Case Summary and Outcome

The Constitutional Court of South Africa rejected an application for an injunction sought by South African Breweries (SAB) to prohibit the use of its trademark by the clothing company – Laugh It Off Promotions – which frequently uses well-known trademarks in a satirical or parodic manner. SAB argued that the defendant clothing company’s use of its “Black Label” beer trademark on T-shirts ridiculed, damaged, and harmed the reputation of its trademark. For its part, the defendant Laugh It Off argued that the T-shirts using the plaintiff’s trademark contained a message of social criticism, satire, and parody protected by freedom of expression. The South African Constitutional Court held that the injunction sought by SAB should not be granted because no concrete harm was proven by the use of the trademark in a parodic message. In this sense, the Court concluded that since no violation of the Trademark Act had been proven, the injunction to prohibit the distribution of T-shirts parodying the beer brand owned by SAB should not be granted.

---

Facts

In 2001, plaintiff South African Breweries (SAB), a company that sells beer in South Africa, sought an injunction against defendant Laugh It Off Promotions to stop it from marketing T-shirts containing its brand name with offensive messages. SAB argued that the defendant launched a series of T-shirts ridiculing its “Carling Black Label” beer brand. SAB considered that “the unauthorized use of its trademarks by the plaintiff in the course of trade infringed the anti-dilution provisions of Article 34(1)(c).” [para. 12]

The plaintiff argued that one of its trademarks contains the following advertisement “America’s lusty, lively beer Carling Black Label Beer Brewed in South Africa.” [para.7]. The plaintiff asserted that “Black Label” beer is very popular and has excellent sales volumes which are due to the fact that its popularity “derives from costly, concerted and pervasive advertising in the form of sports sponsorships, television, radio, print media, coasters, posters, banners, flags, T-shirts, billboards and cab advertising.” [para.7]

SAB argued that the defendant “had produced and was offering for sale to the public T-shirts, which bore a print that was markedly similar, in lettering, color scheme, and background, to that of [SAB’s] ‘Carling Black Label’ marks. The only real difference was in the text. The words ‘Black Label’ from [SAB]’s trademarks were replaced, on the T-shirt, by ‘Black Labour’; [SAB]’s ‘Carling Beer’ was replaced by ‘White Guilt’; and where it was written ‘America’s lusty lively beer’ and ‘enjoyed by men around the world’, [Laugh It Off] had printed ‘Africa’s lusty lively exploitation since 1652’ and ‘No regard given worldwide’, respectively.” [para.8]. SAB considered that the defendant infringed its trademark by damaging not only its sales but the reputation of the trademark.

Defendant Laugh It Off Promotions is an apparel company that engages in the satirical use of well-known trademarks “by altering the images and words of the marks and printing them on T-shirts. [Laugh It Off] sells the T-shirts for profit to make social commentary.” [para.4]. The defendant argued that the use of the plaintiff’s mark did not violate the Trademark Law “as the risk of damage to the reputation of the marks was not established and that, in any event, it was exercising the freedom of expression enshrined in Article 16.1 of the Constitution.” [paragraph 12]. Furthermore, the Respondent argued that prominent trademarks are cultural icons that are not beyond the reach of public criticism. In this regard, the Respondent asserted that “the purpose of copyright and trademark laws in an open and democratic society is not to shut down critical expression or to strangle artistic and other expressive acts in such a way as to give way to an inordinate influence of trademarks.” [para. 13]

The defendant also noted that the message communicated on the T-shirts was a satire or parody of the popular beer brand owned by the plaintiff. On this point, the defendant argued that “the mark stands up to its own weight and popularity. The technique consists of using well-known and registered trademarks of large corporations, slightly altered but recognizable as an adaptation of the original mark. The purpose, [the defendant] explains, is to ridicule the marks; to make a statement about the company’s policies or practices; to sound out issues affecting society at large; to assert freedom of expression and, in so doing, to challenge the unconscionable use of trademark laws to silence expressions that are not flattering about the marks.” [para. 14]

The High Court granted the injunction and ordered the defendant to suspend the selling of the T-shirts with the use of the plaintiff’s proprietary mark. The court held that the message on the T-shirts caused material detriment to the distinctive character of the plaintiff’s trademark. Furthermore, the Court considered that such a message was not protected by the freedom of expression as it exploited the plaintiff’s trademark for profit. In the core of its analysis, the court held that the defendant’s use of the trademark “was not a mere parody that mocks trademarks. Rather, it was a publication bordering on hate speech because it invoked the racial factor, something our Constitution and our new democracy strive to avoid.” The court concluded that the use of the marks by [Laugh It Off] manifests an intent to be hurtful or harmful to the defendant because it is based on race, ethnic or social origin, and color.” [para.15]

