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[2009] ZAGPPHC 110
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Mayo Foundation for Medical Education and Research v Theatre Mayo Clinic Company (Pty) Ltd and Others (1428/2006) [2009] ZAGPPHC 110; 2009 BIP 438 (GNP) (14 September 2009)
IN THE HIGH COURT OF SOUTH
AFRICA
(NORTH AND SOUTH GAUTENG HIGH
COURT, PRETORIA)
REPORTABLE
Date
:
14 September 2009
Case Number:
1428/2006
In the matter between:
MAYO FOUNDATION FOR MEDICAL
EDUCATION
AND
RESEARCH
Applicant
and
THEATRE MAYO
CLINIC COMPANY (PTY) LTD
1
st
Respondent
MAYO PHARMACY
2
nd
Respondent
UNIFORM SA
3
rd
Respondent
BAP HENDRICKS
(PTY) LTD
4
th
Respondent
WYPE WYPKEMA
5
th
Respondent
JUDGMENT
SOUTHWOOD J
[1]
The
applicant seeks an interdict against the first and fifth respondents
(‘the respondents’) restraining them from
passing off
their goods and medical services as being those of, or as being
associated in the course of trade with, the applicant
by using the
names MAYO and MAYO CLINIC and ancillary relief (ie removal of the
offending matter or delivery up) and an order against
the third
respondent that it transfer the domain names mayoclinic.co.za and
mayo.co.za to the applicant. Prior to the hearing
on 27 August 2009
the applicant sought interdicts against the first, second, fourth and
fifth respondents –
(1) on the grounds
of trade mark infringement in terms of section 34(1)(a) and (b) of
the Trade Marks Act 194 of 1993 (‘the
Act’);
(2) on the grounds
of use of the applicant’s well-known marks in contravention of
section 35(3) of the Act; and
(3) on the grounds
of passing-off;
as well as the
above ancillary relief and the above order against the third
respondent. In their heads of argument and at the hearing
the
applicant’s counsel abandoned all the interdictory relief save
that for passing off.
[2] The respondents
which have used the names MAYO and MAYO CLINIC since 1974 to
designate a medical practice conducted at Roodepoort,
dispute that
the applicant is entitled to any relief. The respondents contend
that the applicant has not made out a case for an
interdict for
passing off and that, in any event, the applicant either tacitly
consented to the respondents using the names or
is estopped from
denying that it consented to the respondents using the names.
[3] At the hearing
the parties were in agreement that the fourth and fifth respondents’
answering affidavit should be received
in evidence and the
respondents’ counsel did not apply to strike out offending
matter in the applicant’s founding affidavit
as foreshadowed in
their notice. Instead, the respondents’ counsel simply argued
that in the event of the court granting
relief to the applicant it
should order that the costs of the papers referred to in the notice
be disallowed and/or excluded from
the costs order.
[4] The applicant
launched this application in January 2006, some 32 years after the
fifth respondent commenced using the name MAYO
CLINIC to designate
his new diagnostic clinic at Roodepoort. The fifth respondent
continued to use the names MAYO CLINIC and MAYO
until 1994 when he
registered the first respondent to make it possible for other medical
practitioners to acquire an interest in
the theatre business. After
being informed in 1989 that the name MAYO CLINIC was being used in
respect of the medical practice
at Roodepoort the applicant took no
steps to prevent this. Fourteen years elapsed before the applicant’s
attorney of record,
Spoor & Fisher, addressed a letter of demand
to the first respondent. After the first respondent refused to
accede to the
applicant’s demands the applicant waited another
3 years before instituting these proceedings. It is clear from the
applicant’s
founding affidavit that the applicant’s case
was that as at January 2006 the respondents were infringing its trade
marks
either in terms of section 34(1)(a) or (b) of the Act, were
using the names MAYO CLINIC and MAYO in contravention of section
35(3)
of the Act and were passing off their goods and medical
services and/or business operations as those of or as associated with
the
applicant. It seems that the applicant realised that the
provisions of section 36(2) of the Act were an insurmountable
obstacle
to the relief sought in terms of the Act and therefore
decided not to press for such relief. In addition, the sale of the
fourth
respondent’s business with effect from 1 July 2009
rendered the interdict sought against the second and fourth
respondents
academic.
[5] The applicant
seeks final relief on notice of motion and the principles set out in
Plascon-Evans
Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd
1984
(3) SA 620
(A)
at
634D-635C must be applied where there are disputes of fact. Neither
side contends that the evidence of any deponent must be
rejected on
the papers and neither side seeks to cross-examine any witness.
Counsel made submissions as to the meaning and weight
of the
evidence.
The
parties
[6] The applicant
is one of a number of companies or corporate entities which carry on
the business or conduct the operations of
the MAYO CLINIC in
Rochester, Minnesota;
Jacksonville, Florida and Scottsdale, Arizona, in the United States
of America. The operational corporations are MAYO CLINIC,
Rochester;
MAYO CLINIC, Jacksonville and MAYO CLINIC, Scottsdale. The applicant
owns the intellectual property of all the entities.
For present
purposes it will be accepted that the applicant carried on the
practice or operations of the Mayo Clinic and built
up its
reputation. The respondents do not contend that the applicant is not
entitled to seek relief for passing off.
[7] The first
respondent was incorporated by the fifth respondent in 1994 to take
over the fifth respondents business of providing
operating theatres
which he previously did under the name ‘The Mayo Theatre’.
