THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case No: 251/11
No precedential significance

In the matter between:

NEW BALANCE ATHLETIC SHOE INC
Appellant

and

ABDULLAH MOHAMED DAJEE NO
First Respondent
HASSEN GOOLAN MOHAMED
KAROHA NO
Second Respondent
BASHIR AHMED MOHAMED NO
Third Respondent

Neutral citation: New Balance Athletic Shoe Inc v Dajee NO (251/11)
[2012] ZASCA 3 (2 MARCH 2012)

Coram:
NUGENT, SNYDERS, MALAN, BOSIELO and
MAJIEDT JJA

Heard:
16 FEBRUARY 2012

Delivered:
2 MARCH 2012

Summary:
Trade mark – removal from register – non-use
under s 27(1)(b) of the Trade Marks Act 194 of
1993 – bona fide proprietor under s 10(3) –
deceptive or confusing use under s 10(13).

___________________________________________________________

ORDER
___________________________________________________________

On appeal from: North Gauteng High Court, Pretoria (Southwood,
Phatudi and Makgoka JJ sitting as court of first instance):

The appeals are dismissed with costs that include the costs of two
counsel.
___________________________________________________________

JUDGMENT
___________________________________________________________

NUGENT JA (SNYDERS, MALAN, BOSIELO and MAJIEDT JJA
CONCURRING):

[1] The appellant (which I will refer to as New Balance Inc) is a
United States corporation. It has a wholly owned subsidiary in this
country – New Balance South Africa (Pty) Ltd – that conducts business in
Cape Town (I will refer to it as New Balance SA).

[2] New Balance Inc is the registered proprietor in South Africa of two
trade marks, namely, P-F FLYERS (registration 1972/1361) and P-F
(registration B 1965/02999), both registered in class 25 in respect of
footwear. It acquired the trade marks from a former registered proprietor,
Leif J Ostberg Inc, also a United States corporation, on 5 February 2001.
The assignment of the trade marks to New Balance Inc was registered on
19 September 2002.

[3] The late Mr Dajee conducted business in this country retailing,
marketing, selling and distributing clothing and footwear. His was a
family business that commenced operating in 1931. Mr Dajee took
control of the business in 1968. He died after the current proceedings
were commenced and was substituted by the executors of his estate, who
are the respondents in these appeals. For convenience of narration I will
refer to Mr Dajee as if he was still alive and party to the proceedings.

[4] Mr Dajee is the registered proprietor of the trade mark POSTURE
FOUNDATION – PF (registration 1996/06063), which is registered in
class 25 in respect of clothing, footwear and headgear. The circumstances
in which he became the registered proprietor are dealt with later in this
judgment.

[5] In August 2005 it came to the knowledge of Mr Dajee that New
Balance SA intended to promote footwear bearing the trade marks of
New Balance Inc (P-F and P-F FLYERS), in association with the mark
POSTURE FOUNDATION, at a trade exhibition that was to be held the
following month. Alleging that by doing so New Balance SA would be
infringing his trade marks Mr Dajee, through his attorneys, made various
demands of New Balance SA. New Balance SA declined to submit to the
demands, and announced its intention to apply for the removal from the
register of Mr Dajee‟s trade mark (POSTURE FOUNDATION – PF).

[6] Mr Dajee‟s response was to apply to the registrar for the removal
from the register of New Balance Inc‟s trade marks, relying for his
application on s 27(1)(b) of the Trade Marks Act 194 of 1993, which
allows for such removal at the instance of an interested party on the
grounds of non-use.

[7] Apart from opposing that application New Balance Inc applied in
turn for the removal from the register of Mr Dajee‟s trade mark on
various grounds. Only two remain relevant to this appeal. They are that
the mark was not registrable because, first, it was a „mark in relation to
which the applicant for registration [had] no bona fide claim to
proprietorship‟ (s 10(3)), and secondly, because it was „a mark which, as
a result of the manner in which it [had] been used, would be likely to
cause deception or confusion‟ (s 10(13)).

