices.  The Counterfeit Goods Act and Merchandise Marks Act also provide for the seizure attachment of goods bearing a proprietors registered trade marks.

5.2 Are criminal proceedings available? If so, what are the sanctions?

Criminal proceedings are available under the Counterfeit Goods Act and Merchandise Marks Act and which allows the imposition of fines and imprisonment of offenders.

5.3 Are border measures available?

Customs and excise authorities are seized with the power to seize goods which they suspect would contravene any of the Customs and Excise Act, Counterfeit Goods Act and Merchandise Market Act.

5.4 To what extent are courts willing to grant cross-border or extra-territorial injunctions?      

South African courts are not willing to grant cross-border or extra-territorial injunctions.  

5.5 To what extent do courts recognise the blocking effect of “torpedo” actions abroad?

South African courts do not recognise “torpedo” actions.

5.6 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve trademark disputes? How widespread are ADR methods and in which sectors? If arbitration is available to assess invalidity, will your Trademark Office recognise and execute an arbitral award declaring a trademark invalid? 

Whilst ADR methods are available for resolving trade mark disputes, they have not found common favour to date.  In April 2007, legislation was enacted for the resolution of domain name disputes.  Initial indications are that this procedure is gaining popularity.  Unlike the South African Patent Act, which provides that disputes over a patent may not be decided by an arbitrator, the same is not true for trade marks.  Accordingly, it is submitted that the Trade Marks Office will recognise and execute an arbitrators award however, it would be important that a clause be inserted into the arbitration agreement that the losing party would waive its right to have the registry make a finding on the validity of the arbitrators award.

 

6.     Procedure in Civil Courts

6.1 What is the format of trademark infringement proceedings?

Trade mark infringement proceedings are normally brought by way of action and which require cross-examination of the various parties.  In proceedings where there is no dispute of facts but rather a dispute of law, the proprietor may go by way of application.  Application proceedings are brought by way of Notice of Motion supported by affidavitory evidence.

6.2 Are disputed issues decided by a judge or a jury?

Both action and application proceedings are decided by a judge of the High Court. 

6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?

As explained above, witnesses and experts will be cross-examined in actions whilst in applications the evidence is put before the court by way of affidavit.  In some instances where an application is brought and it is found that the affidavit evidence of the witnesses is contradictory, the court may give directions to allow the deponents to the affidavits to give oral evidence and to allow cross-examination.

6.4 To what extent is survey evidence used (e.g. to support acquired distinctiveness, likelihood of confusion)? What is its relevance in proceedings (e.g. party allegation, evidence)? Who decides which consumers are questioned in the survey (e.g. the court, court expert)? What level of cost should one expect to incur to carry out a survey? Are these costs recoverable from the losing party?

Survey evidence by an independent third party generally appointed by the party wishing to support its evidence via such survey evidence is often used.  Generally the costs associated with carrying out surveys are in the order of US$15 000 - US$30 000.  Costs are normally recoverable from the losing party in terms of established practice in South Africa that the losing party is normally expected to pay the costs of the suit.

6.5 Is evidence obtained for criminal proceedings admissible in civil proceedings, and vice versa?

Depending on the manner in which the evidence was obtained and the relevance thereof, such evidence may be used.  It is however to be noted that this is generally not common practice and the court is largely averse to allowing same.

6.6 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?

In terms of the Act relating to Civil Procedure in the High Court, pre-trial discovery is required in all actions.  In general, each party is required to file a discovery affidavit well before the trial.  In the event that one party wishes to obtain evidence, it is entitled to request and indeed compel if necessary, that such evidence be discovered by the other side or from third parties. 

6.7 What level of proof is required for establishing infringement or invalidity?

As is the case in all the civil matters, proof of infringement or invalidity is based on the balance of probabilities. 

6.8 How long do trademark infringement proceedings typically last? Is it possible to expedite this process?

In the event that a matter is heard by the Registrar, the High Court and the Supreme Court of Appeal, a matter could take anywhere between 18 months and 5 years.  It may be possible to expedite the process by having the matter heard before an arbitrator.

6.9 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?

The most common delaying tactics would include taking exceptions, bringing applications for the striking out of irrelevant matter, amending of pleadings, counter-claiming and pleading that the matter is lis pendens. In general, the plaintiffs’ most efficient way of countering delaying tactics is to ensure that he meets the statutory time periods and enforcing observance of the time periods on the infringer in the event of its non-compliance.  Such counter-tactics may include issuing Notices of Bar in the event that pleadings are not delivered timeously.

 

7.     Final Remedies

7.1 What remedies are available against a trademark infringer (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc.)?

Remedies available to trade mark infringer are final interdicts, delivery up for destruction of infringing goods, awarding of costs for the launching of the infringement proceedings, damages and payment of a reasonable royalty for past infringements.

7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or customers?

