South Africa: Defending The Black Knight

Last Updated: 30 October 2013
Article by Jessica Axelson

The Kwazulu Natal High Court has been called upon to decide whether use of the mark BLACK KNIGHT by KZN Wines and Spirits CC for their whisky infringed Distell Limited's registered trade marks KNIGHT'S GOLD and KNIGHTS label, for goods inclusive of whisky; and additionally whether KZN's label getup constituted passing off. It found no infringement or passing off. 

Photographs of the respective goods not being presently available, this note is limited to a comment on the trade mark infringement aspect. 

What is unusual about this case is that KZN had been using the offending mark and getup for 11 years before proceedings had been instituted by Distell. There was no evidence of confusion between the products during this time. Although not stated expressly, it appears that this factor contributed significantly towards the court's ruling, which was in favour of KZN. 

Where trade mark infringement proceedings are concerned, one compares only the registered trade marks with the offending mark. The getup of the respective parties' goods should be irrelevant. 

Distell's registered trade marks are KNIGHT'S GOLD (as a word mark) and the KNIGHT'S label. The KNIGHT'S GOLD mark contains a disclaimer as follows: "Registration of this trade mark shall give no right to the exclusive use of the surname KNIGHT or of the word GOLD each separately and apart from the mark".

Section 15 of the Trade Marks Act 193 of 1994 provides for the endorsement of disclaimers in relation to the exclusive use of portions of trade marks which are incapable of distinguishing. The effect of such endorsement is that the subject matter disclaimed may be used by third parties with impunity, provided that such use is separate from the remainder of the mark.

Disclaimers may also be given on a conditional basis – for instance in an application for SULTRY STELLENBOSCH for wine, use of the place name term "Stellenbosch" may be disclaimed in its geographical context, separately and apart from the remainder of the mark.

Where KNIGHT'S GOLD is concerned, there is some ambiguity in the disclaimer as to whether the word "Knight" is disclaimed in all contexts, or only if used as a surname. The disclaimer is in relation to "exclusive use of the surname KNIGHT", rather than for instance "exclusive use of the word KNIGHT, used as a surname". It is submitted that in the context, the correct interpretation would be that of a limited disclaimer.

The case did not turn on this point though, and it is, in any event, settled law (in terms of the case of John Craig (Pty) Ltd v Dupa Clothing Industries (Pty) Ltd 1977 (3) SA 144(T)), as referred to in the judgment, that even where a registered trade mark contains a disclaimer, the comparison of the marks must still take into account the whole trade mark as registered and the offending mark.

The enquiry in which the court engages is whether there is a likelihood of deception or confusion by use of the offending mark amongst potential customers. The judge is required to place herself in the position of a potential customer, and notionally transport herself into the aisle of a liquor outlet or onto the barstool of a local pub.

Confusing similarity between marks may be visual, aural or conceptual ie what they look like or sound like or mean. In assessing the visual similarity between the marks the court stated as follows (at para 14):

"As far as the visual similarity is concerned, I am satisfied that the comparison of the marks as a whole reveal that these marks are visually so different that confusion or deception is impossible. I arrive at this conclusion mindful of the fact that it is common for the producers to change the format of their get ups from time to time whilst retaining the essential features. In my view, there is much in the differences of the marks when visually present, which suggests that confusion or deception is unlikely to occur".

With respect, it appears that there is some confusion here between the test relevant to trade mark infringement (which takes into account only the mark(s) as registered and the offending mark), and the test for passing off, in which the get ups of the respective goods is also relevant.

The dominant feature of both Distell's trade marks KNIGHT'S GOLD and KNIGHT'S label, is "KNIGHT'S". KZN's mark BLACK KNIGHT wholly incorporates this element. "KNIGHT" is not used in the context of a surname, and so the disclaimer referred to above would be disregarded. When these marks are considered in isolation, without reference to get up, it is, with respect not clear that confusion amongst consumers would be unlikely.

This is particularly the case when one compares KNIGHT'S GOLD and BLACK KNIGHT. Mention is made in the judgment of the trend in the whisky industry (particularly in relation to Johnny Walker) of distinguishing vintages or grades of whisky by reference to colour. It is submitted that it may well be assumed by consumers, particularly those finding themselves in a bar late at night, whose faculties may be somewhat impaired – that KNIGHT'S GOLD and BLACK KNIGHT may be products from a common source.

Distell's proposition that aural confusion may occur when its whisky is ordered in a noisy and crowded bar or lounge, and the waiter may be confused into thinking that an order was placed for KZN's product, was dismissed by the court. The court's reasoning is that although whisky is a popular drink, it is not a cheap one, and for this reason, whisky drinkers are likely to take care when making a purchase.

It is unclear, with respect, whether the court has in its mind a patron of a bar, or a customer of a liquor outlet, when coming to the conclusion that whisky drinkers would make their purchases with care. What is instructive though, is that this reasoning is followed by a discussion of the use made of KZN's mark and getup since 2002, and the fact that Distell had not submitted any evidence of confusion.

Reference is made to the UK case of Arsenal Football Club P.L.C. v Reed [2001] R.P.C. 46 at 922 to 931 in which it was found by the court that where an applicant approaches the court at the commencement of trade in the offending product by the respondent, it is for the court to make an assessment of the likelihood of future confusion by consumers. However, when trade in the offending product has been ongoing for a substantial period, it is appropriate to ask the question as to whether confusion has arisen.

It is submitted that while in theory this proposition is sound, one must bear in mind two considerations. The first of these is that a patron of a bar placing an order orally for Distell's product, and receiving KZN's product from the waiter, may never realise that confusion has arisen – and would therefore not complain. The second is that the notional customer at a liquor retail outlet experiencing confusion, may also either not complain; may simply select an alternative product to that of either of the parties as a means of addressing confusion; or may seek clarity from a shop assistant. It is submitted that a purchaser who would telephone a large organization such as Distell to notify them about a competing whisky sold under a confusingly similar mark, would be rare.

It will be interesting to see whether Distell is prepared to accept the court's finding, or whether it shall seek leave to appeal.

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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