Liquorice Allsorts - Is it a Trade Mark?

On 16 March 2000, the Supreme Court of Appeal of South Africa handed down its decision in the matter between Cadbury (Proprietary) Limited vs Beacon Sweets & Chocolates (Proprietary) Limited and the Registrar of Trade Marks.

Beacon is the proprietor of South African trade mark registration no 86/3570 in respect of a composite mark consisting of a packet design incorporating a plate of sweets, a man made of these sweets, a blank space and a prominent display of the name LIQUORICE ALLSORTS. The trade mark is registered in class 30 in respect of confectionery and other goods in class 30. The trade mark was registered in 1986 and Beacon claimed to have marketed sweets under the name LIQUORICE ALLSORTS extensively since 1952.

Cadbury is also a manufacturer and distributor of confectionery. Cadbury applied, without attacking the validity of the original trade mark registration, for an additional disclaimer that registration "shall also give no right to the exclusive use of the name LIQUORICE ALLSORTS, separately and apart from the mark", relying on Section 15 of the South African Trade Marks Act 194 of 1993. Section 15 provides that if a trade mark contains matter that is not capable of distinguishing within the meaning of Section 9, the Court may require that the proprietor disclaim any right to the exclusive use of such matter.

When the matter was first heard before acting Judge Maritz in the Transvaal Provincial Division of the High Court, the application brought by Cadbury for the additional disclaimer against Beacon’s trade mark registration was refused. (Reported in South African Law Report 1998(1)SA59(3)).

Matter Contained in a Trade Mark is Capable of Distinguishing:

Beacon argued that the test to determine whether the matter contained in a trade mark is capable of distinguishing or not, namely, LIQUORICE ALLSORTS, is the date of application for registration. In its evidence, Beacon claimed that as at 1986, besides some references in dictionaries, there is no evidence showing that the words LIQUORICE ALLSORTS are not capable of distinguishing.

Section 9 provides:

"(1) In order to be registrable a trade mark shall be capable of distinguishing the goods or services of a person in respect of which it is registered or proposed to be registered from the goods or services of another person, either generally, or where the trade mark is registered or proposed to be registered, subject to limitations, in relation to use within those limitations."

"(2) A mark shall be considered to be capable of distinguishing within the meaning of Section (1) if, at the date of application for registration, it is inherently capable of so distinguishing or it is capable of distinguishing by reason of prior use thereof."

The Court of Appeal agreed with Cadbury that the relevant date of the test must be the date upon which the application is brought to amend the trade mark registration by the endorsement of the disclaimer.

The Appeal Court examined various provisions in the South African Trade Marks Act.

Section 15 of the Trade Marks Act provides:

"If a trade mark contains matter which is not capable of distinguishing within the meaning of Section 9, the Registrar or the Court, in deciding whether the trade mark shall be entered in or shall remain on the register, may require, as a condition of it being entered in or remaining on the register -

"(a) that the proprietor shall disclaim any right to the exclusive use of all or any portion of any such matter to the exclusive use of which the Registrar or the Court holds him not to be entitled; or

"(b) ..."

If the question is whether a trade mark should remain registered in this present form, the date of registration can no longer be relevant. Section 15 concerns itself with matter that is not capable of distinguishing at the time when the Court has to decide in what form the mark shall be entered or remain on the register.

Beacon also argued that Section 15 did not apply to the facts as this Section is restricted to a case where the Court is called upon to decide whether the trade mark "shall remain on the register". It does not apply where it was sought to enter a disclaimer. It therefore argued that the Court had no jurisdiction to make the order sought by Cadbury based on Section 15 of the Trade Marks Act.

Beacon thus argued that if an applicant had no objection to a trade mark as a whole but only to matter contained therein, the Applicant would be obliged to launch an attack against the whole of the trade mark in order to obtain relief under Section 15. This argument was rejected in the High Court because of the perceived absurdity of the result and the Court of Appeal confirmed that it is a necessary implication that the provision is concerned both with the question of whether a trade mark should remain on the register and whether it should remain on the register in its present form.

Section 15 gives the Court a discretion to require the entry of a disclaimer against a trade mark. The Court had to decide whether the term LIQUORICE ALLSORTS is incapable of distinguishing the liquorice confectionery of Beacon from the same product of any other person. In other words, is LIQUORICE ALLSORTS the name of a product (a type of confectionery)? Or is it the name of Beacon’s product?

