Case law on article,‘Grey goods’: not a black and white issue in SA law
The most plain and uncomplicated scenario was decided in the case of Shalom Investments (Pty) Ltd v Dan River Mills Incorporated 1971 (1) SA 689 (A).
This case dealt with the scenario where the goods are imported from the registered proprietor himself, in South Africa and abroad. The defendants had bought material made by the claimant-proprietor with labels bearing his trade mark. The claimant-proprietor had sold the material to an intermediary in the USA, knowing that the goods were predestined for resale. At the time, the USA had anti-trust laws that prevented contractual limitations on the resale of goods; therefore the claimant-proprietor could not have ordained any actual and impactful limitations, even if he had so wanted.
The claimant-proprietor made quite clear his policy in South Africa to restrict the sale of its goods (including its resale) under its trade mark to certain endorsed buyers, and the defendants were at all times aware of such policy. Also, the defendants had — before buying the material in the USA — been explicitly told by the claimant-proprietor’s agent in South Africa that the claimant-proprietor would not sell them its goods, nor provide them with labels with its trade mark for use on such goods.
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The Appellate Division, as it was then called, held that the claimant-proprietor’s actions did not represent an implied consent to the defendants to use the trade mark in question, on clothing made from the abovementioned material.
The Court left open the question of whether a person who legitimately buys or imports goods bearing the trade mark of the manufacturer of that product or the proprietor of the above trade mark, necessarily lacks the consent to resell or deal with it.
The lacuna in the law raised in the Shalom Investments case was neatly dealt with in the case ofHampo Systems (Pty) Ltd v Audiolens (Cape) (Pty) Ltd 1985 (4) SA 257 © (known as the “Pentax” case).
In this case, the proprietor of the PENTAX trade mark for ‘cameras’ in South Africa and Japan, manufactured (without limitation) the cameras under this brand in Japan. Some of the cameras bearing the PENTAX trade mark were legally obtained (without limitation) by the alleged infringer of the claimant-proprietor’s trade mark PENTAX, which were then imported into South Africa and offered for resale under the trade mark.
The proprietor of the trade mark allegedly prohibited the alleged infringer-respondent, and when he persisted to resell the cameras under the trade mark, the applicant (who was the authorised distributor in South Africa) applied for an interdict stopping such use of the trade mark. The Court held that the proprietor had given implied consent to use of the trade mark and could not, now, unilaterally relinquish such consent:
“…although the expression ‘use as a trade mark’ is, in its ordinary meaning, wide enough to cover the sale of genuine goods marked with the trade mark of the proprietor, this expression had a well-established meaning in the common law and in earlier legislation in the context of infringement, viz., to connote only use in respect of goods other than what have been called genuine goods. If it had been the intention of the legislature to change the essential nature of trade mark infringement in this respect, it would no doubt have used explicit language in this regard, as was, indeed, done in the extension of trade mark protection by sub-section 44(1)(b) of the 1963 Trade Marks Act. And I do not think the introduction of the word ‘unauthorised’ could have effected such a change’.
Another issue that has now been addressed in the case of Sony Kabushiki Kaisha v Television Radio Centre (Pty) Ltd (TPD case number 311/84) is whether a modification of the goods imported under the proprietor’s trade mark from another territory, where the proprietor also owns a trade mark, still constitutes “genuine goods”.
The trade mark in question was the word mark SONY in relation to video cassette recorders. The Court held that recorders manufactured abroad and imported into South Africa were without the consent of the proprietor, because they were sold in Japan without limitation and that the recorders had been modified/adapted for use in South Africa, such that their nature had been ‘materially altered’ after they had left the manufacturer and company that affixed the trade marks to the recorders.
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