The Gauteng North High Court recently gave a judgment that will
have significant implications for the motor vehicle industry. BMW
had sued Grandmark, a company that is a major supplier of
replacement parts, in other words vehicle parts that aren't
manufactured by the vehicle manufacturers themselves but rather by
independent companies, and that often cost a fraction of the price
of the originals. BMW claimed that Grandmark was infringing various
BMW trade mark registrations.
The court disagreed. That's because Grandmark's marketing materials used statements like these: 'Replacement part suitable for BMW E46', and 'These products are not manufactured by or under licence from the original vehicle manufacturer.' Statements that, the judge said, made it quite clear that the goods that Grandmark was selling were not BMW parts, but parts suitable for BMW vehicles. Something that certain provisions of the Trade Marks Act allow for. And, more importantly, something that the Supreme Court of Appeal had already said was kosher, when it held in 2007 that 'non-trade mark' or 'descriptive' use of a registered trade mark - in other words use that isn't intended to indicate origin - is lawful. Something that BMW should have been aware of, given that it was a party to that case: it was the famous case of BMW and Verimark, where BMW failed in its attempt to stop Verimark from using a BMW vehicle in a TV ad for a car polish, because the BMW logo (which was visible in the ad) clearly wasn't being used to suggest any connection with BMW.
BMW also sued for infringement of design registrations for a
headlight assembly, a fender, a bonnet and a grille. But this claim
was also dismissed because the registrations were invalid, having
been wrongly registered as so-called 'aesthetic designs'
(designs that are judged by the eye), instead of 'functional
designs' (designs that are necessitated by function) –
the reason why they were registered as aesthetic design was, said
the judge, to avoid the fact that the Designs Act provides that
functional designs will not protect spare parts. The
judge had no doubt that things like fenders are not aesthetic,
because they don't 'influence choice or selection',
they don't have 'individual characteristics ... calculated
to attract the attention of the beholder', and they don't
have something that is 'special, peculiar, distinctive,
significant or striking about them'. Rather they are
functional: 'A replacement part for an E46 BMW serves
only one function and that is to replace a part on an E46 BMW. It
has to look the same, it has to fit the same, and it cannot look
any other way.' The registrations were also invalid
because they weren't new, being mere trade variants of previous
This judgment opens the doors for replacement parts. Which is why it will probably be appealed.
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