THE NEED FOR THE TIMEOUS ENFORCEMENT OF TRADE MARK RIGHTS

Wednesday, April 11, 2007
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By Wim Alberts
It is a universal legal principle that remedial action for the infringement of a right must be instituted timeously. The meaning of the latter concept would depend on the circumstances involved. In this discussion, the focus is on the effect of a delay in enforcing trade mark rights on the position of an entity that has used the mark concurrently with the proprietor. There are in essence five situations that require attention.

Firstly, it must be noted that if an application to register a mark is opposed on the basis of prior rights, it may be possible to obtain registration on the basis of so-called honest concurrent use (section 14(1)). In this instance the duration of use would be a relevant factor to convince the Registrar to accept the application. Registration is important as trade mark infringement proceedings cannot be instituted against the proprietor of a registered mark (section 34(2)(g) of the Trade Marks Act 194 of 1993).

Secondly, in opposition proceedings, a long period of use side-by-side, in particular on an extensive basis, will be an important factor insofar as the issue of confusion is concerned (Webster and Page South African Law of Trade Marks (1997) 7-16).

It was, for instance, said in Arsenal Football Club PLC v Reed [2001] RPC 922 931 paragraph 24, where soccer memorabilia was sold for many years, that:

"Absence of evidence of confusion becomes more telling and more demanding of explanation by the claimant the longer, more open and more extensive the defendant’s activities are."

Thirdly, and flowing from the above, is the fact that a long or extensive period of use would militate against a finding of a likelihood of confusion in infringement cases, in instances where such confusion is in fact important (section 34(1)(b)). Fourthly, someone can also introduce evidence of use over a substantial period of time in order to be able to rely on the special defence of acquiescence in an infringement action. This could then secure the "right" to continue to use the mark. In Safari Surf Shop CC v Heavywater [1996] 4 All SA 316 (D) it was said (page 323) that:

"For a defence of acquiescence to succeed, it must be shown that the person against whom the defence is raised, has lain by with full knowledge of his rights and of the infringement of those rights."

With regard to English law, reference can be made to DaimlerChrysler AG v Javid Alavi (t/a Merc) [2001] RPC 813 where the defendant had used the mark Merc in relation to clothing for 30 years. The court stated that mere delay does not form a ground of defence unless it gives rise to a defence in terms of trade mark legislation, or amount to acquiescence. It was found (paragraph 113, own emphasis) that:

"These facts cannot support a plea of acquiescence. But the period of trading is very long. Had I found that Mr Alavi had infringed one or more of the Mercedes marks, but that there was no passing-off, and that there had been no damage, perhaps the question of delay should have to be considered in the context of relief."

Insofar as passing off was concerned, it was said (paragraph 67) that:
"I should just add that there must come a time after which the court would not interfere with a continued course of trading which might have involved passing off at its inception but no longer did so: logically, this point would come six years after it could safely be said that there was no deception and independent goodwill had been established in the market by the protagonist."

In Policansky Brothers v Hermann & Cannard 1910 TPD 1265 it was said (page 1281) that it would be inequitable for a person to lay by for a considerable time. In relation to the latter criterion Webster and Page 12-84 – 12-85 state that:

"What constitutes lying by for ‘a considerable period’ or an ‘inordinate’ delay poses a difficult question of fact. It would appear to be quite impossible to lay down any hard and fast rules; each case must necessarily be decided upon its merits; where the defendant has used on a very substantial scale and where his use has been attended by considerable publicity a shorter period would no doubt be required than in the case where the defendant has operated on a lesser scale. The prejudice occasioned by an interdict in the case of the former would for obvious reasons be far greater than in the case of the latter."

In William Grant & Sons Ltd v Cape Wine & Distillers Ltd 1990 (3) SA 897 (C) the plaintiff was said to be barred from instituting proceedings in view of the delay that occurred after they became aware of the use of the defendant. The court attached weight to the fact that, initially, the defendant’s position in the market did not threaten the plaintiff. It was accepted that, hypothetically, action at a later stage, once the defendant became a leading brand, whilst originally being an insignificant part of the market for some years after its launching, was in order. The test was said (page 923 H) to be:

"It was for defendants to show that their invasion of plaintiffs’ right had been, for a sufficiently appreciable number of years, substantial enough to justify (and indeed require) the institution of proceedings by plaintiffs, if an end was to be put to defendant’s unlawful competition."

It was also said (page 924 A) that:

"The mere lapse of a number of years during which plaintiffs took no action does not in itself justify a finding of acquiescence on their part."
It may be appropriate to state that the nature of the passing off concerned, namely a misrepresentation as to the origin of the goods, may have influenced the court. The approach where there is a (mere) inter partes dispute leading to confusion, but not deception, as in this case, could be different. It must be pointed out that it does not appear equitable, with respect, to allow a plaintiff to adopt a "wait and see" attitude to determine if, in effect, the defendant’s business will prosper.

The fifth and last ground that could be relevant is estoppel. Rabie The Law of Estoppel in South Africa (1992) 1 defines estoppel as follows:

"The doctrine of estoppel as applied in the courts of South Africa may generally be said to exist in this, that where a person has by his words or conduct made a representation to another person (the representee) and the latter, believing in the truth of the representation, acted thereon and would suffer prejudice if the representator were permitted to deny the truth of the representation made by him, the representator may be estopped, that is precluded, from denying the truth of his representation."

Estoppel will not be an obvious defence for a concurrent user, as he would have to negotiate a number of steep obstacles. Firstly, it is a requirement for estoppel that the misrepresentation must relate to an existing fact, and a representation as to future intention cannot form the basis of a plea of estoppel. Consequently, the fact that a proprietor does not take action, and seemingly lead the concurrent user to believe that the former is not concerned with his use, will not allow the concurrent user to argue that he relied on the inaction of the proprietor. However, decisions such as that in Garlick Ltd v Phillips 1949 (1) SA 121 (A) are to the effect that a pattern of conduct which relates to future intention can, indeed, be seen as a representation of an existing fact.

Secondly, if the proprietor was negligent, in the sense that he ought to have been aware of the use, it is in principle possible for the concurrent user to rely thereon, as negligence is a ground for estoppel (Rabie 101). The concurrent user does not have to show dolus on the part of the proprietor. That would by implication require knowledge of the use of the concurrent user. It would seem difficult to argue in some cases that the proprietor should have been aware of the concurrent user’s use, in particular having regard to geographical considerations. Thirdly, the question as to whether a misrepresentation was being made by an ommissio, and also whether a causal connection exists, could be problematical. It must be proven that the respondent’s continued use was induced by a belief that the proprietor had no objection thereto. It could of course be that it was legal advice that caused the respondent to continue to use the mark, not a representation by the proprietor.

In summary, it appears that there are a number of bases on which the concurrent user of a trade mark could obtain protection, in the event of use of a mark over a sufficient period of time. A court will clearly have regard to the equities involved in interdicting someone who has had a considerable period of use from continuing such use. The important principle that emerges is that it is necessary for trade mark proprietors to police the use of their marks on an intensive scale. Prevention is still better than cure. However, it is also necessary to place the rights of the proprietor on record as soon as he learns of the existence of a potential infringer. This is in particular relevant as far as the special defences of acquiescence and estoppel are concerned, where knowledge of the proprietor’s approach is very relevant. Also, where an application is still pending, it would be incorrect to wait until a trade mark application is registered, in the belief that the registration is somehow immune to an expungement attack. By disclosing the existence of an application, the proprietor’s cover is blown, but so is that of the potential infringer.