Verimark (Pty) Ltd v Bayerische Motoren Werke Aktiengesellschaft

Verimark, a market leader in direct response television marketing, sold Diamond Guard car care products since 1996. In its television advertisements and packaging, Verimark used BMW vehicles to demonstrate the effectiveness of its car polish products. One advertisement showed a BMW being treated with Diamond Guard, then having flammable liquid poured on the hood and set alight without damage. Another showed an older car transforming into a shining BMW after treatment. The BMW logo was clearly visible on the vehicles in these advertisements and on packaging materials. BMW, owner of registered trade marks for its well-known logo in class 3 (for polishes and cleaning preparations, TM 1987/05127) and class 12 (for vehicles, TM 1956/00818/1), applied for an interdict to restrain Verimark from using its logo without authorization. The high court (de Vos J) granted the interdict in relation to the polish mark (class 3) but dismissed the application regarding the car mark (class 12), leading to both an appeal and cross-appeal.

• Whether Verimark's use of the BMW logo on vehicles depicted in advertisements and packaging constitutes 'trade mark use' for purposes of section 34(1)(a) of the Trade Marks Act 194 of 1993
• Whether the presence of the BMW logo on vehicles used in advertisements amounts to unauthorized use of an identical mark in relation to polishes under section 34(1)(a)
• Whether Verimark's use of the BMW logo takes unfair advantage of or is detrimental to the distinctive character or repute of the BMW trade mark under section 34(1)(c) (the anti-dilution provision)
• Whether trade mark infringement requires that the mark be used as a badge of origin to identify the trade source of goods

The appeal was upheld and the cross-appeal dismissed with costs, including costs of two counsel. The order of the high court was amended to read: 'The application is dismissed with costs.' This meant that BMW's application for an interdict was dismissed in its entirety - both in relation to the polish mark (class 3) and the car mark (class 12).

For trade mark infringement under section 34(1)(a) of the Trade Marks Act 194 of 1993, it is not sufficient that a mark identical to a registered trade mark is used without authorization in relation to goods for which the mark is registered. The use must constitute 'trade mark use' - meaning use as a badge of origin that creates the impression of a material link in the course of trade between the goods and the trade mark proprietor. Use of a mark for purely descriptive purposes or in a manner where consumers would not interpret it as designating the origin of the defendant's goods does not constitute infringement. The test is determined through the eyes of the consumer: if the use creates an impression of a material link between the product and the owner of the mark, there is infringement; otherwise there is not. For the anti-dilution provision in section 34(1)(c), while trade mark use in the section 34(1)(a) sense is not required, unfair advantage or detriment to the distinctive character or repute of a well-known mark must be properly substantiated with evidence. Mere mental association between marks does not necessarily establish actionable dilution through blurring or tarnishing.

The court noted that it would be contrived to expect Verimark to advertise car polish without using any make of car or to expect them to hide or remove vehicle logos when demonstrating their products. The court distinguished between added matter extrinsic to a defendant's mark and added matter intrinsic to it, clarifying that the dictum in Adidas regarding comparing marks as registered (without reference to get-up) dealt with determining identity or likelihood of confusion, not with determining the public's perception of what the defendant's mark is. The court observed that the anti-dilution provision is not intended to enable the proprietor of a well-known mark to object as a matter of course to any use of a sign that may remind people of the mark, and there is general reluctance to apply this provision too widely. The court affirmed that not only must advantage be unfair, but it must be of a sufficiently significant degree to warrant restraining what is, ex hypothesi, non-confusing use.

This case is significant in South African trade mark law as it established that section 34(1)(a) of the Trade Marks Act requires 'trade mark use' - meaning use as a badge of origin - before infringement can be found. It rejected a purely literal interpretation of the infringement provisions and aligned South African law with European and English jurisprudence on trade mark use. The judgment clarified that trade mark law protects marks as indicators of trade source, not as copyright-like absolute monopolies over any use of the mark. It also provided important guidance on the anti-dilution provision in section 34(1)(c), confirming that while this provision does not require trade mark use in the same sense, unfair advantage or detriment must be properly substantiated with evidence, and that mere mental association is insufficient to establish dilution. The case balanced the rights of trade mark owners against competitors' legitimate need to use goods (including branded goods) in comparative or demonstrative advertising.