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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."
[43] The essence of the respondent's complaint was that the appellants were prepared to assign the marks to the
respondent at a price bordering on the ridiculous and that they used implied political threats during the
negotiations. This, according to the submission, amounted to "trafficking" and that the only reason for the
extensive use by the Group of the marks was to coerce the respondent into paying exorbitant sums for them.
[44] There is no merit in the submission. "Trafficking" is an emotive term which appeared in the repealed Act but is
not in the current Act. The issue is simply whether or not the Group's use amounted to real commercial
exploitation of the marks in relation to goods or services in the trade mark sense. Exploiting marks in order to
increase their value to be able to sell them at a higher price does not amount to an improper or mala fide
commercial exploitation. The point can be illustrated with reference to a short dictum of Jacob J45 in a case
where the registration of a trade mark was opposed on the ground of bad faith:
"I need say little about this allegation it was based on a suggestion that somehow a patent monopoly was being
extended [by the registration of a trade mark]. That is miles from bad faith."
[45] To conclude on the subject of nonuse: the objection was correctly upheld on the ground that the proprietor
had failed to prove use by itself or permitted use during the period concerned.
The crossappeal
[46] The respondent also sought expungement of the registrations under section 10(3) of the Act. This provides
that "a mark in relation to which the applicant for registration has no bona fide claim to proprietorship," if
registered, "shall, subject to the provisions of sections 3 and 70, be liable to be removed from the register".
The court below, as mentioned, expunged all the registrations on the ground of nonuse but dismissed this
Page 264 of [2005] 4 All SA 245 (SCA)
claim which sought the same relief, albeit under another section of the Act. A crossappeal may, consequently,
have been unnecessary because the respondent could have defended the expungement by relying on section
10(3),46 but since little depends on this procedural aspect I need not consider it any further.47
[47] The respondent's argument under section 10(3) was straightforward. The proprietor, since becoming part of
the Group, has been a dormant
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company. It did not manufacture or sell any clothing. All it did was to hold and register trade marks. For
instance, it applied for GAP STORES at the behest of OK Bazaars (1929) Ltd and entered into a registered
user agreement with it. The other trade marks were not used or intended to be used by the proprietor.
Section 20(1) of the repealed 1963 Act provided that "any person claiming to be the proprietor of a trade
mark used or proposed to be used by him" was entitled to apply for registration. There were two exceptions.
The first, which did not apply, related to the case where someone intended to constitute a body corporate
and assign the mark to that body for its use. The second was where the application for registration was
accompanied by an application for the registration of someone as a registered user. This exception could have
applied in the OK Bazaars case, but according to the trade mark registry the user agreement was never filed,
and the appellants never disclosed the date of the agreement, nor did they allege that it had been filed
simultaneously with the application for registration.
[48] The respondent thus had a prima facie case for expungement on this additional ground.48 The reason the
court below dismissed the claim was based on the introductory proviso to section 10 of the current Act, which
made section 10(3) and all of section 10 subject to section 70. In so far as it is relevant, section 70
states that:
"the validity of the original entry of a trade mark on the register of trade marks existing at the commencement of
this Act [1 May 1995] shall be determined in accordance with the laws in force at the date of such entry."
The appellants relied on section 42 of the 1963 Act,49 which provided that in all proceedings:
"relating to a trade mark registered in part A of the register . . . the original registration of the trade mark in part
A of the register shall, after the expiration of seven years from the date of that registration, be taken to be valid in
all respects, unless
(a)
that registration was obtained by fraud; or
(b)
the trade mark offends against the provisions of either section sixteen or section fortyone."
(The exceptions are inapplicable.)
Page 265 of [2005] 4 All SA 245 (SCA)
[49] We have to assume that these marks were registered in class A because, in spite of no evidence to that
effect in a record of 2500 pages, the respondent did not suggest otherwise. For purposes of section 42, the
date of registration is, once a trade mark is registered, deemed to be the date of application.50 T h a t