The fifth respondent registered the
company to enable colleagues and
fellow medical practitioners to acquire a share in the business. The
fifth respondent is the
managing director of and a shareholder in the
first respondent.
[8] The second respondent is the name
of the pharmacy business conducted by the fourth respondent at the
Mayo Clinic until 1 July
2009. The applicant no longer seeks relief
against the second respondent.
[9] The third respondent is a company
which is responsible for the registration and administration of
domain names at the co.za
domain.
[10] The fourth
respondent was incorporated in 1998 to conduct an in-house retail
pharmacy at the Mayo Clinic to provide for the
needs of patients of
the Mayo and Flora clinics. The fourth respondent no longer conducts
the pharmacy business. With effect from
1 July 2009 the fourth
respondent sold the pharmacy to Pharmedica Zone (Pty) Ltd in terms of
an agreement which prohibits the purchaser
from using the name MAYO
in any way in connection with the pharmacy.
[11] The fifth
respondent is a medical practitioner and businessman. In 1950 the
fifth respondent qualified as a doctor (MBChB)
and in 1964, after he
had worked at a number of hospitals in the United Kingdom and South
Africa, he qualified as a surgeon (ChM).
Since then the fifth
respondent has practised as a consultant surgeon. As businessman the
fifth respondent established and developed
a number of medical
clinics and private hospitals in Gauteng and further afield. In 1974
the fifth respondent established a medical
diagnostic clinic at
Roodepoort, Gauteng (then Transvaal), under the name of MAYO CLINIC.
From 1974 until 1994 the fifth respondent
operated the Mayo Clinic as
a business which provided medical and other services, including
operating theatres for surgical procedures.
The fifth respondent
conducted the operating theatre business under the name and trading
style of ‘THE MAYO THEATRE’.
In 1994 the fifth
respondent incorporated the first respondent and transferred to it
the operating theatre business. The fifth
respondent continued to
conduct the rest of the business using the names MAYO, MAYO CLINIC
and the MAYO MEDICAL DIAGNOSTIC CENTRE.
Passing
off
[12]
In
argument the applicant’s case is that since 1974 the
respondents have been passing-off their medical practice and/or
business
operations as being associated with the applicant by making
use of the names MAYO and MAYO CLINIC. The applicant’s counsel
contend that by 1974 the applicant enjoyed such a huge reputation in
the names MAYO and MAYO CLINIC in the United States of America
and
internationally that the respondents’ use of the names in South
Africa would give rise to deception or confusion as to
whether the
respondents’ practice and/or business operations are associated
with the applicant. They also argue that when
the fifth respondent
adopted the names and commenced using them in 1974 this was a
passing-off which was a continuing wrong which
has persisted up to
the present time.
[13]
The
following issues arise for decision:
(1) Whether at 1974
the applicant had a reputation in South Africa in respect of the
names MAYO and MAYO CLINIC; and if so:
(2) Whether the
fifth respondent’s adoption and use of the names MAYO and MAYO
CLINIC in respect of his diagnostic clinic
in 1974 and thereafter was
a passing-off of his medical practice or business operations as
associated with the applicants’
clinic; and if so:
(3) Whether it was
unlawful in 1974 for the fifth respondent to adopt and use the names
MAYO and MAYO CLINIIC in respect of his
diagnostic clinic because of
the judgment in
Caterham
Car
Sales
& Coachworks Ltd v Birkin Cars (Pty) Ltd
and
another
1998(3)
SA 938 (A) (“
the
Caterham
case”);
and
if not
(4) Whether by the
time these proceedings were launched in 2006 the applicant and first
and fifth respondents shared the reputation
in respect of the names
MAYO and MAYO CLINIC in South Africa;
(5) Whether the
applicant tacitly consented to the first and fifth respondents’
adoption and use of the names MAYO and MAYO
CLINIC;
(6) Whether the
applicant is estopped from denying that it
consented
to the first and fifth respondents using the names MAYO and MAYO
CLINIC.
[14] In
Williams
t/a Jenifer Williams & Associates v Life Line Southern
Transvaal
[1996] ZASCA 46
;
1996
(3) SA 408
(A)
at
418D-H the court summarised the principles relating to passing-off:
‘Passing-off
is a species of wrongful competition in trade or business. In its
classic form it usually consists in A representing,
either expressly
or impliedly (but almost invariably by the latter means), that the
goods or services marketed by him, emanate
in the course of business
from B or that there is an association between such goods or services
and the business conducted by B.
Such conduct is treated by the law
as being wrongful because it results, or is calculated to result, in
the improper filching of
another’s trade and/or in an improper
infringement of his goodwill and/or causing injury to that other’s
trade reputation.
Such a representation may be made impliedly by A
adopting a trade name or a get-up or mark for his goods which so
resembles B’s
name or get-up or mark as to lead the public to
be confused or to be deceived into thinking that A’s goods or
services emanate
from B or that there is the association between them
referred to above. Thus, in order to succeed in a passing-off action
based
upon an implied representation it is generally incumbent upon
the plaintiff to establish,
inter
alia
:
firstly, that the name, get-up or mark used by him has become
distinctive of his goods or services, in the sense that the public
associates the name, get-up or mark with the goods or services
marketed by him (this is often referred to as the acquisition of
reputation); and, secondly, that the name, get-up or mark used by
the defendant is such or is so used as to cause the public to
be
confused or deceived in the manner described above. These principles
are trite and require no citation of authority’.
