BMW Case steers court towards clarification of Section 34 defence

South Africa

In Bayerische Motoren Werke AG v BW Tech (Case 4990/04), the Transvaal Provincial Division of the High Court has outlined the scope of the defence set out in Section 34(2)(c) of the South African Trademarks Act, which affords protection to parties who make a bona fide use of a registered trademark to describe their goods or services.

BW Tech's business is the servicing and repair of motor vehicles, including cars manufactured by Bayerische Motoren Werke AG (BMW), and the sale of car parts. In the conduct of its business, BW Tech made unauthorized and prominent use of the trademarks BMW, BM and the KIDNEY GRILLE device in various ways, including the following advertising slogans: (i) "Your one stop BMW used spares shop", and (ii) "BM spares for Africa!"

Initial correspondence between the parties yielded a written undertaking from BW Tech to cease making unauthorized use of BMW's trademarks. Despite this undertaking, BW Tech continued its conduct, resulting in BMW applying to the High Court for an interdict to restrain BW Tech from infringing its registered trademarks and from breaching the undertaking.

BW Tech did not deny the existence of BMW's registered trademarks, or the fact that they were well known, but contended that it was entitled to make use of BMW's marks pursuant to Section 34(2)(c) of the Trademarks Act. This section provides that the use of a registered trademark in relation to goods or services does not amount to infringement of that trademark where (i) it is reasonable to indicate the intended purpose of such goods or services, including use in relation to spare parts and accessories, and (ii) the use is both bona fide and consistent with fair practice.

The court held that the manner in which BW Tech was using BMW's trademarks did not fall within this exclusion because it was giving undue prominence to the BM and BMW trademarks in its signage, and was not using the marks in a manner merely descriptive of what it sold. The emphasis placed on the trademarks by BW Tech was intended to attract customers, thereby unfairly taking advantage of BMW's goodwill to advertise BW Tech's business.

A defence based on alleged estoppel against BMW because of the existence of various other instances of infringement of its trademarks was also rejected by the court.

Accordingly, BMW was awarded the relief sought.

Chris Job and Mandy Gordon, Adams & Adams, Pretoria

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