CASE HIGHLIGHTS

13 August 2024

Name Dispute: Name Dispute: National Brands Limited (Applicant) vs Frisco Projects (Pty) Limited (First Respondent) and Companies and Intellectual Property Commission (CIPC) (Second Respondent) The Applicant is a public company duly incorporated under the company laws of South Africa with registration number 1948/029389/06, while the First Respondent is a private company duly incorporated under the company laws of South Africa with registration number 2023/098956/07. The Second Respondent is the Companies and Intellectual Property Commission appointed in terms of section 189 of the Companies Act 71 of 2008 (hereafter Companies Act). The Applicant applied for default judgment and sought the following orders:

• that the First Respondent’s company name does not satisfy the requirements of sections 11(2)(a), 11(2)(b), and 11(2)(c)(i) of the Companies Act 71 of 2008 (hereafter Companies Act);
• that the First Respondent is directed to choose a name that does not consist of, or incorporate the mark FRISCO, or any other mark which is confusingly and/or deceptively similar to the Applicant’s FRISCO trademark; and
• that should the First Respondent fail to choose a different name that does not infringe on the Applicant’s trademark within 60 days from the date of the order, the Second Respondent be directed to change the First Respondent's name to its registration number.

  The Applicant is a wholly owned subsidiary of AVI Limited. It produces instant coffee products under its brand FRISCO. The Applicant alleged that it is the proprietor of the FRISCO trademark which was registered on 30 November 1967. This trademark is registered in different categories under classes; 29; 30; and 32. The Applicant contended that its FRISCO trademark is well-known. Further, it is not only popular but is also associated with outstanding quality. It is contended that the trademark has been marketed through a variety of methods including social media marketing and association with the popular DJ Black Coffee. Further, the platforms where this trademark has been marketed are accessed by the Applicant’s customers and members of the public in South Africa daily in the course of trade. The Applicant further contended that it extensively uses this trademark concerning its products daily. According to the Applicant, as a result of its extensive use of the FRISCO trademark, it has acquired a repute and strong common law rights in this trademark. Further, this trademark has become an asset of considerable commercial value and importance to the Applicant. It is alleged that in the last six years, the Applicant has sold 19 606 252 Kg of FRISCO products and generated net total sales revenue of R 1 933 765 877. The Applicant’s is view that any unauthorized use of this trademark, or the usage of confusingly or deceptively similar marks will be damaging to the Applicant’s reputation and business in South Africa. The Applicant submits that the First Respondent’s name infringes on its trademark. Further, its attorneys made it aware of the First Respondent’s name in October 2023. The Applicant instructed its attorneys to send a letter to the sole director of the First Respondent, which was sent on 30 October 2023. In this letter, the First Respondent was requested to change its name to that which does not infringe on the Applicant’s trademark. In addition, the Applicant alluded that, the letter was followed by several telephone conversations with the First Respondent’s sole director who indicated that he was aware of the Applicant’s trademark. Further, he did not have a problem with changing the First Respondent’s name, but he would first have to consult those who are involved with the First Respondent. However, the Applicant states that there was no further correspondence from the First Respondent’s sole director, and he stopped taking their calls. Furthermore, the Applicant claimed to have an interest in the First Respondent’s name because this name wholly incorporates and is confusingly and or deceptively similar to its well-known FRISCO trademark in which the Applicant has major and direct commercial interest. According to the Applicant, the first dominant and memorable portion of the First Respondent’s name is FRISCO, which is its trademark. Further, the inclusion of the word PROJECTS in the First Respondent’s name cannot distinguish its name from the Applicant’s registered trademark. The Applicant submitted that the average consumer would very likely assume that the First Respondent is associated with the Applicant or that its goods and services are endorsed by the Applicant and relate to those of the Applicant. The Applicant contended further that there is a huge likelihood of confusion. Further, this constitutes trademark infringement. The Applicant submitted that it did not authorize the First Respondent to use its trademark as its name. According to the Applicant, the First Respondent's use of its current name is also likely to take advantage of or be detrimental to the distinctive character and repute of the FRISCO trademark. The First Respondent’s failure to respond to the Applicant’s demand led the Applicant to approach the Tribunal for relief. The Tribunal’s staff acknowledged receipt of the Applicant’s application on 7 March 2024. The sheriff’s return of service attached to the default judgment application papers indicatds that the Applicant’s application papers were served at the First Respondent’s registered address on 11 March 2024. Service was effected within five days of issuing the application as prescribed in Regulation 142(1) of the Companies Regulations, 2011. The First Respondent did not oppose the application. In terms of Regulation 43 of the Companies Regulations, 2011, if the First Respondent desired to oppose this application, it ought to have submitted its opposing papers within 20 business days. The First Respondent did not file and serve its answer to the Applicant’s application hence the application for default judgment against the First Respondent. The Applicant has demonstrated good cause why it needed to approach the Tribunal. This was an attempt to protect the Applicant’s trademark and prevent the First Respondent from infringing on this trademark thereby compromising the Applicant’s commercial interests. The Tribunal was satisfied that the Applicant is a person with an interest in the First Respondent’s name and has demonstrated good cause in this matter. The Tribunal’s view is that FRISCO is a well-known brand in South Africa and the First Respondent’s continued use of this part of its name which is the dominant part thereto will likely lead to confusion. Therefore the Tribunal agreed with the Applicant that the First Respondent is taking advantage of the goodwill in its trademark. This will likely lead consumers to believe that the First Respondent or its services and products are somehow associated with the Applicant. The Applicant neither endorsed any of the First Respondent’s activities nor provided the First Respondent permission to use and profit from the usage of its trademark. Order:

