The recent decision in the case of Howden Africa v CFW Industries has attracted considerable interest. In this case a registration for the trade mark Fumex Fans was cancelled for non-use, despite the fact that evidence of use over the relevant five-year period was submitted.
Much of the comment has related to the finding that the use that was shown to have taken place was non-trade mark use, and therefore insufficient – a brochure that had been submitted showed that the trade mark owner sold a whole range of fans which were generally identified by way of descriptive words, including one fan that was identified as follows:
Smoke Venting Fans
The judge said that it was ‘ambiguous whether the word “Fumex” in brackets below the description of the smoke venting fan conveys to the reader of the brochure the fact that “Fumex” is in fact a trade mark or merely intended to be descriptive of a particular type of smoke venting machine.’
This is obviously an interesting issue, especially as our courts emphasise the fact that a trade mark’s main function is to indicate origin, which means that any use that does not suggest a trade connection between the goods and the owner of the mark is not trade mark use. Although this usually comes up in the context of infringement – for example where a company defends an infringement action by claiming that it is simply using the trade mark in a descriptive way – it has now also come up in the context of non-use cancellation proceedings.
We think that an equally interesting aspect of the Howden case is the fact it suggests considerable indifference on the part of the trade mark owner. For starters, it shows indifference to branding principles, with very little thought having gone into how the mark Fumex Fans should be used. It’s basic branding practice to put the trade mark in front of the descriptive wording. It’s unheard of to put the trade mark in brackets, which almost suggests that ‘fumex’ is another appropriate descriptive term. And if you do have a mark that has the potential to be descriptive – Fumex could be seen as a combination of ‘fume’ and ‘extractor’ – you should probably take extra care, for example by using it in a form like this: ‘Fumex brand smoke venting fans’. In the same way that you see use of the expression ‘Kleenex brand tissues’.
Second, the case shows indifference to internal brand differentiation and record-keeping. Apart from the brochure, it seems that the owner of the trade mark filed no other evidence to show use of the trade mark Fumex Fans. This suggests that the trade mark owner was unable to differentiate between sales of its Fumex Fans product and its other products. This is a mistake that no company that takes it trade marks seriously would make.
Finally, the case shows considerable indifference to cancellation proceedings. South African courts have, over the years, been surprisingly generous to trade mark owners in non-use cancellation proceedings, bending over backwards to preserve registrations. There was a case of Kmart, where the court held that proof of advertising in publications that appeared in South Africa as part of a ‘strategy to promote international business’ was sufficient, even though there had been no actual sales. In the more recent case of The Gap Inc v Salt of the Earth Creations, the Supreme Court of Appeal was satisfied with evidence that there had been serious negotiations over the five-year period between the US company that owned the mark and a South African company that wanted to be appointed as the local distributor of Gap products. The court said this of the US company’s activities in South Africa: ‘It may well have been on a more modest scale relative to its activities elsewhere in the world, but it surpasses the fairly low threshold set by the authorities.’
Yet despite this low threshold, South African courts are also becoming more demanding as regards the nature of the evidence that needs to be submitted. Cancellation proceedings are odd, because the party seeking cancellation needs to prove a negative – non-use of a trade mark. It is, however, recognised that the party seeking cancellation only needs to make out a basic case, and that the onus then shifts to the trade mark owner to disprove the claim of non-use. The courts do expect the trade mark owner to take this onus seriously. In the recent case of New Balance v Dajee the Supreme Court of Appeal cancelled a registration despite the fact that evidence of use had been filed, because it found the evidence to be unconvincing – a loosely-worded and ambiguous affidavit, no supporting documentation like invoices, and a few undated photos. The court in this case said that it expects the trade mark owner to be forthcoming on the issue of use because it has ‘comprehensive and peculiar knowledge’ of the matter in issue.
The message is clear – you need to take your trade marks seriously. You need to use them properly and you need to keep proper records of your use. And if you are ever faced with non-use cancellation proceedings, you need to take those very seriously indeed!
For more information please contact:
Head of Trade Mark Department and Director
Department: Trade Mark
Tel: +27 11 324 3000