Groupe LFE (SA) (Pty) Limited v Swartland Winery Limited

The Winery (respondent) began in 1948 as a wine co-operative at Malmesbury, Western Cape, trading as Swartland Winery. The Swartland area has been known by that name since the 17th century. The Winery registered the word mark 'Swartland' in class 33 (wines) on 13 December 1994 under no 2004/22804. The Winery had used the mark for approximately 60 years, with the mark becoming closely associated with its award-winning wines. Groupe LFE (appellant) used the name 'Swartland' on wine bottles intended for export to the Netherlands. The Winery brought an infringement application, and LFE counter-applied for expungement of the trade mark registration. The court below (Bozalek J) found infringement and dismissed the counter-application. LFE appealed with leave of the court below.

• Whether LFE's use of 'Swartland' on wine bottles constituted trade mark infringement under s 34(1)(a) of the Trade Marks Act 194 of 1993
• Whether LFE's use constituted bona fide use of a geographical indication under the defence in s 34(2)(b)
• Whether the trade mark registration was liable to revocation under s 10(2)(b) as consisting exclusively of a sign indicating geographical origin
• Whether the proviso to s 10 saved the registration based on acquired distinctiveness through use
• Whether the registration was contrary to law under s 10(12) due to conflict with the Liquor Products Act 60 of 1989

The appeal was dismissed with costs, including the costs of two counsel. The court below's order granting an interdict and customary related relief for trade mark infringement, and dismissing the counter-application for expungement, was upheld.

The binding legal principles established are: (1) Whether use of a name constitutes trade mark use or bona fide geographical indication depends on how the name is presented to consumers - prominent display with minimal or indistinct geographical qualifiers constitutes trade mark use. (2) Section 64 of the Trade Marks Act deems application of a trade mark in South Africa to goods for export as constituting use in South Africa for purposes of the Act. (3) A geographical term that is prima facie subject to refusal or revocation under s 10(2)(b) may nevertheless be validly registered if it has acquired distinctiveness through use, as provided by the proviso to s 10. (4) The savings provision in s 11(6) of the Liquor Products Act 60 of 1989 protects trade marks (whether registered or unregistered but established) from restrictions on use of wine of origin designations, provided the trade mark was registered, used or established before 1 July 1990.

The court made non-binding observations including: (1) That the axiom 'use does not equal distinctiveness' does not mean that use cannot establish distinctiveness under particular circumstances (and often does). (2) That apprehension of harm is not a requirement for a final interdict in trade mark infringement cases. (3) Commentary on LFE's forum shopping argument, noting that a possible damages claim against Dutch retailers was not an adequate alternative remedy as it was not adequate or reasonable in the circumstances and did not grant similar protection. (4) A comment on the etymology of 'Swartland', noting LFE's advertising materials' less prosaic explanation (black referring to rich soil) versus the traditional explanation (reference to the black colour of an endemic plant after winter rains).

This case clarifies important principles in South African trade mark law regarding: (1) the distinction between trade mark use and bona fide use of geographical indications - the manner of presentation is critical in determining whether use is as a trade mark or merely descriptive; (2) the application of s 64 deeming use in relation to exported goods as use in South Africa; (3) the operation of the proviso to s 10 permitting registration of geographical terms that have acquired distinctiveness through use; and (4) the interaction between trade mark rights and geographical indications under the Liquor Products Act, including the savings provision protecting established trade marks. The case demonstrates that even geographical terms can validly function as registered trade marks if they have acquired secondary meaning through exclusive use.