Significant ruling on geographical place names for services

The Development at Century City

The Supreme Court of Appeal handed down judgment in the case of Century City Apartments Property Services CC and the Registrar of Companies and Close Corporations v Century City Property Owners Association (SCA CASE NO 57 of 2009) on 27 November 2009, ruling that the mark CENTURY CITY for services in classes 36, 41 and 42 has become a sign which may serve in trade to designate the geographical origin of services, and hence ordered that the trade mark registrations for it be revoked.

Century City is a substantial commercial and residential development on some 300 hectares of land next to the N1, the main road leading northward from Cape Town. It falls within the Municipality of the City of Cape Town and, more particularly, the suburb of Montague Gardens. The development began in earnest in 1997 and, according to the Property Owners Association, it was always the intention that Century City would be one development, independently functioning and operating, providing a cross-pollination of services and industries to the owners and tenants within Century City.

The development known as Century City is also home to the well-known shopping centre CANAL WALK which opened in 2000, and was the largest shopping centre in Africa with 125 000 square meters of retail and 9 600 square meters of office space. By 2008, more that 156 000 square meters of office space had been sold and more than 2000 homes had been completed in Century City. By 2010, more than 60 000 persons will be working and living in Century City.

Between 2006 and 2007, the Appellant started trading as Century City Apartments Property Services. During 2006 it registered the domain name www.centurycityapartments.co.za and in 2007 the registration of its close corporation Century City Apartments Property Services CC followed. The Appellant owns various properties in the Century City development. It leases out these properties, as well as several other properties within the Century City development, to holiday makers on a short term basis.
On 3 December 2007 the Century City Property Owners Association brought an application to the Cape High Court for an interdict against Century City Apartment Property Services CC on the basis of trade mark infringement. It relied, inter alia, on its trade mark registrations for the word mark CENTURY CITY in the following classes:

Class 36: Insurance; financial affairs; monetary affairs; real estate affairs, including property, township and residential development, real estate appraisal, estate agencies, real estate management, leasing of real estate.

Class 42: Respect of retail, wholesale, marketing, distribution, hiring, leasing, mail order and merchandising services of all kinds; providing of food and drink including bars, bottle stores and restaurant, snack bars, cafeterias, roadhouses, canteens, fast-food outlets; catering services, cocktail lounge services; temporary accommodation, hotels, hotel management; motels, tourists hostels, accommodation bureaux and services all for reserving accommodation at hotels, boarding houses and the like; arranging, hiring and providing facilities for expositions, exhibitions and the like; services ancillary to the aforegoing.
Most pertinent was the trade mark registration for CENTURY CITY in class 42.

The Appellant brought a counter-application for the cancellation of the CENTURY CITY trade marks on the basis that the marks, in the hands of the Property Owners Association, did not designate its services exclusively, but had rather become a place name, which designates the geographical origin of the services of many.

Section 10(2)(b) of the Trade Marks Act 194 of 1993 provides that the following marks shall not be registerable as trade marks or, if registered, shall be liable for removal from the trade marks register:

10(2)(b) a mark that consist exclusively of a sign or an indication which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or other characteristics of the goods or services, or the mode or time of the production of the goods or of rendering of the services.
 
The Appellant argued that the mark CENTURY CITY had become a place name which served in trade to designate the geographical origin of various services of various traders located at Century City.

The Appellant acknowledged that, in 1997 when the original developer (Monex) filed the various trade mark applications for the mark CENTURY CITY, the mark CENTURY CITY was indeed capable of distinguishing Monex’s services from the goods or services of other persons, and was rightfully registered. During 1997 there was no such place as Century City yet.

It was the Appellant’s case that the mark CENTURY CITY, as a result of the manner in which it had been used, has become a place name and has lost distinctiveness as a result.

It subsequently relied on Section 24(1) of the Trade Marks Act, which provides that in the event of an entry wrongly remaining on the trade marks register, any interested person may apply to the Court for an order making, removing or varying the entry as the Court may deem fit.

The Cape High Court dismissed the counter-application and upheld the Property Owners Association’s application for an interdict against the Appellant.

On appeal, the Supreme Court of Appeal found, per Harms DP, that Century City is a geographical area, fenced, gated and secured, like many a township in this country, with a multitude of individual owners. It differs from a suburb or village in that roads and the like do not belong to a local authority but to an owners’ association and that the association provides some, but not all, of the services that local authorities usually supply. The Court stated further that whether Century City is a suburb in the dictionary sense of the word, is irrelevant. The question remains whether it has become a place name within the meaning of Section 10(2)(b).
Having concluded that Century City has become the name of a geographical location, the SCA then turned to the question whether the mark CENTURY CITY constituted a sign or an indication which may serve, in trade, to designate the geographical origin of the services covered by the registrations. Considering that there are probably hundreds of commercial enterprises that offer the services mentioned under the class 42 registration, like retail merchandising services, restaurants and hotels, the Court found that Century City may serve, in trade, to designate the geographical origin of those services. As regards the class 36 registration, the Court concluded that there are various estate agencies and real estate managers offering services in century City, and that the mark may serve as a geographical indicator for such services.

After applying this consideration to the various trade mark registrations for the mark CENTURY CITY, the Court ruled that the mark CENTURY CITY in classes 35 (as far as the registration extends to management services), 36, 41 and 42 were hit by the prohibition of Section 10 (2)(b) of the Trade Marks Act, and were liable to be cancelled.

The Respondent argued that, blameworthy conduct by the trade mark proprietor is required before a trade mark may be cancelled. The SCA found that blameworthy conduct is not a requirement for the cancellation of a mark in terms of Section 10(2)(b), and stated in any event that the mark CENTURY CITY had become a place name as a necessary consequence of the nature of the development itself.

Accordingly, the appeal was upheld with cost in favour of the Appellant. The Respondent’s trade mark registrations for the mark CENTURY CITY in classes 36, 41, and 42 were revoked, with its trade mark registration for the mark CENTURY CITY in class 35 being amended so as to exclude management services.

The Respondent’s claim based on trade mark infringement was accordingly dismissed.

Adams & Adams, Cape Town acted for the Appellant.

Suzaan Laing
Partner
sl@adamsadams.co.za

Roux Potgieter
Candidate Attorney
roux-p@adamsadams.co.za