National Brands Limited v Cape Cookies CC and Another

Cape Cookies CC applied to register the trade mark SNACKCRAX under application no. 2013/06837 in class 30, covering goods including savoury biscuits. National Brands Limited opposed registration relying on sections 10(4), 10(7), 10(12), 10(14) and 10(17) of the Trade Marks Act 194 of 1993. National Brands is the proprietor of several registered marks including SALTICRAX (registered in 1951 for salt flavoured biscuits), SNACKTIME, and VITASNACK. The SALTICRAX mark has significant reputation and market penetration. National Brands held 66.7% of the savoury biscuit market in 2012, with SALTICRAX accounting for 14.8% market share. Between 1999-2014, SALTICRAX generated R671 million in sales and National Brands spent over R11 million advertising it between 1994-2009. Cape Cookies' SNACKCRAX savoury biscuits have been on the market since August 2014 in competition with SALTICRAX. The high court (Le Roux AJ) dismissed the opposition and ordered registration to proceed. National Brands appealed with leave granted on limited grounds initially, but this court granted leave on all grounds.

• Whether section 10(17) of the Trade Marks Act applies only to dissimilar goods or also to similar goods
• Whether SNACKCRAX is similar to SALTICRAX for purposes of section 10(17)
• Whether SALTICRAX is a well-known trade mark in the Republic
• Whether the use of SNACKCRAX would likely take unfair advantage of, or be detrimental to, the distinctive character or repute of SALTICRAX
• What is the correct test for similarity under section 10(17)
• Whether actual detriment or advantage must be proven under section 10(17) or merely likelihood thereof

1. The appeal is upheld with costs, including those consequent on the employment of two counsel. 2. Cape Cookies CC is directed to pay the costs arising from the inclusion of the two supplementary volumes in the appeal record on the scale as between attorney and client. 3. The order of the high court is set aside and the following order substituted: (a) The opposition to trade mark application no. 2013/06837 in class 30 in the name of Cape Cookies CC succeeds and the application for registration is refused. (b) Cape Cookies CC is directed to pay the costs of the opposition proceedings, including those consequent on the employment of two counsel.

1. Section 10(17) of the Trade Marks Act 194 of 1993 applies to both similar and dissimilar goods and services. The provision is not limited to dissimilar goods only, despite contrary dicta in earlier cases. 2. In determining whether marks are similar under section 10(17), the test is whether there is an easily recognisable likeness between the marks such that the relevant public would make a connection or establish a link between them. This requires global appreciation of visual, aural and conceptual similarity based on overall impression, bearing in mind distinctive and dominant components. 3. Where a mark comprises a distinctive coined word as its dominant feature (such as CRAX), this feature assumes greater significance than descriptive prefixes in assessing similarity. 4. Section 10(17) requires only proof that use of the mark sought to be registered would likely (meaning reasonably probably) take unfair advantage of, or be detrimental to, the distinctive character or repute of the registered well-known mark. Actual proof of detriment or advantage is not required, but well-founded facts supporting the inference must be demonstrated. 5. An applicant for registration bears the overall onus to satisfy the court that there is no bar to registration under the Act. Only one ground of opposition need succeed for registration to be refused.

The court noted that it was unnecessary to decide the 'conundrum' adverted to by Wallis JA in Yuppiechef regarding the possibility of a mark being similar but not deceiving or confusing, as section 10(17) explicitly excludes deception or confusion as elements of the enquiry (though does not exclude the possibility that similar marks might also deceive or confuse). The court emphasized that trade marks should not create monopolies over common English language words, and the phonetic equivalent of a non-distinctive word is itself non-distinctive. The court observed that the primary function of a trade mark is as a badge of origin, though anti-dilution provisions protect additional commercial values beyond source-denoting function. The court noted that special care must be taken in comparing marks to avoid considering extraneous matter such as get-up on goods, focusing only on the marks themselves as they would be entitled to be used if registered. The judgment includes observations on the legislative history of anti-dilution provisions, tracing their origins to the EC Directive and UK White Paper, and South Africa's deliberate choice to adopt a broader formulation than the UK's section 10(3).

This is the first South African appellate decision to comprehensively interpret and apply section 10(17) of the Trade Marks Act 194 of 1993 (the anti-dilution provision at registration stage). The judgment clarifies that section 10(17) applies to similar goods and services, not only dissimilar ones, rejecting earlier high court dicta to the contrary. This brings South African law into alignment with its legislative intention to harmonise with European Community law while adopting a broader approach than UK law. The judgment provides important guidance on the test for 'similarity' under section 10(17), emphasizing easily recognisable likeness creating a connection or link between marks, and the importance of dominant and distinctive features. It clarifies that unlike section 34(1)(c) (infringement), section 10(17) requires only likelihood of unfair advantage or detriment based on well-founded facts, not actual proof thereof. The case reinforces the protection of well-known marks against dilution and unfair advantage-taking at the registration stage, protecting the commercial value and selling power of established brands beyond their source-denoting function. It represents a robust application of anti-dilution principles to preserve the sanctity of the Trade Marks Register.