Supreme Court of Appeal clarifies procedure under Counterfeit Goods Act

The Supreme Court of Appeal continues to aid brand owners by clarifying provisions of trademark legislation in South Africa. This time, it was the turn of Section 5(4) of the Counterfeit Goods Act (37/1997), which sets out the procedure to be followed in the event of a search and seizure without a warrant. Until the court's decision in Minister of Trade and Industry v E L Enterprises ([2010] ZASCA 149, November 29 2010), uncertainty over the procedure had caused advisors to recommend a conservative approach, which often meant additional costs and delay. 

A seizure can take place without a warrant in South Africa where an inspector has reason to believe that:

The act further states that:

"any acts performed by an inspector by virtue of Subsection (2) must be confirmed by a magistrate or a judge of the High Court having jurisdiction in the area where the acts were performed, on the application of the inspector brought within 10 court days of the day on which those acts were performed..." (Section 5(4)).

As the court noted, it was the interpretation of Section 5(4) that was at issue in this case. The appellants had launched an application on notice of motion within the required 10-day period, but served that application on the respondents only after the expiry of the 10-day period. The respondents argued that, because the appellants had served the application outside the prescribed 10-day period, they had failed to have ‘brought’ it within 10 court days. The court upheld this argument.

The court then took a closer look at the conflicting wording of different sections:

"The wording of [Section] 6 is clearer in excluding the giving of notice to any potential respondent than [Section] 5(4)(a). The warrant in terms of [Section] 6 is issued by a judge or magistrate in chambers on the strength of information on oath or affirmation. Section 5(4)(a) does not refer to the warrant being issued ‘in chambers’, unlike [Section] 6 requires an ‘application’ and does not require that the information be placed before the judge or magistrate on oath or affirmation. The essential question is whether these differences in the wording of the two sections justify an interpretation that [Section] 5(4)(a) prescribes formal application procedure on notice of motion with notice to a respondent."

However, the court held that the slight difference in wording does not result in a substantial difference in procedure, and declared that an application in terms of Section 5(4) of the act is not an application on notice of motion addressed to the court which has to be served on the respondent.

It is interesting that this judgment was pursued despite the fact that the parties had agreed a settlement disposing of the matter, in view of the need to seek clarity in the face of conflicting judgments.