The defendant then appealed the High Court’s decision to the Supreme Court of Appeals. The Supreme Court of Appeals rejected the appeal and upheld the High Court’s argument that Laugh It Off violated section 34(1)(c) of the Trademark Act. The Supreme Court of Appeals held that Laugh It Off’s message was not protected free speech “but harbors a predatory intent because T-shirts are primarily marketable goods and not merely a medium of expression.” [para. 24]

Likewise, the Supreme Court of Appeals held that Laugh It Off “is free to express an identical message about ‘black labor’ and ‘white guilt’ through other means without appropriating the T-shirt trademarks’ renown to sell them.”  In short, the court concluded that the plaintiff’s freedom of expression was hardly limited, as adequate alternative avenues were available.” [para. 23]

As a result, the defendant filed an appeal under the South African Constitutional Court.

---

Decision Overview

Justice Moseneke J. delivered the opinion of the court. The Constitutional Court of South Africa had to decide whether the Supreme Court of Appeals, which granted the injunction that prohibited the defendant from using the plaintiff’s trademark in the marketing of T-shirts, violated the right to freedom of expression under section 16(1) of the South African Constitution. 

The defendant Laugh It Off Promotions argued that the Supreme Court of Appeals misinterpreted the constitutional right to freedom of expression in granting the injunction prohibiting it from marketing T-shirts using the trademark owned by the plaintiff SAB. Laugh It Off Promotions remarked that the use of the “Black Label” mark on the T-shirts constituted satirical and parodic expression protected by freedom of expression under section 16(1) of the South African Constitution. The respondent argued that SAB failed to prove any concrete harm. It also remarked that SAB “had not adduced facts to show that the offending use of its marks would be likely to be hurtful, in the economic and trade sense, to the reputation of their marks.” [para.  51]

For its part, the plaintiff SAB argued that the likelihood of suffering economic harm as a consequence of the defendant’s infringing use of its trademark is “evident”. It also emphasized that “no right-thinking South African would wish to be associated with the racially insensitive message conveyed by the applicant on the T-shirts. The racial slur, it submits, is likely to erode the exclusiveness of the mark, discourage people from purchasing [SAB’s] Black Label Beer.” [para. 52]

First, Justice Moseneke explained that the issue to be decided was novel in South African jurisprudence. He also remarked that the case required weighing the guarantee of freedom of expression enshrined in section 16(1) of the Constitution and the protection of intellectual property rights attached to registered trademarks as provided for in section 34(1)(c) of the Trade Marks Act 194 of 1993 which prohibits dilution and blurring of a registered trademark.  

Judge Moseneke explained that the purpose of section 34(1)(c) of the Trademark Act is to protect the commercial value attributed to the reputation of a trademark and to preserve the commercial interests of trademark owners. Under this premise, the judge determined that the regulation prohibits the use that materially damages the reputation of trademarks commonly used to sell goods and services. Likewise, he added that section 34 (1)(c) of the Trademark Act seeks to discourage dilution, that is, the blurring and tarnishment of registered trademarks. In this regard, the judge specified that “blurring occurs when the inherent distinctiveness or uniqueness of the mark is weakened or reduced.  Tarnishment occurs when unfavorable associations are created between a well-known registered mark and the mark of the unauthorized user.  In a case of tarnishment, the object of protection appears to be the reputation, the goodwill, of the mark.” [para. 41]

Then, Judge Moseneke stated that “the present case concerns, not the blurring, but the tarnishment of the ‘Carling Black Label’ marks. This seems obvious because the source of [SAB’s] concern is the infringing use of its marks, in relation to non-competing goods, and yet in a way that creates unfavorable associations and unpleasant connections, which carry with them the likelihood of tarnishing the reputation of its marks.” [para. 42]

