LOTTO mark held to be generic

South Africa
In On-line Lottery Services (Pty) Ltd v National Lotteries Board (Case 536/2008) [2009] ZASCA 86, September 7 2009), the Supreme Court of Appeal of South Africa has upheld On-line Lottery Services (Pty) Ltd's appeal in all substantive respects. 
The case involved the trademark LOTTO. In the underlying proceedings, the National Lotteries Board had successfully shown infringement and passing off through use of the name LOTTOFUN in connection with the sale of tickets for the national lottery by On-line Lottery. On-line Lottery had unsuccessfully filed a claim for the cancellation of the board’s mark on the basis that it had been wrongly made and wrongly remained on the register because it had not been and was not used as a trademark. 
With regard to the cancellation claim, the court stressed the general principles that:

  • use on its own does not mean that a mark is distinctive; and
  • use of a generic name as a trademark by a single user does not mean that the name is a trademark.
In addition, the court held that expert opinion on the meaning of dictionary definitions is not necessary, as dictionary entries generally speak for themselves.
The court further held that “the word 'lotto' was alive in South African language usage at the time of the registration in 1991 and had been for many years”, and that “the concept of 'lotto' as a genus of games of chance which embraces a variety of species was clear”. The court concluded that: 

“the registering party simply appropriated to itself a word already in general circulation which possessed an ascertainable generic and descriptive meaning over which it could have no monopoly and which should have been open to use by all competitive undertakings in the gaming industry.”

The court then turned to the issue of passing off. Establishing passing off when a mark has been ruled to be generic is understandably difficult, and so it proved to be in this case. The court made the curious comment that “the learned judge should have concluded that deception or confusion, which is an essential element of the delict of passing off, had not been shown”. The comment is plainly wrong, as actual deception or confusion is not an essential element of passing off - it is necessary only to show a likelihood of deception or confusion.

Although the IP community would have welcomed a more precise decision from such a powerful bench, the case illustrates that:
  • the South African test for distinctiveness remains somewhat different from the EU test; and
  • a registration certificate is simply a first-glance proof of right, even after substantial use of the mark.
For background on the case please see "LOTTO Case applications heard by Cape High Court".

Darren Olivier, Bowman Gilfillan Inc, London

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