Open Horizon Ltd v Carnilinx (Pty) Ltd

The appellant, Open Horizon Ltd, was the registered proprietor of various PACIFIC trade marks dating back to 5 November 2003, registered in class 34 covering tobacco and cigarettes. The respondent, Carnilinx (Pty) Ltd, applied to register the ATLANTIC trade mark in 2012 and subsequently various ATLANTIC-related marks (ATLANTIC WAVE, ATLANTIC MENTHOL, ATLANTIC BREEZE, ATLANTIC BLUE, ATLANTIC CORAL, ATLANTIC APPLE CRUSH, and ATLANTIC CHERRY CRUSH) between 2016-2017. The appellant sought an interdict restraining the respondent from using these ATLANTIC marks, alleging trade mark infringement under s 34(1)(a) of the Trade Marks Act 194 of 1993 and unlawful competition. The appellant's case was based on conceptual similarity - both marks conjured up the idea of an ocean. The appellant accepted the marks were not phonetically or visually similar. The High Court (Hughes J) dismissed the application with costs.

• Whether the respondent's ATLANTIC marks are so nearly resembling the appellant's registered PACIFIC trade marks as to be likely to deceive or cause confusion under s 34(1)(a) of the Trade Marks Act 194 of 1993
• Whether conceptual similarity alone (both marks referring to oceans) is sufficient to establish trade mark infringement
• Whether the respondent's adoption and use of the ATLANTIC marks amounts to unlawful competition
• Whether a trade mark proprietor can claim a monopoly over a concept or idea (in this case, the concept of an ocean)

The appeal was dismissed with costs, including the costs of two counsel.

Trade marks do not create monopolies in relation to concepts or ideas. For s 34(1)(a) of the Trade Marks Act 194 of 1993, the likelihood of deception or confusion must be attributable to the resemblance of the marks themselves, not to concepts they may evoke. Where marks refer to two different specific things within a broader category (two different oceans), consumers will not perceive them as depicting unidentifiable members of that category but rather as the specific, different things they denote. Conceptual similarity alone, in the absence of visual or phonetic similarity, is insufficient to establish that marks are so nearly resembling as to be likely to deceive or cause confusion. The infringement enquiry is an objective comparison between the registered mark and the infringing mark actually used, confined to the marks themselves without regard to other features of get-up or marketing.

The Court made several non-binding observations: (1) Passing-off might have been a better cause of action than trade mark infringement in this case, though that was not the case advanced; (2) Courts should be wary of allowing unlawful competition to become a vague penumbra around established categories of intellectual property law - it should not be added as a 'ragbag and often forlorn final alternative' to every trade mark action; (3) Some restraints that common law places on passing-off actions (particularly the need to prove likelihood of deception and confusion) are important in preventing the creation of impermissible monopolies; (4) Using general notions of unlawful competition to create an 'ersatz passing off' with less exacting requirements than those required by common law is illegitimate; (5) The Court noted the procedural impropriety of amending pleadings to introduce a new cause of action after all papers had been exchanged, without supporting affidavit, and in the face of repeated statements that the claim was based exclusively on s 34(1)(a).

This case is significant in South African trade mark law as it clarifies that: (1) trade mark proprietors cannot claim monopolies over concepts or ideas merely because marks may evoke similar concepts; (2) conceptual similarity alone, without visual or phonetic similarity, is generally insufficient to establish likelihood of deception or confusion under s 34(1)(a) of the Trade Marks Act; (3) the mere fact that marks share a generic category (e.g., both being ocean names) does not make them confusingly similar; (4) the enquiry in trade mark infringement is confined to the marks themselves, not extraneous matter or get-up; and (5) unlawful competition should not be used as a catch-all alternative to established categories of intellectual property protection, particularly where the same factual basis cannot support both claims. The case reinforces limits on trade mark monopolies and prevents overreach in claiming protection based on abstract concepts.