'Black Labour' user hopes to get last laugh in tarnishment appeal

South Africa

Laugh It Off Promotions CC has applied for leave to appeal in the South African Constitutional Court against the Supreme Court of Appeal's ruling that Laugh It Off's use of the phrase 'Black Labour' on T-shirts diluted South African Breweries International (Finance) BV's (SABMiller) BLACK LABEL trademark.

SABMiller filed a trademark dilution suit against Laugh It Off upon discovering that Laugh It Off was producing and selling T-shirts featuring the general layout and colours of SABMiller's registered marks for a beer label, but with a different message. The mark BLACK LABEL had been replaced by 'Black Labour' while the slogan 'America's lusty, lively beer - brewed in South Africa' had been replaced by 'Africa's lusty, lively exploitation since 1652 - no regard given worldwide', and CARLING BEER had been replaced by 'White guilt'.

In the first instance court, the judge made an order against Laugh It Off on the basis of trademark infringement in terms of Section 34(1)(c) of the Trademarks Act, which protects well-known marks against dilution by tarnishment (see High Court fails to see the joke in BLACK LABEL parody). Laugh It Off appealed.

The Supreme Court of Appeal affirmed ([2004] JOL 12940 (SCA), September 16 2004). The court considered that to make a finding of tarnishment under Section 34(1)(c) of the Trademarks Act, the mark owner must establish that:

  • the defendant used the mark:

    • without authorization;

    • in the course of trade; and

    • in relation to goods or services;

  • the mark used was identical or similar to a registered mark;

  • the mark must be well known in South Africa; and

  • the defendant's use of the mark is likely to take unfair advantage of, or be detrimental to, the distinctive character or the repute of the registered mark.

The court found that it was common cause that the first three elements of the test had been established and all that remained was whether Laugh It Off's use of 'Black Labour' together with the slogan 'Africa's lusty, lively exploitation' on T-shirts was likely to take unfair advantage or be detrimental to the distinctive character or repute of the respondent's registered marks BLACK LABEL and AMERICA'S LUSTY, LIVELY BEER.

In considering the meaning of the word 'detrimental', the court stated, among other things, that (i) the detriment caused must be unfair, and (ii) any action against alleged detrimental use must not unfairly or unduly encroach on the rights of others - including freedom of expression protected under Section 16(1) of the Constitution. A further qualification is that the law, as a general proposition, concerns itself with matters of substance only and accordingly insubstantial prejudice to a mark owner is not enough. Since neither freedom of expression nor trademark rights are absolute, the court found it necessary to consider how they should be balanced.

The court considered the interpretation of the message not only through the eyes of the typical purchaser of such T-shirts but also through the eyes of those who are exposed to the purchaser's attire. The court accepted SABMiller's submission that the message conveyed that (i) since time immemorial SABMiller has been exploiting black labour, and (ii) it should have a feeling of guilt but could not care less. The court found that the message was likely to create in the minds of consumers a particularly unwholesome, unsavoury, or degrading association with the registered marks.

The court rejected Laugh It Off's argument to the effect that there was no detriment because SABMiller had not established that there had been a loss of sales of its beers as a result of the T-shirt sales. The court stressed that Section 34(1)(c) does not require proof of actual loss, but only the likelihood of loss.

The court also stressed that the prohibited use must be "in the course of trade" - in other words in relation to goods or services. In considering the actual use made by Laugh It Off, the court took into account the predatory intent, stressing that the T-shirts are primarily a marketable commodity and not only a communication medium. Consequently, the court found that the message on the T-shirts was materially detrimental to the repute of the registered marks.

The court next considered whether freedom of expression constituted justification. It took into account the aforementioned predatory intent and noted that while many cases of parody constituting fair comment could be justified, parody per se was not a defence against trademark infringement, and purely derisory parody of a mark should not be entitled to protection. Accordingly, it found that Laugh It Off's reliance on the right to freedom of expression was misplaced and granted an injunction and legal costs against Laugh It Off.

Laugh It Off has now applied for leave to appeal in the Constitutional Court. The Freedom of Expression Institute appeared as amicus curiae (a friend of the court) in this application and argued in favour of Laugh It Off. The institute's counsel argued that trademarks enjoy massive protection and the proprietors of trademarks should not be able to exercise their rights in a way that stifles social commentary. However, the parties appear to be in agreement that the issue before the court is essentially a balancing of the right to freedom of expression and the right to protect a trademark.

The Constitutional Court has reserved judgment.

Duncan Maguire, Spoor & Fisher, Centurion

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