CWB South Africa office was recently engaged in a contentious matter between two competitors that sell a wide range of household items, daily life products, health and beauty products, fashion accessories, digital products and the like, particularly in countries like China and Korea.

The defendant appeared to have somehow obtained the plaintiff’s business plan and preemptively filed for the plaintiff’s trade mark in all jurisdictions where they planned to expand, including South Africa, which created significant barriers to the plaintiff’s own registrations. Unfortunately, there was no evidence as to how the defendant became aware of the plaintiff’s plans.

When the defendant’s filing for the plaintiff’s mark was cited as an obstacle to registration by the plaintiff of their own mark in South Africa, a CWB South Africa representative was instructed to oppose the defendant’s trade mark application, which proved to be a challenging matter. As the plaintiff had not used the mark in South Africa, the CWB representative was compelled to base the opposition on bad faith—an inherently difficult argument in the absence of local reputation.

Although there were concerns about the likelihood of success, opposition was initiated before the Trade Mark Registry (TMR). The matter was eventually referred to the High Court, and shortly after, the defendant’s shops in South Africa—operating under their own trade mark, not the plaintiff’s—began closing. It was later brought to attention by a staff member involved in the litigation that the defendant had been identified in a news report linking them to a pyramid scheme, which had reportedly left investors out of pocket.

Under South African law, where a peregrinus (a non-resident party) is involved in litigation and there is concern that they may be unable to satisfy an adverse costs order, the opposing party may apply for security for costs. A registry official was asked for an order compelling the defendant to provide security for costs in favour of the plaintiff. However, the TMR held that, since the merits had already been referred to the High Court, any such application should appropriately be brought before the Court.

An application for security for costs was then submitted to the Court, leading to several difficulties in the course of proceedings.
As both parties were peregrini, the Court was reluctant to accept jurisdiction in a matter involving non-residents. The Court needed to be convinced that jurisdiction was nonetheless appropriate, given that the trade mark in question had been applied for in South Africa.
By this stage, the attorneys previously on record in the trade mark matter had withdrawn and were unable to provide the defendant’s address. The application for security for costs was accordingly served on the defendant electronically, using addresses obtained through online search, which raised concerns for the hearing officer. Nevertheless, an order for security for costs was granted in the plaintiff’s favour, and the defendant failed to comply within the prescribed period.

The order was subsequently returned to the TMR, with a request that, in light of the defendant’s failure to comply, their application for registration of the plaintiff’s trade mark be removed from the register. As expected, given the procedural complexity of the matter, TMR officials were initially hesitant to issue such an order, noting that the merits had already been referred to the High Court. A CWB representative managed to assure the registry that the matter was properly handled before the appropriate forum.

The CWB South Africa office is pleased to report that the defendant’s application to register the plaintiff’s trade mark was removed from the register. This removal, in turn, eliminated the obstacle to the plaintiff to secure registration of their own trade mark, and it is anticipated that the plaintiff’s application will now progress without further impediment.

CWB is committed to supporting our clients every step of the way—offering innovative, tailored solutions that pave the way for long-term success, no matter how long or challenging the path may be.