Cochrane Steel Products (Pty) Ltd v M-Systems Group

Cochrane Steel Products (Pty) Ltd applied for registration of the trade mark 'CLEARVU' in two categories: Class 6 (non-electric cables and wires of common metal; metal fences; metal mesh; pipes and tubes of metal) and Class 37 (building, construction, repair and installation services). M-Systems Group (Pty) Ltd, a competitor in producing and installing fencing products, opposed the application on grounds that: (i) the mark consists exclusively of an indication which may serve in trade to designate the kind, quality, intended purpose or other characteristics of the goods or service (s 10(2)(b) of the Trade Marks Act 194 of 1993); and (ii) it is not capable of distinguishing the goods and services for which it is to be used (ss 9(1) and 10(2)(a) of the Act). The Gauteng Division of the High Court, Pretoria (Basson J) ordered registration of the mark subject to disclaimers and an admission. Cochrane's fencing products were described as an 'invisible wall' and 'shadow wall' - the key characteristic being that whilst the fence serves as a barrier, it does not obstruct sight. Evidence showed that competitors in the security barrier industry commonly used the words 'clear' and 'view' descriptively in relation to their fencing products. M-Systems was subsequently placed in liquidation and its liquidators abided the decision of the court.

• Whether the registration of the composite trade mark 'CLEARVU' should be subject to a disclaimer in respect of the words 'clear' and 'view' separately and apart from the mark
• Whether an admission should be entered that the registration shall not debar others from bona fide descriptive use of the words 'clear view' and 'view'
• Whether the phonetic equivalent 'VU' of the ordinary English word 'view' should be treated as non-distinctive where the word itself is non-distinctive
• The proper application of section 15 of the Trade Marks Act 194 of 1993 regarding disclaimers and admissions
• Whether wealthy traders should be permitted to 'enclose part of the great common of the English language' through trade mark registration

The appeal was dismissed save for the amendment of paragraph 1.2 of the order of the court below by the deletion of the words 'The trade mark registrant admits that'. The registration of the mark 'CLEARVU' was confirmed subject to: (1) The registration of this mark shall give no right to the exclusive use of the words 'clear' and 'view' separately and apart from the mark; (2) The registration of this mark shall not debar others from the bona fide descriptive use in the course of trade of the words 'clear view' and 'view'.

The binding legal principles established are: (1) The phonetic equivalent of a non-distinctive word is itself non-distinctive, and if a word ought to be disclaimed, its phonetic equivalent should also be disclaimed; (2) A trader is not entitled to appropriate exclusively ordinary English words that are commonly used descriptively in relation to the goods or services in question, even when those words are combined in a composite mark or deliberately misspelled; (3) The registration of a composite trade mark should not operate to inhibit the use by others of disclaimed elements that are descriptive and commonly used in the trade; (4) Section 15 of the Trade Marks Act 194 of 1993 is concerned with whether matter contained in a trade mark lacks the capability to distinguish, not whether the trade mark itself is incapable of distinguishing; (5) A disclaimer serves primarily to prevent the registration of a composite mark from operating to inhibit the use of the disclaimed element by others, and traders should not be subjected to the risk of infringement litigation where the Act provides a mechanism to obtain certainty through disclaimers; (6) An 'admission' under South African trade mark practice that registration shall not debar others from bona fide descriptive use can be construed as a disclaimer, as by not debarring others from using a word, the entry in effect disclaims the proprietor's right to exclusive use thereof.

The court made several non-binding observations: (1) The court cited with approval the statement by Cozens-Hardy MR in In Re: Joseph Crossfield & Sons, Limited [1910] 1 Ch 13 (CA) that 'Wealthy traders are habitually eager to enclose part of the great common of the English language and to exclude the general public of the present day and of the future from access to the enclosure'; (2) The court observed that trade mark law principles are abused when used not for their legitimate purpose, but to prevent or inhibit competition; (3) The court noted Justice Holmes's statement that 'When the mark is used in a way that does not deceive the public, we see no sanctity in the word as to prevent its being used to tell the truth'; (4) The court observed that the practice of entering admissions appears to be unique to South Africa and is common in cases of deliberate misspelling of ordinary descriptive words; (5) The court noted that the practice regarding admissions is not consistent and seems to have evolved into a requirement that an admission be entered whenever a feature is a misspelling of a word, whether such word is only remotely one which others may wish to use descriptively or whether it is wholly descriptive or otherwise non-distinctive; (6) The court observed that disclaimers are theoretically never necessary since registration of a trade mark cannot give rise to any rights except those arising from the mark as a whole, but they nonetheless have an important function; (7) The court noted that even with a disclaimer, a trade mark proprietor may nevertheless attempt to assert rights by means of a common-law action based on passing-off, but this is not a sufficient reason to refuse the relief of a disclaimer.

This case is significant in South African intellectual property law as it: (1) Reaffirms the principle that trade mark law exists to prevent misleading commercial speech, not to create unjustified monopolies or inhibit competition; (2) Confirms that ordinary descriptive words commonly used in a particular trade cannot be appropriated exclusively through trade mark registration, even when combined or misspelled; (3) Establishes that the phonetic equivalent of a non-distinctive word is itself non-distinctive and should be subject to disclaimer; (4) Clarifies the practice regarding disclaimers and admissions under section 15 of the Trade Marks Act 194 of 1993; (5) Provides guidance on when disclaimers should be entered to prevent composite marks from operating to inhibit the use of disclaimed elements by others; (6) Reinforces the century-old principle articulated by Cozens-Hardy MR that courts should be careful not to allow wealthy traders to 'enclose part of the great common of the English language' and exclude the public from access to ordinary words; (7) Confirms that traders should not be subjected to the risk of infringement litigation when the Act provides a mechanism (disclaimers) to provide certainty.