See also
Capital
Estate and General Agencies (Pty) Ltd and Others v Holiday Inns Inc
and Others
1977
(2) SA 916
(A)
at
929C-D;
Caterham
case
at
947F-I.
[15
] Prior
to the judgment in the
Caterham
case
it was necessary for a plaintiff seeking relief for passing-off to
prove that he physically carried on business within the court’s
area of jurisdiction. Absent such proof he could not establish that
he had goodwill and he would be non-suited – see
Slenderella
Systems Incorporated of America v Hawkins and
another
1959 (1) SA 519
(W
)
at
521A-522B
;
Lorimar
Productions
Inc
and others v Sterling Clothing Manufacturers (Pty )Ltd ;Lorimar
Productions Inc v OK Hyperama Ltd and others; Lorimar
Productions
and others v Dallas Restaurant
1981 (3) SA 1129
(T)
at
1138H-1140A
;
Tie
Rack plc v Tie Rack Stores Ltd and
another
1989 (4) SA 427
(T)
at
442G-445D. (See also
McDonald’s
Corporation v
Joburgers
Drive-Inn Restaurant (Pty) Ltd and another : Mcdonald’s
Corporation v Dax Prop CC and another: Mcdonald’s
Corporation
v Joburger’s Drive-Inn Restaurant (Pty) Ltd and Dax
Prop
CC
1997 (1) SA 1
(A)
at
18H-19C)
.
In
1998, in the
Caterham
case
,
the court held that these decisions are no longer good law and said
that apart from being based upon a misunderstanding of Lord
MacNaughten’s
dictum
in
The
Commissioners of Inland Revenue v
Muller
& Co’s Margarine Ltd
[1901]
AC 217
(AL)
,
they are inconsistent with general principles and incompatible with
the world we live in and modern jurisprudential trends.
[16] In the
Caterham
case
at paras 20 – 22 the court held that, generally, where a
plaintiff does not carry on a business or conduct its operations
at
the place where the passing off is alleged to occur, the plaintiff
can succeed in proving a passing-off only if the following
requirements are satisfied:
(1) The plaintiff
must establish, in a practical and business sense, a sufficient
reputation amongst a substantial number of persons
who are either
clients or potential clients of his business:
(2) The plaintiff
must prove that the reputation exists where the misrepresentation
complained
of causes actual or potential damage to the drawing power of the
plaintiff’s business. If the plaintiff cannot do so the
misrepresentation is made in the air and does not cause actual or
potential damage. The locality of the plaintiff’s business
is
still relevant. It is an important consideration in determining
whether the plaintiff has potential clients and whether the
alleged
misrepresentation causes the plaintiff’s business any harm.
Similarly, the extent of a business’s reputation
and the scope
of its activities are relevant to the probability of deception and to
damage – the smaller the reputation,
the smaller the likelihood
of deception and of damage, and
vice
versa
:
(3
) The
plaintiff must establish the reputation described in
Reckit
& Colman Products Ltd v Burden Inc and Others
[1990] UKHL 12
;
[1990]
RPC 341
(HL) ([1990] All ER 873)
at
406 (RPC) and 880g-h (All ER):
‘
First, he
must establish a goodwill or reputation attached to the goods or
services which he supplies in the mind of the purchasing
public by
association with the identifying “get-up” (whether it
consists simply of a brand name or a trade description,
or the
individual features of labelling or packaging) under which his
particular goods or services are offered to the public, such
that the
“get-up” is recognised by the public as
distinctive
specifically
of
the plaintiff’s goods or services’:
or, perhaps, more
simply put, in
Adcock
Imgram Products Ltd v Beecham SA (Pty) Ltd
1977
(4) SA 434
(W)
at
437A-B:
‘the
plaintiff must prove that the feature of his product on which he
relies has acquired a meaning or significance, so that
it indicates a
single source for goods on which that feature is used’;
i.e. reputation
is dependent upon distinctiveness:
(4) The plaintiff
must establish that this reputation existed when the defendant
entered the market and when the representation
took place. A
plaintiff cannot rely upon a reputation that overtook the business
of the defendant.
[17] A person’s
name can, through use in relation to goods and services, acquire a
secondary meaning so that it becomes distinctive
of those goods or
services – see
Policansky
Bros Ltd v L & H Policansky
1935
AD 89
at
103-104;
Brian
Boswell Circus v Boswell-Wilkie Circus
1985
(4) SA 466
(A)
at
482B-G. In the absence of direct evidence or a market survey as to
the reputation of the name and its consequent distinctiveness
for
the purpose of passing-off proceedings the court is required to
infer from the evidence as to the manner and scale of use
of the
name that it has become distinctive. See
Cambridge
Plan AG and Another v Moore and Others
1987
(4) SA 821
(D)
at
837B-E;
Hollywood
Curl (Pty) Ltd and Another v Twins Products (Pty) Ltd (1)
1989
(1) SA 236
(A)
at
251D-E;
Daimler
Chryssler Aktiengesellschaft v Afinta Motor Corp
[2001]
2 All SA 219
(T)
at
227f.
[18] In the present
case the alleged passing-off commenced in 1974 which is the date at
which the applicant must establish the requisite
reputation. The
applicant relies on its allegedly huge reputation in the United
States of America and internationally as well
as the direct evidence
of four members of the medical profession who qualified as doctors in
South Africa in the 1960’s,
fifth respondent’s letter of
April 1989 and D M Kisch’s letter dated 29 September 2003
addressed to Spoor & Fisher
in answer to its letter of demand.
