Distell Limited v KZN Wines and Spirits CC

Distell Limited is a leading producer and marketer of wines and spirits in South Africa. It holds two registered word trademarks in Class 33 for whisky: KNIGHT'S GOLD (registered 30 October 1990) and KNIGHTS (registered 24 January 1994). In 2002, KZN Wines and Spirits CC began importing whisky from Scotland bearing the mark 'BLACK KNIGHT' and selling it exclusively to Midmar Liquors Limited, which operates approximately 40 outlets across South Africa. Midmar has sold both BLACK KNIGHT and KNIGHTS whisky since at least 2009. In May 2011, Distell discovered the use of the BLACK KNIGHT mark and brought an application in the KwaZulu-Natal High Court for an interdict restraining KZN Wines from infringing its two word marks. The years of competitive trading showed no evidence of actual confusion between the products.

• Whether the use of the mark BLACK KNIGHT in relation to whisky infringes Distell's registered trademarks KNIGHT'S GOLD and KNIGHTS under section 34(1)(a) of the Trade Marks Act 194 of 1993
• Whether the use of BLACK KNIGHT is likely to deceive or cause confusion as contemplated by s 34(1)(a)
• Whether KZN Wines was passing off its BLACK KNIGHT whisky as Distell's products
• What is the dominant or striking feature of each competing mark
• Whether the absence of evidence of actual confusion over years of competitive trading is relevant to assessing likelihood of confusion

The appeal was dismissed with costs, including costs of two counsel where employed. The respondent was ordered to pay the costs occasioned by the postponement of the hearing of the appeal on 10 September 2015.

The binding legal principles established are: (1) In assessing trade mark infringement under s 34(1)(a) of the Trade Marks Act 194 of 1993, a court must undertake a global appreciation of the visual, aural and conceptual similarity of the marks based on the overall impression given by the marks, bearing in mind their distinctive and dominant components. (2) All elements of a composite mark must be considered - individual words cannot be arbitrarily selected as 'dominant' while ignoring other significant elements (such as descriptive adjectives like 'black' or 'gold'). (3) The absence of evidence of actual confusion after a substantial period of competitive trading (in this case, years of both products being sold at the same outlets) is highly relevant and can be determinative in finding that there is no likelihood of confusion or deception. (4) Even where products are sold in environments conducive to confusion (such as noisy bars or crowded bottle stores), if the marks differ sufficiently in sound, sense and appearance, no infringement will be found. (5) The marks BLACK KNIGHT and KNIGHTS (or KNIGHT'S GOLD) are sufficiently different in their overall impression that they are not likely to deceive or cause confusion, even among consumers with imperfect recollection.

The Court made several non-binding observations: (1) While acknowledging Colman J's observation in Oude Meester Groep that on convivial occasions enlivened by beer or spirits, recollection may fade and articulation may deteriorate, the Court did not find this determinative in the present case. (2) The Court noted that it had not been advised how Distell discovered in May 2011 that the BLACK KNIGHT mark was being sold at the same outlets as KNIGHTS, suggesting some curiosity about the delay in bringing the action given the products had been sold together since at least 2009. (3) The Court stated there was no need to discuss the very different shapes and colours of the bottles in which KNIGHTS and BLACK KNIGHT are sold, since the question of passing-off fell away given the lack of likelihood of confusion. This suggests that had the matter proceeded on passing-off grounds, the get-up of the bottles would have been relevant. (4) The Court noted that the High Court's finding that consumers would exercise greater circumspection because whisky is not a cheap drink, even though both products were inexpensive whiskies, without explicitly endorsing or rejecting this reasoning.

This case is significant in South African trade mark law for several reasons: (1) It reaffirms and consolidates the principles established in Plascon-Evans and subsequent cases regarding the assessment of likelihood of confusion in trade mark infringement matters. (2) It emphasizes the importance of the 'global appreciation' approach adopted from European jurisprudence, requiring courts to consider the overall impression of marks rather than dissecting individual elements. (3) It establishes that all elements of a composite mark must be considered, not just what one party claims to be the 'dominant' element - both 'black' and 'knight' are equally significant in BLACK KNIGHT, just as both 'knight's' and 'gold' are significant in KNIGHT'S GOLD. (4) Importantly, it confirms that the absence of evidence of actual confusion after years of competitive trading is highly relevant and can be determinative in assessing whether there is a likelihood of confusion or deception. (5) It demonstrates the practical application of trade mark infringement principles in the alcoholic beverages market, clarifying that even in environments like crowded bars or taverns, confusion must be assessed objectively based on the actual marks used.