Significant ruling on geographical place names for services issued

South Africa
In Century City Apartments Property Services CC v Century City Property Owners' Association (Case 57/2009, November 27 2009), the Supreme Court of Appeal has ruled that the mark CENTURY CITY for services in Classes 36, 41 and 42 of the Nice Classification had become a sign which may serve in trade to designate the geographical origin of services.  

Century City is a substantial commercial and residential development next to the N1, the main road leading northward from Cape Town. It falls within the municipality of the City of Cape Town and, more particularly, the suburb of Montague Gardens. The development began in earnest in 1997 and, according to the Century City Property Owners' Association, it was always the intention that Century City would be one development, independently functioning and operating, providing services and industries to owners and tenants within it.

Century City is also home to the well-known shopping centre Canal Walk, which opened in 2000; it was the largest shopping centre in Africa, with 125,000 square metres of retail and 9,600 square metres of office space. Between 2006 and 2007, the appellant started trading as Century City Apartments Property Services. In 2006 it registered the domain name 'centurycityapartments.co.za', and in 2007 the registration of its close corporation Century City Apartments Property Services CC followed. The appellant owns various properties in the Century City development. It leases out these properties, as well as several other properties within the development, to holidaymakers on a short-term basis.

On December 3 2007 the Property Owners' Association brought an application to the Cape High Court for an interdict against the appellant on the basis of trademark infringement. It relied, among other things, on its trademark registrations for the word mark CENTURY CITY in the following classes:
  • Class 36 - "Insurance; financial affairs; monetary affairs; real estate affairs, including property, township and residential development, real estate appraisal, estate agencies, real estate management, leasing of real estate".
  • Class 42 - "Respect of retail, wholesale, marketing, distribution, hiring, leasing, mail order and merchandising services of all kinds; providing of food and drink including bars, bottle stores and restaurant, snack bars, cafeterias, roadhouses, canteens, fast-food outlets; catering services, cocktail lounge services; temporary accommodation, hotels, hotel management; motels, tourists hostels, accommodation bureaux and services all for reserving accommodation at hotels, boarding houses and the like; arranging, hiring and providing facilities for expositions, exhibitions and the like; services ancillary to the foregoing".
Most pertinent was the trademark registration for CENTURY CITY in Class 42.

The appellant brought a counter-application for the cancellation of the CENTURY CITY marks on the basis that the marks, in the hands of the Property Owners' Association, did not designate its services exclusively, but had become a place name which designates the geographical origin of the services of many traders located at Century City.

Section 10(2)(b) of the Trademarks Act 194/1993 provides that the following marks shall not be registerable as a trademark or, if registered, shall be liable for removal from the register:

"marks that consist exclusively of a sign or an indication which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or other characteristics of the goods or services, or the mode or time of the production of the goods or of rendering of the services."  

The appellant acknowledged that in 1997, when the original developer (Monex) filed the various trademark applications for CENTURY CITY, the mark was indeed capable of distinguishing Monex’s services from the goods or services of other persons, and was rightfully registered.

It was the appellant’s case that the mark CENTURY CITY, as a result of the manner in which it had been used, had become a place name and had lost distinctiveness. The appellant also relied on Section 24(1) of the act, which provides that in the event of an entry wrongly remaining on the register, any interested person may apply to the court for an order making, removing or varying the entry as the court may deem fit.

The Cape High Court dismissed the counter-application and upheld the Property Owners' Association's application for an interdict against the appellant.

On appeal, the Supreme Court of Appeal found that Century City is a geographical area, fenced, gated and secured, like many a township in South Africa, with a multitude of individual owners. It differs from a suburb or village in that roads and the like do not belong to a local authority but to an owners’ association, and that the association provides some, but not all, of the services that local authorities usually supply. The court further stated that whether Century City is a suburb in the dictionary sense of the word was irrelevant. The question remained as to whether it had become a place name within the meaning of Section 10(2)(b).

Having concluded that Century City had become the name of a geographical location, the court then turned to the question of whether the mark CENTURY CITY constituted a sign or an indication which may serve, in trade, to designate the geographical origin of the services covered by the registrations. Considering that there are probably hundreds of commercial enterprises that offer the services mentioned under the Class 42 registration, the court found that Century City may serve, in trade, to designate the geographical origin of those services. As regards the Class 36 registration, the court concluded that there are various estate agencies and real estate managers offering services in Century City, and that the mark may serve as a geographical indicator for such services.

After applying this consideration to the various trademark registrations for CENTURY CITY, the court ruled that the mark in Classes 35 (as far as the registration extends to management services), 36, 41 and 42 were hit by the prohibition of Section 10 (2)(b) of the act, and were thus liable to be cancelled.

The Property Owners' Association argued that blameworthy conduct by the trademark proprietor is required before a mark may be cancelled. The court found that blameworthy conduct was not a requirement for the cancellation of a mark in terms of Section 10(2)(b), and stated that, in any event, the mark CENTURY CITY had become a place name as a necessary consequence of the nature of the development itself.

Accordingly, the appeal was upheld with cost in favour of the appellant. The registrations for the mark CENTURY CITY in Classes 36, 41 and 42 were revoked, and the registration for the mark in Class 35 was amended so as to exclude management services.

The Property Owners' Association's claim based on trademark infringement was accordingly dismissed.

Suzaan Laing and Roux Potgieter, Adams & Adams, Cape Town 

Adams & Adams acted for the appellant in this case

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