The evidence showed that the term is given in some dictionaries as the name of a product. The Court of Appeal disagreed with the decision in the High Court and stated that the use of a hyphen in the name ALL-SORTS, neither added to nor subtracted from anything, especially since the use of hyphens is usually optional and they are not pronounced.

The evidence showed that confectionery manufacturing books give methods and recipes for the manufacture of LIQUORICE ALLSORTS and Cadbury claimed that LIQUORICE ALLSORTS is a well-established and recognised product type manufactured and produced in a substantially uniform configuration, notwithstanding any individual variations.

The Court was unable to find an alternative name for the product that suggested that the words LIQUORICE ALLSORTS were a type of confectionery rather than Beacon’s product.

The Court of Appeal held that evidence regarding exclusive use for many years, large volumes of sales, and high advertising expenditure, must be approached with some degree of circumspection.

"The sole producer or distributor of a product whether new or old, cannot by means of advertising and selling a product under its generic name, render the name capable of distinguishing in terms of Section 9".

It was further detrimental to Beacon’s case that it "allowed" a number of large supermarket chains in South Africa to sell this confectionery using the name LIQUORICE ALLSORTS with their own trade marks and packaging.

The Trade Marks Act in Section 38 deals with permitted use of trade marks but this relates to the use of a registered trade mark. The use by the various large supermarket chains did not constitute use of the trade mark as registered by Beacon.

The use by the chains of the name LIQUORICE ALLSORTS was not use of the trade mark as registered, but only of matter contained therein.

The alleged consent by Beacon did not accordingly constitute permitted use within the meaning of the Trade Marks Act. The fact that the various supermarket chains used their own trade marks on the packaging for their LIQUORICE ALLSORTS confectionery was also detrimental to Beacon’s case as it was a further condition of the registration of the trade mark that only a trade mark registered in the name of Beacon, or in respect of which Beacon was a registered user, or a trade mark of one of Beacon’s registered users, may be used in the blank space appearing in the trade mark. The trade marks of the supermarket chains do not fall in any of these categories and the breach of this condition cannot, it was held by the Appeal Court, give Beacon any rights or otherwise protect it.

The Court of Appeal held that Beacon was not entitled to the exclusive use of the words LIQUORICE ALLSORTS because it is used by Beacon and others in the trade to describe the product and not to distinguish Beacon’s product from that of others.

The final question was whether it was necessary for the Court to exercise its discretion to require the endorsement of the disclaimer.

Although a disclaimer may not be necessary since registration of a trade mark cannot give rise to any rights except those arising from the mark as a whole, the Court of Appeal chose to exercise its discretion and order the entry of a disclaimer against Beacon’s trade mark registrations. Its reasons for doing so was that the name LIQUORICE ALLSORTS is the dominant part of the trade mark as registered by Beacon, Beacon had been asserting trade mark rights in LIQUORICE ALLSORTS as such against others, based on this trade mark registration, and it also had filed an application for the registration of the words LIQUORICE ALLSORTS on their own.

The High Court in the first judgement had held that Cadbury was sufficiently protected as the Trade Marks Act provides that a registered trade mark is not infringed by the use of any bona fide description or indication of the kind of the goods concerned (Section 34(2)(c)). The Court of Appeal found that although Cadbury may have a perfect defence, even in the absence of a disclaimer, this attitude was unrealistic as it would require Cadbury to go to the trouble and expense of first manufacturing and selling the product subject to the risk of infringement litigation, as opposed to simply relying on the Trade Marks Act to apply for a declaration of rights to obtain certainty by having the trade mark registration endorsed with a disclaimer.

The appeal accordingly had to succeed. The costs were awarded against Beacon and an order was granted that trade mark registration number 86/3570 be amended by the insertion of the additional disclaimer:

"The registration of this trade mark shall give no right to the exclusive use of the name LIQUORICE ALLSORTS separately and apart from the mark".

Stephen Goldberg

Spoor & Fisher

Date published: 2000/03/01
Author: Stephan Goldberg

Tags: liquorice allsorts trade marks cadbury beacon