We lawyers are often accused of being indecisive. You have a strong case… mind you there have been cases that have gone the other way… it’s really not possible to anticipate what the judge will make of this. It all sounds so weak!
But it’s not that we’re wimps. Many cases are genuinely hard to call because the law’s so uncertain. For example, cases involving that most basic of trade mark conundrums - whether a trade mark is too close to an earlier trade mark.
In some cases, the two parties are interested in exactly the same goods and the issue is simply whether the trade marks are confusingly similar. This is relatively easy, and the courts have laid down all sorts of tests and considerations that need to be borne in mind, for example: consider the names visually, phonetically and conceptually; consider whether goods of that type are bought by discerning people or by all and sundry; consider whether goods of that type are bought only after careful consideration or on impulse; bear in mind that consumers have imperfect recollection; bear in mind that consumers don’t always see trade marks side-by-side.
In other cases, however, the goods are not the same, and what’s required is a determination of both the similarity between the trade marks and the similarity between the goods in order to decide whether consumers are likely to be confused. That’s where a recent US decision comes in. In this case, the US trade mark authorities refused an application by a microbrewer (craft brewer) to register the trade mark 5 GOLDEN RINGS for beer on the basis of existing registrations for the trade marks GOLD RING and GOLD RING VINEYARDS for wine. Why? Because not only were the trade marks similar, but they also covered goods that were similar or closely-related. On the issue of the goods, the authorities were influenced by the fact that there was evidence that a number of companies produce both beer and wine - there were, for example, 19 US trade mark registrations where the same company had registered a trade mark for both beer and wine.
I suspect that many trade mark lawyers would consider this finding to be reasonable. In fact, I can say with confidence that most trade mark lawyers charged with establishing whether a particular trade mark could safely be used for beer (which falls into class 32 of the classification system) would search that trade mark not only in class 32 but also in class 33 which covers wine.
Yet it’s not at all clear whether a South African court would have come to the same conclusion. That’s because we recently had a case where the court held that the trade mark Zonquasdrift for wine could co-exist with the trade mark Zonquasdrif (no‘t’at the end) for wine grapes, because the goods were not similar. This case went all the way to the Supreme Court of Appeal (SCA), and the court applied the reasoning of the famous old UK case of British Sugar. In that case the court laid down various tests that should be followed in order to determine whether or not goods are similar: you look at the uses of the goods; the users of the goods; the physical nature of the goods; and the trade channels through which they are sold. In the Zonquasdrift case, the SCA said that it was very relevant that, whereas wine is bought by the general public, wine grapes are bought by specialists (wine producers) who are not easily confused. The approach therefore seems to be this: if you determine that the goods are not similar, that’s the end of the enquiry; if you determine that they are similar, you go on to consider the trade marks and the likelihood of confusion.
In another recent South African decision involving the trade mark Due South in relation to various goods and services, the court adopted an approach that suggests that the classification system is critical, in other words that goods won’t be similar if they fall into different classes. The judge in this case was also strongly influenced by considerations of competition law and policy, and he suggested that trade mark rights should be interpreted in a restrictive way.
So what about European law, a body of law that tends to be very influential in South Africa? The EU courts seem to have moved away from the mechanical, two-step approach laid out in the British Sugar case, to a more holistic or global approach. This approach allows a court to decide that if the trade marks are very close, the goods will not always need to be that close in order for there to be a likelihood of confusion. And vice versa.
So it came as a bit of a surprise when in 2012 the EU trade mark authorities held that the trade mark Matador could co-exist for beer and tequila-based drinks. The authorities emphasised the fact that, even though the products may be in the same general product category and they may be consumed in the same establishments, they look different, they taste different, the one quenches thirst whereas the other doesn’t, they don’t complement one another, they don’t act as substitutes for one another, and they aren’t sold on the same shelves in supermarkets.
Yet in 2013 Europe’s highest court, the Court of Justice of the European Union (CJEU), seemed to revert to the more holistic approach. In a case that involved leather goods (class 18) and clothing (class 25), the court reiterated that the likelihood of confusion between trade marks involves a global assessment of the similarities between both the trade marks and the goods. It went on to say that ‘complementarity’ of goods is an issue that should be considered. It said that goods will be complementary ‘if there is a close connection between them, in the sense that one is indispensable or important for the use of the other in such a way that a customer may think that the responsibility for the production of those goods lies with that same undertaking’. As such, clothing and handbags were similar because ‘they have a common aesthetic function by jointly contributing to the external image (look) of the consumer concerned’. How very European!
That’s why we hedge our bets!