THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case no: 829/2017

In the matter between:
MORRIS MATERIAL HANDLING LIMITED
APPELLANT
and
MORRIS MATERIAL HANDLING
SA (PTY) LTD

FIRST RESPONDENT

Neutral citation: Morris Material Handling Ltd v Morris Material
Handling (Pty) Ltd (829/2017) [2018] ZASCA 67 (25
May 2018)
Coram:  MAYA P, MAJIEDT, WALLIS, DAMBUZA AND VAN DER
MERWE JJA
Heard:
9 MAY 2018
Delivered: 25 MAY 2018
Summary:  Trade mark – expungement from the register for non-use –
s 27(1)(b) of Trade Marks Act 194 of 1993 – whether mark used by
proprietor thereof.

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Tuchten
J, sitting as court of first instance):
The appeal is dismissed with costs, such costs to include those
consequent upon the employment of two counsel.

JUDGMENT

Wallis JA (Maya P, Majiedt, Dambuza and Van der Merwe JJA
concurring)

[1] The only issue in this appeal is whether the appellant’s registered
trade mark MORRIS registered in classes 7 and 11 under registration
number 1935/00289/2-3 should be expunged from the register for non-
use in terms of s 27(1)(b) of the Trade Marks Act 194 of 1993 (the Act).
The mark was originally registered in the name of a United States
corporation, MHE Technologies Inc (MHE), but in 2001 it was assigned
to a British company, GW 103 Ltd (GW), as part of a broader transaction
in which MHE sold identified parts of its international business to GW.
GW subsequently changed its name to Morris Material Handling Limited.
In order to avoid confusion between two entities with similar names I will
refer to it as the appellant.

[2] The respondent, Morris Material Handling SA (Pty) Ltd, is a South
African company that manufactures cranes and claims a reputation in this

country for cranes bearing the mark MORRIS. Its endeavour in 2014 to
register MORRIS as a trade mark was blocked by the existence of the
appellant’s existing mark. It accordingly brought the present proceedings
with a view to having the appellant’s mark expunged from the register,
thus clearing the path for the registration of its own mark. It obtained an
order for the rectification of the register from Tuchten J, sitting in the
Gauteng Division of the High Court, Pretoria. The appeal is with his
leave.

[3] A trade mark falls to be removed from the register for non-use in
terms of s 27(1)(b) of the Act when:
‘up to the date three months before the date of the application, a continuous period of
five years or longer has elapsed from the date of issue of the certificate of registration
during which the trade mark was registered and during which there was no bona
fide use thereof in relation to those goods or services by any proprietor thereof or any
person permitted to use the trade mark as contemplated in section 38 during the period
concerned.’
An application under this section potentially raises the following five
questions,1 namely:
(a) Were the marks used during this period?
(b) Were they used by the proprietor?
(c) Was any other use permitted use?
(d) Was the permitted use controlled?
(e) Was the use bona fide?
The argument addressed to us on behalf of the respondent was that until a
late change of counsel the case was brought and conducted in the high
court as a case of permitted use. However, Mr Michau for the appellant,

1 A M Moolla Group Ltd and Others v Gap Inc and Others 2005 (6) SA 568 (SCA) (The Gap) para 28.

expressly eschewed any reliance on permitted use and it is therefore
unnecessary for us to address it.

[4] The heads of argument foreshadowed a debate whether there had
been any use of the mark in South Africa during the relevant period and if
so whether that was bona fide. The issue was purely factual as the parties
were at one that the enquiry in terms of s 27(1)(b) was summarised in the
following terms in Westminster Tobacco:2
‘… bona fide use is use of the trade mark in relation to goods of the type in respect of
which the mark is registered. The use must be use as a trade mark, for the commercial
purposes that trade mark registration exists to protect. It must be use in the course of
trade and for the purpose of establishing, creating or promoting trade in the goods to
which the mark is attached. The use does not have to be extensive, but it must be
genuine.  Genuineness is to be contrasted with use that is merely token, but the line is
a fine one, because the use may be minimal.  It may in part be prompted by the fear of
removal from the register and be directed at protecting the proprietor’s trade generally
or preventing the mark from falling into the hands of a competitor. Provided,
however, the use is bona fide and genuine and principally directed at promoting trade
in goods bearing the mark, these further purposes however important, are irrelevant.
What is impermissible is:
“ . . . user for an ulterior purpose, unassociated with a genuine intention of pursuing
the object for which the Act allows the registration of a trade mark and protects its use
. . .”.
Whether use of the mark was bona fide is a question to be determined on the facts of
the particular case.’

