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

CASE NO: 19693/08

In the matter between:

and

and in the matter between:

and

and

JUDGMENT DELIVERED ON 15 JUNE 2011

GOLIATH, J:

[1] The applicant is Southern Liqueur Company Limited, a company duly incorporated according to the Company Laws of South Africa and having its principle place of business at Aan-De-Wagenweg, Stellenbosch, Western Cape.

[2] The respondent is SLD Liquor Manufacturers (Pty) Ltd, a company duly incorporated according to the Company Laws of South Africa, having its registered address at 6 Golay Road, Ottery, Cape Town. Respondent's principle business is recorded as "manufacture, production, wholesale, retail distribution marketing and export of liquor and retail products and related product".

[3] The applicant is the registered owner of the trade mark registration No 84/2496 "Amarula" in Class 33 in respect of alcoholic beverages (except beer). It uses the trade mark in connection with the sale of cream liqueur produced from fresh cream and fruit from the marula tree, being its Amarula Cream Liqueur product. The applicant in this matter seeks interdictory and ancillary relief against respondent based on the provisions of s 34(1) of the Trade Marks Act, No 194 of 1993, ("the Act") and passing-off at common law.

THE COUNTER-APPLICATION

[5] The provisio to s 10(2) provides that a mark shall not be refused registration or be liable to be removed from the register if at the date of the application for registration or the date of an application for removal, as the case may be, it has in fact become capable of distinguishing within the meaning of s 9 as a result of use made of the mark. In my view Amarula has acquired distinctiveness through extensive use in relation to its Marula Fruit Cream Cocktail. I am satisfied that the applicant has established that the mark has in fact become capable of distinguishing within the meaning of sec 9 of the Act as a result of use made of the mark. Notwithstanding the descriptive element contained in the mark, it nevertheless qualifies to remain on the register. Applicant's trade mark is saved by this proviso. However, the applicant has conceded that the registration of the trade mark should be amended and endorsed and in this respect voluntarily undertook to effect entry of the following admission:
"Registration of this mark shall not debar others from the bona fide descriptive use in the ordinary course of trade of the word 'Marula'.

THE MAIN APPLICATION
[6] During July 2008, applicant became aware that the respondent had commenced marketing and distributing a liqueur product under the trade name "Marula". The product is listed as "Black Horse Premium Marula Cream" with the trade mark "Marula" prominently depicted on both the body and neck of the label. The respondent acknowledges that it markets and distributes a liqueur product in competition with the applicant under a label described as "Black Horse Marula Cream Liqueur".

[9] Consequently, respondent argues, the correct approach establishes that the word "Marula" is used in a descriptive sense for the following reasons:

public will see the word "Marula" on its product as a flavour and not a trade mark.
(iv) The prominence afforded to the word "Marula" is merely ascribed to the intention of the respondent and other traders to clearly distinguish the flavours to the discernable purchasing public. In similar fashion, the word "Strawberry" on the respondent's "Black Horse Strawberry Cream Liqueur" product is larger than the other words on the label.

[10] In view of these factors the average consumer will not perceive the use of the word "Marula" on the respondent's label as a trade mark, nor would the public be confused as to the true origin of the goods, argued respondent. The average consumer would perceive the word as descriptive of the nature, kind and characteristics of that particular product.

[11] Respondent submits that the applicant has failed to make out a case based on trade mark infringement as encapsulated in s 34(1) of the Act. Applicant has produced no evidence of the tarnishing or dilution of its registered trade name "Amarula", nor is there any evidential proof that respondent has taken unfair advantage of the mark. The fact that applicant's registered trade mark is well-known is immaterial and does not assist in establishing an infringement case under s 34(1) Respondent further contends that applicant cannot succeed in a passing-off complaint since any source of confusion must arise from the misrepresentation allegedly made by the infringing party, as evidenced by its get-up, that the goods are related to the applicant's goods. The fact that the parties compete in the same market with similar products, that the products have a similar African theme and that the marula tree and fruit are indigenous to Africa, cannot be used as motivation to sustain a passing-off claim. Respondent denies that it is infringing the trade mark registration upon which the applicant relies or is passing-off its product as that of the applicant.

