New Balance Athletic Shoe Inc v Dajee NO

New Balance Inc, a United States corporation with a South African subsidiary, was the registered proprietor of two trade marks in South Africa: P-F FLYERS (registration 1972/1361) and P-F (registration B 1965/02999), both registered in class 25 for footwear. The marks were acquired from a former proprietor on 5 February 2001, with assignment registered on 19 September 2002. Mr Dajee conducted a family business in South Africa retailing clothing and footwear since 1931 (he took control in 1968). He was the registered proprietor of the trade mark POSTURE FOUNDATION – PF (registration 1996/06063) in class 25 for clothing, footwear and headgear, which he adopted and registered in 1996 believing the mark had been abandoned. In August 2005, Mr Dajee learned that New Balance SA intended to promote footwear bearing P-F and P-F FLYERS marks at a trade exhibition. Mr Dajee made demands through his attorneys, which New Balance SA declined. New Balance SA announced its intention to apply for removal of Mr Dajee's trade mark. In response, Mr Dajee applied to the registrar for removal of New Balance Inc's trade marks for non-use under s 27(1)(b) of the Trade Marks Act 194 of 1993. New Balance Inc opposed and counter-applied for removal of Mr Dajee's mark on grounds it was not registrable under s 10(3) (no bona fide claim to proprietorship) and s 10(13) (likely to cause deception or confusion). The registrar upheld Mr Dajee's application and dismissed New Balance Inc's application. New Balance Inc appealed to the North Gauteng High Court (full court), which dismissed both appeals. Leave to appeal to the Supreme Court of Appeal was granted.

• Whether New Balance Inc's trade marks P-F and P-F FLYERS should be removed from the register for non-use under s 27(1)(b) of the Trade Marks Act 194 of 1993
• Whether sufficient evidence of bona fide use during the relevant five-year period (3 July 2000 to 3 July 2005) was established by New Balance Inc
• Whether Mr Dajee had a bona fide claim to proprietorship of the POSTURE FOUNDATION – PF mark under s 10(3) of the Trade Marks Act
• Whether the territorial concept of trade mark proprietorship should be departed from in favour of a trans-territorial approach
• Whether Mr Dajee's mark should be removed under s 10(13) as likely to cause deception or confusion as a result of the manner in which it was used
• Whether exceptional circumstances existed to justify exercising the court's discretion not to remove New Balance Inc's marks from the register despite non-use

Both appeals dismissed with costs, including costs of two counsel. The order removing New Balance Inc's trade marks P-F and P-F FLYERS from the register for non-use was confirmed. The dismissal of New Balance Inc's application to remove Mr Dajee's trade mark POSTURE FOUNDATION – PF from the register was confirmed.

1. In applications for removal of trade marks for non-use under s 27(1)(b) of the Trade Marks Act 194 of 1993, the proprietor who bears the onus of proving use must provide clear and unambiguous evidence that use occurred during the specific relevant period (five years from date of registration to three months before the application). Vague temporal references such as 'during the past five years' when deposed to after the relevant period, without documentary corroboration, are insufficient. 2. Trade marks remain territorial concepts in South African law. A person can become a bona fide proprietor under s 10(3) by appropriating a mark for use in South Africa even if that mark has been extensively used and registered in foreign countries by another person, provided there has been no prior use of the mark in South Africa and no fraud or breach of confidential relations. 3. For s 10(13) to apply (removal for marks likely to cause deception or confusion as a result of manner of use), it is the use of the entire registered mark that must be examined, not merely use of a component or portion of the mark. 4. The court's residual discretion to refuse removal of a trade mark from the register despite non-use is only to be exercised in exceptional circumstances. Long registration, intention to use in future, use shortly after the relevant period, or extensive foreign use do not constitute exceptional circumstances.

1. The court observed that in trade mark non-use proceedings, where the proprietor respondent bears the onus and can be expected to have comprehensive and peculiar knowledge of use, clear and compelling evidence should be expected, and proprietors ought not to expect the evidential burden to be discharged by allegations that are sparse, ambiguous, or lacking in conviction. 2. The court noted that while the Plascon-Evans rule applies in application proceedings, courts must be vigilant not to permit abuse by unvirtuous respondents sheltering behind patently implausible affidavit versions or bald denials, particularly in proceedings where the respondent has peculiar knowledge of the facts. 3. Nugent JA commented that the absence of any documentary evidence corroborating alleged sales (no invoices, delivery notes, or accounting records) was 'remarkable', suggesting an inference that documentation was not advanced lest it reveal when alleged sales occurred, though he noted it was not necessary to find deliberate concealment. 4. On the invitation to adopt a trans-territorial approach to trade mark proprietorship, the court observed this would have implications for the country's international relations and obligations that require careful legislative consideration, not judicial intervention. 5. The court noted that trade marks are registered for use, not merely to prevent others from using them, reflecting the underlying policy of the registration system. 6. The judgment acknowledged that common law is capable of constitutional development, but distinguished this from interpretation of statutory provisions where the meaning has been judicially settled and alteration is a matter for the legislature.

This case is significant for South African trade mark law in several respects: 1. Evidence standards for non-use applications: It clarifies the evidentiary burden on proprietors defending against removal for non-use under s 27(1)(b). Proprietors must provide clear, unambiguous and temporally specific evidence of use during the relevant period. Vague temporal references and absence of documentary corroboration will be insufficient. 2. Application of Plascon-Evans in trade mark proceedings: While the Plascon-Evans principles apply, courts will not permit proprietors who bear the onus and have peculiar knowledge of use to shelter behind implausible or ambiguous affidavit versions. Clear and compelling evidence is expected. 3. Territoriality principle affirmed: The judgment strongly reaffirms the territorial nature of trade mark rights in South Africa, following Victoria's Secret. Foreign use and registration, no matter how extensive, does not prevent adoption and registration in South Africa absent use here or fraud/breach of confidence. 4. Limits of judicial law reform: The court definitively rejected invitations to judicially develop a trans-territorial approach to trade mark proprietorship, holding that territoriality is embedded in the statute and only the legislature can reform this, considering international relations and obligations. 5. Discretion in removal proceedings: The judgment confirms that the discretion not to remove marks despite non-use is only to be exercised in exceptional circumstances, and factors such as long registration, intention to use, or foreign use do not constitute such circumstances. 6. Section 10(13) application: The entire registered mark, not merely a component, must be used in a manner likely to cause deception or confusion for s 10(13) to apply. The case is marked as having 'no precedential significance' but nonetheless provides important guidance on evidentiary standards and procedural issues in trade mark removal proceedings.