A wine brand owner has recently been unable to enforce his trade mark registration against use of a confusingly similar mark for wine grapes in a case that went on appeal to the Supreme Court of Appeal (SCA). 

Registered trade marks are protected against use of confusingly similar marks on goods or services which are so similar to those for which the mark is registered that, in use, there exists a likelihood of deception or confusion. 

The introduction into the Trade Marks Act (1993) of protection against use of a confusingly similar mark in relation to “similar” goods or services came in the wake of the repeal of the 1963 Act, which had allowed brand owners to file trade mark applications defensively. Under the 1993 Act, a trade mark applicant must either be using the mark or must intend to use the mark on the very goods for which registration is sought, for the application to be valid. Filing applications for a mark one has no intention to use must result in invalidity. 

Extending trade mark protection to similar goods and services makes practical sense. A trade mark serves as an indication of origin of goods or services. If one encounters a confusingly similar mark used in respect of similar goods or services to those for which a mark is registered, it stands to reason that one would wonder whether they have a common source. 

Against this background, the strength of a registered trade mark in class 33 for wines was tested in the case of Mettenheimer v Zonquasdrif Vineyards CC, with judgment handed down by the Supreme Court of Appeal on 19 November 2013. 

Mr Mettenheimer is the owner of the registered trade mark ZONQUASDRIFT in class 33 for goods inclusive of wine, and owner of the farm Zonquasdrift, situated between Malmesbury and Riebeek Kasteel in the Western Cape. 

In 2010 a neighbouring farm started trading through the close corporation Zonquasdrif Vineyards CC, and sold wine grapes under the trading name “Zonquasdrif Vineyards”. The trade mark owner applied to the High Court for an interdict against infringement of the trade mark, and for an order that the close corporation name be amended to remove the confusing similarity between it and the registered trade mark ZONQUASDRIFT. 

The close similarity between the marks ZONQUASDRIFT and ZONQUASDRIF VINEYARDS was clear. The word “vineyards” is purely descriptive, and does not distinguish the one ZONQUASDRIF from the other ZONQUASDRIFT. The case accordingly turned on the similarity between the goods in question – being wine on the one hand, and wine grapes on the other. 

Given the function of a trade mark as a source indicator, the question the Supreme Court of Appeal had to decide was whether consumers, having knowledge of the trade mark ZONQUASDRIFT as applied to wines, and upon encountering the mark ZONQUASDRIF VINEYARDS for wine grapes would be confused. Would they wonder whether such wine and wine grapes come from the same commercial undertaking, or source? 

On a common sense approach one would. Say, for instance, one encountered wine grapes being sold under the trade mark MEERLUST. Would it not be reasonable to assume that these raw ingredients for wine production emanate from the same source as MEERLUST wine? 

The SCA’s finding has unfortunately been that such confusion would not arise. With reference to the UK case of British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch D) they have reiterated that considerations for assessing “similarity” in a trade mark sense include: 

  1. The uses of the respective goods;
  2. The users of the respective goods;
  3. The physical nature of the goods and
  4. The respective trade channels through which the goods reach the market. 

In applying these criteria, the SCA found any similarity to be “slight indeed”. The crux of the decision relies on a finding that wineries that buy bulk wine grapes for wine production form a specialized consumer base, and that the likelihood of confusion is therefore reduced. 

This decision is surprising given that OHIM (the Office for Harmonization in the Internal Market), which handles oppositions to Community Trade Mark Applications in the EU, recently issued the opposite finding on virtually the same facts. There, the opponent, Smart Wines GmbH owned the registered trade mark SMART WARE for goods including wine. On the basis of this registration it opposed an application for SMART VINEYARDS for wine grapes. OHIM refused the SMART VINEYARDS application based on the cumulative similarity between the marks (SMART WARE v SMART VINEYARDS) and the respective goods (wine v wine grapes). 

The SCA’s finding in the ZONQUASDRIFT case is a worry not only for wineries who may be unable to prevent use of a near identical mark on wine grapes; but for brand owners in general. Although there is little South African case law on the “similarity of goods” test, this finding by our highest court foreshadows that that test shall be applied very narrowly, and consequently is to the detriment of brand owners.