A recent South African court ruling dealing with one company’s use of another’s trade mark on an aggregator website has attracted some interest.
The case in question is Car Find (Pty) Ltd v Car Trader (Pty) Ltd and Others (South Gauteng High Court, Judge van Oosten, 12 February 2016). The facts were that Car Find, which is involved in the used car trade industry, has registrations for the trade mark CARFIND in class 35, covering advertising and business services, and in class 38, for telecommunications services. Car Find sued competitor Car Trader for using the CARFIND trade mark on website autofuzion.co.za without authority. Car Trader’s site is an aggregator website that provides information about car sales and is aimed at car dealers, who need a subscription to use the site. The trade mark CARFIND pops up on the website alongside the trade marks of other car retailers, like Surf4cars and Auto Mart, which effectively allows subscribers direct access to a number of car retail sites without having to access them separately.
The case was brought as a matter of urgency and the first issue the court had to decide on was whether the case was in fact urgent. Somewhat surprisingly, some may argue, the court decided that the matter was urgent, despite the fact that Car Find had been aware of Car Trader’s use for some three months before it had taken action. The court justified this finding by referring to this comment that appears in the book “Kerr on Injunctions” and which was quoted with approval in the earlier South African decision of Tullen Industries Ltd v A de Souza Costa (Pty) Ltd and Others 1976 (4) SA 220 (W): “The life of a trade mark depends on the promptitude with which it is vindicated.”
The next issue was whether there had been infringement. This was what is known by lawyers as an “identical mark/identical goods case” (section 34(1)(a) of the South African Trade Marks Act 194 of 1993). The court had no doubt that there was an infringement and delivered a very short judgment finding that Car Find was entitled to an interdict: “It is common cause that a portal, identical to the trade mark, appears on the website, in the course of trade, in relation to advertising, for which the trade mark is registered, in respect of which no authorisation exists. I have made the finding that the respondents are using the trade mark and it follows that all requirements necessary to an entitlement to a final interdict, in order to protect the trade mark, have been established.”
Should this decision be appealed (and there are indications that it may be), this, perhaps, will not be a bad thing, given the brevity of the judgment and the importance of this matter to modern business. Some lawyers have expressed surprise that there was not at least some discussion on the keywords (AdWords) cases (although the issue is not quite the same, there are similarities). The keywords cases deal with the issue of whether or not it is an infringement of a registered trade mark for a third party to buy that trade mark as a keyword, with the result that people searching the trade mark are directed to its advertising material rather than that of the trade mark owner. In a long line of cases in a number of countries in Europe and in New Zealand, Australia and South Africa, the courts have made it clear that using a competitor’s trade mark as a keyword is lawful, provided it is clear from the advertising material that the consumer is directed to that there is no connection with the trade mark owner; in other words, that it is the site of a competitor of the trade mark owner.
There have also been suggestions that the court should have considered the issue of whether or not this was trade mark use, something that has clearly been a requirement for infringement in South Africa since the famous case of Verimark (Pty) Ltd v. BMW AG  SCA 53 (RSA). In this case, the court held that Verimark’s use of a BMW vehicle in a television advert for car polish did not infringe BMW’s registration for its badge (despite the fact that the badge was clearly visible in the advert), because this was not trade mark use of the BMW trade mark but merely incidental use. In other words, Verimark’s use of the BMW badge was not use intended to suggest a connection between the car polish and BMW. In Europe, this principle is expressed slightly differently, with the courts speaking of the fact that there is only an infringement if the function of the trade mark (generally its origin-indicating function) has been negatively affected or compromised.
However, in fairness to the court in the Car Find case, the issue of consumer confusion does appear to have been considered to some extent. In this regard, the court said this: “The direct access to portals, including that of [Car Find], in fact enhances the website and therefore the services offered by [Car Trader and others]. It moreover, implies that some link in the course of the trade exists between [Car Trade and others] and [Car Find]. [Car Trade and others] deny any connection with [Car Find] or that the website implies as much. No factual foundation for the latter denial exists and I am satisfied that the objective dealer, upon accessing the website, may well infer a link between [Car Trade and others] and [Car Find].”
A more considered decision on this interesting issue will be very welcome.