The respondents contend that this evidence does not establish that
the applicant’s name
had become distinctive in South Africa by
1974. The respondents also contend that here is no evidence to
suggest that a reputation
existed in the minds of the general public
in 1974 or at any other time. Against that background the
applicant’s evidence
will be considered.
[19
] The
history of the applicant and the nature and scope of its operations
is set out in the founding affidavit by Jonathan J. Oviatt,
the
applicant’s general counsel, who has been an attorney with the
applicant since 1991. No objection was taken to the evidence
given
by Mr. Oviatt which related to the years before 1991.
[20
] Mr.
Oviatt’s evidence pertaining to the applicant’s
reputation at 1974 may be summarised as follows: the MAYO CLINIC
was
established in 1914 by the Mayo brothers, William and Charles, who
practised as medical doctors in Rochester, Minnesota, United
States
of America. The brothers pioneered the practice of medicine by
doctors working in teams rather than as individual doctors.
Their
practice flourished and by 1912 the Mayo brothers decided to house
the practice in one building: ie all the doctors, their
departments,
laboratories, workshops, editorial services and business offices
under one roof. When completed in 1914 the building
was called the
Mayo clinic. The practice continued to flourish and the doctors
continued to refine their new system of healthcare.
They helped
originate medical specialities in the United States of America and
they visited other countries to study and also
received foreign
medical specialists who came to exchange knowledge. The Mayo
brothers and the Mayo Clinic became well-known and
the clinic became
well-known as a centre of surgical excellence. The name MAYO also
became associated with several innovative surgical
procedures
pioneered by the MAYO brothers. In 1915, the Mayo School of Graduate
Medical Education was opened. It was one of the
first medical
schools in the world to train medical specialists. In 1919 the Mayo
brothers dissolved their practice and transferred
the clinic’s
name and other assets to the Mayo Foundation, a private
not-for-profit charitable organisation. Thereafter
the Mayos, their
partners and all Mayo clinic physicians worked for a salary. All
profits were used for education, research and
patient care. After
the Mayo brothers died in 1939 the organisation continued to thrive.
In 1972 the Mayo Clinic Medical School
was opened. Over the years
doctors and researchers at the Mayo Clinic have been involved in
major advances and discoveries in medical
science and treatment.
Most of these activities were carried on at the Mayo Clinic in
Rochester Minnesota. It was only in 1986
that the Mayo Clinic, for
the first time, extended its activities outside Minnesota when it
opened a clinic in Jacksonville Florida.
[21] Mr Oviatt
also
refers to the following facts:
(1) Since 1925 the
MAYO SCHOOL OF GRADUATE MEDICINE has trained more that 16 000 medical
specialists. These include more than 50
South African medical school
graduates since 1950 (ie on average one per year or 24 up to 1970);
(2)
Since
1917 the Mayo Graduate School has awarded 425 graduate degrees in
seven specialities. (He does not say how many before 1974
or whether
they included any South Africans);
(3) Since 1972 the
Mayo Medical School has graduated more than 1 000 students. (He does
not say how many in 1972 and 1973 or whether
they included any South
Africans);
(4) Since 1973 the
Mayo School of Health Sciences has enrolled students in allied
health service programmes. (He does not say how
many students
enrolled in 1973 or whether they included any South Africans);
(5) In 1922 a
newsreel dealing with Charles Mayo’s visit to the White
House to assist in the care of President Harding’s
wife was
broadcast. (He does not say where or for how long this newsreel was
broadcast or whether it was ever broadcast in South
Africa);
(6) In 1958 a
British newsreel dealing with the visit of two boys to the Mayo
Clinic for heart surgery which was performed only
at the Mayo Clinic
was broadcast. (He does not say where or for how long this was
broadcast or whether it was ever broadcast in
South Africa);
(7) Since 1925
Mayo
Clinic Proceedings
,
one of the United States of America’s largest circulation
medical journals has been published and distributed monthly
to
physicians around the world. (He does not way whether it was
distributed to doctors in South Africa);
(8) The Mayo Clinic
annual reports, particularly those for 1970 and 1974, deal in
general terms with the Mayo Clinic’s primary
activities of
patient care, education and research. These reports refer to the
numbers of doctors who worked in the various fields.
He does not
relate any numbers to doctors in South Africa;
(9) A number of
books have been written about the Mayo brothers and the Mayo clinic.
(He does not say whether any of these were
available in South
Africa).
[22] Mr Oviatt also
refers to four affidavits by medical practitioners who qualified in
South Africa in the 1960s: David Marshall
Dent; John Vivian Robbs;
Philippus Christoffel Bornman and Jonathan Clain. Professor Dent is
the Deputy Dean of the Faculty of
Health Sciences at the University
of Cape Town. He graduated as a doctor at the University of Cape Town
in 1964 and qualified as
a surgeon in 1969. He testifies that as a
student at the University of Cape Town in the 1960’s he first
became aware of the
Mayo Clinic because many students aspired to
start their careers there. He also testifies that the Mayo Clinic has
been well known
in South Africa since at least the 1960’s “not
only amongst the medical fraternity but also among members of the
public”.
Professor Robbs is professor of surgery in the
Department of Health Sciences at the University of Natal. He states
that he graduated
as a doctor at the University of Cape Town in 1967
and qualified as a surgeon in 1974. He testifies that in the course
of his studies
at the University of Cape Town in the 1960’s he
became aware of the Mayo Clinic of Minnesota “which was
regarded as
a medical institution seen as the fountain of all
knowledge”. He says that the Mayo Clinic has been well known
in South
Africa since at least the mid 1960’s amongst students,
doctors, surgeons and other members of the medical fraternity.