[8] The registrar upheld Mr Dajee‟s application, and dismissed that of
New Balance Inc. New Balance Inc appealed against both orders to the
full court of the North Gauteng High Court, as it was permitted to do by
s 53. That court (Southwood, Phatudi and Makgoka JJ) dismissed both
appeals, but granted leave to appeal to this court.

[9] I deal first with the appeal against the order removing the trade
marks of New Balance Inc from the register.

[10] It is trite that a trade mark is registered in order for the proprietor to
use it and not merely to prevent others from using it.1 That principle is
recognised in s 27(1)(b), which allows for the removal of a trade mark
from the register for non-use, in the following terms:
„[A] registered trade mark may, on application to the … registrar by any interested
person, be removed from the register in respect of any of the goods or services in
respect of which it is registered, on the ground … that up to the date three months
before the date of the application, a continuous period of five years or longer has
elapsed from the date of issue of the certificate of registration during which the trade

1 The Advocate General, F G Jacobs, in Hölterhoff v Freiesleben (ECJ) (Case C-2/00), cited with
approval in A M Moolla Group Ltd v The Gap Inc 2005 (6) SA 568 (SCA) para 26.

mark was registered and during which there was no bona fide use thereof in relation
to those goods or services by any proprietor thereof or any person permitted to use the
trade mark as contemplated in section 38 during the period concerned.‟

[11] The allegations made by Mr Dajee in support of his application
were straightforward. He alleged that he keeps himself informed of
existing and new products that have a bearing on his business, and that he
constantly monitors the South African trade so as to remain aware of the
activities of competitors and potential competitors. He said that he was
not aware of any use in South Africa of the trade marks of New Balance
Inc in relation to the goods for which they are registered nor, indeed, in
relation to any other clothing, footwear, or related fashion goods, up until
August 2005, when he learnt that New Balance SA intended introducing
goods to the trade in South Africa at the trade exhibition. Those
allegations were supported by a director of Tomenco (Pty) Ltd, Mr Ivan
Kukuljevic, which had been involved in the footwear and clothing
industries since 1967. Mr Kukuljevic said that to his knowledge there had
been no use of the trade marks in relation to any fashion goods, including
footwear, by any other person in the normal course of trade in South
Africa prior to the exhibition.

[12] Mr Edward J Haddad, the vice president of New Balance Inc, who
deposed to the answering affidavit, said nothing himself concerning the
use of the trade marks in this country, confining himself to their use in
other parts of the world. As to alleged use in South Africa he relied upon
a supporting affidavit of Mr Gary van Rooyen, the General Manager of
New Balance SA.

[13] Mr van Rooyen‟s affidavit is decidedly sparse. He said that
footwear bearing the trade marks P-F and P-F FLYERS had been sold to
members of the public in the ordinary course of business at the factory
store of New Balance SA in Cape Town „during the past four years‟. He
attached a photograph depicting the interior of the store, a photograph of
footwear on display in the store, two photographs depicting models
displaying the footwear, and two photographs depicting what was said to
be „the typical manner in which the . . . trade marks P-F and P-F FLYERS
are being used in South Africa‟. He said that the turnover in South Africa
of goods bearing the trade marks „during the past five years‟ amounted to
R700 000, and that promotional expenditure of R250 000 had been
incurred during that period. Three executives of New Balance SA
deposed to affidavits, in identical form, in which they purported to
„confirm that footwear bearing the trade marks P-F and P-F FLYERS
have been sold by [New Balance SA] in at least the past four years‟ at its
factory store.

[14] Mr van Rooyen also said that as a result of great demand for the
footwear, and after conducting market research „for the best part of
2005‟, it had been decided by New Balance SA, in conjunction with New
Balance Inc, that New Balance SA would expand sales of the footwear,
and that an agreement had been reached with a wholesaler on 10 May
2005 to assist in the distribution of the goods. An affidavit deposed to by
a member of the close corporation that operates the wholesaler makes no
mention of the alleged agreement, nor, indeed, of any discussions or
negotiations to that end, but in any event, the evidence advanced by Mr
van Rooyen is not evidence of relevant use.

