In an October 6, 1995 decision, arising from proceedings brought by McDonald's Corporation for permanent injunctions against two South African companies to restrain the unauthorized use of their registered marks, and expungement actions brought in response by the South African companies against the registered marks, a provincial court in Pretoria refused such injunctions and held that the McDonald's registrations should be expunged on the ground of non-use.

Under the former trademark law in South Africa, registered marks, which had not been used for a period of 5 consecutive years following their application date, were vulnerable to attack on the ground of non-use, in the absence of circumstances justifying such non-use. McDonald's attempted to overcome the expungement proceedings by claiming that the non-use was due to the apartheid sanctions against South Africa. However, the court refused to accept this argument noting, inter alia, that the long periods of non-use, dating back to 1968, and McDonald's filing of new applications every five to six years, indicating an intent to circumvent non-use attacks, demonstrated that McDonald's did not have a bona fide intention to use their marks in South Africa.

McDonald's also argued in the injunction proceedings that, under the new Trade Marks Act which entered into force on May 1, 1995, their well known reputation in their marks should enable them to prevent the unauthorized use of their marks in South Africa. This claim was supported by survey evidence showing that McDonald's marks were recognized in South Africa. However, the court refused to accept the survey evidence, deeming it hearsay, and held against McDonald's on the ground that they had not proved that their marks were well-known in South Africa.

McDonald's have announced that they intend to appeal this decision. Meanwhile, however, owners of registered trademarks in South Africa should review their registrations and consider re-filing applications for those marks which may be vulnerable to cancellation on the ground of non use; it is our opinion that such re-filing and replacement should not be held to imply that there was no bona fide intention to use the marks concerned in the face of an attack.

Editor's Note: See our July 1997 Newsletter for an update on this story.