©2016. Published in Landslide, Vol. 9, No. 1, September/October 2016, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
Many similarities exist between the practice of law and winemaking. Both are steeped in tradition and rely on the application of well-tested and established principles. Both depend on raw materials—the facts and the grapes—in crafting the end product, which it is hoped will stand the test of time. However, the peculiar facts that relate to the wine industry do not necessarily lend themselves to vintage judgments.
Geographical indications (GIs) play a significant part in the South African wine industry. In terms of an agreement between the European Community and South Africa,1 a number of regions, districts, wards, and estates have been designated as GIs of wines originating in South Africa. Many of the names are uniquely South African, and it is unlikely that a non–South African producer of wines would wish to obtain trademark rights in names peculiar to South Africa such as Klein Karoo, Boberg, Agterkliphoogte, Klaasvoogds, Buffeljags, or Slanghoek. On the other hand, English names or words such as McGregor, Springfield, Leopard Hill, and Walker Bay are also protected.
Any wine producer who wishes to sell wines and obtain trademark rights in South Africa will be well advised to be familiar with the wide range of South African GIs for wines.
Trademark disputes inevitably arise, and the South African wine industry has been a fruitful source of precedent in trademark law. In the last few years, the South Africa Supreme Court of Appeal (SCA) has tested or established legal principles relating to container marks, similar goods, geographical names, and the likelihood of confusion test. However, as we will see, particular facts steeped in the history and tradition of the wine industry can lead to surprising results.
Swartland is a region in the Western Cape, about 30 miles north of Cape Town. It is an up-and-coming wine producing region and has been designated as such in terms of South Africa’s “Wine of Origin” system.2 SWARTLAND is also a trademark for wines produced by one of the nearly 25 wine producers in the Swartland region. Robertson is a town in the center of another well-known wine region, while Constantia is the region in South Africa where wines were first produced in 1659. Trademarks such as KLEIN (small) CONSTANTIA, GROOT (big) CONSTANTIA, CONSTANTIA UITSIG (view), CONSTANTIA GLEN, and CONSTANTIA MIST coexist without confusion, yet ROBERTSON HILLS was found to be confusingly similar to ROBERTSON WINERY.
Any wine aficionado knows that the grapes are the essential starting point for a good wine, and specific areas such as Constantia, Swartland, or Robertson are known for their particular terroir. Most of the premier vineyards in South Africa produce estate wines, and the grapes used to make a wine labeled with the estate’s name must be grown on the estate. It follows from this that there is a very strong link between the grapes that may be grown on Klein Constantia Estate and the wine being bottled by the estate bearing the trademark KLEIN CONSTANTIA. One would then think it would be a simple conclusion to draw that, for purposes of the similar goods test in trademark infringement proceedings, if a near identical trademark were to be used in relation to both wine grapes and wine, the requisite likelihood of confusion for trademark infringement would inevitably follow. We will test this proposition later, but will begin our legal wine tour with something more mundane, namely wine bottles.
In Bergkelder v. Vredendal,3 the SCA dealt with the history of container marks, confirming that from a legal perspective container trademarks do not differ from any other kind of trademark in that they must be capable of distinguishing. The SCA went on to state “[h]owever, from a practical point of view [container marks] stand on a different footing,” and then set the bar particularly high by concluding “[s]ince containers are not usually perceived to be source indicators, a container mark must, in order to be able to fulfil a trade mark function, at least differ ‘significantly from the norm or custom of the sector.’”4
Some would say that the SCA’s conclusion that “containers are not usually perceived to be source indicators” is unjustifiable because, in many instances, a container may be highly distinctive, ranging from the Coca-Cola bottle to distinctive containers for perfumes. In this case, though, the subject container was neither particularly distinctive nor unique:
Wine drinking is steeped in tradition and wine is usually marketed in conventional bottles. These include the thick glass Champagne bottle used for sparkling wines, the Burgundy bottle with low shoulders, the Bordeaux bottle with its broad shoulders, the mace-shaped bottle used for Rhein and Moselle wines, the Alsace slender flute, the Chianti bulbous fiasco and, relevant for present purposes, the so-called Bocksbeutel. By the name hangs a tail. Translated literally from the German (though not entirely accurately) Bocksbeutel means a “goat’s poach,” which, it is said, is a humorous (according to others, vulgar) allusion to its shape. It is a short, flat, broad-bellied glass flagon or, to give another description, a bottle with a flattened globular shape. The oldest surviving example of a Bocksbeutel is supposed to date back to 1400 BC.5
Bergkelder adopted the Bocksbeutel bottle in South Africa in the 1950s for marketing its Grünberger line of wines. In the year before the legal proceedings, it sold about two million liters. However, when Bergkelder began marketing its wine, Portuguese wines were being sold on the local market in Bocksbeutels and, at the time of the proceedings, continued being sold. There is a historical link here because while Franconian vintners have been using Bocksbeutels for at least 500 years and Germany has tried to obtain protection for the bottle as a GI, the bottle shape had also been used by Portuguese wine growers for their famed vino verde.