The judge argued that the Trademark Act’s anti-dilution protection must be understood through the prism of the Constitution and the guarantee of freedom of expression. Then, the judge held that “the declaration of unfair use or risk of impairment of the reputation of trademarks depends on whether or not the infringing expression is protected by Article 16.1 of the Constitution. Whether the expression is constitutionally protected, what is unfair or detrimental, or not, in the context of Article 34(1)(c) must then mediate against the competing claim of freedom of expression.” [para. 44]. Furthermore, the judge remarked that freedom of expression “is a vital incidence of dignity, equal value and liberty. It carries its own inherent value and serves a set of other intertwined constitutional purposes in an open and democratic society.” [para. 45] It also held that the limits of freedom of expression in Article 16 of the Constitution should be “generously” delimited. It added that the right to freedom of expression is not absolute and can be limited by a law of general application. On this point, he explained that “the anti-dilution prohibition in section 34(1)(c) seeks, in effect, to exclude certain expressive conduct in relation to well-known trademarks.  It thus limits the right to free expression enshrined at least in Article 16(1)(a) to (c) of the Constitution.” [para. 48]

However, the judge held that such a rule must be interpreted in a way that is compatible with the right to freedom of expression in the Constitution. Under this premise, the judge held that “the anti-dilution provision must have a meaning that is as little destructive as possible of other enshrined rights and, in this case, of free speech rights.  The scope of the statutory prohibition must be limited to the least intrusive means necessary to achieve the section’s purpose.  Courts must be astute not to turn the anti-dilution safeguard for well-known marks, normally controlled by powerful financial interests, into a monopoly adverse to other claims of expressive conduct of at least equal cogency and value in our wider society.” [para. 48] Accordingly, the judge stated that “to succeed, the trademark owner has the burden of demonstrating a likelihood of substantial injury or harm which, viewed in the context of the case, amounts to unfairness.  It remains to resolve the content of the substantial injury contemplated by the section.” [para. 50]

Next, the judge held that courts must determine the likelihood of injury “to the attractiveness of selling a mark in the light of proven facts and not mere allegations.” [para. 54]. On the issue, the judge held that the Supreme Court of Appeal erred in drawing an inference of material injury apparently suffered by SAB from the mere assumption of the meaning attributed to the message on the T-shirts. On this point, the judge held that such an inference is insufficient as an indicator of substantial or material economic injury to plaintiff SAB’s proprietary mark. Furthermore, the judge emphasized that “the mere fact that the expressive act may indeed cause discomfort to some and appear morally reprehensible or distasteful to others is not normally indicative of an infringement of section 34(1)(c). Such moral or other censure is an irrelevant consideration if the expression enjoys protection under the Constitution.” [para. 55]

The judge then held that SAB failed to demonstrate any substantial commercial harm from the use of its mark on the defendant apparel company’s T-shirts and merely argued that “the likelihood of harm is self-evident”. The judge rejected this argument and stated that “for decades the ‘Carling Black Label’ marks have enjoyed considerable recognition and renown in our land.  The brands make up a leading, public-facing beer brand that sells billions of liters of beer across the country. There is not the slightest indication that, from the time the T-shirts saw the light of day until the date the injunction proceedings were initiated, there was any real likelihood that their dominant position in the market would be reduced or that beer sales would be compromised.  Nor is there any evidence of the likelihood of future commercial injury.” [para. 57]

Lastly, the judge expressly refused to rule on whether the satirical content of the message on the T-shirts was protected by freedom of expression. On the question, he held that “where no economic harm has been shown, the fairness of parody or satire or lampooning does not fall for consideration. It must always be kept in mind that, unlike in the US, in our jurisprudence there are no enclaves of protected expression such as parody or satire and therefore the mere characterization of an expression as such would not be decisive of what is fair use under our anti-dilution protection of section 34(1)(c) because ordinarily all categories of expression, save those excluded by the Constitution itself, enjoy constitutional shield and may be restricted only in a way constitutionally authorized.” [para. 65]

For the foregoing reasons, the judge ordered that the injunctive relief sought by SAB be denied and that all costs of the trial be awarded to the plaintiff. 

Finally, Judges Langa DCJ, Madala J, Mokgoro J, Ngcobo J, O’Regan J, Sachs J, Skweyiya J, Van der Westhuizen J and Yacoob J concurred with Moseneke J’s judgment.

Concurrent votes and dissents

In his concurring vote, Judge Sachs added that the injunction requested by SAB should be rejected not only because of its lack of evidence but also because of the relevance of satirical expressions in a constitutional democracy. In this sense, the judge considered that satire is a fundamental way to reproach and question the cultural hegemony exercised by companies and their trademarks in society. 