[15] That is the extent of the evidence that was advanced by New
Balance Inc in support of its allegation of relevant use. There are no
invoices or delivery notes recording purchase or receipt of the stock that
was alleged to have been sold at the Cape Town factory store, no invoices
recording sales, no accounting records of the transactions: in short, no
documentary evidence at all was advanced to corroborate the allegation
that footwear was sold.

[16] The court below evaluated the evidence according to the rules laid
down in Plascon-Evans (the case is so well known that its full citation
will only further burden its annotation) and both counsel accepted that
that was the correct approach. Those rules manifest the principle that
application proceedings are intended for the resolution of legal issues. For
that reason final relief will be granted only where the relief is justified by
undisputed facts (facts alleged by the applicant that are not disputed,
together with facts alleged by the respondent), though there are
exceptions,2 which applies as much where the respondent bears the onus
of proof.

[17] But the rule in Plascon-Evans is not blind to the potential for
abuse. As this court said in Fakie NO v CCII Systems (Pty) Ltd,3 „in the
interests of justice, courts have been at pains not to permit unvirtuous
respondents to shelter behind patently implausible affidavit versions or
bald denials.‟4 That seems to me to be particularly important in
proceedings of this nature, in which the proprietor respondent, who bears

2 „[F]or example, where the allegations or denials of the respondents are so far-fetched or clearly
untenable that the Court is justified in rejecting them merely on the papers‟ Plascon-Evans at 635C.
3 Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA).
4 Para 55.

the onus of proving relevant use,5 can be expected to have comprehensive
and peculiar knowledge of that fact if it has occurred. In those
circumstances it can be expected that a proprietor who alleges relevant
use will advance clear and compelling evidence to that effect, and ought
not to expect that the evidential burden will be discharged by allegations
that are sparse, ambiguous, or lacking in conviction.

[18] In this case it is remarkable that no documents were advanced to
corroborate the allegations of sales. Nonetheless, counsel for New
Balance Inc submitted, while its evidence might have been fuller, the
factual allegations made by Mr van Rooyen, corroborated as they are by
three others, cannot be summarily dismissed as false. While that might be
correct, in my view New Balance Inc faces an insurmountable hurdle.

[19] The relevant period during which relevant use needs to be shown is
3 July 2000 to 3 July 2005. Use outside that period is immaterial. The
court below pointed out that the affidavits of Mr van Rooyen and the
three executives were deposed to on 2 March 2006, which was eight
months after expiry of the relevant period. The evidence of sales is
decidedly unspecific as to when the alleged sales occurred. The four
deponents content themselves with alleging that the sales took place,
variously, „during the past five years‟ and „during at least the past four
years‟.  In both cases that could mean that they took place between 6 July
2005 and 2 March 2006, just as much as that they took place between 3
July 2000 and 3 July 2005. Greater particularity concerning the dates
might have been revealed by documentary evidence, of which there is
none, and the evidence does not disclose when the various photographs
were taken.

5 Section 27(3).

[20] On that issue Southwood J, who delivered the judgment of the
court, said the following:
„None of the witnesses has attempted to show that sales took place during the relevant
period and their statements are ambiguous about when the use, if there was use, took
place.  In view of the documentary evidence which would be available to these
witnesses if their statements were correct the vagueness and ambiguity must be
deliberate.‟

[21] Counsel for New Balance Inc took issue with the finding of the
learned judge that the absence of evidence must be deliberate.  He
submitted that that equates to a finding that the deponents set out to
mislead the court, which was not justified. He submitted that a court must
assume that witnesses are honest, and that while better evidence might
have been presented, the allegations are nonetheless prima facie factual
evidence of use.

