Tag Archives: Rights

Your business risk in selling products to a consumer

Articles imagesThe Consumer Protection Act 68 of 2008 (CPA) came into effect on 1 April 2011. A concise definition of consumers are persons to whom goods or services are marketed, who have entered into transactions with suppliers, users of particular goods or recipients/beneficiaries of services and if the consumer is a juristic person then it will be considered a consumer if it has a turnover or asset value of less than R2 million.

Section 55, states that a consumer has the right to receive goods that are reasonably suitable for the purposes for which they are intended, must be of good quality, in good working order and free of any defects.

The above section brings about the implied warranty in terms of section 56 wherein a consumer can within six months after the delivery of any goods return the goods to the supplier, without penalty and at the supplier’s risk and expense. If the goods fail to satisfy the requirements and standards contemplated in section 55, the supplier must, at the direction of the consumer, either repair or replace the failed, unsafe or defective goods or refund to the consumer the price paid by the consumer, for the goods.

It however is the latter part of section 55 regarding products being free of any defects that has made a substantial change to our common law in terms of product liability. In terms of the common law, a seller of goods is strictly liable to a purchaser for any latent defect in goods (ie. a defect which would not be apparent upon inspection by an ordinary person and which makes the goods unfit, or partially unfit, for the purpose for which they are intended to be used).

In terms of the common law, a seller of goods is strictly liable to a purchaser for any latent defect in goods (ie. a defect which would not be apparent upon inspection by an ordinary person and which makes the goods unfit, or partially unfit, for the purpose for which they are intended to be used).

Section 61 of the CPA has now changed the common law position. It provides that irrespective of negligence each producer, importer, distributor or retailer of a particular product is strictly liable for any harm caused wholly or partly as a consequence of:

  • supplying any unsafe goods;
  • had a product failure, defect or hazard in any goods; or
  • the consumer was provided with inadequate instructions or warnings in relation to any hazard arising from or associated with the use of the product.

Each producer, importer, distributor and retailer of the product is jointly and severally liable, meaning that a person who suffers harm from a defective product can bring a claim against any person in this supply chain.

Therefore a consumer will no longer be required to prove that the manufacturer or other person in the supply chain acted negligently in manufacturing or supplying the goods in question.

This is risky for any business, practising as a retailer to end consumers of a product. It is imperative that goods purchased are inspected prior to the resale to consumers. Furthermore, such businesses should ensure that they have well drafted indemnity clauses in their agreements with their suppliers in which their liability is limited by the supplier agreeing to make good any loss or consequential damages that it may incur.

Please do not hesitate to contact our Commercial Department at kevind@kisch-ip.com or merciaf@kisch-ip.com or 011 324 3025/33 with any queries, or for further information on the Consumer Protection Act, or if you require our assistance in drafting or amending your indemnity agreement.

For more information, please contact:

Anola NaidooANOLA NAIDOO
Candidate Attorney
Department: Commercial
Tel: +27 11 324 3060
Email: anolan@kisch-ip.com

Author: Anola Naidoo

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

What’s your classification?

DMK-a4bWhen determining trade mark rights, the classification system is of utmost importance. This system determines the scope of one’s statutory trade mark rights since trade mark infringement can only take place in respect of the goods or services that have been specified in the particular class, or in respect of related goods or services. Where a person registers a trade mark in respect of a certain class of goods or services, it would not be justifiable if such rights extended to other dissimilar classes of goods or services, which would result in granting that person a monopoly over goods or services that he or she is not necessarily trading in.

In the case of Impala Platinum Holdings Limited v Impala Warehousing and Logistics Africa (Proprietary) Limited and Others, the Court had to determine whether Impala Warehousing and Logistics Africa (Proprietary) Limited (“IW”) was infringing and passing off Impala Platinum Holdings Limited’s (“Implats”) registered trade marks.

Implats trades in the field of mining goods and had registered its “IMPALA” trade mark in classes 1, 6, 14, 36, 40 and 42. IW trades in warehousing and logistics services and was, in fact, involved in the transportation of mining goods in which Implats trades. Implats, however, had failed to register its “IMPALA” trade mark in class 39 in respect of transport and logistics services. Nevertheless, Impats instituted trade mark infringement and passing off proceedings against IW and IW countered with partial expungment (trade mark cancellation) proceedings against Implat’s “IMPALA” trade marks on the basis of non-use.

The evidence led by the parties in this case showed that Implats actually used the name “IMPLATS” instead of “IMPALA” in all of its communications, on its website and in the email addresses of employees and that the mark “IMPALA” was used together with the descriptor “PLATINUM”. On the other hand, IW used other descriptors such as “WHAREHOUSING & LOGISTICS” and “AFRICA” together with the “IMPALA” mark so as to distinguish itself from Implats.

When determining whether trade mark infringement or passing off has occurred, the court must establish whether there exists a likelihood of deception or confusion arising in the market place if both parties were to use the same or similar trade mark. Our courts have previously found that, where trade marks with a greater degree of resemblance are used in respect of goods or services with a lesser degree of similarity, the likelihood of deception or confusion arising is minimised. Where identical marks are used in relation to the completely different goods or services, it is likely that this will not constitute trade mark infringement.

In this particular case, Implats had failed to register its “IMPALA” trade mark in respect of the services offered by IW under its “IMPALA” mark. Our courts have also previously found that the fact that a party has chosen not to register its trade mark in a particular class is telling. If Implats had intended to use and protect the mark in respect of transport and logistical services, it should have registered its “IMPALA” trade mark in that class, namely class 39.

Another significant aspect of this particular case is that the evidence of use led by Implats was not clearly explained, particularly in respect of how and in what manner it used the “IMPALA” trade mark and the distinction between its use of the registered “IMPALA” trade mark and the “IMPLATS” mark. Implats further failed to deal, in detail, with a comparison of the parties use of the “IMPALA” marks, a comparison of the target market (notional users/purchasers), the nature of the respective goods and services and a comparison of their respective trade channels, so as to demonstrate the alleged possibility of confusion or deception. Instead, it simply made a general allegation in its founding papers and failed to expand thereon. As has been previously held in our case law, in particular the popular Plascon-Evans case, evidence in motion proceedings is led by way of affidavits. These affidavits therefore constitute both the pleadings and the evidence and so it is imperative that they are clear. Neither the court nor the other party should have to speculate on the relevance of certain facts contained in such affidavits.

In the end, the Court found that the essence of the parties’ respective goods and services were different, thereby minimising the likelihood of deception or confusion, and that Implats had failed to show evidence of use of its “IMPALA” trade marks beyond the sphere of mining and selling platinum related products. The Court therefore dismissed Implat’s main applications and allowed IW’s counter application for expungement and partial expungement of Implat’s trade marks, so as to limit the scope of Implat’s trade mark rights to the field of mining and selling platinum related products only.

There is no doubt from our South African case law that trade mark proprietors may have difficulty in proving trade mark infringement or passing off in relation to particular goods or services where it has not in fact registered or used its trade mark in relation to those particular goods or services. Trade mark proprietors should therefore ensure that they are sufficiently protected by registering their trade marks in all of the classes of goods or services in which they trade. Finally, our courts have made it clear that, when determining which classes of goods or services one wishes to protect its trade mark in, using a wide specification that includes goods or services that are not used or intended to be used should be avoided. Trade marks with specifications which are too vague or which are simply indefinite may be vulnerable to expungement or rectification proceedings.

For more information, please contact:

TAMMI WIRTZ
Candidate Attorney
Department: Trade Mark
Tel: +27 11 324 3089
Email: tammiw@dmkisch.com

Author: Tammi Wirtz

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.