Recent cases in the footwear industry which I will discuss below, illustrate that no longer can one be blasé about the protection of your intellectual property. If you like what you created, designed or worked long and hard to build a reputation in, protecting it should enjoy the highest priority.
In early June 2014, the World Intellectual Property Review (WIPR) website reported that the well-known US shoemaker, New Balance, sued Karl Lagerfeld, the lead fashion designer for the luxury brand, Chanel, in the US District Court for the Southern District of New York over a range of sport shoes that allegedly infringed its trade marks and trade dress or design.
The infringement action brought by New Balance alleged that Lagerfeld's black and white shoes which included an uppercase "K" on the side are substantially similar to their sport shoes which use similar colours and also have an uppercase "N" printed on them. New Balance further claims that Lagerfeld has been selling the 'near identical and confusingly similar' sport shoes through online retailer Net-a-Porter which inevitably diluted their trade mark rights, which they have acquired since the 1970's.
New Balance has asked the court to recall and destroy any such infringing goods, and force Lagerfeld to pay damages. Lagerfeld has currently not filed a response in the matter.
On 11 September 2009 the Supreme Court of Appeal (SCA) of South Africa handed down judgement in the matter between Puma AG Rudolf Dassler Sport and footwear retailer Global Warming (Pty) Limited.
The appeal was against a court a quo decision which held that Global Warming's use of a tapering, split-stripe device and the words "DT New York" on the side of a shoe did not infringe Puma's registered "Form Strip" trade marks (representations below). Puma sought an interdict and the payment of a reasonable royalty, in terms of sections 34(1)(a) and 34(3)(d) of the Trade Marks Act 194 of 1993. The court a quo dismissed Puma's claim and Puma took the matter on appeal.
Puma relied on Section 34(1)(a) of the Trade Marks Act 194 of 1993, which provides that the rights in respect of a trade mark are infringed by the unauthorised use in the course of trade in relation to goods in respect of which a trademark is registered, of an identical mark or of a mark so nearly resembling the registered trademark as to be likely to deceive or cause confusion.
On appeal, the SCA compared Global Warming's tapering, split-stripe device in its entirety, including the words "DT New York", with Puma's "Form Strip" device trade mark no. 82/04607, which does not include any words. The SCA therefore recognised that the strip and the stripes were different and the fact that the words "DT New York" were included on Global Warning's footwear appeared to be sufficient to differentiate the marks (including Puma's trade mark no. 80/05551 which included the word "Puma") from one another to the extent that they are not confusingly or deceptively similar.
The SCA held that despite the fact that Global Warming specifically sought to produce a shoe that closely resembled Puma's shoes without infringing its trade marks, that the intention to compete must not be confused with the intention to mislead. Lastly, the SCA rejected the court a quo's finding that a claim for reasonable royalties cannot succeed where Puma has failed to prove that they had suffered actual loss. In this regard, the SCA held that "the purpose of permitting a claim for damages in the form of notional royalties is to obviate proof of actual loss" and that "all a claimant has to prove when relying on section 34(3)(d) is the number of infringing articles and the reasonable royalty rate. The appeal was however, dismissed with costs.
In another South African judgement, Adidas AG & another v Pepkor Retail Limited brought an application in the Western Cape High Court in which they alleged that the Pepkor was infringing Adidas' intellectual property rights in respect of their well-known three stripe trade mark, and that Pepkor was passing-off its footwear as that of the Adidas by featuring two or four parallel stripes on their footwear products.
The court a quo found that Pepkor was not infringing the Adidas trademarks or passing-off its goods as those of Adidas and dismissed the application.
On appeal, Adidas relied on Section 34(1)(a) of the Act and the SCA considered the Verimark (Pty) Ltd v BMW AG; BMW AG v Verimark (Pty) Ltd case which held that in order for something to be an infringement, the 'unauthorised' use must create an impression of a material link between the product and the owner of the mark.
The SCA therefore held that the mere fact that Adidas' three stripe trade mark is world famous, does not justify a finding that there cannot be any likelihood of deception or confusion between the marks. Accordingly, the more distinctive the trade mark is, or the greater its reputation, the greater the likelihood that there will be deception or confusion where a similar mark is used on competing products. The SCA ordered that Pepkor be interdicted and restrained from infringing the Adidas rights acquired by its registered trade marks and reputation therein. Pepkor was then directed to remove the infringing marks from its footwear and, where the marks were inseparable or incapable of being removed, such footwear was to be delivered to the Appellant.
When considering whether the public will be confused or deceived by the use of an alleged infringing mark, the court must consider an average consumer, with average intelligence, purchasing a product based on his/her recollection of the most dominant element of the product. The mere fact that there is a price difference between the products is of persuasive value, but not the ultimate determining factor.
The average consumer will not necessarily have the advantage of seeing the products side by side in order to clearly distinguish the marks from one another and whilst it is important to facilitate fair competition and trade in our growing economy, it is equally important to recognise the statutory protection and reputation of trade marks acquired by well-known brands, including those listed above. In addition to this, it must be noted that a trader must make it abundantly clear to the public that his/her products are his own and that there is no material link between their products and those of another.
Therefore, while we don't know what the outcome of the New Balance vs. Karl Lagerfeld matter will be, on the one hand, South African case law (as held in Puma vs. Global Warming) provides that where use of an 'alleged infringing' mark clearly distinguishes it from the registered mark i.e. the "K" vs. the "N", the marks may not be considered confusingly or deceptively similar to one another.
However, as held in Adidas vs. Pepkor, the mere fact that a mark is famous does not justify a finding that there cannot be any likelihood of deception or confusion between the marks. Accordingly, the more distinctive the trade mark is i.e. New Balance, or the greater its reputation, the greater the likelihood that there will be deception or confusion where a similar mark is used on competing products.
Therefore, either way, it is of utmost importance to all traders and manufacturers whether well-known or not, to obtain statutory protection of their trade marks as once registered, the trade mark registrations will serve as an absolute defense to any infringement action. A monopoly will also be enjoyed in the marks and elements protected. Thus if it is important and if you like it, put a ® on it!