• The First Respondent was ordered to change its registered name to a name that does not incorporate the word “FRISCO”, because its registered name is in contravention of sections 11(2)(b)(iii) and 11(2)(c)(i) of the Companies Act.
• The First Respondent was ordered to change its name within ninety (90) calendar days of the date of receipt of this order and to file a notice of amendment of its Memorandum of Incorporation to effect the change of its name.
• Should the First Respondent fail to change its name as stated in order b, the Second Respondent is ordered to change the First Respondent’s name to its registration number.
• The Registrar of this Tribunal is directed to serve this order on the Respondents.
• There is no order as to costs as the application was not opposed.

  Director Dispute Babalwa Totongwana (Applicant) vs Lebogang Sekete (Respondent) The Applicant and the Respondent are both directors of MADE IN AFRICA COSMETICS (PTY) LTD (registration number 2018/215714/07). This was an application for default judgment where the application sought an order that the Respondent be removed as the director of the MADE IN AFRICA COSMETICS (PTY) LTD. Both the Applicant and the Respondent are shareholders in the company with each of them owning 50% of the MADE IN AFRICA COSMETICS (PTY) LTD’s shares. The Applicant approached the Tribunal to assist her in resolving her dispute with the Respondent through its alternative dispute resolution mechanisms. Both the parties subjected themselves to the mediation process initiated by this Tribunal and were assisted in reaching a settlement, the terms of which are as follows:

• The Respondent would sell all her shares to the Applicant for R 60 000.00.
• The Respondent will resign in writing as a director of the MADE IN AFRICA COSMETICS (PTY) LTD.
• The Respondent’s resignation letter should be forwarded to the Tribunal and will be made available to the Applicant once the Applicant has made the final payment to the Respondent.

On 23 November 2023, the Respondent resigned in writing from her position as the MADE IN AFRICA COSMETICS (PTY) LTD’s director. On the same day, the Applicant accepted the Respondent’s resignation in writing. The receipt of the resignation letter and the acceptance thereof suggests that the Applicant paid the amount to which the parties agreed. For the Respondent to officially cease to be the MADE IN AFRICA COSMETICS (PTY) LTD’s director, she had to verify her profile on the Companies and Intellectual Property Commission’s (CIPC) website to enable the Commissioner to remove her as a director. The Applicant alleges that the Respondent refused to do so. The Applicant contends that the Respondent failed to amend the necessary documents that would lead to her removal as the MADE IN AFRICA COSMETICS (PTY) LTD’s director. According to the Applicant, the Respondent also closed the MADE IN AFRICA COSMETICS (PTY) LTD’s bank account without her knowledge. Furthermore, to open a new bank account for the MADE IN AFRICA COSMETICS (PTY) LTD, the Applicant required amended documents from the CIPC which do not include the Respondent’s name. According to the Applicant, the Respondent is not cooperating despite having resigned as the MADE IN AFRICA COSMETICS (PTY) LTD’s director. Further, the Respondent is not responding to communication from the Applicant and the CIPC. The Applicant applied to the Tribunal in terms of Regulation 142(1) of the Companies Regulations by completing the relevant form and submitting a very brief affidavit. In terms of Regulation 142(2) of the Regulations, the Applicant is required to serve a copy of the application and supporting affidavit on the Respondent cited in the application, within 5 business days after filing it with the Companies Tribunal. On the 26 February 2024, the Applicant filed an application with the Tribunal. It appears that the Applicant served the application by sending an email to the Respondent wherein some of the officials of the Tribunal were copied on the same day. It is not clear whether the Respondent received the application. It is worth noting that the email used to send the application and affidavit to the Respondent is the same email that the parties have been communicating with; also, it is the same email that the officials of the Tribunal also used to communicate with the Respondent. It is reasonable to assume that the Respondent received the email and decided not to respond. This is consistent with the Applicant’s version that the respondent has been unresponsive since she signed the settlement agreement. The Respondent failed to file a response within the stipulated twenty (20) business days hence, the applicant proceeded to apply for a default judgment. As per the Applicant’s brief affidavit, it is clear that the Respondent neglected her duties as the director and she has also been derelict in the performance of her duties. Even worse, the Respondent has officially resigned as a director following a mediation process but she has not cooperated with the Applicant to officially have her name removed as a director MADE IN AFRICA COSMETICS (PTY) LTD. The Respondent has also closed the company’s bank account without the Applicant’s consent as a director and co-shareholder of the company. The Respondent has also failed to assist the Applicant in opening a new bank account because, despite her resignation, her name is still reflected on the registration documents of the company, and her consent is needed for a new bank account to be opened. I am convinced that the Applicant has made a case for the Respondent’s removal as the director of the company. Order:

• The relief sought by the Applicant was granted.
• The Respondent was removed as a director of MADE IN AFRICA COSMETICS (PTY) LTD in terms of section 71(8) of the Companies Act.
• The CIPC was ordered to deregister the Respondent as the director of MADE IN AFRICA COSMETICS (PTY) LTD (registration number 2018/215714/07) within a period of 10 (ten) days from the date of receipt of this order.
• The Registrar of the Tribunal is hereby directed to deliver a copy of this order to the CIPC within 5 (five) days from the date of handing down of this order.