The Gap Inc v Salt of the Earth Creations (Pty) Ltd and others

The Gap Inc (appellant), a United States corporation, was the registered proprietor of the trade mark 'Gap' in class 3 for body and personal care products in South Africa (trade mark no. 94/10423). Salt of the Earth Creations (Pty) Ltd and other respondents, South African companies, applied to expunge the mark from the Register of Trade Marks on grounds of non-use. The protagonists had a history of litigation over the Gap trade mark in respect of clothing. The North Gauteng High Court (Southwood J) ordered expungement of the mark on the basis of non-use in terms of section 27(1) of the Trade Marks Act 194 of 1993. The Gap Inc appealed. The relevant period for proving bona fide use was 4 December 2002 to 4 December 2007. The Gap presented evidence of use in two periods: (1) October 2002 to May 2003 involving negotiations and a retailer licence agreement with Clicks Group Limited, resulting in Gap 'Sense' eau de toilette being sold in approximately 100 Clicks outlets, though only 21 bottles were actually sold; and (2) from 2006/2007 onwards involving appointment of Stuttafords Stores as an authorized distributor, with negotiations in August 2007 in New York culminating in an order for 800 units of body care products placed in October 2007. By the time of the application, the parties had settled all pending litigation but the appeal had to proceed because the judgment affected a public register.

• Whether the appellant had made bona fide use of the trade mark Gap in class 3 products in South Africa during the relevant five-year period prior to the application for expungement
• What constitutes 'bona fide use' of a trade mark under section 27(1) of the Trade Marks Act 194 of 1993
• Whether negotiations and correspondence for the purpose of introducing products bearing a trade mark into the South African market constitute 'use' of the mark
• Whether the quantum of use was sufficient to defeat an application for expungement
• Whether negotiations conducted outside South Africa can constitute use of a South African trade mark

The appeal was upheld. The order of the North Gauteng High Court was set aside and replaced with an order dismissing the application for expungement. No order for costs was made either in the Supreme Court of Appeal or the court below, as agreed by the parties.

Under section 27(1) of the Trade Marks Act 194 of 1993, bona fide use of a trade mark does not require continuous or quantitatively significant use; the quantum required is relatively low provided the use is genuine and not merely token use to preserve rights. Negotiations and correspondence with potential distributors aimed at introducing products bearing a trade mark into the South African market constitute 'use' of the mark sufficient to resist expungement, even where such negotiations occur outside South Africa's borders, provided they involve South Africans representing South African entities taking steps to use a South African trade mark in South Africa. Bona fide use means use by the proprietor with the object or intention primarily of protecting, facilitating and furthering trading in the goods, not for some ulterior objective. The assessment must consider all facts and circumstances, including the nature of the goods, characteristics of the market, and the scale and frequency of use.

The court noted that it was not necessary to determine whether the sales to Clicks during the first period (2002-2003) constituted bona fide use, as the matter could be decided on the evidence relating to the second period alone. This implicitly suggests doubt about whether those sales would have been sufficient, though the court expressly left the matter undecided. The court also observed that trade marks are territorial in nature, reinforcing the general principle while demonstrating its application need not be rigid in the context of cross-border commercial negotiations. The court noted that judgments affecting public registers (in rem judgments) must be appealed even where parties have settled their disputes, as the register itself creates and defines proprietary rights. The court cited with approval the principle from AM Moolla Group that a trader registers a trade mark primarily to use it himself, not merely to prevent others from using it, and that use by the proprietor is a central and essential element of ownership.

This case is significant in South African trade mark law as it clarifies the threshold for establishing 'bona fide use' to resist expungement applications under section 27(1) of the Trade Marks Act 194 of 1993. It confirms that the quantum of use required is relatively low and need not be continuous or quantitatively significant, provided it is genuine and not merely token use to preserve rights. Importantly, the judgment establishes that negotiations and correspondence aimed at introducing products bearing a trade mark into the South African market can constitute 'use' of the mark, even when such negotiations occur outside South Africa's borders, provided they involve steps to use the South African trade mark in South Africa. The case reinforces the principle that trade mark proprietorship depends on use rather than mere registration, while setting a practical and commercially realistic standard for what constitutes sufficient use. It also illustrates the territorial nature of trade marks while adopting a flexible approach to cross-border commercial activities in the modern global marketplace.