In rejecting Bergkelder’s claim of acquired distinctiveness, the SCA stressed that use does not necessarily equal distinctiveness, concluding that “although the shape of the container may assist in distinguishing Bergkelder’s wine, a Bocksbeutel cannot per se perform the ‘badge of origin’ function with other wines in Bocksbeutels on the market.”6
Not satisfied with “diluting” container marks, the SCA in a footnote stated: “This raises the question whether a trade mark can be infringed by non–trade mark use of a trade mark.”7 This then led to the case of Verimark v. BMW,8 which established that use otherwise than as a trademark would not constitute primary trademark infringement, formulating the test as follows:
What is, accordingly, required is an interpretation of the mark through the eyes of the consumer as used by the alleged infringer. If the use creates an impression of a material link between the product and the owner of the mark there is infringement; otherwise there is not. The use of a mark for purely descriptive purposes will not create that impression but it is also clear that this is not necessarily the definitive test.9
This finding has opened the door in South Africa to comparative brand advertising, which had previously been found to constitute primary trademark infringement.10
Words and Phrases
The South African wine industry commenced in South Africa in 1659, with the first production of wine (aimed largely at preventing scurvy suffered by Dutch sailors). The French Huguenots brought a French flair to the industry after their arrival in 1688. Thus, it is not surprising that many of the initial trademarks for wines, many of which exist to this day, are Dutch- or French-based, such as Meerlust, Vergelegen, Zonquasdrift, Grande Provence, and La Motte. These language issues tested the Registrar of Trade Marks in the De Gewel case, where the Dutch words “De Gewel,” meaning “The Gable,” were refused registration by reason of an existing registration of the trademark WHITE GABLE for wines.11
In 1995, the infringement provisions of South Africa’s Trade Marks Act were amended to include section 34(1)(b), infringement in relation to use on similar goods.12 Before then, while a plaintiff could rely on a passing-off cause of action, unless the defendant’s use related to the identical goods or services of the plaintiff’s registered trademark, the plaintiff could not rely on the infringement provisions of the Trade Marks Act. Eighteen years passed before this section was tested by the SCA but, not surprisingly, wine was once again involved.
In Mettenheimer v. Zonquasdrif,13 Mettenheimer was the registered proprietor of the trademark ZONQUASDRIFT for alcoholic beverages, except beer; the trademark covered wine but not wine grapes. Zonquasdrift used the trademark ZONQUASDRIF VINEYARDS for wine grapes. The SCA observed that in comparing the two marks they were virtually identical, and in dealing with the similarity of goods stated:
Can it be said that, having regard to the sameness of the two marks, the similarity between the goods in respect of which the appellants’ mark is registered (wine) and the goods in which respondent trades (wine grapes) is such that confusion or deception is the probable result? The deception and confusion we are talking about, of course, must relate to the origin of the respective goods. So, is it likely that the notional purchaser may be confused to think that these goods have the same origin?14
In applying the relevant legal principles to the facts, the court stated:
[F]irst impressions are that the likelihood of confusion is slight indeed. The nature of the two products is entirely different. The one is a fruit—albeit inedible—and the other is an alcoholic beverage. As are their uses, their users and the trade channels through which they are marketed. Since wine grapes are not suitable for consumption as a fruit, they are not sold to the public and they are therefore not to be found in any retail outlets. Wine, on the other hand, is marketed, advertised and sold directly to the public in supermarkets, liquor stores and other retail outlets. The prospects of Zonquasdrift wine and Zonquasdrif grapes ever being marketed or sold in close proximity can therefore safely be excluded as non-existent.15
The appellants had argued that, despite the distinct difference between the two products based on the aforementioned criteria, there nevertheless exists a likelihood of confusion as wine grapes constitute a raw material from which wine is made and the two products are accordingly associated with one another. They argued that there is no clear delineation between farms producing and selling wine grapes and those selling both wine and grapes. Anyone who has had the pleasure of visiting one of the many South African wine estates will appreciate this.
