Grünberger wine loses its bottle in shape mark battle

South Africa

In Die Bergkelder Beperk v Shoprite-Checkers Ltd (Case 5641/02, October 13 2004), the Cape High Court has ordered the expungement of the plaintiff's container mark, the Grünberger bottle, on the grounds that it was not distinctive.

At the time of registering its Grünberger bottle in Class 33 of the Nice Classification in 1977 in relation to, among other things, alcoholic beverages produced in South Africa, Die Bergkelder Beperk had already used its mark on an extensive scale and it had acquired a substantial repute. Although the Grünberger wine was the only South African wine sold in the Grünberger bottle, various fine wines of foreign origin were contained in similar bottles, which were available on the local market. In November 2001 Shoprite-Checkers Ltd, a large supermarket chain, started selling a South African white wine in a bottle that is identical in shape to the Grünberger bottle. This wine bears the name Muchas Gracias.

Bergkelder subsequently instituted trademark infringement proceedings against Shoprite-Checkers. Bergkelder sought an order restraining Shoprite-Checkers' use, relying on the Grünberger bottle mark registration. Shoprite-Checkers filed a counter-application for the expungement of Bergkelder's bottle shape registration on the grounds that it lacked distinctiveness (see Bottle shape mark risks cancellation following competitors' alleged infringement). At the same time, Stellenbosch Farmers' Winery (SFW), one of the largest producers and suppliers of South African wine and the owner of the word mark GRACA for wines, instituted trademark infringement proceedings against Shoprite-Checkers' use of the MUCHAS GRACIAS mark. SFW sought an order enjoining Shoprite-Checkers from using (i) that mark in relation to wine, or (ii) any other mark that is likely to deceive or confuse consumers.

In respect of Bergkelder's claim, the court found that there was a likelihood of deception and confusion between Bergkelder's registered bottle shape and the bottle used by Shoprite-Checkers. However, the court also found that the shape of the Grünberger bottle is purely functional and thus not entitled to trademark protection pursuant to Section 34(2)(e) of the Trademarks Act of 1993, which reads as follows:

"A registered trademark is not infringed by…(e) the bona fide use by any person of any utilitarian features embodied in a container, shape, configuration, colour or pattern which is registered as a trademark."

Turning to Shoprite-Checkers' counterclaim, the court recognized that the Grünberger bottle shape had been registered in Part A of the register under the repealed Trademarks Act 62 of 1963. Under that act, marks registered in Part A of the register are considered immune to attack on validity grounds seven years after their registration. The court also stated that where a mark is attacked on the grounds that it has become non-distinctive, it is necessary to show that the loss of distinctiveness is the mark owner's fault. However, the court held that this principle does not apply when the mark was non-distinctive at the time it was registered, which it found to be the case here. Consequently, it ordered that the Grünberger bottle shape registration be expunged from the register. This is an interesting conclusion as the court had conceded that the seven-year rule required it to accept that the mark was distinctive in 1977 (ie, the date of registration).

Considering SFW's infringement claim, the court found that the names Graça and Muchas Gracias as used in the course of trade would be confusingly similar. However, the court found the omission of the cedilla under the 'c' in the registered GRACA mark sufficient to negate any phonetic confusing similarity with MUCHAS GRACIAS.

Bergkelder and SFW are in the process of prosecuting an appeal to either the Supreme Court of Appeal or the Full Bench of the Court of the Cape of Good Hope (Provincial Division). The initiation of the appeal has had the immediate effect of suspending the expungement order of Bergkelder's shape mark registration. Consequently, this battle is far from over.

Duncan Maguire, Spoor & Fisher, Centurion

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