On-line Lottery Services (Pty) Ltd v National Lotteries Board and Others

The National Lotteries Board (NLB) was the registered proprietor of the trade mark 'LOTTO' in classes 36 (financial services) and 41 (lottery services). Uthingo Management (Pty) Ltd was appointed as the sole licensed operator of the National Lottery and used the mark in operating the Lotto game. On-line Lottery Services (Pty) Ltd conducted an online business under the trading name 'Lottofun', through which customers could order participation in the National Lottery. The NLB and Uthingo alleged that On-line’s activities infringed the LOTTO trade mark, constituted passing off, unlawful competition, and contravened the Lotteries Act. On-line opposed the claims and counter-applied for expungement of the LOTTO trade mark from the register, arguing that 'lotto' is a generic, descriptive term incapable of distinguishing, and that there had been non-use in respect of class 36.

The appeal succeeded. The orders of the High Court (except striking-out orders) were set aside. The application by the NLB and Uthingo was dismissed. The Registrar of Trade Marks was directed to expunge the LOTTO trade mark registrations in classes 36 and 41 from the register. The respondents were ordered to pay costs, including the costs of two counsel.

The case is a leading South African authority on the registrability of generic and descriptive terms as trade marks, especially in the context of services. It affirms that common descriptive words such as 'lotto' cannot be monopolised through trade mark registration and clarifies the strict approach to acquired distinctiveness. The judgment is also important for its treatment of passing off in relation to descriptive names and its application of non-use provisions in trade mark law.