THE SIGNIFICANCE OF PROMOTIONAL TRADE MARK USE
THE SIGNIFICANCE OF PROMOTIONAL TRADE MARK USEBy Wim Alberts
The phenomenon of the promotional use of a trade mark can occur in many settings. On golfing days, a variety of prizes can be contributed by the sponsor, for instance, an insurance company, and can include umbrellas, golf bags, golf balls, golf caps, wine etc. In another context, during a visit to your medical practitioner, a number of items can be found, sponsored by pharmaceutical companies, including prescription pads, clocks, pens, letter openers, computer mouses, paper weights, calendars etc. These items all have one thing in common: they feature the trade mark of a company that is not involved in the field concerned. Why should this matter? This question can be answered having regard to the decision in Arjo Wiggins Ltd v Idem (Pty) Ltd 2002 (1) SA 591 (SCA).
The Arjo Wiggings case
Idem (Pty) Ltd ("Idem") attacked a trade mark registration for IDEM, held by Arjo Wiggins (Pty) Ltd ("Arjo"), on the basis of the non-use thereof. The registration’s specifications originally extended to "paper, paper articles, cardboard, cardboard articles and paper stationery". Arjo only sold carbonless copying paper under their trade mark IDEM. This they termed their "primary" use of the mark. They also distributed address books, note pads, adhesive stickers, desk note blocks, pens and pencils. Their IDEM mark was placed on these goods, which were not sold, but given to customers and potential customers for so-called "promotional purposes". This Arjo termed their "secondary" use of the mark.
To defend an expungement attack on the basis of non-use, section 27(1)(b) of the Trade Marks Act 194 of 1993 requires that there must have been "bona fide use" of a trade mark. The extent to which such use took place would impact directly upon the scope of the specifications that would remain in Arjo’s registration. In the Court a quo the specifications were in effect limited to Arjo’s field of primary use, namely carbonless paper (Arjo’s appeal was against this limitation). Arjo submitted that even though the secondary products were not sold, their distribution for promotional purposes did constitute bona fide use of the mark in a commercial context, in furtherance of their business. Should this submission be correct, the implication thereof would be that there was use of the mark also in relation to "paper and paper articles" (Arjo proposed this, wider, specification). Arjo also submitted that relevant use for statutory purposes included use on goods subsidiary to those in which it mainly dealt. Idem’s view was that bona fide use meant use in relation to the specific goods in respect of which the mark is registered, for the purpose of furthering trade in those goods, and not for any other purpose.
The Court said that Arjo’s use of its mark on the secondary products was of a commercial nature, in that it was done to promote knowledge, recognition, and acceptance of the IDEM mark in relation to its primary product, being carbonless copying paper. Use of the mark on the secondary products promoted or was intended to promote trade in the primary product (599 D). This is clearly not an ulterior purpose. The Court acknowledged that Arjo had the commercially authentic aim of promoting sales of its traded. The Court then (600 C-F) reached the important conclusion that since absence of intention to trade commercially in the particular goods in respect of which the trade mark is registered renders use of the mark statutorily inauthentic, it must follow that use of a trade mark on goods other than with the object of promoting trade in those goods cannot constitute bona fide use for statutory purposes, even if that use promotes trade in other goods. The Court however allowed the appeal, on other grounds, with the result that the goods retained in the specifications of Arjo’s registration were "paper and paper articles".
This decision is of importance as it throws light on the relevance of the so-called "promotional" use of a trade mark. The judgment establishes that in instances where a particular trade mark is being used for promotional purposes in a field removed from the main trade of the proprietor, a trade mark registration for the former would be vulnerable to an expungement attack on the basis of non-use. This would be the position if the mark is not applied with the object of promoting trade in those (secondary) goods. This principle can be illustrated further by having regard to the British decision in Kodiak Trade Mark 1990 FSR 49, a case referred to by the Court in the Arjo-matter.
