Territoriality of trade marks : Which way is the polo horse running?

2012-06-06


In the New Balance case discussed last month the Supreme Court of Appeal also re-affirmed the principle of territoriality of trade marks.  New Balance, having failed to prove relevant use of its P-F FLYERS and P-F trade marks in South Africa, had tried to rely on its overseas reputation in arguing that Mr Dajee had no bona fide claim to proprietorship of his POSTURE FOUNDATION – PF  trade mark in South Africa.

In his evidence Mr Dajee had said that in 1996 he was looking for a new trade mark and recalled the trade mark POSTURE FOUNDATION P-F but he believed that the use of the mark had long since been abandoned and had not been used anywhere for many years.  He was satisfied that the mark was unknown to consumers in South Africa and he alleged that he had adopted and registered the trade mark in good faith in 1996.

The meaning of a “proprietor” of a mark and the relevance of goodwill and reputation was a particularly hot topic in South Africa in the 1980s and 1990s.  There were a number of reasons for this.  Firstly, our common law did not recognise a reputation without goodwill.  Secondly, the Trade Marks Act did not contain a provision dealing with the protection of foreign well known trade marks (in terms of the provisions of Section 6bis of the Paris Convention).  Thirdly, the economic sanctions at the time provided fertile grounds for local entities to adopt trade marks which, while well known abroad, had no reputation and goodwill in South Africa so there was nothing, in law, the proprietors of such trade marks could do to stop this.  Those of you who dined in the Hard Rock Café in Cape Town in the 1980s may be surprised to learn that there was no link between that restaurant and the already then well known Hard Rock Cafés throughout the world.  More obscure was the Dallas restaurant in Pretoria, which was not connected with what was then the very popular Dallas TV series.

McDonald’s was more fortunate because the use by the local entitity of the McDONALD’S trade mark was minimal and by the time McDonald’s sought to protect its McDONALD’S trade marks in South Africa, international sanctions were over and the new Trade Marks Act had come into force on 1 May 1995 giving statutory protection to well known trade marks.  McDonald’s accordingly succeeded both on interdicting third party use of the McDONALD’S trade mark and in defending its various McDONALD’S trademark registrations from a non-use cancellation attack on the grounds that its marks were well known, even though, at that time, the McDONALD’S trade mark had never been used in South Africa.  This then paved the way for the countless genuine McDONALD’S food outlets which we see in South Africa today.

Another area where there have been a number of issues with regard to the adoption in South Africa of foreign trade marks is in the clothing industry.  

The most high profile manifestation of this is the recent opening of genuine GAP stores, the culmination of litigation between the South African claimants to the GAP trade mark and US Gap Corporation, which litigation lasted for well over 10 years.  In reaffirming the point of law on proprietorship in the New Balance case, the SCA quoted the Victoria’s Secret case, a leading trade mark case of the early 1990s.  Despite the protestations of the US Victoria’s Secret trade mark owner, there was nothing that they could legally do to stop the adoption by Edgars of the Victoria’s Secret trade mark in South Africa for their own range of lingerie.

The situation with the POLO trade mark in South Africa is interesting.  In the USA and countless other jurisdictions worldwide Ralph Lauren is the owner of the word mark POLO together with the well known polo player device.  However POLO clothing sold in South Africa, also with a polo player device, is not connected in any way with Ralph Lauren.  As illustrated in the comparison of the two trade marks, the only differences are the inclusion of the additional trade mark RALPH LAUREN and the fact the  polo player devices are slightly different, the most noticeable difference being that the South Africa polo horse faces right while the US polo faces left.  As this trade mark appears prominently on the breast pocket of  shirts (and other clothing) without any additional word marks (those are typically found inside the collar), the easiest way in practice to identify whether a POLO shirt is of US or South African extraction is to see whether the horse is running towards the centre (US) or away  (SA).  

Charles Webster


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