PepsiCo Inc v Atlantic Industries

PepsiCo Inc, proprietor of the registered trade marks PEPSI and PEPSI-COLA in class 32, applied to register the marks PEPSI TWIST (word and device marks) for non-alcoholic beverages. Atlantic Industries, a subsidiary of The Coca-Cola Company and proprietor of the registered marks TWIST, LEMON TWIST and DIET TWIST in the same class, opposed the application. PepsiCo counter-applied for the expungement of Atlantic’s TWIST marks, alleging that they were descriptive and not inherently distinctive. The High Court dismissed the expungement application but allowed registration of PEPSI TWIST. On appeal, the full court dismissed PepsiCo’s expungement application and upheld Atlantic’s opposition to the PEPSI TWIST marks. PepsiCo appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel. Atlantic’s trade marks remained on the register, and its opposition to the registration of PEPSI TWIST was upheld.

The case clarifies the test for inherent distinctiveness versus descriptiveness in South African trade mark law and affirms that common English words can be inherently distinctive when used arbitrarily. It is also significant for confirming that the incorporation of an earlier registered mark as a sub-brand within a composite mark can create a likelihood of confusion, even where the composite mark includes a famous house mark. The judgment aligns South African law with international trade mark principles.