The SCA was not persuaded, but rather analyzed the winemaking industry and wine grape industry. In essence, the court found that wine grapes (as opposed to table grapes) are not sold to the public but only to winemakers and wine cooperatives (often through specialist intermediaries), and that such buyers would not be confused as to the source (in a trademark sense) of the respondents’ wine grapes and the appellants’ wines. While that may be so, what the SCA overlooked is that not only specialized buyers buy wine grapes (for example, wine hobbyists buy grapes to make their own wine at home). Following the court’s reasoning, it is arguable that the SCA would have found infringement had the respondent used ZONQUASDRIF on table grapes, with the key difference being that table grapes and wine are both sold in supermarkets.
In 2011, a fundamental principle of trademark law was tested in the case LFE v. Swartland,16 namely the registrability of geographical names. Section 10 of the Trade Marks Act provides that a mark which consists exclusively of a sign or indication which may serve, in trade, to designate the geographical origin of goods is not registrable. This specific section is over and above the general registrability requirements of section 9, which provides that, in order to be registrable, a trademark must be capable of distinguishing the goods or services of one person from the goods or services of another person.
Swartland is a designated wine of origin region. It appears on all maps illustrating the Western Cape, and in 2010, about 25 wineries were listed on the “Swartland Map.” Swartland Winery Limited is one such winery and is the registered proprietor of trademark number 2004/22804 SWARTLAND in class 33 for wines.
A more obvious conflict with the registrability requirements of South African trademark law you could not hope to find, except perhaps the trademarks CONSTANTIA or STELLENBOSCH for wines. Constantia was the first area in South Africa where wines were produced. The area is no longer an outlying farming region, as it was in the seventeenth century, but a prestigious suburb of Cape Town, with a limited number of wine estates such as Klein (small) Constantia and Groot (big) Constantia. Clearly, as no single wine producer can monopolize Constantia, the other, albeit descriptive, words distinguish these various estates and the wines they produce. Stellenbosch is the best known wine producing area with over 150 estates, some of which have the prefix Stell but only one of which, Stellenbosch Hills, contains the town’s name. (Stellenbosch Hills used to be called Vlottenberg, a comfortable name for a South African speaker but less appealing in the export market.)
Swartland Winery was initially incorporated in 1948 with headquarters at Malmesbury (the principal town in the Swartland region). The judgment in Swartland reflects:
The area consisting of the districts Malmesbury, Darling, the Riebeecks, Moorreesburg, Porterville, Piketberg and beyond has been known since the days of Jan van Riebeeck (the second half of the 17th [century]) as Het Zwarte Land in Dutch and later as Swartland in Afrikaans, allegedly a reference to the black colour into which an endemic plant turns after the winter rains. Advertising material used by Dutch retailers selling LFE’s wines has a less prosaic explanation: the black is supposed to refer to the colour of the rich soil of the area as if rich soil is good for viniculture.17
Swartland Winery brought trademark infringement proceedings against LFE, objecting to its use of Swartland on its wine bottles. LFE countered that it used the name Swartland as a GI (as it is entitled to do) and not as a trademark, and that its wines are actually sold as no-name brands. The court made short shrift of this defense, pointing out that the main label contains a prominent Swartland 6 mm high in white capital letters, while there is a rather indistinct golden medallion with the inscription “wine of origin,” concluding: “What this conveys to the average purchaser is two things: the trade mark is Swartland and it is a wine of origin. The medallion, on the other hand, tells one that it is a wine of origin from Swartland.”18
More importantly, LFE had also counterclaimed for cancellation of the trademark on the grounds that it offended section 10(2)(b). The SCA stated, “Swartland is no doubt a sign that may serve to indicate the geographical origin of wines and it is, accordingly, prima facie subject to revocation.”19 The SCA then considered the proviso to section 10, which provides that a mark may not be refused registration or, if registered, will not be liable to be removed from the registry by virtue of the provisions of section 10(2) if at the date of an application from removal from the registry it has in fact become capable of distinguishing within the meaning of section 9 as a result of use made of the mark. In this regard, Swartland Winery’s extensive use since 1948 saved the day: It established that it produces about two million 12-bottle cases per annum, it has traded under the name Swartland Winery for some 60 years, and the relevant public associated the mark with its well-known and award-winning wines.
The facts clearly favored Swartland Winery. It was fortunate to be the first entity to commence using a geographical term as a trademark, before the wine industry expanded into that area. It also ensured factual distinctiveness, or secondary meaning, of Swartland by the time the inevitable challenge against its registration arose.