Professor
Bornman is a professor in the Department of Surgery at the
University of Cape Town. He graduated as a doctor at the University
of Pretoria in 1967 and qualified as a surgeon in 1974 at the
University of the Orange Free State. He states that while he was a
student at the University of Pretoria in the 1960’s he first
became aware of the Mayo Clinic of Minnesota. He says that while
qualifying as a doctor he often encountered doctors from the Mayo
Clinic who came to South Africa to lecture to medical students,
practitioners and surgeons. He also says that the Mayo Clinic has
been well known in South Africa amongst doctors, surgeons and
members
of the public since at least the mid 1960’s. Professor Clain is
a professor of medicine at the Mayo Clinic College
of Medicine
Rochester, Minnesota. He qualified as a doctor at the University of
Cape Town during the period 1961 to 1966. After
completing his
internship he qualified as a specialist physician in 1972. He worked
as Senior Registrar in Gastroenterology at
Groote Schuur hospital in
1973 and 1974 and then became a Research Fellow at the Mayo Clinic in
1975 and 1976. He joined the Mayo
Clinic permanently in 1979.
Professor Clain states that during his medical studies at the
University of Cape Town in the 1960s
and early 1970’s he became
aware of the Mayo Clinic of Minnesota and its extensive reputation
within the medical fraternity.
This reputation led to his decision to
join the Mayo Clinic in 1975. He says that the Mayo Clinic’s
worldwide activities
were such that it was known within the South
African medical fraternity at least in the 1960’s and certainly
by 1974.
[23] In addition to
the
applicant’s direct evidence of reputation the applicant relies
on the fifth respondents’ own evidence. In his answering
affidavit on behalf of the first respondent the fifth respondent says
that as a student he read biographies of the Mayo brothers
and their
father. In the fifth respondent’s letter to the applicant dated
17 April 1989 the fifth respondent said that he
decided to establish
his medical clinic because he had always had great admiration for the
Mayo Clinic and the original Mayo and
the Mayo brothers. He said that
on the spur of the moment he decided to call his clinic the Mayo
Clinic. The letter makes it clear
that in 1950 when the fifth
respondent qualified as a doctor at the University of Pretoria he
already knew about the Mayo Clinic.
He said that at that stage he had
decided to specialise in surgery and that he intended to go to the
Mayo Clinic in the United
States of America to do so until a
prominent surgeon in Pretoria persuaded him not to. In its response
to Spoor & Fisher’s
letter of demand the respondents’
attorney, D M Kisch Inc, said that its client was aware of the Mayo
Clinic’s existence
and reputation in 1974 when it adopted the
name. It did so to honour the great Mayo doctors, the father and his
two sons.
[24]
In
the light of all this evidence an inference that knowledge about the
applicant and its extensive activities in medical education,
research
and treatment in the United States of America had spilled over to
South Africa and that the Mayo Clinic had the requisite
reputation in
South Africa in 1974 is justified. The evidence of the five medical
doctors that they knew about the Mayo Clinic
when they qualified as
doctors strongly supports this inference. It is significant that
they obtained this knowledge while studying
and the conclusion is
inescapable that their fellow students also became aware of the
applicant. Accordingly it is found that
the name was known to ‘a
substantial number of members of the public or persons in the trade
in question’ – see
McDonald’s
case
supra
at 19F-H.
[25]
Even
if the applicant had the requisite reputation in South Africa in 1974
the question to be answered is whether the use of the
names, MAYO
CLINIC and MAYO, by the fifth respondent and the other respondents
would cause the applicant harm. In 1974 the applicant
provided
medical treatment and education and conducted research at Rochester,
Minnesota, United States of America. In South Africa
the applicants’
reputation extended only to prospective doctors and members of the
medical profession. The fifth respondent’s
medical practice
provided only medical treatment in one province in South Africa. The
evidence does not show that merely by using
the names MAYO CLINIC and
MAYO in South Africa the respondents would have attracted doctors who
would otherwise have furthered
their studies or pursued research at
the applicant’s MAYO CLINIC and thereby caused the applicant
harm. The two institutions
were so far removed from each other
geographically and in the nature and scope of their activities that
this seems unlikely. The
applicant does not allege that the quality
of the medical treatment at the respondent’s clinic was
sub-standard or of a low
quality and that it, the applicant, could
not be expected to leave its reputation in the hands of the
respondents.
[26] If it is
accepted that the respondents’ use of the names would cause
harm to the applicant the next question to be answered
is whether the
respondents were entitled to adopt the names MAYO CLINIC and MAYO,
knowing that they referred to a clinic in Minnesota,
USA. The answer
to this question must be found in the effect of the judgment in the
Caterham
case.
The applicant contends that when the judgment was handed down it had
the effect of overturning the legal position which had hitherto
prevailed. The applicant argues that what was previously lawful
became unlawful, that the adoption and use of the names MAYO CLINIC
and MAYO in 1974 constituted a passing-off of the respondents’
medical practice and operations as being associated with
the
applicant’s MAYO CLINIC and that this was a continuing wrong
which the court should now interdict. In support of this
argument the
applicant relies on
The
Mine
Workers Union v JP Prinsloo
1948 (3) SA 831
(A)
at
852
;
Hahlo & Kahn
The
South African Legal System and its
Background
306;
Hosten
et al
Introduction
to South African Law
and
Legal Theory
49
and 429
;
Tsung
v Industrial Development
Corp
of South Africa Ltd
[2006] ZASCA 28
;
2006 (4) SA 177
SCA
at
183J-184A
.
