Puma AG Rudolf Dassler Sport v Rampar Trading (Pty) Ltd

Puma AG Rudolf Dassler Sport is a German company with an international reputation in sportswear, including sport shoes. It owns various registered trade marks including word marks, a leaping puma device, and several "form strip device" marks registered in class 25 for clothing, footwear and headgear. The basic form strip device is a tapering curved stripe. Rampar Trading (Pty) Ltd owns a chain of retail shoe stores known as Dodo's, selling branded shoes and a budget line under its own Dodo name and device mark. In September 2009, inspectors detained a consignment of shoes imported by Rampar, suspecting they were counterfeit. The shoes (four types) bore stripe devices on the side which Puma alleged infringed its form strip marks. The shoes also bore a Dodo trade mark. On 28 October 2009, following a warrant obtained under s 6 of the Counterfeit Goods Act 37 of 1997, police seized the goods. Rampar applied to the Durban High Court under s 7(4) of the Act for a declaration that the goods were not counterfeit and for their return. Rampar's main contention was that stripe devices were decorative and did not perform a trade mark function, and that counterfeiting required "cloning" of actual goods bearing the mark, not just use of the mark itself.

• Whether the Counterfeit Goods Act 37 of 1997 requires 'cloning' of actual goods bearing a trade mark, or whether counterfeiting can occur through use of a registered trade mark on goods not yet produced by the rights owner (the 'cloning issue')
• Whether the shoes seized from Rampar were 'counterfeit' within the meaning of the definition of 'counterfeiting' in s 1 of the Act
• The proper interpretation of 'protected goods' under the Counterfeit Goods Act, particularly para (b) of the definition
• Whether the marks applied to Rampar's shoes constituted 'the subject matter' or 'a colourable imitation' of Puma's registered trade marks
• The distinction between counterfeiting under the Act and standard trade mark infringement

The appeal was upheld with costs and the order of the court below was substituted with an order dismissing the application with costs.

The binding legal principles established are: (1) Under the Counterfeit Goods Act 37 of 1997, counterfeiting does not require 'cloning' of actual goods produced by the intellectual property rights owner; (2) 'Protected goods' under s 1 para (b) includes notional goods - any particular class or kind of goods which may bear a registered trade mark but which have not yet been produced by or with the authority of the IP owner; (3) Para (a) of the 'counterfeiting' definition was intended to deal with copyright piracy (requiring 'substantially identical copies'), while para (b) was intended to deal with trade mark counterfeiting (using concepts of 'colourable imitation' and 'calculated to be confused'); (4) Counterfeiting under the Act requires more than standard trade mark infringement - it involves deliberate and fraudulent infringement and requires that goods are 'calculated to be confused with' or 'taken as being' the registered mark; (5) One cannot use a registered trade mark and then argue it was used as ornamentation or decoration to avoid a finding of counterfeiting; (6) The addition of subsidiary marks (such as other brand names or devices) does not prevent a finding of counterfeiting if the counterfeit mark is still present and 'calculated to be confused with' or 'taken as being' the registered mark.

The court made several non-binding observations: (1) Although South Africa is party to TRIPS by virtue of WTO membership, TRIPS provisions do not form part of South African municipal law, meaning legislation may be interpreted to conform to TRIPS but may nevertheless not comply with TRIPS obligations or may have stricter requirements; (2) The term 'counterfeiting' is inappropriate for copyright cases - 'piracy' should be used instead; (3) The definition of counterfeiting in the Act is 'somewhat opaque'; (4) No visible steps have been taken to solve the ongoing problems with interpretation of the Counterfeit Goods Act; (5) The court expressed doubt whether para (b) of the counterfeiting definition can apply to copyright piracy; (6) The court noted that s 3(2)(b) confirms that the Act contemplates counterfeiting of notional goods because it does not require a specimen of protected goods in the case of para (b) since 'one would imagine there cannot be one'; (7) Reference to standard trade mark infringement tests (likelihood of deception or confusion, confusing similarity, passing-off principles, imperfect recollection, etc.) was 'singularly out of place and unhelpful' in the context of counterfeiting.

This judgment is significant in South African intellectual property law for clarifying the interpretation of the Counterfeit Goods Act 37 of 1997, particularly: (1) It establishes that counterfeiting does not require 'cloning' of actual goods produced by the rights owner - it is sufficient that goods bear a counterfeit mark even if applied to goods the rights owner has not yet produced but which fall within the class of goods covered by the registration; (2) It clarifies the meaning of 'protected goods' under s 1, distinguishing between actual goods (para (a)) and notional goods (para (b)); (3) It distinguishes between counterfeiting (which requires deliberate and fraudulent infringement) and standard trade mark infringement; (4) It establishes that para (a) of the counterfeiting definition deals with copyright piracy while para (b) deals with trade mark counterfeiting; (5) It confirms that a trade mark owner cannot escape liability for counterfeiting by adding subsidiary marks or claiming the use was decorative rather than as a trade mark. The judgment extends protection beyond what some commentators understood to be required by the TRIPS Agreement, showing that South African law may impose stricter requirements than international obligations.