REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA WESTERN CAPE HIGH COURT, CAPE TOWN

CASE NO: 16231 / 2008

In the matter between:

and

And in the counter-application between:

and

			JUDGMENT : 25 MAY 2009

BOZALEK J:

INTRODUCTION

3. First respondent is a company registered in South Africa which exports and markets South African wines overseas and whose principal place of business is in Somerset West. Second respondent is first respondent's managing director and describes himself as an active participant in the wine industry since 1991. It would appear that the principal focus of the respondents' activities is the export of South African wines to the Netherlands.

5. The respondents opposed both the granting of the interim interdict and the granting of final relief. In addition first respondent has brought a substantive counter-application for the expungement of the applicant's trade mark and an application to strike out certain passages in the affidavits filed on behalf of the applicant. I shall refer to the parties by their descriptions in the main application.   The Registrar of Trade Marks is cited as a respondent in the counter application and abides by the decision of the court.

7. Respondents opposed the relief sought on a number of grounds, some of which had become academic by the time of the return date. However, it persists in its main ground of opposition, namely the denial of any trade mark infringement on the ground that its labelling did nothing more than identify the place of origin of its wine and, secondly, that the mark, by reason of it being a mere description of the geographical origin of the goods, was not registrable as a trade mark. This defence led to the counter-application for the expungement of the trade mark.

THE ISSUES

9. The main application is founded upon the infringement of a registered trade mark and it is appropriate, therefore, to deal first with the counter application since, if that is successful, the applicant will be unable to prove a "clear right" in the main application.

THE COUNTER APPLICATION

	

 
through use (which must self-evidently be used as a trade mark) prior to the date of application for registration that it is capable of performing the distinguishing function of a trade mark, it will be registrable. There is no requirement that a mark must have any particular trademark characteristics in order to become distinguishable through use but such characteristics could be an important element in determining whether a particular mark has become capable of distinguishing through use".

20. In reaching this conclusion, I should add, I furthermore attach some significance to the fact that, on a proper analysis of events, first respondent, through the manner in which it has labelled and marketed its wine, has indirectly acknowledged that the applicant's trade mark, notwithstanding its geographical nature and origin, has in fact become capable of being distinguished from its parallel meaning as a geographical area.

THE MAIN APPLICATION

25. Section 34(1)(a) of the Trade Marks Act states that:

"(t)he rights acquired by registration of a trade mark shall be infringed by - (a) the unauthorised use in the course of trade in relation to goods or services in respect of which the trade mark is registered, of an identical mark or of a mark so nearly resembling it as to be likely to deceive or cause confusion;

.
27. Nor is there any convincing evidence that "fair practice" in the Netherlands differs from that standard in this country. The only evidence in this regard emanated from first respondent which attached copies of wine labels allegedly used in Europe to substantiate its claim that it is common practice to present the area of origin of wine, such as Bordeaux, Chablis and Chianti, as the primary description of the product on bottle labels. I find the examples unconvincing. Only one clearly shows the bottle's label and, although the word "Bordeaux" is prominently featured, of almost equal prominence is the name of the producer. The same applies to the label of wine emanating from Chablis, whilst the label for the bottle of Chianti, although indistinct, appeared also to feature the name of the producer above that word.

29. It is appropriate at this point to consider first respondent's striking out application. In its first manifestation it was confined to those paragraphs of the founding affidavit of first applicant's managing director, Vermeulen, based upon what was ostensibly conveyed to him by Melis, applicant's agent in the Netherlands. By the time of the hearing, however, the hearsay contents of these paragraphs were rendered admissible, by the filing of Melis's confirmatory affidavit, properly commissioned. As such, the application to strike out these paragraphs must fail. In its heads of argument, however, first respondent expanded the striking out application to include a range of further paragraphs and sentences contained in Vermeulen's affidavit. I have difficulty in dealing with this application since, although not abandoning it, first respondent's counsel made only very general submissions in support thereof. He contented himself with contending in the heads that the passages objected to were inadmissible as being hearsay, otherwise irrelevant or that Vermeulen was not able "competently" to depose thereto.
30. For the most part, the material objected to consists of Vermeulen's views and submissions relating to standard wine-labelling practice. Much of this is Vermeulen's opinion, based on his experience of what consumers expect to see on a label and how they might be misled. From this he draws conclusions and makes submissions as to the proprietry of first respondent's labelling practices. Although the drawing of such conclusions is properly the province of this Court, the balance of Vermeulen's evidence, given his experience in the wine industry, is in my view an admissible expert opinion. For these reasons alone I am not disposed to grant the extended striking out order.

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FORM OF THE RELIEF
34. In addition to the interdictory relief the applicant has also sought, in paras 2.4 and 2.5 of the notice of motion, orders directing first respondent to remove the offending trade mark from all material or, where this is not possible, delivering the material up to the applicant for destruction. It also initially sought an order directing the holding of an enquiry for the purposes of determining the amount of any damages or royalty to which it is entitled as a result of the unlawful infringement of its trade mark. That relief is contemplated by section 34(3)(b), (c) and (d) and section 34(4) of the Trade Marks Act and is relief which can accompany orders restraining the infringement of a mark. In its original form, the orders made no mention of when or by whom the enquiry would be held nor stipulated the appropriate "procedures" which should be followed therein. After requesting further submissions from counsel on this aspect, the Court was advised on behalf of the applicant that it did not persist in seeking relief relating to the holding of such an enquiry.

35. Applicant asked also that the existing order be expanded to include a new range of wine bearing the infringing trade mark as shown on Annexure SW 15, a range apparently launched by first respondent in the Netherlands after the inception of the initial application. Yet a further addition sought to the order was an amendment making it clear that the labelling includes first respondent's neck labels which also bear the infringing mark. Such further relief is to my mind justified.

COSTS
36. The order generally made in proceedings such as these is that the unsuccessful respondent(s) must pay the costs and I can see no reason to depart therefrom. As regards the costs incurred by the second respondent, applicant's counsel urged me to make no order since the time taken up in arguing this point was minimal, and since little if any additional costs would have been incurred by the citing of second respondent given that he would have been actively involved in the matter in any event in his capacity as the first respondent's managing director. This submission is borne out by the fact, although argument in this matter lasted two days, I doubt whether the issue of the second respondent's joinder accounted for much more than ten minutes worth of argument. Similarly, the matter enjoyed very limited attention in the papers. In the circumstances, in the exercise of my discretion I do not consider it appropriate to make any award of costs against applicant in this regard.

ORDER

1.2. First respondent is interdicted and restrained from manufacturing, marketing, selling or exporting wine using the wine labels, including the neck labels, shown on the photographs to founding affidavit as "SW 10 A" and "SW 10 B" and to the replying affidavit as "SW 15"; or any other wine labels including the neck labels similar thereto;

1.4. First respondent is, subject to the qualification contained in para 1.3 above, directed to remove the offending trade mark from all goods, labels, containers, packaging, advertising matter and other material of whatsoever sort, alternatively, where the offending mark is inseparable or incapable of being removed from the above-mentioned material, directing the first respondent to deliver up for destruction all such material to the applicant.

2.	The costs in this application are to be paid by first respondent, such costs to include those consequent upon the employment of two counsel;
3.	First respondent's counter-application and striking out application are dismissed with costs, including the costs consequent upon the employment of two counsel.

LJ BOZALEK, J