ARTICLE
7 July 2022

Trade Marks Oceans Apart

E
ENS

Contributor

ENS is an independent law firm with over 200 years of experience. The firm has over 600 practitioners in 14 offices on the continent, in Ghana, Mauritius, Namibia, Rwanda, South Africa, Tanzania and Uganda.
This article discusses the recent South African Supreme Court of Appeal ("SCA") judgment of Open Horizon Ltd v Carnilinx (Pty) handed down on 26 May 2022.
South Africa Intellectual Property

BACKGROUND

This article discusses the recent South African Supreme Court of Appeal ("SCA") judgment of Open Horizon Ltd v Carnilinx (Pty) handed down on 26 May 2022.

THE FACTS

A South African tobacco company ("the Appellant") registered, inter alia, the trade marks PACIFIC, PACIFIC STORM, and PACIFIC MIST in South Africa in class 34 covering tobacco and cigarettes.

A competitor ("the Respondent") started using the trade marks ATLANTIC, ATLANTIC WAVE, ATLANTIC BREEZE, and ATLANTIC BLUE in South Africa, also in relation to tobacco and cigarettes.

The Appellant sued for trade mark infringement, later adding a claim of unlawful competition. The High Court was not convinced that the Appellant had a case and the Appellant took the matter on appeal. The SCA dealt first with the issue of trade mark infringement.

TRADE MARK INFRINGEMENT

Conceptual similarity

The Appellant relied on its registered trade marks PACIFIC, PACIFIC STORM, and PACIFIC MIST and argued that the dominant feature of the Respondent's trade marks was the word ATLANTIC, a word that is conceptually similar to its dominant feature, PACIFIC. Judge Ponnan summarised the case as follows:

"The Appellant's case, in short, is that the Respondent is not entitled to use the ATLANTIC trade mark, which happens to be the name of an ocean, because it might conjure up the same idea as the Appellant's registered trade mark, which also happens to be the name of another ocean, namely the Pacific ocean."

The court's finding

Judge Ponnan was unimpressed with the infringement claim. He said that "registered trade marks do not create monopolies in relation to concepts or ideas." He referred to an earlier case, Sun International v La Chemise Lacoste 2004 BIP (RTM) 11, where the court said that "whilst conceptual deception or confusion can constitute a bar to registration in an appropriate case, caution must be exercised not to create a monopoly in relation to a concept." In that case, the court held that the plaintiff could not claim a monopoly in a concept for any crocodile.

Judge Ponnan referred to an EU case, where Apple Inc. opposed a trade mark comprising the word "Pear" together with a pear device. The court held that there were "clear differences between the concepts conveyed by the [two] marks – put simply one was an apple, and the other a pear.... it is inconceivable that the relevant public displaying a high level of attention will use the term 'fruit' instead of 'pear' or 'apple' when referring to the conflicting marks."

Judge Ponnan said that this reasoning was apposite: "The words relate to two different oceans. Pacific and Atlantic will not be perceived by the average consumer as depicting two unidentifiable oceans but rather two vastly different oceans located in two different geographical locations in the world... there is not likely to be deception or confusion."

Unlawful competition

The Appellant also complained about the Respondent "obtaining a springboard advantage and taking unfair advantage of the Applicant's fruit and labours... and interfering with the Applicant's exclusive rights in its PACIFIC trade marks and PACIFIC get-ups."

But there was no evidentiary support and no case based on unlawful competition had been made out in the founding papers. Judge Ponnan said that "our courts have generally declined to come to the aid of an applicant, who complains that a rival trader has used its name for its own commercial purposes unless the applicant can establish that the rival trader is using its trade mark or trade name in a manner likely to deceive or confuse members of the public."

Judge Ponnan also reminded us of the earlier judicial caution against "using some general notion of unlawful competition to create an ersatz passing off with requirements (in the alternative) less exacting than those required by the common law." A caution followed by these memorable words: "Unlawful competition should not be added as a ragbag and often forlorn alternative to every trade mark, copyright, design or passing off action. In most cases, it is one of the established categories or nothing."

So there was no trade mark infringement and no unlawful competition and the appeal was dismissed. What can we learn from this? When comparing trade marks to determine whether they are confusingly similar, we assess their visual, phonetic, and conceptual similarities. This case shows that conceptual similarity is the most difficult of the three tests to prove.

Reviewed by Gaelyn Scott, head of ENSafrica's IP department.

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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