[12] Applicant, on the other hand, contends that the "Amarula" trade mark is well known for the purposes of the provisions of s 34(1 )(c) of the Act and that it has the necessary reputation in order to found an action for the common law of delict or passing-off

[14]   In terms of s 2(1) of the Act, a trade mark is defined as:

"A mark used or proposed to be used by a person in relation to goods or services for the purpose of distinguishing the goods or services in relation to which the mank is used or proposed to be used from the same kind of goods or services connected in the course of trade with any other person,"
[15]   Section 34(1) of the Act, provides that:

"The rights acquired by registration of a trade mark shall be infringed by:-
(a) The unauthorized 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;
(b) the unauthorized use of a mark which is identical or similar to the trade mark registered, in the course of trade in relation to goods or services which are so similar to the goods or services in respect of which the trade mark is registered, that in such use there exists the likelihood of deception or confusion;
(c) the unauthorized use in the course of trade in relation to any goods or services of a mark which is identical or similar to a trade mark registered, if such trade mark is well-known in the Republic and the use of the said mark would be likely to take unfair advantage of, or be detrimental to, the distinctive character or the repute of the registered trade mark, notwithstanding the absence of confusion or deception..."

[16]   Section 34(2) provides that a registered trade mark is not infringed by:
(a)    …

(c)     The bona fide use of the trade mark in relation to goods or services where it is reasonable to indicate the intended purpose of such goods, including spare parts and accessories, and such services-"

"(i)     What is, accordingly, required is an interpretation of the mark through the eyes of the consumer as used by the alleged infringer. If the use creates the impression of a material link between the product and the owner of the mark there is infringement; otherwise there is not"

[22] The circumstances of the use of the word "Marula" must accordingly be considered and the general visual presentation and impression of the product assessed, such assessment to include the use of the trade mark "Black Horse".

[24] On first impression the shapes and sizes of the two bottles are identical. Both products have a main and neck label. Both labels on each product reflects the trade name and flavour. Closer scrutiny of the two products reveal marked differences in its labelling:

(a)   There is no consistency in the size of the labels despite the fact that the bottles are the same size   The label of the Marula product is approximately 7cm in length whilst the "Strawberry" label is approximately 9cm in length.
(b )On the main label of the strawberry flavoured product the word "Black Horse" incorporating a figure of a black horse appears prominently above the word "Strawberry" on the main label. The word "Black" is depicted in bold black font 4mm high. The word "Horse" is in a slightly bigger black font 6mm in size. On the main label of the Marula product the words "Black Horse" appears in a slightly smaller font measuring 2mm The image of the black horse which is featured on the strawberry product is notably absent on the main label of the Marula product.
(c) The neck label of the "Strawberry" product features the words "Black Horse" in a small bold font. Between the words "Black" and "Horse" is the image of a black horse. On the neck label of the Marula product the words "Black Horse" appear against a shaded background with the notable absence of the black horse figure
(d) On the Marula product the word "Marula" appears in bold red capital letters on both the main label and the neck label. On the strawberry product the word "Strawberry" appears in red capital letters on the main label, but in black script on the neck label.
(e) The word "Cream Liqueur" on the main label of the "Strawberry" product is written in a slightly bigger black font than the Marula product.
(f) The back of both products are identical with the words "Marula" and "Strawberry" in capital letters. However, it is visibly noticeable that the word "Marula" in bold goldish lettering measuring 1cm is larger than the word "Strawberry" which measures 7mm. It is also striking that the complete Dark Horse trade mark incorporating the figure of the horse is only depicted on the back label of the Marula product and not on both the front and back labels as is the case with the Strawberry product.

[25| A critical evaluation of the two labels clearly demonstrates inconsistent use of the principle trade mark "Black Horse". It is evident that there is a dilution of the trade name on the Marula product due to the indistinct print of the trade mark, the deliberate adjustment of the principal trade mark by reducing font size, and the removal of the horse figure. Clearly the Dark Horse trademark should be used in conjunction with the horse figure in order for the public to recognise and associate its product with a particular trade origin as illustrated in its strawberry product.