A final injunction is by its very nature final.  Accordingly, continued infringement will constitute a contempt of court which carries with it criminal sanctions.  It goes with saying that such future infringement must be of exactly the same nature as that in respect of which the infringement action was granted.  Whilst the injunction will be effective against the infringer, this will not be so in the case of its suppliers or customers.  In this case, actions would have to be launched against their suppliers or customers separately.  Experience has shown that the most practical way of discouraging continued infringement by the supplier or customer is to advise them of the outcome of the judgment.

7.3 What monetary remedies are available against a trademark infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?

Monetary remedies available are set out above.  As far as punitive damages are concerned, such awards are rare in South Africa and would require a certain degree of reckless, irresponsible and reprehensible behaviour on the part of the infringer.

 

8.     Preliminary Relief

8.1. Is preliminary relief available? If so, what preliminary measures are available (e.g. preliminary injunction) and under what conditions?

Interim interdicts are available in circumstances where the applicant can show that he has a prima facie right, that there is a well grounded apprehension of irreparable harm if the interim relief is not granted, that the balance of convenience favours the applicant and further that there are no other satisfactory remedies available to the applicant.

8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?

As advised above, ex parte relief will be provided by way of an ex parte “Anton Pillar” order as mentioned in paragraph 5.1 above. 

8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefaçon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?

Whilst civil procedure in South Africa allows for the granting of an order for the searching of an infringer’s premises, where notice is given to the alleged infringer, this is rarely done.  In most cases this is done by way of the ex parte “Anton Pillar” order mentioned above or by way of the Counterfeit Goods and/or Merchandise Marks Act where the authorities are used as a vehicle for obtaining the necessary evidence albeit for criminal proceedings.  This evidence may, depending on the circumstances be used by the plaintiff in civil proceedings for infringement.

8.4 Can the defendant put the validity of a trademark at issue in preliminary injunction proceedings?

The respondent (as opposed to a defendant because all interim injunctions proceedings are brought by way of application) can always put the validity of a trade mark at issue.  Such allegation however, rarely has any effect as there is a presumption that upon registration, a trade mark is prima facie valid. 

8.5 What is the format of preliminary injunction proceedings?

In general, the main point of issue in preliminary injunctions applies to the person who is going to be most inconvenienced in the event that the decision goes their way.

8.6 To what extent are documents, affidavits, witnesses, survey evidence, and/or (court-appointed or private) experts used in preliminary injunction proceedings?

As already stated, all evidence in interim interdict applications are brought by way of affidavit.

8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?

The level of proof requires a balance of probabilities as is the accepted norm in all civil matters.  As far as infringement is concerned, all the applicant must show is that he has a prima facie right i.e. a registered trade mark.  As far as invalidity is concerned, experience has shown that an attack on validity is largely of little effect as the registration of the mark is deemed to be prima facie evidence of the validity of the mark.

8.8 How long do preliminary injunction proceedings typically last? 

As interim interdicts are not appealable, the interdict will endure until the finalisation of the main infringement action.  Depending on the urgency with which the application is brought, an interim interdict can be granted within a month of its launching.

8.9 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?

It is necessary to launch the infringement action following the grant of an interim order.  In general, the urgent and final infringement action are often instituted simultaneously.       

 

9.     Appeal Procedure

9.1 What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?

As already indicated above, interim proceedings are not appealable.  As far as the main proceedings are concerned, the infringer would be entitled to first apply for leave to appeal from the court a quo to either three judges of the same High Court or to the Supreme Court of Appeal.  In the event that leave is not granted, the infringer is entitled to petition the Chief Justice of the Supreme Court of Appeal.

9.2 How long do appeal proceedings typically last?

At present, it takes between 2 and 4 years for a matter to be heard by the Supreme Court of Appeal.

 

10.    Litigation Costs

10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?

The costs associated with an interim application, main infringement action and appeal are generally in the order of US$20 000 - US$40 000, US$ 50 000 - US$100 000 and US$30 000 - US$60 000 respectively.

10.2 Are costs recoverable from the losing party?

Costs can be awarded on a party-party, attorney-client and attorney-own-client scale and which generally amounts to 50%, 75% and 100% respectively of the costs actually incurred by the successful party.

 

11.    Forthcoming legislation

11.1 What are the important developing and emerging trends in your country’s trademark law?

Apart from acceptance of reasonable royalties being paid in lieu of damages, there do not appear to be any important developing and emerging trends in South African law different from those experienced through the rest of the Convention Countries.         

11.2 To the extent it relates to trademark enforcement, please outline any major trademark legislation in the pipeline.

South Africa expects to join the Madrid Protocol at the end of 2008.

           

12.    Useful references

12.1 Please identify any useful works of reference relating to trademark law and trademark litigation in your country, including useful websites.

           

Hahn & Hahn Inc        www.hahn.co.za

            Domain Disputes:       www.domaindisputes.co.za

            South African Law of Trade Marks  by Webster & Page