The recent South African High Court decision in the case of Howden Africa v CFW Industries is extremely interesting. Not so much for what it said (it said very little, comprising no more than two pages of 'Written Reasons'), but for what it held.
What happened here? A company had a registration for the trade mark Fumex Fans covering fire extraction fans. A competitor, who wanted to register a similar trade mark, Fumax, applied to cancel the registration for Fumex Fans on the basis of five years' non-use. The trade mark owner responded by filing an affidavit, in which it said that it had used the trade mark during the relevant period. The only actual evidence it submitted, however, was a brochure that showed that it sold a wide range of fans under the trade mark CFW, and that the various fans were identified by descriptive terms. One of these fans, which appeared on a page entitled 'Axial Fans', was described as follows: 'Smoke Venting Fan (Fumex)'. The court had no hesitation in finding that the registration should be cancelled for non-use.
A little law may be in order. The Trade Marks Act tells us that, in order to survive an attack, the trade mark owner must show that it made genuine use of its trade mark over the relevant five-year period. The courts have told us that "genuine use" means ordinary commercial use in the context of the particular company and the particular product area. The use must not be token use, in other words use that serves no real commercial purpose and is simply intended to keep the registration alive. On the other hand, the courts have told us that actual sales are not always required, and that genuine preparations may be sufficient. In a case involving the trade mark gap, the Supreme Court of Appeal was satisfied with evidence that showed that there had been genuine negotiations between the US company that owns the brand and a South African retailer that wanted to be appointed as a distributor.
Which leads us on to the issue of evidence. The South African courts have made it quite plain that they will demand clear evidence of use if a registration is to be kept alive. In a case involving the company New Balance and the trade mark PF, the Supreme Court of Appeal cancelled a registration because it felt that the evidence of use was unconvincing: an affidavit stating that a small number of shoes had been sold in a particular store in South Africa. However it was not clear that the sales had occurred during the critical five-year period and there was no documentation in the form of invoices or delivery notes. Instead, only photos were brought as evidence displaying the shoes in a store, but these were undated. The court had strong words for the trade mark owner, suggesting that the 'vagueness and ambiguity must be deliberate'. It went on to say that it will not 'permit unvirtuous respondents to shelter behind patently implausible affidavit versions or bald denials', especially if they can 'be expected to have comprehensive and peculiar knowledge' of the matter in issue.
Based on this, it is no surprise that the registration for Fumex Fans was cancelled. But what makes the case really interesting is that the decision does not seem to have turned on the paucity of the evidence. The critical part of the decision reads as follows: 'The applicant argued that the advertisement brochure does not prove in clear and unambiguous terms the relevant use of the trade mark during the relevant period. I agreed. It is at least ambiguous whether the word "Fumex" in brackets below the description of the smoke venting fan conveys to the reader of the brochure the fact that "Fumex" is in fact a trade mark or merely intended to be descriptive of a particular type of smoke venting machine.'
This is something else altogether. The court was not saying that it does not believe the trade mark was used. It was saying that the trademark was used incorrectly. For some time the courts have been telling us to distinguish between trade mark use and descriptive or non-trade mark use but this has usually been in a very different context. Normally the issue comes up when determining whether the company that is alleged to have infringed a trade mark registration has used it as a trade mark (in which case it is an infringement), or in some other way, perhaps descriptively (in which case it is not an infringement).
The Supreme Court of Appeal highlighted this issue in 2007, when it held that a company called Verimark, which had used a BMW vehicle in a TV advertisement for car polish, had not infringed the BMW logo trade mark, despite the fact that the badge was visible in the advertisement. Why? Because it was not trade mark use, it was not use that suggested a connection between the product (the car polish) and the trade mark of BMW. Instead, the court said, the BMW logo had been used in a descriptive or incidental way. The South African court was simply following a long line of EU cases, which have made it clear that a trade mark registration is only infringed if it is used in a way that affects the trade mark's function, which is to indicate origin, in other words tell the consumer who or where the goods come from.
It is a great pity that the court did not explain why the use of Fumex was deemed to be descriptive or other non-trade mark use. Was it because it appeared in brackets after wording that it was deemed to be descriptive? If so, should the court not have considered whether it is likely that a company would use two different descriptive terms in connection with the same product? Or was it because the owner seemed to make a habit of identifying its various products by way of descriptive terms? Was it because the word 'fumex' sounds like it might be a contraction of 'fume' and 'extraction'. We just do not know.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.