In a recent decision by the Western Cape High Court, a producer and exporter of wine was restrained from infringing the Applicant’s registered trade mark SWARTLAND through the manufacture, marketing, selling or exporting of wine incorporating the SWARTLAND trade mark.
The court’s decision was complicated by the fact that, as most wine drinkers will attest, the name “Swartland” actually signifies an area in South Africa well-known for the production of wines of origin, to the extent that it has been statutorily proclaimed as such.
This fact formed the crux of the Respondent’s defence to the infringement claim, as well as its primary ground for seeking expungement of the Applicant’s SWARTLAND registrations. In its counter-application for expungement, the Respondent argued that the mark SWARTLAND does not constitute a trade mark, as it is a term which in trade serves to designate the geographical origin of the goods. The Respondent also argued that the mark was not registrable is its use is contrary to law, as contemplated in Trade Marks Act. On this basis, the Respondent argued that the mark was liable to be removed from the Register.
The court held that it was appropriate to first determine the counter-application for expungement, since the main application was predicated upon the infringement of a registered mark. If the counter claim was successful, the Applicant would be unable to prove the “clear right” required to found an interdict.
In its defence to the expungement application, the Applicant alleged that the SWARTLAND mark had, at the date on which the Respondent launched its counter-application, become capable of distinguishing through prior use, and therefore in terms of the South African Trade Marks Act, was not liable for removal from the Register.
The court accepted the Applicant’s evidence showing that the SWARTLAND mark had become associated with the Applicant and its products, and that the Applicant’s award-wining winery had acquired a considerable reputation in its 60 years of existence. In particular, the court noted that no other winery or wine estate used the word “Swartland” in its name, nor was the word incorporated in the name of any wine (other than the Applicant’s and Respondent’s wines).
In addition, the Applicant alleged that wine producers, distributors, retailers and consumers in South Africa and elsewhere had come to associate the SWARTLAND mark with the Applicant’s wines, while also recognising that there is a “wine of origin” region of the same name.
The Respondent disputed the Applicant’s defence, inter alia on the basis that the geographical nature of the SWARTLAND mark was such that it could never distinguish the Applicant’s product.
The court considered various rulings dealing with the limited circumstances in which geographical terms are admitted to the Register. Ultimately, it determined that the SWARTLAND mark had indeed become capable of distinguishing the Applicant’s product, based on the Applicant’s unchallenged use of the SWARTLAND trade mark in relation to wine products, as well as its evidence relating to the fact that no other winery or wine estate used the mark in its name or in relation to its product.
In reaching this conclusion, the court also attached significance to the fact that the Respondent had “through the manner in which it had labelled and marketed its wine ... indirectly acknowledged that the Applicant’s trade mark, notwithstanding its geographical nature and origin ... in fact become capable of being distinguished from its parallel meaning as a geographical area.”
Having dismissed the expungement application, the court moved on to consider the main application. The Respondent’s defence to the infringement claim was two-fold. Its first argument relating to the alleged non-distinctiveness of the SWARTLAND trade mark was dealt with and rejected by the court in the expungement proceedings.
Its second defence, which related to the manner in which it used the mark on the contested wines, was that the reasonable consumer, upon reading the label on the wine, would appreciate that he is purchasing no more than a bottle of wine which originates from the Swartland region. Consequently, the Respondent argued, confusion or deception with the Applicant’s products was unlikely.
This defence was founded on a provision in the Trade Marks Act which allows a transgressor to escape the relevant infringement provisions if he can show that his use of the registered mark, being a bona fide description of the geographical origin of the goods, is consistent with “fair practice”.
The court noted that the clear prominence of the SWARTLAND mark on the labels of the Respondent’s wines, particularly in comparison with the smaller and less prominently-positioned type face in which the words “Wyn van Oorsprong” (“Wine of Origin”) appeared on the labels, tended to cast doubt on the Respondent’s explanation that the use of the mark was intended merely to convey the region of the wine’s origin.
A factor which further discredited the Respondent’s argument was related to the fact that ordinarily the wine of origin description is given little prominence on the label of a bottle, and is unlikely to appear more than once. This was not the case with the Respondent’s bottles, on which the SWARTLAND mark appeared at least seven times, in an arresting colour, sometimes absent the “Wyn van Oorspring” qualifier.
Having regard to this, the court went on to consider evidence as to the meaning of “fair practice”, ultimately finding that the Respondent’s conduct did not satisfy the relevant requirements. This disposed of the Respondent’s defences.
Finally, the court held that sufficient evidence had been placed before it to establish that the Applicant did indeed have a clear right, and that, if the Respondent were permitted to continue marketing its wine under the SWARTLAND trade mark, the Applicant would suffer damage.
This damage would extend beyond loss of sales, and result in diminution of the Applicant’s brand integrity, goodwill and reputation. Accordingly, the court ruled in favour of the Applicant, interdicting the Respondent from continuing its unlawful conduct.