South Africa: Confusing Dissimilarity

Last Updated: 25 June 2012
Article by Ilse Du Plessis

Most Read Contributor in South Africa, September 2016

The concept of similarity lies at the heart of trade mark law - most trade mark cases involve a determination of whether one trade mark is confusingly similar to another. But similarity comes up in another context too:  the similarity of goods. On 13 June 2012, Judge Dennis Davis of the Western Cape High Court handed down an interesting judgment on this issue.

The facts were simple enough: a wine producer, who exported a wine to Germany under the name Zonquasdrift, had a South African trade mark registration for this mark covering alcoholic beverages (class 33 of the classification). A neighbouring farmer, on the other hand, used the almost identical name, Zonquasdrif Vineyards, in relation to wine grapes that it sold to co-op cellars. Hence the wine producer went to court and applied for an order preventing the grape farmer from using the name. The case was brought under section 34 (1) (b) of the Trade Marks Act, which says that the owner of a trade mark registration can stop use of 'a mark which is identical or similar to the trade mark registered... in relation to goods or services which are so similar to the goods and services in respect of which the trade mark is registered that in such use there exists the likelihood of deception or confusion'.  The grape farmer brought a counter application to cancel the trade mark registration on the basis that it was a geographical name, and therefore non-distinctive - the grape farmer claimed that the name designates a crossing point on the Berg River, and that various farms in the area use it as a geographical indicator.

The enquiry was basically this: are wine and wine grapes so similar that the use of the almost identical mark by different parties will cause confusion?  "Yes", said the wine producer, "wine is made from grapes, and it's well known that some wine farms produce both wine (that's sold to the public) and grapes (that are sold to co-operative cellars), so there are no clear delineations between farms producing grapes and wine. Indeed we too produce wine under the name Zonquasdrift, and we sell grapes to Riebeek Cellars".  "No", said the grape farmer, "if you look at the famous 1996 UK case of British Sugar (aka theTreat case), you'll see that the factors you need to consider in deciding similarity of goods include the uses of the goods, the users of the goods, the physical nature of the goods, the trade channels through which they reach the market, the question of whether the goods are found in the same outlets and on the same shelves, and the extent to which the goods are competitive. And, if you look at LAWSA (Law of South Africa), you'll see that the authors say you need to consider whether the goods 'resemble' one another, or whether they're 'functionally related'. On none of these tests are wine and grapes similar".

Judge Davis agreed with the grape farmer, and held that the goods were not similar. He pointed out the obvious differences:  the physical nature of goods is very different; wine is a drink whereas grapes are used to make wine; wine is bought by end users, whereas grapes are bought by cellars; this particular wine is sold in Germany, whereas the grapes are sold in South Africa; even if the wine is ever sold in South Africa it will be sold in supermarkets, whereas the grapes will not. He distinguished the famous 1991 French Connection case (Danco Clothing) - where the Appeal Court held that if a mark registered for clothing were to be  used on cosmetics there would be confusion -   on the basis that there had been expert evidence on the issue in that case, something that had  been missing in this case . And he held that the geographical significance of the name reduced the likelihood of confusion.

This decision is bound to create some consternation in the trade mark world.  If clothing and cosmetics are similar, how can wine and wine grapes not be?  And if wine and wine grapes are not similar, what goods are?  What about apples and apple juice, fabrics and clothing?   Things have moved on quite a bit since the British Sugar decision – the European court has made it clear in cases like Canon (1998) that further factors need to be considered, including whether the goods complement one another.  For example, it was held in the O Store case that clothing and clothing retail services are similar because, even though they fail most of the British Sugar tests, they're complementary.   In the famous Waterford case (2009) - a rare European case involving a South African party – the court held that glasses and wine were complementary, but not sufficiently so to make them similar.  It is also clear that there is a link between the enquiry regarding the similarity of the marks and that involving the similarity  of the goods – it's been held that a lesser degree of similarity between the goods can be offset by a greater degree of similarity between the marks, and vice versa.

Consequently, the infringement case failed.  As for the counter application, this was seemingly abandoned as it had simply been raised as a defence to the infringement claim. Pretty unsatisfying all around!

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.

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