Kodak obtained a registration for KODAK in relation to clothing. This registration was attacked on the basis that it has not been used. The evidence established that Kodak had had T-shirts, sports jackets, ties etc. manufactured, and then sold them to, inter alia, its representatives. This clothing featured slogans such as: "DO IT. Use KODAK film and plates". They were not sold through normal retail channels. The Court considered the latter fact, in conjunction with the size and the number involved, to signify that the KODAK trade mark on the clothing would not be taken to be the trade mark of the clothing themselves, but of the business being advertised on them (63). Consequently, there was no bona fide use of the mark. The possibility of an attack on a registration on the basis that the mark was registered without the bona fide intention to use it (section 27(1)(a)) must also be borne in mind. This approach was mentioned in the decision in South African Football Association v Sandton Woodrush (Pty) Ltd 2002 (2) SA 236 (T), which related to rights to BAFANA BAFANA, the nickname of the National Soccer team. SAFA filed applications for the mark BAFANA BAFANA in 41 of the available 42 classes. It was held that there could not have been an intention by the SAFA to use BAFANA BAFANA in relation to all said goods and services (240 C-D).
The Arjo-decision is not to the effect that the proprietor of a registered trade mark does not have rights in relation to the area of promotional use of his trade mark. It is clear that in a common law context, for example, protection by way of passing off would be unaffected. In other words, the question would simply be whether there is a reputation, and the likelihood of confusion. Another example is the opposition of a trade mark application. It would seem that the promotional use of a mark can found an opposition in terms of section 10(12) of the Act, if a reputation has been established. Another relevant aspect is the Act’s provisions relating to well-known marks. Where a vehicle manufacturer for instance sponsors a sports event, known as the "BMW Cup", it would not be able, as per the Arjo-decision, to rely thereon in expungement proceedings. However, such use does increase awareness of the mark, and in this way it can become "well-known". A related observation is that as such status can open the door to protection against unauthorised use in relation to any goods or services, it could be of little practical benefit to a third party to expunge a well-known mark in a class where there is no use of the mark in the sense contemplated in the Arjo-decision. The owner of the BMW mark can thus, for example, prevent the use of its mark in relation to paint, even if its registration in class 2 is expunged. In other words, the proprietor may be able to rely on other bases to protect his trade mark rights.
A third party can also not necessarily, with impunity, use the mark of the proprietor in a specific area and defend itself on the basis that it is only done for purposes of promoting its business. The meaning and import of the concept "use" can differ according to the context in which it is considered. The legal position of the proprietor of an "ordinary" mark would be governed, firstly, by section 34(1)(a) of the Act. This provision would enable him to prevent the unauthorised use of his mark in relation to the same goods or services for which it is registered. In Nitedals Taendstikfabrik v R Lehmann & Co. Ltd  RPC 793, A had a registration for COW in relation to matches, and B, a producer of condensed milk, intended to sell matches which would feature the same word. In an interlocutory hearing the Court expressed the view (page 796 at 25) that B’s conduct amounted to an infringement of A’s trade mark rights. A third party can thus not escape liability merely because its use in relation to the same goods is of a promotional nature. The same position should apply, secondly, to use in relation to goods of a similar nature. Where A has a registration for perfumes, and B uses a mark that is identical to that of A on clothing, so as to promote his (B’s) coffee shop, A should be able to invoke the protection of section 34(1)(b) of the Act against the infringement of his trade mark rights.
All of the above views regarding infringement of statutory rights must be read subject to the important comment of Harms JA in the decision in Bergkelder Beperk v Vredendal Koöp Wynmakery  SCA 8 (RSA). This is namely that the approach that a trade mark can be infringed by non-trade mark use may be questioned (paragraph 15). In the various examples given above it was assumed that the promotional use by the third party would be seen as suggesting a connection in the course of trade. A full discussion of this aspect however falls outside the scope of this contribution.
It appears that the promotional use of a trade mark would not suffice for protection against a non-use attack. At the same time, the conclusion does not disturb the scope of protection proprietors enjoy against third parties’ infringing use of (registered) trade marks for so-called "promotional purposes". An infringer could promote his own downfall.