[27]
Before
the
Caterham
case
it was not unlawful in the Transvaal Province to adopt and use the
name or trademark of a foreigner who did not physically carry
on a
business within the court’s area of jurisdiction, even if the
name or trademark was well known and had a reputation
there –
see eg.
The
Tie Rack plc v Tie Rack Stores
(Pty)
Ltd
supra
at
442C- 444D
;
McDonald’s
case at 18H-19C;
Victoria’s
Secret Inc v Edgars
Stores
Ltd
[1994] ZASCA 43
;
1994 (3) SA 739
(A)
at
746F-747A
.
It has already been pointed out that the judgment in the
Caterham
case
held
that it was no longer necessary to prove that the plaintiff was
physically conducting business within the court’s area
of
jurisdiction in order to obtain relief for passing-off. The effect
of the judgment is that henceforth the new law will prevail.
It does
not operate retrospectively. I do not know of any statutory
provision, principle of law or judgment which states that a
judgment
of a court which alters the law on a question of principle has
retrospective effect. None of the cases referred to suggests
such a
conclusion. Only the Legislature can make laws having retrospective
effect. The task of the courts is simply to find the
law, state what
the law is and apply it to the facts.
[28] The crux of
the applicant’s argument is that the judgment in the
Caterham
case,
in effect, decided that any rights claimed by virtue of the earlier
precedents simply do not exist: the principle relied upon
in these
precedents was irrevocably shown to be wrong and cannot be
resurrected. It is argued that this case does not involve a
deprivation of rights contrary to the Constitution: rights did not
exist in the first place and that the fifth respondent acted
at his
peril in adopting the MAYO name in 1974 in the face of its
established reputation. Accordingly, it is submitted, this court
is
bound by the decision in the
Caterham
case
which
its must apply to the present case. I am not persuaded by this
argument and do not find any of the cases referred to by the
applicant decisive or even persuasive on the point.
[29] The question
whether the respondent was entitled to adopt the applicant’s
names must be decided in the light of the law
prevailing at the time
ie. 1974. If the fifth respondent was entitled to adopt the
applicants’ names in 1974 he acted lawfully
and the reputation
built up in not tainted - as argued by the applicant - and at best
for the applicant it and the respondents
enjoy a shared reputation.
This appears from the following paragraphs.
[30] In 1974, after
he had qu
alified
as a surgeon and practised for some years, the fifth respondent
established a medical diagnostic clinic under the name
MAYO CLINIC.
He did this because he realised that to improve the standard of
private medical practice it was necessary for a
number of specialist
in different fields to work together. Because group practices were
illegal he decided to develop a practice
where the various doctors
and specialist were housed together.
[31] At first there were only four
doctors and they were housed in a one storey building next to the
Flora Clinic Hospital. The
building had consulting rooms for
doctors, a pharmacy, an operating theatre and a small X-ray
department as well as laboratory
facilities. The fifth respondent
had intended to call the facility the Diagnostic Clinic but when
there were delays in registering
the name the fifth respondent
suggested the name MAYO CLINIC which the Medical Council approved.
The fifth respondent said that
when he adopted the name MAYO CLINIC
he was aware of the MAYO CLINIC in Minnesota, United States of
America, but he did not know
of any medical services offered by the
United State’s institution in the Republic and he did not know
that it had a reputation
for such services in South Africa. He
therefore adopted the name without any intention of benefitting from
any reputation which
the applicant had in South Africa.
[31] T
he
fifth respondent’s clinic was very successful –
(1) In 1976 the
fifth respondent established a MAYO CLINIC LIFE EXTENTION CENTRE.
It is a specialised annual check-up centre
where complete and
in-depth medical evaluations are preformed in less than three
hours. The centre has grown substantially
and now has seven
doctors and ten sisters doing check-ups, X-rays, mammography,
bone density tests and pathological services;
(2) In 1980 the
Mayo Clinic was expanded. A second building was erected with
consulting rooms for doctors and specialists;
(3) In 1981 the Mayo Clinic was
expanded further. A third building having a proper X-ray department
was completed and a fourth
building was erected. The original
building was enlarged to accommodate a more sophisticated theatre
arrangement;
(4) After 1986
the Mayo Clinic was expanded still further. A four storey building
(Mayo no 5) and a five storey building (Mayo
no 6) were built on
the property. At the same time the Flora Clinic was enlarged from
a 60 to 450 bed facility;
(5) By 1985 the
Mayo and Flora Clinics consisted of six buildings, the last being
four storeys. The two clinics housed 450 beds,
20 day clinic beds
and 11 theatres. There were full time pathologists as well as a
large radiological firm with all necessary
scanners;
(6) In 1993 three
more buildings were completed to house
inter
alia
a larger in-house pharmacy and a restaurant to cater for patients
and clients;
(7) In 1994 the
fifth respondent incorporated the first respondent to take over the
operating theatre business while the fifth
respondent continued
with the rest of the practice;
(8) In 1995 the
MAYO CLINIC started the Global Aesthetic Centre which is equipped
with the latest laser technology, ‘synergie’
cellulite
equipment and Dermological skin care products. Medical services in
the centre are provided by dermatologists,
plastic surgeons and
highly qualified skin-care therapists. The Centre is a leader in
the field in South Africa;
(9) In 2003 the
MAYO CLINIC started a specialised Gastro Intestinal Unit where
endoscopic evaluations of oesophagal, intestinal
and bowl problems
are performed. The unit also specialises is the assessment and
treatment of hiatus hernia;
(10) In 2005 the MAYO CLINIC
established a large urology unit, a blood transfusion centre and a
pain clinic;
(11) By 2006 the
MAYO CLINIC consisted of nine multi-storey buildings accommodating
more that 50 doctors, physicians and paramedical
personnel as well
as operating clinics and theatres.
