judgment in AM Moolla Group v The Gap:3
"The concept of bona fide use has been the subject of a number of judgments, also of this Court, and the area need
not be traversed again. For present purposes, it suffices to say that 'bona fide user':
'means a user by the proprietor of his registered trade mark in connection with the particular goods in respect
of which it is registered with the object or intention primarily of protecting, facilitating, and furthering his
trading in such goods, and not for some other, ulterior object'.4
This test is similar to that proposed in an opinion by the Advocate General in the European Court of Justice in
the Ansul case:
'When assessing whether use of the trade mark is genuine, regard must be had to all the facts and
circumstances relevant to establishing whether the commercial exploitation of the mark is real,
particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a
share in the market for the goods or services protected by the mark, the nature of those goods or services,
the characteristics of the market and the scale and frequency of use of the mark.'"
[6] I add one further quotation from the decision in Ansul:5
'"Genuine use' must therefore be understood to denote use that is not merely token, serving solely to preserve the
rights conferred by the mark. Such use must be consistent with the essential function of a trade mark, which is to
guarantee the identity of the origin of goods or services to the consumer or end user by enabling him, without any
possibility of confusion, to distinguish the product or service from others which have another origin.
. . . Use of the mark must therefore relate to goods or services already marketed or about to be marketed and for
which preparations by the undertaking to secure customers are underway, particularly in the form of advertising
campaigns."
[7] In summary, bona fide use is use of the trade mark in relation to goods of the type in respect of which the
mark is registered. The use must be use as a trade mark, for the commercial purposes that trade mark
registration exists to protect. It must be use in the course of trade and for the purpose of establishing,
creating or promoting trade in the goods to which the mark is attached. The use does not have to be
extensive, but it must be genuine.6 Genuineness is to be contrasted with use that is merely token,
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but the line is a fine one, because the use may be minimal.7 It may in part be prompted by the fear of
removal from the register and be directed at protecting the proprietor's trade generally or preventing the
mark from falling into the hands of a competitor. Provided, however, the use is bona fide and genuine and
principally directed at promoting trade in goods bearing the mark, these further purposes however important,
are irrelevant.8 What is impermissible is:
" . . . user for an ulterior purpose, unassociated with a genuine intention of pursuing the object for which the Act
allows the registration of a trade mark and protects its use . . .".9
Whether use of the mark was bona fide is a question to be determined on the facts of the particular case.
The launch of PARLIAMENT cigarettes
[8] Turning then to the facts, before 2007 BATSA did not use the PARLIAMENT mark on any cigarettes or tobacco
related products. In September 2007, it caused one million cigarettes ("sticks" in the parlance of the trade) to
be manufactured for the purpose of being sold under the PARLIAMENT mark. In the latter stages of October
2007, a launch was planned of PARLIAMENT cigarettes in the Cape Peninsula to take place in December 2007.
It was, however, aborted. According to Ms Heglund, the principal witness for BATSA, this was because the
launch of a new product in that area would have interfered with a far more important project, namely a policy
of direct selling to stores (the "DSS policy"), which involved a substantial change to BATSA's method of
supplying retail outlets. Previously it had done this through a relatively small group of wholesalers, but the
change contemplated BATSA undertaking direct deliveries to retail outlets.
[9] The first launch of cigarettes under the PARLIAMENT mark occurred in Upington from 17 January 2008. The
cigarettes were initially placed in twenty retail outlets identified by Mr Nel, a sales representative in Upington,
as being shops that predominantly served the low price end of the market. This sales effort in the Upington
area did not last long a few weeks at most. In May 2008, a price card was issued showing the prices at
which PARLIAMENT cigarettes could be sold and on 2 June 2008 sales were expanded to retail outlets in the
Bloemfontein and Welkom areas. In August 2008, after the expiry of the relevant period, sales of PARLIAMENT
cigarettes were also extended to Gauteng. The mark was used on cigarettes for a few years until 201210
and sales extended to some
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other areas including the Eastern Cape, the whole of Gauteng and the Southern Cape. Overall the brand did
not become a particularly successful product. We were furnished with a schedule showing sales of about 1,5
million cigarettes in 2008; slightly less than 10 million in 2009 and nearly 15 million in 2010, which is tiny in
relation to a market measured in the billions of cigarettes every year. A production record produced by BATSA
suggested that production was anticipated to tail off in 2011 and subsequent years and according to Mr
Joubert's evidence sales of PARLIAMENT cigarettes ended in 2012.
BATSA's initial case
[10] BATSA's case underwent a marked transformation in the course of the litigation, precipitated by the discovery