BMW succeeds against replacement parts supplier

In Commercial Auto Glass (Pty) Limited v BMW AG (Case N331/06, September 7 2007), the Supreme Court of Appeal has rejected Commercial Auto Glass (Pty) Limited's appeal against a judgment of the Transvaal Provincial Division of the High Court enjoining it from infringing BMW AG's registered trademarks BMW, BM and 3-SERIES, and unregistered well-known trademarks E30, E36 and E46.

Commercial Auto Glass is in the business of supplying and fitting accessories and spare parts, including windscreens, for all types of vehicles. In its advertisements in the media, product labelling, written quotations and invoices, it uses trademarks such as BMW E36 3-SERIES in referring to windscreens. The windscreens are supplied with no qualification or explanation as to their precise nature or origin.

BMW had successfully instituted proceedings based on infringement of its registered and well-known unregistered trademarks under Sections 35(1)(a) and/or 34(1)(b), and Section 35 of the Trademarks Act. On appeal, Commercial Auto Glass argued that it was simply using the trademarks to inform the public that it was selling windscreens that fit BMW cars, and not that the windscreens were original BMW windscreens. It alleged that such use:

• was not 'trademark use';
  
  
• did not mislead the public; and
  
  
• in any event, was a constitutionally protected form of commercial speech.

Commercial Auto Glass also argued that such use fell within the scope of the defence under Section 34(2)(c) of the act, which provides as follows:

"A registered trademark is not infringed by… the bona fide use of the trademark in relation to goods or services where it is reasonable to indicate the intended purpose of such goods, including spare parts and accessories, and such services,… provided that the use contemplated… is consistent with fair practice."

The Supreme Court of Appeal rejected all these arguments, holding that a substantial number of consumers would be deceived by interpreting the actions of Commercial Auto Glass as representing that the windscreens in issue were genuine BMW parts. It confirmed the view taken by the court in an earlier (unreported) case, BMW AG v Autostyle Retail (Case TPD 5887/2005), which held as follows:

"Use will not be bona fide, however, if the user does not unequivocally make it clear that its goods are not connected in the course of trade with the proprietor of the trademark. It follows that bona fide use in Section 34(2)(c) means honest use of a trademark, without the intention to deceive anybody, while unequivocally making it clear that the goods are not connected in the course of trade with the proprietor of the trademark."

The court also referred - with approval - to the approach taken by the European Court of Justice in the Gillette Case (C-228/03). Account should be taken of:

• the overall presentation of products marketed by a third party; and
  
  
• the effort made by that third party to ensure that consumers distinguish its products from those covered by registered trademarks.

The court upheld the appeal to a very limited extent for technical reasons. However, it granted substituted orders enjoining Commercial Auto Glass from infringing BMW's trademarks; moreover, it awarded BMW the costs of the hearing in the court a quo and the costs of appeal.

Chris Job, Adams & Adams, Pretoria