[32] These facts
justify an inference that the first and fifth respondents established
a reputation in the Transvaal and Gauteng,
its successor, in respect
of the names MAYO and MAYO CLINIC, ie they are distinctive of the
first and fifth respondents’
practices and business activities.
[33] The parties
agree
that if two parties share a reputation in a name, neither will be
able to restrain the other from using the name. See
Endomol
Productions SA (Pty) Ltd & others v Midi Television
(Pty)
Ltd & others
2002 BIP 274 (T)
at
286-287
.
[34] This
conclusion is the end of the matter and strictly speaking it is not
necessary to consider the remaining questions: ie
whether the
applicant tacitly consented to the respondents’ use of the
names or whether the applicant is estopped from denying
that it
consented to the respondents using the names. Nevertheless, as the
parties presented argument I shall briefly record my
views on these
issues. The respondents’ arguments are based on the
correspondence between the applicant and the fifth respondent
in
1989, the applicant’s failure to object to the use of the names
and the applicant’s failure to take action for 14
years. It is
common cause that the letters were sent on behalf of the applicant.
[35] On 16 February
1989 Professor Jon van Heerden on behalf of the applicant addressed
the following letter to the Mayo Clinic
in South Africa:
‘
Dear
Sirs
There are so many
Mayo Clinics scattered throughout the world. We continue to be
interested in those clinics, and particularly,
how the name was
chosen. I would appreciate your letting me know a little bit about
your Mayo Clinic and how the name was chosen.’
On 17 April 1989 the fifth respondent
replied in the following terms:
‘
Dear
Professor van Heerden
Thank you very much for your letter
enquiring about our Mayo Clinic.
To commence I would like to mention
that I am also a general surgeon in private practice here in
Johannesburg and Weltevreden Park.
At the same time I have maintained
my connection with the Johannesburg University Hospital doing one
session per week. Professors
Myburgh and Lawson have mentioned your
name and a young surgeon Dr Leon Erasmus, who is at present my
partner, has also worked
as a full time surgeon with Professor
Myburgh. He also spent some time at your Mayo Clinic in Rochester and
met you while he was
there and sends his regards.
………
I qualified in 1950
at the Pretoria University. I decided to specialise in surgery and my
choice was the Mayo Clinic in America.
A letter was written to
Professor T G Dry who was a Physician at your Mayo Clinic and also
hailed from South Africa and his nickname
here was Tiekiedraai. He
replied that he had a job for me but I unfortunately declined the
offer. The reason for that was that
Dr C A R Scheulenburg a leading
surgeon in Pretoria at that time advised me against taking the Mayo
Clinic post stating that the
American degrees were not recognised
here in South Africa and that I should first go to England and obtain
my F. R. C. S. in London
and then spend a few years in teaching
hospitals in the UK and then finally rounding it off by spending the
last year at your Clinic.
Taking his advice I
spent
seven
years doing registrarship in England notably at Guys, Hammersmith
Post Graduate Hospital and with Professor Milnes-Walker
in Bristol.
My intention was then to complete my studies in America but my wife
put her foot down, having spent so many years overseas,
said it was
time to go home.
During the 1970s almost all my surgery
was done in State Hospitals but always having had great admiration
for the Mayo Clinic and
the original Dr Mayo and the Mayo brothers I
decided to initiate a medical centre in Weltevreden Park, just west
of Johannesburg.
The one half of the ground was scheduled to become
consulting rooms and a diagnostic centre whilst the other half was
destined
to become the hospital.
The building being
almost complete, my colleagues who were going to practice in the
building urgently enquired about the name. They
were told that it was
going to be called The Diagnostic Centre but that I was waiting for
reply from the Medical Council. These
doctors were anxious to print
their stationery and to notify their colleagues. They consequently
wanted to know if the Medical
Council were to decide against the name
what alternative name I would suggest. On the spur of the moment I
replied the Mayo Clinic.
My friends, without consulting me, made a
personal visit to the Medical Council in Pretoria requesting an
urgent decision. The
Medical Council then said that the name
Diagnostic Clinic would probably be undesirable. On their own my
colleagues decided that
it would now be called the Mayo Clinic and
requested the Municipality to put up signs directing the public to
the Clinic.
It was only one
night when I noticed
,
for the first time all the street signs, that it dawned on me that my
doctor friends regarded my joke, of calling the Diagnostic
Clinic the
Mayo Clinic, not as such.
I was horrified because I thought it
would be pedantic for a small place with such a humble beginning to
be called the Mayo Clinic.
I consequently covered all the signs up
with big sheets.
The next day I consulted the Municipal
administrators requesting to have the signs removed. The Municipality
however was not amused
stating that it had cost them a lot of money
and that they were doing a big favour to the doctors and would not
remove the signs
or the name. My medical colleagues were amused and
all regarded this as a big joke. This however led to the name of the
Mayo Clinic
here in South Africa.
