Ruling leaves rights in THE GAP open to question

South Africa

The South African Supreme Court of Appeal has ruled on the drawn-out conflict relating to the trademark THE GAP between US company The Gap Inc and the South African A M Moolla Group (Case 123/2004, September 9 2005). Although the court ordered the removal from the Trademarks Register of numerous THE GAP marks owned by the South African entity, it did not expressly restrain that entity from using the marks.

A member of the A M Moolla group of companies had registered, among others, the trademarks THE GAP, GAP KIDS and GAP STORES in the 1970s and 1980s in relation to clothing. Various companies in the group (seven of which were appellants in the case) had used these trademarks from time to time.

The Gap is the originator of The Gap stores and clothing in the United States (which commenced in 1969) and holds numerous registrations in many countries of the world for various trademarks, including THE GAP trademark. The Gap claimed that its trademark THE GAP was well known in South Africa.

The Gap sought to restrain A M Moolla from using THE GAP trademarks under Section 35 of the Trademarks Act 1993, which gives effect to the provisions of Article 6bis of the Paris Convention for the Protection of Industrial Property and Articles 16(2) and 16(3) of the Agreement on Trade-Related Aspects of Intellectual Property Rights. The Gap also applied for the removal of the various THE GAP trademark registrations from the register on the grounds of (i) non-use for five years pursuant to Section 27(1)(b) of the act; and (ii) A M Moolla's lack of claim to proprietorship under Section 10(3).

The case eventually came before the Supreme Court. Among other things, the court made the following findings:

  • Regarding the non-use attack, as the proprietor of THE GAP trademarks was effectively dormant, it was necessary to show use of the marks by other members of the A M Moolla group under licence. The court refused to accept A M Moolla's evidence in this regard and, accordingly, it directed the removal of various THE GAP trademark registrations from the register.

  • In coming to its conclusion regarding non-use, the court considered whether the issue of the lack of quality control as an independent factor under Section 27(1)(b) had relevance and whether, in the absence of quality control, use by a licensee could qualify as "permitted use". Following UK case law, it noted that:

    "In principle, there does not appear to be any reason at present to require quality control by or on behalf of the proprietor as a requirement for permitted use."

  • Despite some doubts, the court assumed in favour of The Gap that its GAP trademarks were well known in South Africa at the time of the institution of the proceedings, and also as at August 31 1991 - a requirement of Section 36(2) of the act.

  • The court held that A M Moolla could not rely on the provisions of Section 36(2) to claim a vested right to carry on using the THE GAP trademarks because they had not been used in a continuous manner from a date before August 31 1991.

  • The court nevertheless found that The Gap had not established that A M Moolla's trademarks constituted "a reproduction, imitation or translation of the well-known trademark" at the time when the local entity commenced use of the THE GAP trademarks and registered them. In coming to this conclusion, the court quoted with approval from the decision of the US Court of Appeals for the Federal Circuit in Person's Co Ltd v Christman (Case 900 F.2d 1565 (Fed.Cir 1990)) and concluded:

    "Although the marks in contention may at first blush appear to be imitations or reproductions of ... [The Gap's] marks, the crucial point is that when any reproduction or imitation took place, it was not of a 'well-known' mark, but of a mark not well-known within this country."

  • Accordingly, A M Moolla's appeal against the grant of the interdicts restraining its use of the THE GAP marks was upheld.

  • Turning next to the question of proprietorship, the court applied the repealed Trademarks Act 1963 and upheld, in part, A M Moolla's defence that some of its THE GAP trademark registrations had been on the register for more than seven years and therefore could not be removed. The court agreed that this was true of its 1973 and 1980 registrations, but rejected the defence in relation to the 1988 and 1989 registrations. The reason for the rejection was that the relevant registrations (measured from the date of filing of the trademark applications) had not been on the register for more than seven years prior to the implementation of the Trademarks Act 1993 on May 1 1995.

Thus, A M Moolla has lost a number of its THE GAP trademark registrations. Yet, on the other hand, the court has not restrained it or its related companies from using these marks. It therefore seems that, practically speaking, The Gap is no closer to its presumed goal of clearing away the obstacles to its exclusive use and registration of THE GAP trademarks in South Africa.

Chris Job, Adams & Adams, Pretoria

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