Arjo Wiggins Ltd v Idem (Pty) Ltd

Arjo Wiggins Ltd ("Arjo"), a UK company, was the registered proprietor in South Africa of the trade mark "Idem" since 1972, registered for "paper, paper articles, cardboard, cardboard articles and paper stationery". It traded through an associated company, Carbonless Papers Ltd. Idem (Pty) Ltd ("the respondent"), a local company, had held the same "Idem" trade mark registration until its expiry in 1993 for various stationery items. After the respondent's registration lapsed, Arjo sued for infringement in 1997. The respondent counterclaimed with an expungement application under section 27 of the Trade Marks Act 194 of 1993. Arjo's actual sales in South Africa were confined to carbonless copying paper sold to the printing industry (the "primary" use). Arjo also distributed promotional items (address books, notepads, pens, pencils bearing the Idem mark) to customers and potential customers for promotional purposes (the "secondary" use), though these were not sold and distribution was not extensive (approximately 4,000 items annually). In the High Court, Hartzenberg J ordered deletion of the trade mark registration except for "carbonless paper, namely specialized paper whose purpose it is to perform the same function as carbon paper because of its special characteristics". Arjo appealed.

• Whether promotional use of a trade mark on goods that are not themselves traded constitutes 'bona fide use' for purposes of section 27 of the Trade Marks Act 194 of 1993
• What is the proper scope of removal from the register when a trade mark proprietor proves use only within a subset of a registered category of goods
• Whether the court should limit a trade mark registration to the specific goods traded (carbonless copying paper) or permit retention of the broader category (paper and paper articles)
• What constitutes a 'commercially coherent category of goods' for purposes of expungement

The appeal succeeded with costs, including costs of two counsel. The High Court order was substituted with an order that: (a) The trade mark registration no 72/0463 'Idem' in class 16 in the name of Arjo Wiggins Ltd is rectified in terms of section 27 of the Act by deletion of all goods covered by the registration other than 'paper and paper articles'; (b) The first respondent (Idem (Pty) Ltd) is to pay the costs. The costs order in the High Court was not changed.

(1) Promotional use of a trade mark on goods that are not themselves the object of trade does not constitute 'bona fide use' for purposes of section 27 of the Trade Marks Act 194 of 1993. Bona fide use requires use in connection with the particular goods in respect of which the trade mark is registered, with the object or intention of protecting, facilitating or furthering trade in those goods, not for some other ulterior purpose. Use of a trade mark on goods other than with the object of promoting trade in those goods cannot constitute bona fide use for statutory purposes, even if that use promotes trade in other goods. (2) Once a trade mark proprietor proves relevant use of its mark within a subset of a registered category of goods, removal from the register will not be ordered unless it is evident to the court (or the applicant lays a foundation suggesting) that the expungement sought describes a commercially coherent category of goods within the existing specification. The anterior question 'in regard to what expungible category of goods has non-use been shown?' must be answered before determining the ambit of expungement. There must be a conceptual, operational or functional basis for further attenuation of the proprietor's registration within the category in which the proprietor proved statutorily relevant use.

The court noted difficult questions may arise about the discretion section 27(1) appears to confer, referencing the previous holding under the 1963 Act that a general or residual discretion exists to refuse expungement only in exceptional circumstances. However, on the approach adopted in this judgment, those questions did not arise. The court also noted, without deciding, the question whether the extended protection afforded by section 34(1)(b) (regarding use on similar goods creating likelihood of deception or confusion) is relevant to exercise of the discretion in section 27. Cameron JA expressed the test from Kerly's Law of Trade Marks: if genuine use is shown only on a particular item, the first question is whether the specification extends unduly beyond it; if so, the inquiry is how would the notional reasonable person describe that item, which provides the appropriate wording for the specification. This test avoids the 'red tea caddy' problem of over-specific limitations. The court observed that wide words in trade mark specifications can cover what are commercially quite different sorts of articles, and gave examples such as the distinction between printed stationery and literary texts, or between domestic containers and red tea caddies, or between wine generally and red wine specifically.

This case established important principles in South African trade mark law regarding the scope of 'bona fide use' for purposes of avoiding expungement under section 27 of the Trade Marks Act. It clarified that promotional use on goods not themselves traded does not constitute bona fide use. More significantly, it established the test for determining the appropriate scope of expungement when use is proved only for a subset of a registered category: removal will not be ordered to a narrower subset unless the applicant establishes that the expungement describes a 'commercially coherent category' of goods within the existing specification. The decision balances the policy against defensive registrations with practical commercial reality in defining trade mark specifications. The 'commercially coherent category' test and rejection of the 'red tea caddy' problem (over-specific limitations) have continuing significance in trade mark rectification applications.