[22] Greater particularity concerning the time at which sales took place
would indeed have been revealed by documentary evidence corroborating
the alleged use, of which there is none, and the evidence does not disclose
when the various photographs were taken.  Given the clear requirement of
the section that use be demonstrated during a specific period I, like the
court below, find it difficult to avoid the inference that documentation
was not advanced lest it revealed the time at which the alleged sales
occurred.  But in any event it is not necessary to find that the ambiguity,
and absence of supporting evidence, was deliberate.  The fact remains
that there is no clear evidence that the alleged use occurred during the
relevant period, and the surrounding circumstances revealed in the
affidavits provide no sufficient basis for inferring that they must have

occurred then.  Whatever corroborating evidence might or might not be
required in proceedings of this kind, what is called for, at the least, is
clear and unambiguous factual evidence that brings the matter within the
terms of the section.  I agree with the court below that the evidence was
insufficient for that purpose

[23] In the absence of clear and unambiguous proof of relevant use
during the relevant period, the trade marks of New Balance Inc are liable
to be removed from the register, though the registrar, and the court below,
retained a discretion not to do so. For reasons that will become apparent I
deal later in this judgment with the submission by counsel for New
Balance Inc that that discretion ought to have been exercised in its favour.
I turn to the second appeal, which is against the dismissal of the
application by New Balance Inc for removal of Mr Dajee‟s trade mark.

[24] I deal first with s 10(3), which precludes registration of, and
renders liable to removal from the register, a „mark in relation to which
the applicant for registration has no bona fide claim to proprietorship‟.

[25] A United States corporation, BF Goodridge Company, was at one
time the proprietor in the United States (and perhaps in other countries as
well) of the trade marks POSTURE FOUNDATION, P-F and P-F
FLYERS. At some unspecified time the three trade marks were sold by
BF Goodridge Company to Brookfield Athletic Shoe Company Inc. They
then came into the hands of Leif J Ostberg Inc (when and how it came to
be the proprietor does not appear from the evidence), which sold them to
New Balance Inc on 5 February 2001.

[26] BF Goodridge had used the mark POSTURE FOUNDATION in
the United States, and elsewhere in the world, as far back as the 1930‟s.
Mr Dajee said that in 1996 he was looking for a new trade mark, and
recalled the mark (the mark that he said he recalled was POSTURE
FOUNDATION P-F). He believed that the use of the mark had long since
been abandoned and it had not been used anywhere for many years. He
said he was satisfied that the mark was unknown to consumers in South
Africa and he adopted and registered the trade mark in good faith in 1996.

[27] The meaning of a „proprietor‟ of a mark, as that term was used in
s 20 of the former Trade Marks Act 62 of 1963,6 was considered by this
Court in Victoria’s Secret Inc v Edgars Stores Ltd,7 and there is no basis
for construing the word differently in s 10(3). On the contrary, it should
be assumed that the drafter of s 10(3) was well aware of the construction
that had been adopted in Victoria’s Secret, and intended that the word
should bear that meaning when it was repeated in that section.8

[28] In Victoria’s Secret Nicholas AJA said that „one can claim to be
the proprietor of a trade mark if one has appropriated a mark for use in
relation to goods or services for the purpose stated‟,9 using the verb
„appropriate‟ in its meaning of „to take for one's own‟. To that must be
added that a trade mark is a territorial concept, with the consequence that
a person might be considered to have adopted a mark, and thus become
its proprietor, notwithstanding that it has been used in a foreign country.
As Nicholas AJA said in Victoria’s Secret:

6 Section 20(1): „Any person claiming to be the proprietor of a trade mark used or proposed to be used
by him and who is desirous of registering it, shall apply to the registrar in the prescribed manner for
registration and the application shall be accompanied by the fee prescribed.‟
7 Victoria’s Secret Inc v Edgars Stores Ltd 1994 (3) SA 739 (A).
8 Cf Ex parte Minister of Justice: in re Rex v Bolon 1941 AD 345 at 359-360.
9 At 744I.

