SWARTLAND is a valid trademark for wine, says court

South Africa
In Swartland Winery Ltd v Group LFE (SA) (Pty) Ltd (Case 16231/2008, May 25 2009), the Western Cape High Court has restrained a producer and exporter of wine from infringing the registered trademark SWARTLAND through the manufacture, marketing, selling or exporting of wine incorporating the SWARTLAND mark. 

The name Swartland designates an area in South Africa that is well known for the production of wines, to the extent that it has been statutorily proclaimed as such. This fact formed the crux of the respondent’s defence to the infringement claim, as well as its primary ground for seeking expungement of the SWARTLAND mark. In its counter-application for expungement, the respondent argued that SWARTLAND does not constitute a trademark, as it is a term which serves to designate in trade the geographical origin of the goods. The respondent also argued that the mark was not registrable as its use is contrary to law under the Trademarks Act. On this basis, the respondent claimed that the mark was liable to be removed from the Register.
 
The court held that it was appropriate first to determine the counter-application for expungement, since the main application was predicated upon the infringement of a registered mark. If the counterclaim was successful, the applicant would be unable to prove the 'clear right' required to found an interdict.
 
In its defence to the expungement application, the applicant alleged that the SWARTLAND mark had, at the date on which the respondent launched its counter-application, become capable of distinguishing through prior use and, therefore, was not liable for removal from the Trademark Register under the act. The court accepted the applicant’s evidence showing that the SWARTLAND mark had become associated with the applicant and its products, and that the applicant’s award-wining winery had acquired a considerable reputation in its 60 years of existence. In particular, the court noted that no other winery or wine estate used the word 'Swartland' in its name, nor was the word incorporated in the name of any wine (other than the applicant’s and respondent’s wines). In addition, the applicant alleged that wine producers, distributors, retailers and consumers in South Africa and elsewhere had come to associate the SWARTLAND mark with the applicant’s wines, while also recognizing that there is a 'wine of origin' region of the same name.
 
The respondent disputed the applicant’s defence on the basis that the geographical nature of the SWARTLAND mark was such that it could never distinguish the applicant’s product.
 
The court considered various rulings dealing with the limited circumstances in which geographical terms are admitted to the Trademark Register. Ultimately, it determined that the SWARTLAND mark had become capable of distinguishing the applicant’s goods based on:

  • the applicant’s unchallenged use of the SWARTLAND mark in relation to wine products; and
  • its evidence relating to the fact that no other winery or wine estate used the mark in its name or in relation to its product.  
In reaching this conclusion, the court attached significance to the fact that the respondent had:
 
“through the manner in which it had labelled and marketed its wine, [...] indirectly acknowledged that the applicant’s trademark, notwithstanding its geographical nature and origin, [...] had in fact become capable of being distinguished from its parallel meaning as a geographical area.” 
 
Having dismissed the expungement application, the court moved on to consider the main application. The respondent’s defence to the infringement claim was two-fold. Its first argument, which related to the alleged non-distinctiveness of the SWARTLAND mark, had been dealt with and rejected by the court in the expungement proceedings. Its second defence, which related to the manner in which it used the mark on the contested wines, was that the reasonable consumer, upon reading the label on the wine, would appreciate that he or she is purchasing no more than a bottle of wine which originates from the Swartland region. Consequently, confusion or deception with the applicant’s products was unlikely. This defence was founded on a provision of the act which allows a transgressor to escape the relevant infringement provisions if it can show that its use of the registered mark, being a good-faith description of the geographical origin of the goods, is consistent with fair practice.
 
The court noted that the clear prominence of the SWARTLAND mark on the labels of the respondent’s wines, particularly in comparison with the smaller and less prominently positioned typeface in which the words 'Wyn van Oorsprong' ('wine of origin') appeared on the labels, tended to cast doubt on the respondent’s explanation that its use of the mark was intended to convey only the region of the wine’s origin. A factor which further discredited the respondent’s argument was that the 'wine of origin' description is ordinarily given little prominence on the label of a bottle and is unlikely to appear more than once. This was not the case with the respondent’s bottles, on which the SWARTLAND mark appeared at least seven times, in an arresting colour, sometimes absent the 'Wyn van Oorsprong' qualifier. 
 
Having regard to this, the court went on to consider evidence as to the meaning of 'fair practice', ultimately finding that the respondent’s conduct did not satisfy the relevant requirements. 
 
Finally, the court held that sufficient evidence had been placed before it to establish that the applicant had a clear right and that, if the respondent were permitted to continue marketing its wine under the SWARTLAND mark, the applicant would suffer damage. This damage would extend beyond loss of sales and result in diminution of the applicant’s brand integrity, goodwill and reputation. 
 
Lauren Frizelle, Spoor & Fisher, Pretoria

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