3 May 2009

The curious case of Jenni Button

In the recent judgment of Jenni Button v Jenni Button (Pty) Ltd & Others, the Cape High Court (the Court) confirmed the established principles regarding the use of a personal name as a trade mark. 

In 1997 Jenni Button (Pty) Ltd (the first Jenni Button), founded by the well-known South African fashion designer, Jenni Button (the actual Jenni Button), sold its business to Jenni Button (Pty) Ltd (the new Jenni Button).

The first Jenni Button had been using the trading style 'Jenni Button' and 'JB Inc' when it concluded the sale agreement with the new Jenni Button. In terms of the agreement, the new Jenni Button bought 'the business' of the first Jenni Button, which included, inter alia, the names 'Jenni Button' and 'JB Inc' and all goodwill relating thereto, and all trade marks and copyright in or relating to the names 'Jenni Button' and 'JB Inc' which, together, comprised a going concern. To give effect to the clause, the first Jenni Button agreed to change its name to 'Brutus Trading (Pty) Ltd.'

In terms of the agreement, the actual Jenni Button would resign as director of the first Jenni Button and would in return be appointed as an executive director in the new Jenni Button and receive an interest of at least 30% in the new Jenni Button.

After negotiations in respect of the terms and conditions upon which the actual Jenni Button would be appointed by the new Jenni Button broke down, she (the actual Jenni Button) resigned from the new Jenni Button without finality having been reached.

While the case dealt primarily with the actual Jenni Button's claim for specific performance of the agreement, an interesting counter-application was also brought in which the new Jenni Button was seeking an order declaring that:

  • It was the lawful owner of the 'Jenni Button' and 'JB Inc' trade names and the actual Jenni Button had no rights to the names in connection with the retail clothing trade; and
  • the actual Jenni Button be interdicted and restrained from using the 'Jenni Button' and 'JB Inc' trade names or variations thereof for the purpose of conducting business within the retail clothing trade, including domain names and websites.

The Court considered the common law principles relating to passing off and identified two aspects of use by the actual Jenni Button that the new Jenni Button argued was unlawful, namely:

  • Use of the 'Jenni Button' trade name in connection with goods designed, manufactured and sold by the actual Jenni Button's current business trading as 'Philosophy'
  • Use of the words 'Jenni Button' as part of a domain name used by the actual Jenni Button.

Use of a personal name as a business

The actual Jenni Button argued that she was entitled to use her own name in the context of clothing designs and relied on Section 34(2) of the Trade Marks Act 194 of 1993.

Section 34(2)(a) provides that "A registered trade mark is not infringed by any bona fide use by a person of his own name, the name of his place of business, the name of any of his predecessors in business, or the name of any such predecessors' place of business."

The Court found that the actual Jenni Button could not rely on Section 34(2)(a) as she was not the proprietor of a registered trade mark, however, the following common law test was still applicable:

  • The Court referred to the judgment in Policansky Brothers Ltd v L & H Policansky 1935 AD 89, which was affirmed in Brian Boswell Circus v Brian Boswell-Wilkie Circus 1985 (4) SA 466 (A) and held that a person enjoys a property right or quasi-property right to the use and enjoyment of his own family name in the conducting of business and sale of goods and that every person therefore has a prima facie right to honestly use their own name in conducting a business.
  • The Court also confirmed the limitations referred to in Policansky, most notably that a person is precluded from trading under his/her own name where he/she has contracted not to do so. In considering the facts at hand, the court held that the actual Jenni Button had in fact disposed of her rights in favour of the first Jenni Button, who had sold the rights to the new Jenni Button in the sale agreement.
  • The Court finally considered the requirement of bona fide use under Section 34(2)(a) and held that the use must be honest without the intention to deceive or to "...make use of the goodwill which has been acquired by another person" (as per Lawsa second edition, 2007).
  • The Court accordingly held that "... it is this very name ('Jenni Button') that has been sold to the first respondent (the new Jenni Button) by her erstwhile business (the first Jenni Button). I have no doubt that the continued use by the applicant of her own name in the course of her current business infringes the right to the goodwill attaching to the 'Jenni Button' trade name which vests in the first respondent."
  • The Court confirmed that, as long as the businesses operate in the same field, the actual Jenni Button was not entitled to make use of her own name in the course of her business. This did however only apply to South Africa as the new Jenni Button did not argue that the marks had established an international reputation at the stage when they acquired the rights thereto.

Use of personal name as domain name

The actual Jenni Button had also been conducting her international business, Jenni Button International, via the domain name www.jennibutton.com.

The Court found that, as it did with the use of the trade name, the actual Jenni Button could not be restrained from using her name insofar as the business is not South African. However, she was not entitled to represent that the business of Jenni Button International had any South African outlets or was conducting business in South Africa.

The Court examined the evidence on record and found that the actual Jenni Button had in fact represented to the South African public that she was operating in Cape Town under the 'Jenni Button trade name' at 'Philosophy' outlets and that the 'Philosophy' name was rendered ''totally subservient to the name 'Jenni Button'.''

The Court therefore ordered that, apart from dismissing the main application, the actual Jenni Button was interdicted and restrained from in any way using the 'Jenni Button' trade name for the purposes of conducting business within the retail clothing trade in the Republic of South Africa.

Eben van Wyk
Director: Intellectual Property

Rico Burnett
Associate: Intellectual Property

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