[5] The founding affidavit claimed that the respondent was the only
entity in South Africa making use of the MORRIS mark in respect of

2 Westminster Tobacco (Cape Town and London) (Pty) Ltd v Philip Morris Products SA [2017]
ZASCA 10; [2017] 2 All SA 389 (SCA) para 7.

cranes and related goods and services and claimed that the appellant had
made no use of the trade mark during the five years and three months
prior to 31 July 2014. Initially this was understood to convey that there
had been no other use of the mark at all during this period, but it
transpired that this was not correct as the following paragraphs
demonstrate.

[6] Documents attached to the answering affidavit showed that in
2013 an entity called Konecranes (Pty) Ltd (Konecranes SA) had
established a parts distribution centre in Johannesburg for the supply of
parts for a variety of cranes including cranes bearing the MORRIS mark
and said to emanate from the respondent. An email dated 27 February
2014 addressed to a client on behalf of Konecranes SA said that they
were expecting a consignment of spare parts for ‘Morris P360 Series,
P410, P420, P430 and P450 Series’ cranes and a later email dated 8 April
2014 reflected that these had arrived. In addition fliers were distributed to
clients in early 2014 showing the brands of cranes for which parts would
be available from the Parts Centre. In the centre of the flier and its most
prominent item was the mark ‘MORRIS®’. At the same time media
releases published in various outlets contained the same depiction of the
mark or referred to the respondent’s name, without its corporate
identifiers, as a brand.

[7] In the face of this evidence counsel for the respondent accepted
that there had been sufficient use of the mark for the purpose of
establishing bona fide use in accordance with section 27(2)(b). The
dispute therefore came down to the question whether this was use by the
proprietor of the mark. To that question the appellant answered ‘Yes’ and
the respondent ‘No’.

[8] Nothing was said in the founding affidavit in this regard, which is
not surprising given that the deponent adopted the stance that there had
been no use of the mark at all in South Africa. It was dealt with in the
answering affidavit deposed to by Mr Patrick Campbell, who had been
employed by the appellant since 2002 and in 2006 had become its
General Manager for Services and Parts.

[9] Mr Campbell explained that in March 2001 MHE sold its business
operations in the United States, United Kingdom, Saudi Arabia, Thailand
and Singapore to GW. At the same time it assigned the trade mark
MORRIS registered in Australia, France and South Africa, to GW. He
attached a schedule to his affidavit showing that apart from these the
trade mark MORRIS has been registered in China, the European
Community and Mexico, while MORRIS CRANE SYSTEMS has been
registered or is pending in a number of countries.

[10] Mr Campbell said that in 2006 Konecranes Plc acquired the
appellant. This does not appear to be a separate United Kingdom
company, but an English transliteration of the name of the Finnish
company Konecranes Oyj,3 which is the holding company of an
international business described in some of the press releases as a global
crane giant. There is a separate UK company called Konecranes UK Ltd.
This operates from the same registered office as the appellant as does an
entity or business division – whether it is a separate juristic person is
unclear – called Konecranes (UK Parts Centre). A later affidavit by Mr
Knut Stewen, who described himself as a director of both the appellant

3 Plc is an acronym for public limited company and Oyj is the Finnish equivalent.

and Konecranes SA, reveals that the international business operates in
regions, as in addition to his other two roles, Mr Stewen said that he was
the Vice-President, Head of Region Africa.

[11] No attempt was made to place before the court information
showing the relationship between these various aspects of the overall
group or to explain how they now conduct business. There was a
considerable measure of ambiguity about this. An invoice was attached to
Mr Campbell’s affidavit showing the importation of a range of parts the
price being over £43 000 of which five items totalling some £560 were
said to be spares for the appellant’s MORRIS cranes. The other 74 items
presumably related to other types of cranes but which ones was not said.
The invoice did not identify who was supplying the parts beyond saying
that payment was to be made to a UK subsidiary of a Finnish bank and
the remittance was to be sent to Konecranes UK Ltd. Printed at the top of
each page of the invoice, one above the other, were ‘KONECRANES’
with some indecipherable lettering below; ‘MORRIS’ and below that in
smaller block capitals ‘Material Handling’; and lastly ‘KONECRANES
(UK Parts Centre).

[12] The emails, fliers and press releases relied on by the appellant to
prove use of the mark were equally ambiguous in identifying the entity
that was making use of the mark. The first, dated 24 June 2013, said that
Konecranes Southern Africa had established a parts distribution centre to
supply Konecranes parts and parts for ‘the “Alpha Brands” owned by
Konecranes, Morris Material Handling, Stahl, SWF and Verlinde among
them’ as well as competitor parts ‘such as Abus and Demag’. The words
‘among them’ indicated that the Alpha Brands included Morris Material
Handling, Stahl, SWF and Verlinde. That was reinforced by the reference

to competitor brands. Although it was said that Konecranes SA had
established the parts centre, it also said that this was supported by the
Konecranes Central Distribution Centre based in Finland.

