Salticrax owner National Brands has won its case at the Supreme Court of Appeal, blocking competitor Cape Cookies from registering SnackCrax as a trademark.
However, this does not mean Cape Cookies has to stop selling SnackCrax yet.
The product has been available in stores since 2014.
The court found that National Brands, owned by JSE-listed AVI, which also owns the Snacktime and Vitasnack brands, has used Salticrax for 58 years, resulting in significant goodwill associated with the brand. In 2014, Cape Cookies tried to register SnackCrax and VitaCrax, and VitaCrax was the latter the subject of another case.
According to the judgment, National Brands holds about two-thirds of the savoury biscuit market, with Salticrax accounting for 13% of the market in 2014. More recent figures were not provided.
National Brands contended in the court that Cape Cookies’ SnackCrax trademark amalgamates the “Snack” element of its Snacktime trademark and the “Crax” element of its Salticrax trademark. That this was “deliberately done to imitate the product so as to obtain an unfair advantage in the market place by deceiving or confusing consumers”.
The high court had previously ruled in favour of Cape Cookies, saying National Brands had “failed to establish that the prospective trade is inherently deceptive or the use of which would be likely to deceive or cause confusion”.
But the appeal court decided on Monday that “crax” was a distinctive trademark. It said that this reassured the buyer and functioned as a badge of origin for goods. “A registered trademark constitutes a monopoly.”
Cape Cookies had argued that “crax” was a general word for crackers, functioning as an abbreviation and not a distinctive or made-up word.
The judges consulted three dictionaries, none of which contained the word “crax” as an alternative to “crackers”, leading them to conclude that it was not a common everyday word.
Trademark
A trademark is protected by law against identical or similar marks.
The court spent time defining what constitutes similarity. If similarity is defined too widely, many new trademarks would be considered in breach, possibly disallowing too many ideas and affecting free trade.
The court said “If the word ‘similar’ is given too extensive an interpretation, the section might have the effect of creating an unacceptable monopoly for the proprietor of a trademark.”
However, it is also necessary to preserve the reputation of a registered trademark and not allow knock-offs that are too similar.
The appeal court agreed with National Brands’ submission that Cape Cookies would probably take unfair advantage of “the power of attraction, prestige, and repute” of Salticrax. This would allow Cape Cookies to avoid marketing and benefit from the advertising campaigns of National Brands, which spent R11m over 15 years promoting Salticrax.
However, if National Brands wants SnackCrax rebranded and not sold in existing packaging, it would have to go back to court and argue that SnackCrax is infringing its trademark and interdict it from using its current packaging, said Hanh & Hahn lawyer Janusz Luterek.
This would be a separate legal matter, requiring a new judgment. Such a case may be pending or have started, he said.
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