Trade mark law in South Africa is very similar to trade mark law in the UK. That makes a recent UK trade mark decision regarding Claridge’s of interest to us. The decision illustrates how important trade mark registration is and reminds us how much of a role reputation can play in a trade mark infringement case. It also reminds us that individuals can sometimes be held responsible for the actions of their companies, and it brings home the benefits of a specialist IP court.
A trade mark registration, whether in South Africa or the UK, gives the owner broad protection. In general terms, the owner is protected against the unauthorised use of that trade mark, or a similar trade mark, in respect of the goods or services covered by the registration, or indeed similar goods or services.
However, if the registered trade mark is “well-known” (the UK legislation talks of it as having a reputation) there is even greater protection for the trade mark owner. When the trade mark is well-known, the owner is protected against the use of a similar trade mark if that use takes (in the words of the South African legislation) “unfair advantage of” or is “detrimental to” the “distinctive character or the repute of the registered trade mark, notwithstanding the absence of confusion or deception.” This latter form of protection is sometimes referred to as protection against dilution or tarnishment.
The case of Claridge’s Hotel Limited v Claridge Candles Limited and Denise Shepherd is a decision of the Intellectual Property Enterprise Court dated 29 July 2019. It involved the famous London hotel and a small candle manufacturer based in the town of Folkestone in Kent. The legal issue was summed up by Judge Douglas Campbell with admirable clarity in the opening line of his judgment: “Can Claridge's Hotel stop the sale of Claridge branded candles and other goods by the Defendants?”
The London hotel, which was established way back in 1856, has a trade mark registration for the name Claridge’s in classes 3, 5, 16, 35, 43 and 44. Besides covering the obvious hotel and restaurant services, the registration covers a range of goods and services including cosmetics, toiletries, retail services and health services. The registration does not, however, cover candles, which fall into class 4. The candle maker sells candles bearing the trade mark Claridge; there is also a reference in the branding to London, something that the company was unable to properly explain.
In a well-reasoned and clearly-explained judgment, one that contains numerous references to earlier cases, Judge Campbell held that there was infringement under section 10(3) of the UK legislation, the section that deals with dilution or tarnishment.
The judge made the point that the two trade marks were practically identical. The Claridge’s Hotel had a significant reputation and there was indeed a likelihood of confusion, in that people might well believe that the goods and services came from businesses that were economically linked. The judge spoke of “the similarity in the marks, the fact that both are premium offerings, the strength of the mark's reputation and the degree of its distinctive character. All of these factors contribute to the link, as does the likelihood of confusion which arises as a result thereof.”
The candle maker was also benefitting from the hotel’s reputation for luxury and elegance, which allowed the candle maker to charge high prices for its products. It was therefore gaining an unfair advantage. The judge used the expression “a transfer of image”. He said this:
“I consider that notwithstanding the Defendants' own intentions and views, the effect of their use of the Claridge mark will have been to cause a transfer of image from the Claimant's mark to the Defendants' sign in the mind of the average consumer. In particular the Defendants' sign does not merely take advantage of the fact that the Claimants' mark is so well known in relation to hotel services, but also takes advantage of its reputation for luxury, glamour, elegance and exclusivity. I have no doubt that the Defendants' use of this sign does in fact enable them to charge higher prices for their products, and/or enables them to sell more of their products to consumers. As such it has an effect on the economic behaviour of their customers. This is not merely a commercial advantage but an unfair one.”
There was therefore trade mark infringement, as well as passing off. And indeed personal liability for the individual behind the candle maker, which was essentially a one-person company. The only setback for the hotel was a partial cancellation of its trade mark registration in respect of certain goods for which it had not used its trade mark.
In South Africa there is not a great deal of specialist IP expertise in courts, other than the Supreme Court of Appeal. This does perhaps contribute to the fact that a considerable number of IP cases are taken on appeal. A specialist IP court would be welcomed.
Reviewed by Gaelyn Scott, head of ENSafrica's IP department.
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