Freedom to Corrupt a Trade Mark - Revisited

Introduction

The so-called “Laugh It Off” trade mark case in which judgment was given by the Constitutional Court last year was the subject of much public interest. I wrote an article entitled “Trade Mark Dilution Laughed Off” on the judgment of the Constitutional Court [Laugh It Off Promotions CC v South African Breweries International (Finance) BV trading as Sabmark International and Freedom of Expression Institute – 2006 (1) SA 144 (CC)] and its implications for trade mark law and this was published in the October 2005 edition of the journal De Rebus. In that article I welcomed the fact that the Constitutional Court had in effect accorded equal status to intellectual property rights and the various fundamental rights enshrined in the Bill of Rights comprised in the Constitution. I found this solace despite the fact that in that case the Constitutional Court held against the trade mark proprietor and found that Laugh It Off Promotions had not infringed Sabmark International’s registered trade marks.

Laugh it Off Case

The Laugh It Off case dealt with the question of whether Sabmark’s registered BLACK LABEL & DEVICE was infringed by Laugh It Off Promotions’ use of a corrupted version of it, namely BLACK LABOUR & DEVICE, on t-shirts. The Cape Provincial Division of the High Court as well as the Supreme Court of Appeal upheld Sabmark’s trade mark infringement claim, but the Constitutional Court thought differently and overturned the decision of the Supreme Court of Appeal. The case concerned so-called trade mark infringement by dilution, which essentially amounts to disparagement of a registered trade mark, and the Constitutional Court found that the interests of the two competing parties, each with their rights having equal status, must be weighed up against each other in the light of the facts of the particular case. The court decided that Laugh It Off Promotions’ right of freedom of expression, i.e. making political commentary, must in the particular circumstances that prevailed take precedence over the trade mark rights of Sabmark.

Unlike the approach of the Supreme Court of Appeal, which was to make a finding that trade mark infringement had taken place and then to consider whether the constitutional right of freedom of speech afforded a defence to that infringement, the Constitutional Court took the view that the correct approach was that the wording of the relevant infringement provision of the Trade Marks Act must be viewed through the prism of the Constitution and must be interpreted in a manner which is least likely to conflict with the right of freedom of speech. This approach led to the crucial issue being whether the alleged infringing use “would be likely to take unfair advantage of, or be detrimental to, the distinctive character or repute of the registered trade mark” (Section 34(1)(c) of the Trade Marks Act, 1993). The Constitutional Court held that it was necessary that evidence should have been led to show that the use complained of would have caused economic damage to the trade mark proprietor, and since no such evidence had been adduced, the trade mark infringement claim failed. In trade mark law, showing the likelihood of economic damage of this nature in order to establish infringement is peculiar to infringement by dilution and does not apply to conventional trade mark infringement, where the test is essentially whether the two competing marks are confusingly similar to each other.

The trade mark BLACK LABOUR & DEVICE was interpreted as a comment on the labour practices of South African Breweries, the user of the relevant trade mark, during the Apartheid era. Labour practices in general were, of course, at the time fertile ground for comment. One can understand to some extent that someone purporting to comment on this situation could in principle have been commenting on a political issue where the right of freedom of speech comes into play. Would the position, however, be different if the trade mark used by Laugh It Off Promotions made no political commentary and purported to do no more than be cute or rude? For instance, what would have happened if Standard Bank Limited, one of the other traders who attracted the attention of Laugh It Off Promotions, had pursued a claim of trade mark infringement based on its STANDARD BANK DEVICE trade mark which was corrupted by Laugh It Off Promotions into STANDARD WANK & DEVICE, a mark which clearly did not purport to make any political statement.

Standard Wank Case

Standard Bank Limited advanced a claim of trade mark infringement against Laugh It Off Promotions. Representations of the STANDARD BANK DEVICE trade mark and the derivative STANDARD WANK DEVICE, as used by Laugh It Off Promotions, are given below. Standard Bank’s trade mark is registered in respect of clothing and the STANDARD WANK mark was used as a motif on t-shirts.

 

Standard Bank Device

Owned by The Standard Bank of South Africa Limited

 

Standard Wank Device

Owned by Laugh It Off Promotions CC

However, unlike in the BLACK LABEL case, which was based on trade mark infringement by dilution, the Standard Bank’s trade mark infringement case was based on conventional trade mark infringement, which requires the trade mark proprietor to show that the contentious trade mark so nearly resembles the registered trade mark so as to be likely to deceive or cause confusion. This is a vastly different test to that applicable in the BLACK LABEL case, a dilution case. The crux is not disparagement of a mark but similarity between two marks. In applying the test for conventional infringement, the court is required to view the marks in abstract and in a notional situation where each of the marks is used in a fair and normal manner in the clothing trade. Regard must be had to various considerations such as the market in which the goods are commonly sold and the nature of the likely purchasers. I believe that it could be argued that the two marks are confusingly similar. There is certainly no doubt that the STANDARD WANK DEVICE mark was copied and derived from the STANDARD BANK DEVICE mark.

Standard Bank also had a claim of copyright infringement arising out of the use of the contentious mark. The STANDARD BANK DEVICE mark constitutes an artistic work in terms of the Copyright Act and the copyright in such a work is infringed by the making of an unauthorised reproduction or adaptation of it or of any substantial part of it. What constitutes a “substantial part” of a work is a qualitative and not a quantitative assessment and can amount to the essence of the work. In my opinion: "There is a good prospect that the court would hold that the STANDARD WANK DEVICE mark infringes the copyright in the Standard Bank work."

The Constitutional Prism

In applying the principles enunciated in the Laugh It Off case, the court would be required to view the provisions of the respective Acts laying down these tests through the prism of the Constitution and, assuming that a defence of freedom of expression is raised, to interpret the provisions in question in a manner which impinges to the minimum on the right of freedom of speech. I have difficulty in seeing how the prism of the Constitution would alter a conclusion that the two marks are confusingly similar to each other or that the STANDARD WANK DEVICE mark is a reproduction or adaptation of any substantial part of the Standard Bank work. The marks look substantially similar whether viewed through a glass pane or though a prism. Accordingly, in my view there is a prospect that the court, including the Constitutional Court, would hold that the use of the mark STANDARD WANK DEVICE infringes Standard Bank’s aforementioned intellectual property rights.

Conclusion

The crux of the STANDARD WANK case would have been the determination of whether Standard Bank’s intellectual property rights had been infringed by Laugh It Off Promotions. However, in the result, the Standard Bank case came to naught and a further opportunity to experience judicial application of the interface between intellectual property rights and a fundamental right enshrined in the Bill of Rights did not come to fruition. Commentators can thus only speculate and opine as to what the final outcome of the case would have been but arguably that it would have been favourable to the intellectual property rights owner.

But further cases will undoubtedly arise in the future and, notwithstanding the decision in the Laugh It Off case, intellectual property rights will live to fight another day in the competition with fundamental rights.

Dr. Owen Dean

Spoor & Fisher

Date published: 2006/11/11
Author: Dr Owen Dean

Tags: corrupt trade marl laugh it off standard bank black label