'Use will not be bona fide, however, if the user does not unequivocally make it clear that his goods are not connected in the course of trade with the proprietor of the trade mark. It follows that bona fide use in sec 34(2)(c) means honest use of a trade mark, without the intention to deceive anybody and while unequivocally making it clear that the goods are not connected in the course of trade with the proprietor of the trade mark."

"In that regard (dealing with honest practices), account should be taken of the overall presentation of the product marketed by the third party, particularly the circumstances in which the mark of which the third party is not the owner is displayed in that presentation, the circumstances in which a distinction is made between that mark and the mark or sign of the third party and the effort made by that third party to ensure that consumers distinguish its products from those of which it is not the trade mark owner."

[28] Applicant has conclusively shown, and it was not disputed by respondent, that the flavour variant of products in the liqueur and cocktail market are depicted in a manner less prominent than the principal trade mark. The flavour variant of respondent's Marula product is reflected in such a position on its labels that the principal trademark becomes irrelevant and invisible. There are several ways to draw to the attention of the consumer that the product's flavour is "Marula". Respondent chose to do so by using the word "Marula" in red bold capital letters and bold gold capital letters which bore a deceptive resemblance to applicant's trade name. The only distinctive feature on the Marula product that is given prominence on the main, neck and back labels is the word "Marula" Furthermore, by reducing the size of the Marula label, in comparison with its strawberry label, the respondent effectively gave more prominence to the word
"Marula" on the Marula product This fact, coupled with the eye catching red and gold bold lettering, leads one to conclude that respondent intended to align its product with that of the applicant's.

[30] The parties have similar products with a general African theme. I am satisfied that there is a reasonable likelihood that members of the public may be confused into believing that there is some trade connection between the goods of the parties. The difference in the shapes or sizes of the bottles and labels are not sufficient to overcome the general visual impression of similarity. The nature of the confusion or deception is likely to divert business away from the applicant, which could result in a loss of its market share. It was clearly established that "Amarula" is a well-known brand in South Africa. The applicant has established itself as a market leader with its award winning "Amarula Cream Liqueur" and presently holds a dominant share in the overall Marula Cream Liqueur market. Its reputation was created at enormous advertising costs.   Consequently, respondent's conduct is likely to take unfair advantage of the distinctive character and reputation of the "Amarula" mark in a manner that is unfair.

[31] I am accordingly satisfied that respondent's conduct constitutes trade mark infringement in terms of the provisions of s 34(1) of the "Act" and passing-off in terms of the Common Law.

[32]   In the circumstances the following order is made:-
(a) The respondent is interdicted and restrained from infringing the applicant's registered trade mark AMARULA in Class 33 by using, in the course of trade, in relation to alcoholic beverages, the mark MARULA, or any other mark so similar to the AMARULA mark as to be likely to deceive or cause confusion in terms of the provisions of section 34(1 )(a) of the Trade Marks Act No 194 of 1993 ("the Act");
(b) The respondent is interdicted and restrained from infringing the applicants registered trade mark AMARULA in Class 33 (being a mark which is well known in the Republic) by using, in the course of trade, in relation to alcoholic beverages, the mark MARULA, to use of which would be likely to take unfair advantage of, or be detrimental to, the distinctive character or repute of the applicant's registered trade mark in terms of section 34(1 )(c) of the Act;
(c) The respondent is interdicted and restrained from passing off its alcoholic beverages as and for those of the applicant by using in the course of trade the mark MARULA per se and/or the labels featuring this mark affixed to the respondent's product as represented in Annexure "J" to the founding affidavit of Werner Swanepoel, or any mark or get up which is deceptively or confusingly similar to the applicant's trade mark AMARULA.
(d) The respondent is ordered to deliver up to the applicant for destruction all containers, brochures, advertising matter, signs and other documents or materials of any nature whatsoever bearing the infringing marks and/or the offending labels in terms of the provisions of section 34(3) of the Trade Marks Act, or at common law.
(e) The respondent is ordered to pay the costs of suit, including the costs consequent upon the employment of two counsel.

P L GOLIATH