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THE PRIOR USE DEFENCE

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The prior use defence doesn’t come up often. It’s an unwieldy defence that goes like this: you’re not guilty of infringing a registered trade mark if you (or your predecessor in title) started using your trade mark before the registered trade mark was registered or first used (whichever date is the earlier), and you’ve used it continuously and honestly since then. The defence came up in the recent Supreme Court of Appeal case of Etraction (Pty) Ltd v Tyrecor (Pty) Ltd (28 May 2015). The facts:
• Etraction had a 2008 registration for the mark Infinity covering vehicle parts, tyres and rims.
• Tyrecor had been importing tyres called Infinity since 2009.
• Another company, Falck, had been importing tyres called Infinity since 2006.
• Etraction had used the trade mark Infinity since 1995, but for rims, not tyres.

The prior use defence succeeded. The court held that, although the relationship between Tyrecor and Falck was a bit unclear, Falck was Tyrecor’s predecessor in title, so its use had predated Etraction’s. Tyrecor’s counter-application to partially cancel the Infinity registration for tyres also succeeded, with the court holding that Etraction had registered the mark in bad faith and without any intention to use it on tyres – Etraction only applied for registration after it became aware of the other side’s use, and its intention was simply to ‘stultify’ their business.

The judgment is, however, most likely to be remembered for the other issues. In examining the prior use defence, the court considered a range of issues such as: the fact that you can’t own rights to an unregistered trade mark (only to the goodwill), with the result that the prior use defence is therefore not linked to ownership; the fact that the prior use defence is seemingly intended to protect common law rights, something that suggests that it’s only available to someone who can show that it has acquired a reputation and can sue for passing off; before eventually concluding that defence shouldn’t be limited in this way. The court said that a company that simply imports and distributes a product can sometimes acquire trade mark rights. It even saw fit to comment on whether reputation or goodwill is a requirement for passing off. Much of this material will be used by lawyers in future cases.

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