We in this country are still not
allowed to work in a group practice – it is therefore only the
building – being called
the Mayo Clinic but we practice on our
own.
Our medical set-up has also grown
considerably during the last ten years. There are now six Mayo Clinic
buildings, the last few
being four stories high and when our new
additions are finalised we will have 250 beds plus 20 day clinic beds
and 11 theatres.
Fulltime pathologists as well as a big radiological
firm with all the scanners are already in full operation.
If at all possible I am considering
visiting the Mayo Clinic in Minnesota next year and would very much
like to meet you and look
around your famous Clinic.
Thank you very much for your letter.
With best wishes.’
The correspondence ended with another
letter from Professor van Heerden on behalf of the applicant which
reads as follows:
‘
Dear Dr
Wypkema
Thank you so much
for your most interesting letter received today. I
t
was fascinating to learn more of the history of the Mayo clinic in
South Africa, and wonder I you would be so kind as to send
me some
pictures that include the name “Mayo Clinic”.
I do remember
Professor Tom Dry, all too well. I did part of my training with his
son, young Tom who now resides in Iowa, which
is not too far south
of Rochester.
I would be
delighted if you would pay us a visit at some time in 1990. Please
let me know how I may facilitate this visit.
I look forward to
hearing from you, and thank you once again for the delightful
letter.’
[36] In
the
first respondent’s answering affidavit the fifth respondent
comments as follows about the effect of this correspondence:
“
63 At no
time was I advised by the Applicant that they
intended
interdicting or restraining me from using the name MAYO CLINIC,
nor did they allege that the use of the name was
contrary to any
of their proprietary rights and title in the MAYO or MAYO CLINIC
trademarks. There was not a word uttered
that they thought that my
conduct was unlawful.
They
created to me the impression and represented to me that they were
satisfied with my response. I therefore continued with my business
and expanded it to what it is today. As a result the applicant should
be estopped from seeking the relief in the notice of motion.
64 Since 1989, I
continued to use the MAYO CLINIC name in relation to the Clinic
and related service offering, which use
extended with the
expansion of the business, which was as a result of the continuing
popularity and notoriety, which the first
respondent and I had
engendered as a result of the high quality services and facilities
offered. It was a natural progression.
65 It was only on
14 August 2003, that the Applicant addressed a letter of demand,
sent on behalf its attorneys messrs Spoor
& Fisher, objecting
to the use of the MAYO trademark in relation to our services and
demanding that the First Respondent
immediately
cease
all use of the MAYO and MAYO CLINIC trademarks and transfer the
domain name mayoclinic.co.za. …”
[37] The applicant
contends that the respondents are attempting to set up a defence of a
tacit
pactum
de non petendo
(ie
an agreement not to sue). The respondents do not dispute this. They
simply argue that this is borne out by the facts. It seems
to me to
be clear that the parties did not intend to enter into a contract of
any kind. There is no indication of such an intention
in the letters.
However that is not the end of the matter. As I understand the
respondents’ answering affidavit they are
saying that the
applicant consented to the passing-of. Where a person consents to a
wrongful act or delict the defence is
volenti
non fit iniuria
which requires that the respondents establish “knowledge,
appreciation and consent “ on the part of the applicant –
see
Waring
& Gillow, Ltd v Sherbourne
1904 TS 340
at
344
;
Santam
Insurance Co Ltd v Vorster
73 (4) SA 764
(A)
at
779B
.
This
is a question of fact and gives rise to difficulties where the
consent is alleged to be by conduct - see
Santam
Insurance Co Ltd v Vorster
supra
at
779A-781G
.
[38] The applicant
clearly knew about the respondent’s
use
of the name MAYO CLIINIC and was concerned about this. Accordingly,
the applicant (Professor van Heerden) addressed the letter
of 16
February 1989 to the respondents. Having being informed about the
fifth respondent’s adoption and use of the name and
the nature
and extent of the fifth respondent’s medical practice and
activities the applicant did not object to the use of
the name or
take steps to prevent such use. The applicant (Professor van Heerden)
simply thanked the fifth respondent for the interesting
letter. The
applicant then did nothing to protect its rights in respect of the
name for 14 years. In these circumstances the most
plausible
inference is that the applicant consented to the respondent using the
name. Spoor and Fisher’s letter of demand
makes it plain that
the applicant appreciated that the respondents’ use of the name
in relation to their clinic could constitute
passing-off. In my view
the respondents have established the defence of consent or
volenti
non fit iniuria.
[39]
As far as estoppel is concerned it seems to be clear that the
letters do not contain a representation that the applicant consents
to the respondents using the names. There is accordingly no basis for
a defence of estoppel.
ORDER:
[39] The application is dismissed with
costs.
__________________________
B R SOUTHWOOD
JUDGE OF THE HIGH COURT
NORTH &
SOUTH GAUTENG DIVISION
MATTER IS REPORTABLE
DATE OF HEARING: 27 AUGUST 2009
FOR APPLICANT SPOOR & FISHER
c/o VAN ZYL LE ROUX HURTER
MONUMENT OFFICE PARK
BLOCK 3
Cnr STEENBOK AVENUE &
ELEPHANT STREET
MONUMENT PARK, PRETORIA
COUNSEL FOR APPL ADV G E MARLEY (SC)
ADV S M DAVIES
FOR 1
ST
TO 3
RD
RESP. D M KISCH INC
SUITE 3 PARKLAND BUILDING
223 BRONKHORTS
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PRETORIA
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