„[T]he fact that a trade mark is registered and has been used, even extensively used,
by one person in a foreign country does not in itself constitute a bar to its adoption
and registration by some other person in South Africa.‟10
Later he said the following:11
„In the case of a foreign trade mark, there is no legal bar to its adoption in South
Africa unless it is attended by something more. Thus in delivering the unanimous
judgment of the Full Court in P Lorillard and Co (supra at 356G-H), Boshoff J said:
“The basis of the challenge on this ground is that the objector was to the knowledge of
the applicant the proprietor of such a trade mark in the United States of America and
that the applicant improperly appropriated the mark. In the present state of the law a
trade mark is a purely territorial concept and there is, generally speaking, nothing to
prevent a person from asserting a proprietary right in a trade mark in relation to which
no one else has in the same territory asserted a similar right.”
See also Lorimar Productions Inc and Others v Sterling Clothing Manufacturers (Pty)
Ltd; Lorimar Productions Inc and Others v OK Hyperama Ltd and Others; Lorimar
Productions Inc and Others v Dallas Restaurant 1981 (3) SA 1129 (T) at 1156A-B;
and Re Impex Electrical Ltd's Trade Marks; Impex Electrical Ltd v Weinbaum [1927]
44 RPC 405 (Ch).‟

[29] The learned judge went on to point out that the principle has been
similarly recognised in comparable jurisdictions:12
„The principle has been recognised also in Australia. In a passage in his judgment in
The Seven Up Company v OT Ltd (1947) 75 CLR 203, Williams J said at 211:
“In my opinion the effect of these cases is that in the absence of fraud it is not
unlawful for a trader to become the registered proprietor under the Trade Marks Act
of a mark which has been used, however extensively, by another trader as a mark for
similar goods in a foreign country, provided the foreign mark has not been used at all
in Australia at the date of the application for registration. But the position is different
if at that date the mark has become identified with the goods of the foreign trade in
Australia because those goods have been brought into Australia by the foreign trader

10 At 745H-I.
11 At 746F-I.
12 At 746I-747G.

himself or by some importer or in some other manner. The Court frowns upon any
attempt by one trader to appropriate the mark of another trader although that trader is
a foreign trader and the mark has only been used by him in a foreign country. It
therefore seizes upon a very small amount of use of the foreign mark in Australia to
hold that it has become identified with and distinctive of the goods of the foreign
trader in Australia. It is not then a mark which another trader is entitled to apply to
register under the Trade Marks Act because it is not his property but the property of
the foreign trader. The Registrar is entitled to refuse to register the mark for such
goods. If it has been registered the Court may rectify the register on the ground that
the mark is wrongly entered on the register.”
In the appeal in The Seven Up case loc cit Latham CJ said at 215-6:
“The use of the trade mark elsewhere than in Australia is not in itself a relevant
matter, nor is registration of the trade mark abroad in itself a relevant matter . . . In my
opinion the knowledge that a trade mark is registered in another country or used in
another country is irrelevant in considering whether or not the registration of a mark
would be likely to cause deception in Australia or in considering whether the mark is
otherwise disentitled to protection in a court of justice. User in Australia would be
relevant. So also would facts establishing a breach of confidential relations or any
fraud . . . The desire to use in Australia a successful trade mark in competition in
trade with a person who may come here and who uses that trade mark in another
country cannot be described as fraud or as involving any breach of the law.”
(My emphasis.) Similarly, Rich J said at 216:
“Although the mark "7Up" has been extensively used in the United States, there has
been no user of it in Australia. It is to the market of this country alone that one has to
have regard. For that purpose foreign markets are wholly irrelevant unless it can be
shown by evidence that in fact goods marked with the foreign mark have been
imported into this country and the foreign mark thus acquires this characteristic that it
is distinctive of the goods of the manufacturer.”‟

[30] The trade mark that was used and registered by BF Goodridge
Company outside South Africa (and which ultimately passed to New
Balance Inc) was POSTURE FOUNDATION, which was not the mark
that
was
adopted
and
registered
by
Mr
Dajee
(POSTURE

FOUNDATION – PF) but nothing turns on that.  New Balance Inc
advanced no evidence of use of the mark POSTURE FOUNDATION –
PF, nor, indeed, of the mark POSTURE FOUNDATION, in this country
prior to its use by Mr Dajee, and it was on that basis that the court below
found that it had not established that Mr Dajee was not the bona fide
proprietor of his trade mark at the time he applied for its registration.
There was some suggestion in argument before us that the affidavit of Mr
Dajee himself, carefully construed, reveals at least some use of the mark
in South Africa prior to its adoption by Mr Dajee, but I think that is a
strained construction of his evidence and the submission has no merit. I
do not think that the finding of the court below on this issue can be
faulted.