Another well-known region for wines is Robertson. In the case of Roodezandt v. Robertson,20 Roodezandt had secured registration of the trademark ROBERTSON HILLS for wines in February 2008. Robertson Winery was the proprietor of three earlier registered trademarks including the word ROBERTSON, the most relevant being ROBERTSON VINEYARDS. The mark was registered subject to a disclaimer that its registration “shall give no rise to the exclusive use of the geographical name Robertson where used bona fide as an indication of origin.”21
Unlike the Swartland position, it was clear that given the geographical significance of Robertson, no winemaker could obtain exclusive rights in the word Robertson. Similar to the Swartland case, Robertson Winery has been producing and distributing wines since 1941 and sold over one million 12-bottle cases in 2010 alone. Robertson Winery’s evidence established that its wines are the only wines in relation to which the word Robertson has ever been used to identify the wine producer.
The SCA turned to the well-established authorities on the likelihood of confusion test and produced a useful compilation of the six most important points for purposes of the comparison which, one anticipates, will be used extensively in future judgments. The SCA observed that the term Robertson constitutes a dominant component of Robertson Winery’s trademarks and that the suffix HILLS in itself is as nondistinctive as “winery” and “vineyards,” concluding: “On the face of it and having regard to the crystalised principles of comparison to which I have referred, Roodezandt’s mark therefore seems to create the likelihood of deception or confusion.”22
The SCA found that although Robertson is not a constructed or invented word, but rather is the name of a town, this alone does not necessarily mean that it could never acquire distinctiveness with reference to wine. Relying on the Swartland case, the court concluded that the fact that Robertson is the name of a defined production area for wine is not directly relevant, endorsing the following quote from the Zonquasdrift case:
According to well-established principle, a trade mark serves as a badge of origin, in the sense that it identifies and guarantees the trade origin of the goods to which it applies. . . . But in the wine industry a trade mark in respect of wine serves to guarantee the origin of the wine only. The badge of origin in respect of the grapes from which that wine is made is provided by the wine of origin scheme (WO scheme).23
Another win for the original trademark owner incorporating a geographical name. But is this good law?
While I have no quarrel with the legal principles set out in the Robertson case, in my opinion the court was unduly influenced by the particular facts of the Zonquasdrift and Swartland cases, and failed properly to distinguish these cases with the facts in Robertson. There are strong similarities between Swartland and Robertson Vineyards as trademarks, both having been used for over 60 years, and it may be that Robertson Winery would, as Swartland did, be able to prove, if challenged, that Robertson had in fact acquired distinctiveness for wines. However, the validity of the trademark Robertson Vineyards was never challenged, so evidence of acquired distinctiveness was never lead.
As we have seen, the wine industry has been a fruitful source of trademark judgments. Trademark lawyers who may be surprised at some outcomes must realize that the final result has always depended on the way the particular facts have been paired with the relevant legal principles. On that basis, it is safe to say that the wine industry has been the source of many vintage judgments.
1. Agreement between the European Community and the Republic of South Africa on Trade in Wine, 2002 O.J. (L 28/4).
2. The South African Wine of Origin scheme was established in terms of the Liquor Products Act 60 of 1989. The scheme seeks to regulate claims of origin instituted by winemakers, by guaranteeing that the grapes used to produce the wine are indeed from the specific area as claimed.
3. Bergkelder Bpk. v. Vredendal Koöp Wynmakery  SCA 8 (RSA) (S. Afr.).
4. Id. at paras. 7, 9.
5. Id. at para. 2.
6. Id. at para. 18.
7. Id. at para. 11 n.15.
8. Verimark (Pty) Ltd v. BMW AG  SCA 53 (RSA) (S. Afr.).
9. Id. at para. 7.
10. See Abbott Labs. v. UAP Crop Care (Pty) Ltd 1999 (3) SA 624 (C) (S. Afr.).
11. See Geoffrey C. Webster et al., South African Law of Trade Marks ¶ 7.9, at 7–11 (4th ed. 1997).
12. Trade Marks Act 194 of 1993 (effective May 1, 1995) (S. Afr.).
13. Mettenheimer v. Zonquasdrif Vineyards CC  ZASCA 152 (S. Afr.).
14. Id. at para. 12.
15. Id. at para. 14.
16. Grp. LFE (SA) (Pty) Ltd v. Swartland Winery Ltd  ZASCA 4 (S. Afr.).
17. Id. at para. 2.
18. Id. at para. 8.
19. Id. at para. 14.
20. Roodezandt Ko-Operatiewe Wynmakery Ltd v. Robertson Winery (Pty) Ltd  ZASCA 173 (S. Afr.).
21. Id. at para. 2.
22. Id. at para. 7.
23. Id. at para. 10 (quoting Mettenheimer v. Zonquasdrift Vineyards CC  ZASCA 152, at para. 19).