IP ENSight | 6 December 2016

Passing off in Namibia

by Ilse du Plessis and Karin Malherbe

In a rare IP law decision in Namibia, the High Court has made it clear that it takes IP seriously, that English and South African IP decisions are very relevant, and that anyone alleging passing off will need to submit compelling evidence to establish that they have the necessary reputation.

The decision in the case of Mega Power Centre CC trading as Talisman Plant & Tool Hire v Talisman Franchise Operations (Pty) Ltd and Others was handed down on 28 October 2016 (there was an earlier decision, which we have reported on previously). The facts of the case were straightforward. A Namibian businessman started a plant tool hire business in 2006 under the name Talisman Plant and Tool Hire. At the time, he had been aware that there was a company in neighbouring South Africa that offered a similar service under the name Talisman, but his investigations showed that this company had never done business in Namibia. In 2013, the businessman learned that a competitor business would start operating in Namibia under the name Talisman Hire – this business was, in fact, a franchisee of the South African company. The applicant brought a court application for an interdict based on passing off.

The judgment kicks off nicely, with wording that shows that it takes IP seriously: “It has often been said that competition is the life blood of commerce ... hence competition as such cannot be unlawful … but competition may be rendered unlawful by the manner in which the competitor conducts his or her trade.”

The judge then discusses a number of well-known court decisions that deal with passing off, including South African decisions like Brian Boswell Circus (Pty) Ltd and Another v Boswell-Wilkie Circus (Pty) Ltd and Adcock-Ingram Products Ltd v Beecham SA (Pty) Ltd, as well as English decisions like Erven Warnink B.V v J. Townsend & Sons (Hull) Ltd.

The judge goes on to discuss the requirements for a passing-off claim: the plaintiff must show that its name has become distinctive; there must be a misrepresentation; and the defendant’s use of the feature or name must be calculated to deceive.

The applicant’s evidence took the form of an affidavit from the businessman saying that:

  • he had been selling and hiring building construction equipment under the name Talisman Plant & Tool Hire since 2006
  • he had been aware of the South African company when he started the business, but was quite sure that it had never traded in Namibia
  • he had taken active steps to develop the Talisman brand through signage and a logo, ensuring that the name and logo appeared on all equipment
  • the business had grown steadily over the years and had a significant client base comprising construction companies, mining companies and government entities
  • he employed some 17 people
  • he had obtained a defensive company name registration back in 2006, but had only sought trade mark registration in 2013
  • he was not able to submit financial statements, but he did have a letter from his auditor confirming that the business had grown steadily since inception

Not good enough, said the judge; what’s required is factual evidence. If there was a reputation “one would have expected some particularity and perhaps even confirmatory affidavits from some of those companies and parastatals … there is no primary factual evidence from which the court can deduce that the trade mark Talisman has been the subject of exposure in Namibia and that members of the public believe that it enjoys the reputation [which] is worthy of protection at common law.”

What is unfortunate is that the judge then goes on to make the point that the word “‘talisman’ is not a fancy or invented word, but one that is commonly used in the English language”. The judge says that the court cases mentioned above have made it clear that “where the applicant has used an invented or fancy name for his business it will more easily be found that the respondents, if they use the same or a similar name for their own business, are falsely representing their business as being part of, or being associated with the business of the applicant … where an applicant uses his own name or mere descriptive words in naming his business, an interdict will not easily be granted unless the applicant can show that his name, or the descriptive words used by him have acquired a secondary meaning and are associated in the minds of the public with the applicant’s products or business.”

It’s true that invented words make particularly good trade marks, but then so do dictionary words when used fancifully. Talisman is one of these. One can’t help feeling that, given the strength of the word “talisman”, the highly specialist nature of the service, and the small market in Namibia, consumer confusion is almost inevitable here.

 

Ilse du Plessis

trade mark attorney | director | IP
iduplessis@ENSafrica.com
cell: +27 82 411 7547

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Karin Malherbe

ENSafrica Namibia | associate
kmalherbe@ENSafrica.com
cell: +264 81 489 0304

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