[31] Much of the argument was directed instead to inviting us to depart
from the territorial approach to trade marks and to embrace in its place a
trans-territorial concept, having the effect that foreign proprietorship of a
mark should cling to the mark when it is used in this country. The
concept of territoriality, it was submitted in short, has become outmoded
in the global village. A similar invitation was extended to this court, and
rejected, in Victoria’s Secret. There Nicholas AJA said that to accede to
the invitation would pre-empt s 35 of the present Trade Marks Act, which
had not yet come into existence, and his observation naturally carries
even more weight now that the section does exist.

[32] But in any event I think there is an insuperable hurdle to accepting
the invitation. We are not now concerned with the common law, which,
as counsel correctly submitted, is capable of being constitutionally
developed. We are concerned with the application of a statute.
Territoriality is imbedded within the proper meaning of the term in the

statute, as it has been judicially interpreted, and it is not open to a court to
alter the statute. That is a matter for the legislature, which will no doubt
need to consider carefully the implications of reforming the law,
including its implications for the country‟s international relations and
obligations, before embarking on that course.

[33] That brings me back to the outstanding issue in the first appeal.
A court has a general or residual discretion to refuse removal of a trade
mark from the register but that discretion is to be exercised against
removal only where the circumstances are exceptional.13 New Balance
Inc advanced various factors that, in combination, so it was submitted,
constitute exceptional circumstances.

[34] First, it was submitted that the removal of the trade marks from the
register will have no practical effect on the activities of Mr Dajee or on
the use of his own trade mark. Secondly, it was submitted that the trade
marks have been on the register for a considerable time (almost 50 years
in one case and almost 40 years in the other case), that New Balance Inc
(or at least its subsidiary) has demonstrated that the trade marks were
used, if not during the relevant period, then at least shortly thereafter, and
it has evinced a clear intention to use them even more extensively in the
future. Finally, it was pointed out that the trade marks have been
registered, and used extensively in other parts of the world. I do not think
it can be said with any conviction that removal of the trade marks will
have no practical effect. As for the remaining factors, it seems to me that
it would entirely undermine the section if removal were to be refused on
those grounds.

13 McDonald’s Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd; McDonald’s Corporation v
Dax Prop CC; McDonald’s Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd and Dax Prop CC
1997 (1) SA 1 (A).

[35] The second ground upon which it was sought to have Mr Dajee‟s
trade mark removed was the injunction in s 10(13) of the Act, which
precludes registration, and allows for removal from the register, of a mark
which, „as a result of the manner in which it has been used, would be
likely to cause deception or confusion‟.

[36] The court below pointed out, and it is conceded by counsel for
New Balance Inc, that it is the use of the mark, and not merely a portion
of the mark, which must be likely to cause deception or confusion, in
order for the section to be invoked. It pointed out that the attack under
this subsection was founded on the fact that at times Mr Dajee used the
letters P-F on footwear, which was not use of the mark. Before us counsel
for New Balance Inc drew our attention to the mark on an advertisement
that is amongst the papers filed in this case. That was not the basis upon
which the claim was brought and pursued either before the registrar or
before the court below – indeed, it is not mentioned even in the heads of
argument – and I do not think the belated reference to that document calls
for consideration.

[37] In my view the orders of the court below cannot be faulted. The
appeals are dismissed with costs that include the costs of two counsel.

__________________
R W NUGENT
JUDGE OF APPEAL

APPEARANCES:

For appellant:
O Salmon

F Southwood

Instructed by:

Eversheds, Johannesburg;

Webbers, Bloemfontein.

For respondents:
G E Morley SC

I Joubert

Instructed by:

Adams & Adams, Pretoria

Honey Attorneys, Bloemfontein.