Applicant for interdict held to have no bona fide claim to proprietorship of mark

In Etraction (Pty) Limited v Tyrecor (Pty) Limited (Case No 16926/2011 and 16926A/2011), the applicant, Etraction (Pty) Limited, had approached the Western Cape High Court for an order preventing the respondent, Tyrecor (Pty) Limited, from infringing its registered trademark INFINITY. The applicant had applied to register its trademark in 2008. In response to the infringement application, the respondent counterclaimed for the partial cancellation of the applicant’s registered trademark.

The respondent’s defence to the allegation of infringement was based on Section 36 of the Trademarks Act 1993, which provides that the act will not prevent any party from using a mark if that person has made continuous, good faith, use of the mark prior to the date of first use and registration of a registered trademark.

The evidence supported the allegation that the respondent (and its predecessors in title) had been using the mark INFINITY in South Africa continuously since, at least, 2006. The respondent’s right to use this mark derived from a tacit agreement with the supplier from whom it imported the products concerned.

The court, relying on earlier case law (see, eg, Protective Mining & Industrial Equipment Systems (Pty) Ltd 8 (formerly Hampo Systems (Pty) Ltd) v Audiolens (Cape) (Pty) Ltd (1987 (2) SA 961 (AD))), held that where a proprietor applies a trademark to its goods and places them on the market, it agrees, unconditionally, to the resale (in the form supplied) of those goods under the mark.

The court noted that a failure to rely on passing-off remedies is indicative that the applicant did not have common law rights to the mark INFINITY.

Prior to coming to a conclusion on whether the respondent had a valid defence, the court was required to determine whether the common law rights of the respondent predecessors in title (Falck Trading (Pty) Limited) had been validly transferred to the respondent. The court held that the absence of a written agreement transferring the rights from Falck Trading, and the failure to comply with certain requirement of the Companies Act 2008, did not invalidate the transfer of rights.

Therefore, the court concluded that the respondent had common law rights which predated the use and registration of the applicant’s rights and, accordingly, the respondent had a defence to the claim of trademark infringement.

The court then turned to consider the claim for partial cancellation of the applicant’s registered trademark.

The respondent based in claim for partial cancellation on the fact that the applicant was aware of the respondent’s use of the INFINITY mark in respect of tyres prior to filing its application. The respondent argued that, therefore, the applicant did not have a bona fide claim to proprietorship of the INFINITY trademark and no bona fide intention to use the mark.

This claim is founded on the basis of three interrelated provisions of the Trademarks Act. Section 10(3) prohibits the registration of a mark to which the applicant for registration does not have a bona fide claim to proprietorship. Section 10(7) prohibits the registration of any trademark where the application for registration is mala fide. Section 27(1)(a) allows a mark to be cancelled if proprietor did not have a bona fide intention to use the mark at the time of registration.

The court noted that there is, in general, no bar to the adoption of a foreign mark, where that mark has no reputation in South Africa, provided that this adoption is not accompanied by some factor (such as dishonesty or sharp practice) which undermines the title to the proprietorship of the mark.

The court noted two factors which undermined the applicant’s claim to proprietorship of the mark INFINITY. First, at the time the applicant adopted the mark, it was already in use by the person from whom it acquired the INFINITY-branded products it sold. It also noted that the applicant and respondent had attempted to come to a business arrangement in terms of which the applicant would supply INFINITY-branded tyres to the respondent. Two weeks after these negotiations failed, in 2008, the applicant applied to register INFINITY. It then waited until 2011 to institute proceedings against the respondent.

The court held that these actions, in conjunction with its use of the mark from 1995 until 2008 before applying to register the mark, amount to sharp practice and removed its claim to bona fide proprietorship.

The court also noted that an absence of an intention to use the mark in relation to one’s own goods, prevent a bona fide claim to proprietorship.

Accordingly, the court concluded that the applicant did not have a bona fide claim to proprietorship of the INFINITY mark and granted the claim for partial cancellation. 

Ian Learmonth, Adams & Adams, Johannesburg