Judge Sachs J asked: “Does the law have a sense of humor?  This question arises every time the irresistible force of freedom of expression, in the form of parody, meets the immovable object of property rights, in the form of trademark protection.  And if the international experience is anything to go by, it seems that far from providing clear guidance, court decisions on the subject have been as variable as the judicial mood itself.” [para. 71] Next, the judge stated that while he agrees with Judge Moseneke’s reasoning, he held that “something more needs to be said.” [para. 74]

Sachs considered that while the solution proposed in Judge Moseneke’s opinion was correct, he held that “when balancing the different interests involved it failed to appreciate why the parodic use of the trademark in the milieu in which Laugh it Off operated was central to its critical project.” [paras. 74 – 75]  It also added that Moseneke opinion’s “gave too little weight to the unique expressive weight of the parodic form used.” [para. 75]

Furthermore, Judge Sachs considered the message that the defendant disseminated with the T-shirts -which used the plaintiff’s SAB trademark to parody and denounce the power of the beer brand in general- had a clear sense of provocation. With this in mind, the judge argued that “if the parody doesn’t sting, it doesn’t work”.  The question before us, however, is not whether it stings or whether Laugh it Off’s provocations were brave or reckless, funny or silly.  The question we have to consider is whether they were legally and constitutionally permissible.  I think they were eminently so, and I give my reasons.” [para. 76]

Judge Sachs then explained that the question to be analyzed is whether considering the facts and their specific context “an independent observer who is sensitive to both the free speech values of the Constitution and the property protection objectives of trademark law would say that the harm caused by the parody to the trademark owner’s property interests outweighs the free speech interests involved.” [para. 83] Furthermore, the judge stated that “in our consumerist society in which the trademark occupies a prominent space in public culture, one does not have to be a “cultural inhibitor” to recognize that there is a legitimate place for criticism of a particular trademark, or of the influence of the trademark in general or of the overzealous use of trademark law to stifle public debate.” [para. 87]

On this point, the judge considered the medium used to parody relevant and the context in which the parody was made. He explained that “the fact that the parodies appear on T-shirts to be worn by irreverent young people who enjoy the idea of being clowns, could be very relevant.” [para. 88]. In turn, with regard to whether the fact that the parody is considered distasteful should deprive it of constitutional protection, the judge held that “courts should be extremely reluctant to evaluate a parody on the basis of whether they consider it funny or flimsy.” [para. 89]

Under the aforementioned standards, the judge evaluated the facts of the case. First, he held that Laugh it Off is a very small company with a small budget that is sustained -mainly- by the sale of comic T-shirts. Then, he explained that Laugh it Off does not seek to compete with SAB in the beer sales market, nor to attack SAB’s product. It further argued that “there is no evidence that SAB’s allegations of past racist labor practices in any way affect the enthusiasm of current customers to have another glass of Carling Black Label.  Indeed, it is hard to imagine that black working-class drinkers would raise an eyebrow at the suggestion that, along with virtually every other company at the time, SAB benefited from the use of cheap black labor produced by the pass laws and the lack of union and political rights.” [para. 99]

Furthermore, Judge Sachs explained that the Laugh it Off campaign was intended to make people laugh. On this point, the judge held that “the evidence indicates that everyone associated with the T-shirts, whether as producer or consumer, knew that they were intended to mock the dominance exerted by brands in our social and cultural life.  What united seller and buyer had nothing to do with beer, but with irreverence.  The use of the brand was central to the project.” [para. 101]

Finally, Judge Sachs concluded that “the balancing exercise in the present case is therefore straightforward.  From the standpoint of injury, there is virtually no, if any, harm to the marketability of Carling Black Label beer. This is a case where communication was far more important than the trade.  The trade was incidental to the communication.  The company’s objective, as clearly understood by all involved, was to convey a message.  Selling T-shirts was necessary for sustainability. It was not a commercial activity disguised as freedom of expression. To say that the message could have been conveyed by means other than the use of the trademark is to miss the point of the parody. The message lies precisely in the dislocated use of the trademark. What is being questioned is the power of the brand in general, exemplified by the brand in particular.  It is not about the beer itself. It should be emphasized that the question is not whether the parody succeeds in hitting the mark. What matters is that it was part of a genuine attempt to criticize the status quo in our society.” [para. 104]

For the reasons set out above, Judge Sachs expressed his concurring vote to the vote of Judge Moseneke J.

---