[13] The later emails did not clarify this. They all came from
Konecranes SA as did the fliers. These referred to the international
operation, saying that ‘more than 100 Crane and Hoist brands’ were
owned by Konecranes. Both “MORRIS’ and ‘MORRIS MATERIAL
HANDLING’ appear on the flier as brands owned by Konecranes. The
press releases also concentrated on the international giant, Konecranes,
which in context could only be a reference to the international company,
not the appellant, which was categorised simply as a brand owned by the
international company.

[14] All in all the picture as it emerged from the documents was murky.
It was wholly unclear who was making use of the MORRIS mark in
South Africa. Bearing in mind that this mark was referred to in all the
documents, together with a number of other ‘brands’, collectively as
Konecrane brands, it is difficult to see how any of this material can be
said to have involved use of the particular mark MORRIS by the
appellant. After all the balance of the material in the fliers and press
releases did not relate to that mark or the appellant. It is therefore
impossible to say that any of this constituted use of the mark by the
appellant. The picture that the documents paint is of a number of brands
and marks falling within the overall Konecranes stable being advertised
collectively by or on behalf of one or more of the Konecranes entities,
rather than a specific use of the MORRIS mark by the appellant for its
own business purposes.

[15] So, what did the appellant say in this regard? The answer is, very
little. Mr Campbell said only that the appellant had used its mark in South
Africa during the relevant period. He gave no further details in regard to
the use of the mark beyond saying that:
‘The Respondent’s MORRIS branded products have been and are available for
purchase in South Africa and have been so available and sold during the relevant
period. Through an internal arrangement, Konecranes4 is authorised to distribute the
Respondent’s MORRIS branded products in Africa, including in South Africa.’
No details were given of any sales of MORRIS branded products in South
Africa during the relevant period. A few paragraphs later Mr Campbell
said, with reference to the emails, fliers and press releases, that
Konecranes SA was authorised to distribute MORRIS branded products
in Africa including South Africa. This highlighted the problem of
determining who was distributing what for whom.

[16]   The response to these allegations by Mr Chiappa, the managing
director of the respondent, whose knowledge of the crane market in South
Africa was not challenged, was a blunt denial of the existence of any
internal arrangement between the respondent and Konecranes. Mr
Chiappa then highlighted the inconsistencies in the appellant’s papers that
have already been mentioned. In regard to the documents relied upon by
the appellant in Mr Campbell’s affidavit, he said repeatedly that they did
not show use of the MORRIS mark by the registered proprietor thereof.
The challenge could not have been laid down more clearly. The
respondent was putting the appellant to the proof of its allegations in
regard to the existence of the ‘internal arrangement’ and that the use of

4 Earlier in this affidavit Mr Campbell said that references to ‘Konecranes’ should be understood as
references to Konecranes Plc, the parent company.

the mark as evidenced in the documents was use by the registered
proprietor of the mark.

[17] The appellant did not rise to this challenge. It delivered the further
affidavit by Mr Stewen referred to in para 10 with a view to
supplementing the evidence of Mr Campbell. But the supplementary
material took the matter no further. Mr Stewens said that he confirmed:
‘… the arrangement in place between the Respondent and Konecranes in terms
whereof Konecranes is authorised to distribute the Respondent’s MORRIS branded
products in South Africa.’
The problem was that this did not disclose in what way this involved the
appellant making use of its mark. It did not say, much less provide proof,
that the appellant was still trading, as opposed to being a dormant
company within the larger Konecranes group, kept alive because it was
the proprietor of various trade marks. This was an extraordinary omission
bearing in mind that Mr Stewen was a director of the appellant and
Konecranes SA, as well as being a very senior figure in the broader
African region of the Konecranes group.

[18] Ms Celeste Viljoen, who was the author of the emails and the
person responsible for the fliers and press releases, filed an affidavit at
this stage of the proceedings. She was the manager of the Spare Parts
Distribution Centre. She simply confirmed that Konecranes SA supplied
parts bearing the appellant’s MORRIS trade mark.

[19] The question is whether that evidence was sufficient to discharge
the onus resting on the appellant to show that it was the appellant that had
made use of the mark in the various ways described above. The evidence
suffered from all the deficiencies mentioned in the judgments of this

Court in The Gap5 and New Balance.6 In the former case, which bore
some resemblance to this one, Harms JA said in relation to the evidence
produced that the:
‘evidence in this regard is not only vague to such an extent that it smacks of
evasiveness, but it is also contradictory. The problem lies in the loose structure of the
group,  which consists of companies and partnerships with an overlap of shareholders
and directors. The group, it appears, tends to ignore corporate identities and moved
enterprises between companies. For instance, at times, the fourth appellant itself
conducted business and, at other times, a business under its name appeared to be an
operating division of the second appellant.  In line with this approach, Dr Vahed said
that when the group obtained control of the proprietor it (the group) 'acquired' the
'Gap' trade marks. These were dealt with as group property, any member using them
whenever it suited it. If then, in a 200 page affidavit, Dr Vahed dealt with the issue of
licensing in a single phrase, saying that the use by the members of the group since
1983 was 'with the licence' of the proprietor, one has to conclude that this was no
more than a mere allegation and did not amount to factual evidence. Affidavits in
application proceedings must do more than make bald allegations; they must, in
addition, provide the facts that support the allegations. If  the licence had been in
terms of a written agreement, one would have expected some particularity and
perhaps even the production of a copy; if oral, one would have expected some
indication of between whom, when and where; if tacit, an allegation to that effect with
the facts that gave rise to the tacit agreement would not have been out of place. In
any event, the grant of a licence to the group is not only improbable but also
incompatible with the perception that existed within the group that the trade marks
belonged to the group.’

[20] In New Balance the Court was concerned with evidence (or the
lack of it) dealing with actual use of the mark at the relevant time. No
invoices or any other proof of sales were adduced in support of the

5 The Gap para 31.
6 New Balance Athletic Shoe Inc v Dajee and Others [2012] ZASCA 3; 2012 BIP 102 (SCA).

appellant’s case. Nugent JA said in regard to the complete absence of
documentary evidence of sales during the relevant period:7
‘ But in any event it is not necessary to find that the ambiguity, and absence of
supporting evidence, was deliberate. The fact remains that there is no clear evidence
that the alleged use occurred during the relevant period, and the surrounding
circumstances revealed in the affidavits provide no sufficient basis for inferring that
they must have occurred then. Whatever corroborating evidence might or might not
be required in proceedings of this kind, what is called for, at the least, is clear and
unambiguous factual evidence that brings the matter within the terms of the section. I
agree with the court below that the evidence was insufficient for that purpose.
In the absence of clear and unambiguous proof of relevant use during the relevant
period, the trademarks of New Balance Inc are liable to be removed from the register
…’

[21]  I would caution that in neither of these cases was the court
suggesting that the onus resting on the proprietor of the trade mark was
anything more than a requirement to establish bona fide use by the
proprietor of the mark on a balance of probabilities. But, if clear and
unambiguous proof of facts, such as sales contracts, invoices, trading
accounts and financial records, should be available to demonstrate that
the proprietor used the mark, the failure to produce such proof will count
heavily against the party bearing the onus. Here, apart from the single
ambiguous invoice referred to in para 11, not a single document was
produced that unequivocally demonstrated that the mark was being used
by the appellant, even in the extended sense that indirect ‘back door’
trading was recognised as use in Wistyn.8

7 New Balance paras 22 and 23.
8 Wistyn Enterprises (Pty) Ltd v Levi Strauss & Co and Another 1986 (4) SA 796 (T).

[22] In the present case there is no evidence at all that the appellant
continues to produce cranes or trade in them or is commercially active. If
it is we do not know whether it is still producing cranes under the
MORRIS brand or has merged its operations with its parent, Konecranes
Plc. We do not know whether Konecranes Plc is now using the MORRIS
mark and, if so, on what basis. Certainly it, or its South African
subsidiary or associate, seems to be using a wide variety of marks that
Konecranes Plc claims are collectively owned by it and constitute its
brands.

[23] The other feature of importance in my view is the complete failure
to respond to the challenge raised by the respondent to the existence of
the ‘internal arrangement’ under which Konecranes (either Plc or SA)
was said to be distributing MORRIS branded products in South Africa.
We are dealing with an international group of companies that is a global
giant in its field of operations. When GW took over the business of MHE
great care was taken to assign particular trade marks including the one in
dispute. That trade mark has been in existence on the South African
register since its registration in 1936. I find it difficult to believe that if
there were an arrangement under which either the international or the
South African company was acting as distributor for MORRIS branded
products in this country there would be no record of it. In enterprises of
that size records are kept of such matters in formal agreements, minutes
of board and executive meetings and in correspondence. Yet none of
these have been produced. In their absence the position in my view is that
the appellant failed to discharge the onus resting upon it of showing on a
balance of probabilities bona fide use by it, as the proprietor of the mark,
during the relevant period.

[24] The appeal is dismissed with costs, such costs to include those
consequent upon the employment of two counsel.

________________________
M J D WALLIS
JUDGE OF APPEAL

Appearances
For appellant:
R Michau SC (with him L Harilal)

Instructed by:
Adams and Adams Inc, Pretoria
Honey Attorneys, Bloemfontein

For respondent:
L Bowman SC (with him I Joubert)

Instructed by:
Spoor and Fisher, Pretoria
Phatshoane Henney Attorneys, Bloemfontein.