neither party is surprised by the stance of the other. 15 However, as I conclude that the point is without
merit, it is unnecessary to decide whether it was open to Philip Morris to advance it.
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[43] The starting point is that the mark PARLIAMENT was affixed to the cigarettes for a purpose. This was not a
"no name" brand of cigarettes, but one marketed to retailers and thence to consumers under that particular
name. Outlets that made repeat orders in the five years that it was on the market would have asked for it by
name. So would smokers who bought it. There must have been a reasonable number of these as over 20
million cigarettes were sold. The mark satisfied the most fundamental requirement of a trade mark, namely,
that of identifying the source from which the goods were derived and distinguishing it from its competitors.
Had a person asking for Voyager been given PARLIAMENT, or vice versa, they would have objected that they
had been given the wrong cigarettes.
[44] The next point is that the use was in the very market for which the registration existed, namely, cigarettes. It
was directed at a very specific segment of that market, namely, the low price sector. The intention was not to
build a massive new brand that might compete with BATSA's other brands, especially those in the mid price or
popular price range. As Ms Heglund expressed it they would not want "to drive [a] huge amount of equity on
brand in that segment". Most particularly, it was not to be built up to a position where it might draw custom
away from the jewel in the crown that was Peter Stuyvesant. Its primary use would be strategically in low
price hot spots where there were signs of competitors building a sufficient presence to start eroding BATSA's
overall position. But it would be necessary to "keep the brand ticking over" so as to maintain a degree of
market recognition and not to treat every hot spot as if it were a launch from scratch. That is reflected in the
level of sales over the five years that it was on the market.
[45] In a market such as that for cigarettes, as with other similar markets, there is a commercial purpose in the
manufacturer providing different offerings aimed at different sectors of the market and pricing them differently.
For example, if one has the leading brand in the premium sector it gives a measure of control over price in all
sectors. A diversified range of products can be targeted at different sectors, thereby enhancing sales and
profits. On the other hand, there are potential pitfalls. If a leading position is built up in one sector, one does
not wish to imperil the profitability of that sector by providing a lower priced competitor. The sensitivity of
BATSA to the standing of Peter Stuyvesant is understandable. But the fact that this precluded a fullblooded
launch of a competing product in the low price segment does not mean that the launch that did occur was not
genuine, albeit for a limited purpose. That launch had to take place with a product under a specific mark and
PARLIAMENT was chosen for that purpose.
[46] No questions were put to either Ms Heglund or Mr Joubert as to the reasons why the PARLIAMENT brand was
withdrawn. Had such questions been put, we would have known whether it was decided that the strategy of
attacking hot spots and trying to disrupt the market for competitors was not working. The entire exercise was
a novel one in which the conventional playbook for the launch of a brand could not be applied. Whether it was
even feasible to develop a brand, to play the envisaged role, was unknown. However, BATSA thought it
necessary to
Page 405 of [2017] 2 All SA 389 (SCA)
make the attempt and they used PARLIAMENT to do so. Assuming it was a failure that cannot detract from the
genuineness of the attempt.
[47] Louw J reached a different conclusion. He said:
"The basis of the decision in Rembrandt was that to constitute bona fide use, the proprietor of the mark had to use the
mark upon goods with the object or intention of protecting, facilitating or furthering trade in those goods. That was not
the respondent's object or intention. If a mark is used on goods not with the object of promoting trade in those goods
as an end in itself, but with an ulterior purpose such as disrupting the business of a competitor, or protecting its trade
in other goods, such use does not, in my view, constitute bona fide use of the trade mark and can therefore not be
said to be statutorily authentic."
[48] I am respectfully unable to agree. This overlooks the point that all the legitimate commercial purposes
referred to by the judge would have underpinned a decision to launch a competing product in the low price
sector in the fashion Ms Fleming regarded as normal. The use of a mark on such a product would undoubtedly
have been bona fide use. The fact that, for sound commercial reasons, the product was launched on a more
circumspect basis with less ambitious goals cannot mean that the use of a mark on it was not bona fide. That
is to introduce a quantitative and qualitative element to the enquiry into bona fide use of a mark and that
would be inconsistent with the cases cited in paragraphs 5 to 7 above.
Conclusion
[49] In my view, therefore, the use BATSA made of the PARLIAMENT marks was bona fide use in terms of the Act. In
the result, the appeal must succeed. In regard to costs we were asked to make the intervening party liable
jointly and severally with Philip Morris for the costs, but I do not think that justified. Its intervention was
purely to protect its position in regard to its attempt to register the PARLIAMENT mark and added nothing to
the costs.
[50] Accordingly, it is ordered that:
1.
The appeal is upheld with costs, such costs to be paid by the first respondent and to include those consequent
upon the employment of two Counsel.
2.
The order of the High Court is set aside and replaced by the following: