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[1992] ZASCA 207
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Beecham Group Plc v Southern Transvaal Pharmaceutical Pricing Bureau (Pty) Ltd. and Another (48/91) [1992] ZASCA 207; 1993 (1) SA 546 (AD); (25 November 1992)
CASE NO 48/91
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE
DIVISION)
In the matter between:
BEECHAM GROUP
PLC
Appellant
and
SOUTHERN TRANSVAAL PHARMACEUTICAL PRICING
BUREAU (PROPRIETARY) LIMITED
First Respondent
and
SUPER SCRIPTS (PROPRIETARY) LIMITED
Second Respondent
CORAM
: Corbett CJ, E M Grosskopf, Goldstone, JJA, Nicholas et Kriegler
AJJA.
DATE OF HEARING
: 6 November 1992.
DATE OF JUDGMENT
: 25 November 1992.
JUDGMENT
/
CORBETT
CJ:
2
CORBETT
CJ:
The appellant, Beecham Group PLC, is a company incorporated in the United
Kingdom and having its registered office there. It carries
on business as a
large research-based pharmaceutical company and it produces and markets, inter
alia, medicines for the treatment
of a wide variety of human ailments. It trades
in South Africa through the medium of a wholly-owned subsidiary, Beecham
Pharmaceuticals
(Proprietary) Ltd.
The appellant is the proprietor of seven trade
marks, each of which is registered under the Trade Marks
Act 62 of 1963 ("the Act") in part A of the register in
respect of goods falling under class 5 (schedule A). The
mark in each case consists of a name and is registered
either in respect of all the goods listed in class 5 or
some of them. Class 5 comprises:
"Pharmaceutical, veterinary and sanitary substances; infants'
and invalids' foods;
3
plasters, material for bandaging; material for stopping teeth,
dental wax; disinfectants; preparations for killing weeds and destroying
vermin."
The trade marks in question are the following: Amoxil, Ampiclox, Aserbine,
Floxapen, Maxolon, Orbenin and Penbritin. They are all
used by the appellant in
the marketing of medicines which it produces.
The first and second respondents are companies incorporated according to the
laws of South Africa and each has its principal place
of business at the same
address in Braamfontein, Johannesburg. Second respondent is a wholly-owned
subsidiary of the first respondent.
Since 1 March 1987 second respondent alone
has carried on the business, aspects of which are said to give rise to the cause
of action
in this case. In this judgment, unless the context otherwise requires,
I shall accordingly refer merely to the second respondent
and I
4
shall call it "the respondent". The respondent produces and
markets what is termed "a computerized retail pharmacy system" under the
name
"Super Scripts II". (I shall refer to this as the "Super Scripts system".)
In November 1989 appellant, alleging that respondent's Super Scripts system
infringed its rights derived from the aforementioned registered
trade marks,
instituted motion proceedings in the Witwatersrand Local Division claiming an
interdict, certain ancillary relief and
costs. The application was opposed by
the respondents. In its founding affidavit the appellant alleged that
respondent's conduct
amounted to the infringement of its trade mark rights under
sec 44(1)(a) or, alternatively, under sec 44(1)(b) of the Trade Marks
Act 62 of
1963, as amended.
When the matter came before Streicher J appellant's counsel indicated that
the order sought (which was a final order) was based on
sec 44(1)(b) only.
5
The learned Judge, having heard argument
(appellant did not ask for the matter to be referred to evidence), dismissed the
application
with costs. He subsequently granted leave to appeal to this Court.
The judgment of Streicher J has been reported, see
1992 (2) SA 213
(W), and it
fully sets out the facts. I shall consequently give a relatively abbreviated
account of the circumstances which gave
rise to this litigation.
The principal purpose of the Super Scripts system is to assist the retail
pharmacist in the dispensing of doctors' prescriptions for
medicine. In order to
understand how it does this it is necessary to know something about modern
medicines and how they are prescribed
by doctors.
Such medicines contain one or more pharmacologically active ingredients and
sometimes, in addition, other pharmacologically inactive
ingredients, which
serve purposes such as sweetening, flavouring or colouring the
6
product. The active ingredient, which is the
essence of the medicine, has what is termed an "approved", or "generic", name.
This is
usually an abbreviated form of the full chemical name of the substance
in question and this approved name is the name under which
it appears in
textbooks, works of reference and scientific publications. In addition, there
are brand names. Where a particular medicine
is initially marketed during the
currency of a patent and the use of the active ingredient in it is protected by
the patent, then
for the duration of the patent there will normally be only one
medicine on the market containing this ingredient. Nevertheless, in
order to
preserve his commercial advantage after the patent has lapsed the manufacturer
usually gives his product a brand name different
from the approved name. There
will thus be side-by-side for the same medicine an approved name and a brand
name.
7
After the expiry of the patent, however, the active ingredient
becomes part of the public domain and it is common practice for other
manufacturers to produce and market medicines containing the same active
ingredient under different brand names, often registered
as trade marks. These
are commonly referred to as "generic alternatives". What is essentially the same
medicine may consequently
be marketed by various competitors, inclu- ding the
original patentee, under these various brand names. It is also not uncommon for
the original patentee, while continuing to market the previously patented
medicine under its well-known trade mark name, also to
manufacture and market
another medicine containing the same active ingredient but under a different
trade name.
Even after the expiry of the patent the original product continues to enjoy a
considerable commercial advantage because of the years
of unopposed
8
promotion of its brand name. In order to compete
the
manufacturers of generic alternatives generally market
their products at lower prices.
When a doctor prescribes a medicine for a
patient he can
either prescribe a particular brand name
or he can simply specify the
approved name. While the
active ingredient is still under patent it would
make no
difference whether the brand name or the approved name
were
prescribed because there would normally be only one
medicine containing that
particular ingredient on the
market. After the expiry of the patent, however,
and
with the advent of generic alternatives a different
situation presents
itself. If the doctor has prescribed
a brand name, then, although there may
be generic
alternatives, the pharmacist may not, without the
doctor's
consent, supply the patient with anything other
than the brand-name medicine
prescribed; but with the
consent of the doctor the pharmacist may offer and
supply
9
to the patient a generic alternative. Where, however, the
doctor has prescribed the medicine under its approved name or, as may happen
after the expiry of the patent, has prescribed a brand name "or generic
equivalent" (known as "generic prescribing"), the pharmacist
can give the
patient the option of choosing any one of the available brands of medicine
containing the active ingredient denoted
by the approved name. In exercising
this choice the patient may be influenced by the individual prices of the
original medicine and
its generic equivalents.
Most practising pharmacists in South Africa belong to the Pharmaceutical
Society of South Africa ("the Society"), the aim of which
is to represent the
interests of pharmacists and the pharmaceutical profession. The Society operates
what is called a "Contractual
Dispensing Services System for Medical Schemes",
which provides benefits to pharmacists, medical
10
aid schemes and the consumer. An optional feature
of the system is the "Maximum Medical Aid Price" ("MMAP") scheme.
When a
particular medical aid scheme adopts the MMAP scheme retail pharmacists are
informed of this by the Society and the pharmacists
are requested to implement
the MMAP scheme in respect of those prescriptions which they dispense to
customers who are members of
that medical aid scheme. Under the provisions of
the MMAP scheme the medical aid scheme undertakes to pay (to the pharmacist) a
particular
maximum price in respect of a particular generic medicine supplied to
a member, such price being usually related to the lowest priced
preparation of
that specific generic medicine (though other factors, such as country-wide
availability, may also be taken into account).
This then becomes in effect the
MMAP approved product. The customer may elect to have a higher-priced
equivalent
11
(because his doctor has prescribed it or for other reasons),
but in that event the customer must himself pay the pharmacist the difference
in
price.
Under the MMAP scheme the pharmacist dispensing a prescription to a
customer who is a member of a medical aid scheme which has adopted
the MMAP
scheme needs to know, in addition to the MMAP maximum for a prescribed medicine,
what generic alternatives there are for
the prescribed medicine and also what
the respective prices of such medicines are. He needs this information in order
to determine
what portion of the price of the prescribed medicine will be paid
for by the medical aid scheme and what portion, if any, will have
to be
recovered from the customer direct, and to advise the customer accordingly. Also
it is not uncommon for the customer, on being
told that he will be required to
pay portion of the price of the prescribed medicine, to enquire of the
pharmacist whether there
is a less
12
expensive equivalent which would be covered in
full by
his medical aid scheme.
Even where the MMAP scheme is not
applicable a pharmacist may be called upon to advise a customer as to generic
alternatives to the
prescribed medicine and their respective prices. This will
occur where the doctor has prescribed the medicine under its approved
name and
there are generic alternatives, or where the doctor has prescribed a brand name
"or generic equivalent".
There are various standard works of reference and price lists from which the
pharmacist may glean the information necessary to carry
out his dispensing
functions under the MMAP scheme or to advise a customer who has been given a
generic prescription by his doctor.
But reference to such publications (if
available to the pharmacist) is time-consuming and they do not always contain
up-to-date information.
13
Respondent's Super Scripts system was devised
partly in order to supply the means whereby this information could be made
available
quickly and efficiently to the pharmacist. The system comprises
computer programs (the spelling now adopted in computer terminology)
and data
files. A computer program is a series of instructions or statements, in a form
acceptable to a computer, designed to cause
the computer to execute a series of
operations. A data file is a collection of related data records organized in a
specific way and
containing information. The operation of the program causes the
computer to handle the stored information in a particular way, e
g by retrieving
it or sorting it or presenting it in one or other form.
The Super Scripts system contains a large number of data files. Each of the
data files contains different kinds of information. Some
of this information is
already there when the pharmacist acquires the
14
system; other information is entered upon data
files by the pharmacist when using the system. The system also comprises about
71 programs,
each of which contains a different series of instructions which the
computer , operator can give to the computer, thereby causing
the computer to
perform certain functions in relation to the stored data. These include a dosage
instruction program, a prescription
repeat program, a drug interaction
monitoring facility, a patient counselling message program and a debtors' system
program. Two
further programs, of particular relevance in this case, are the
MMAP option and the generic equivalent option.
The MMAP option (first introduced into the system in May 1987) provides the
mechanism whereby the pharmacist may administer the MMAP
scheme in his pharmacy.
Briefly, what happens when a customer belong-ing to a medical aid scheme which
has adopted the MMAP scheme
brings his prescription to a pharmacist who has
15
available on his computer the Super Scripts system, is the
following. The pharmacist will enter the patient's name and medical aid
details
into the computer. As soon as the medicine and the quantity to be dispensed are
entered and, provided that the product concerned
is on the MMAP data file, the
Super Scripts system will cause the computer to inform the pharmacist that the
particular medical aid
scheme has adopted the MMAP scheme in respect of that
product. By operating the program the pharmacist can proceed to obtain all
relevant information about the MMAP maximum price, the availability and prices
of generic alternatives and the amount (if any) which
the customer will have to
pay if the prescribed medicine is dispensed. On this information the customer
can then decide whether to
take the prescribed medicine or, where the cost
thereof is in excess of the MMAP maximum price, to request a cheaper generic
alternative.
The latter option will, as I have indicated, require the
doctor's
16
consent, unless the prescription is for a medicine under its
approved name or provides for a generic alternative to a medicine prescribed
under its brand name.
In addition to the MMAP option, the Super Scripts system has a separate
general generic equivalent option which can be accessed by
the pharmacist. This
enables the pharmacist, in a case of generic prescribing, to ascertain the
various brand medicines available
and their respective prices so that, in
consultation with the customer, a brand medicine can be chosen for
dispensing.
It will be apparent from the aforegoing that the data files relating to the
MMAP and general generic equivalent options contain, in
the form of magnetic
patterns on the relevant hard discs, the approved names and brand names of a
large number of medicines. These
include the brand names constituting the seven
registered trade marks which form the basis of appellant's cause of action in
this
case. When the computer is operated
17
these names may be called up and displayed on the computer
screen and they may also figure on printouts which may be extracted from
the
program.
Appellant has attached to the founding
affidavit a number of
printouts reflecting what a
pharmacist using the dispensing functions of the
Super
Scripts system will see on his computer screen. All of
these contain
one or other of appellant's trade marks.
One such printout, for example,
shows, inter alia, the
name of the customer/patient, the name of the
prescribing
doctor, the name of the customer's medical aid scheme and
the
product prescribed, viz Maxolon T. (It will be
recalled that Maxolon is one
of appellant's registered
trade marks.) The further information disclosed by
the
computer and recorded on the printout includes the name
of the "MMAP
Product", viz. Prostal, and the prices of
both products. Below this there is
a list, headed
"Generic Product Selection" which includes Maxolon T,
18
Prostal, the approved name Metoclopramide HCL and
several generic alternatives, together with all their respective prices.
What
is significant is that a perusal of these printouts shows that in all cases the
appellant's product marketed under one or other
of the seven trade marks is more
expensive than the MMAP product and in most instances it is more expensive than
other generic alternatives.
In the founding affidavit it is alleged that in the
Super Scripts system, and more particularly in the MMAP and generic equivalents
options, appellant's trade marks "are being used ... for the purpose of
diverting sales away from" the appellant. It is denied in
the answering
affidavit that the appellant's trade marks are used in the Super Scripts system
for this purpose; but, it seems to
me, it can hardly be denied that these
options do, in some degree, have the effect of
19
diverting sales away from the appellant. And there lies the
rub.
The interdict sought by the appellant in the Court a quo (the full text of
which appears at page 215 B-E of the reported judgment)
is one restraining the
respondent from infringing appellant's seven registered trade marks by
incorporating such marks in any electronic
storage media in a manner which
causes the registered trade marks to be displayed for the purposes of comparing
the appellant's products
with other parties' products and indicating that such
other parties' products may be utilised in substitution for those of the
appellant.
The appellant also sought an order for the erasure from any
electronic storage media in respondent's possession or under its control
of all
reference to such registered trade marks.
As I have indicated, appellant founds its case on sec 44(1)(b), the relevant
portion of which reads as
20
follows:
"(1) the rights acquired by
registration of a trade mark shall be infringed by -
(b) unauthorized use in the course
of trade, otherwise than as a
trade
mark, of a mark so nearly
resembling it as to be likely to
deceive or
cause confusion, if
such use is in relation to or in connection with goods
or
services for which the trade
mark is registered and is likely
to
cause injury or prejudice to
the proprietor of the trade
mark: "
With regard to the interpretation of sec
44(1)(b), and more particularly the meaning of the words
"use in the course of trade", Streicher J held that (at
220 I-J):
" the intention of the Legislature was
that ' use in the course of trade' should not be interpreted to
mean use in the
21
course of trade other than in the goods for which the trade
mark is registered and not in order to prey upon or take advantage of
the
reputation and goodwill of the proprietor of the mark, and that the section
should be interpreted so as to exclude such use."
(See also the learned Judge's remarks at pp 219 I -220 B.) Applying this
interpretation to the facts of the case, he held that respondent's
marketing of
the Super Scripts system did not infringe appellant's trade marks. In reaching
this conclusion as to the meaning of
sec 44(1)(b) Streicher J relied to some
extent on the authority of an English case,
M Ravok (Weatherwear), Ltd v
National Trade Press, Ltd
[1955] 1 All E R 621
(QBD), a decision of Goddard
CJ.
Before us appellant's counsel submitted that the phrase "use in the course of
trade" was clear and unambiguous, that it meant use
in the course of
any
trade
22
and that this would include the trade carried on by the
respondent, viz the production and sale of computer systems. It was further
contended that Streicher J's reliance on the
Ravok
case was misplaced
because of differences in wording of the British legislation.
I am not persuaded that the phrase in question is clear and unambiguous. The
further requirement in sec 44(1) (b) that the user by
the alleged infringer
should be "in relation to or in connection with goods .... for which the trade
mark is registered" suggests,
in my view, at least the possibility that the
subsection contemplates use by the alleged infringer in the course of trading in
such
goods. Be that as it may, it is in my opinion appropriate to interpret the
phrase in question in the light of its context, i e in
the light of the language
of the rest of the statute, the subject-matter with which it is concerned, and
its apparent scope and purpose
(see
University of Cape Town v Cape Bar
Council
23
and Another
1986 (4) SA 903
(A), at 914 A - D;
Protective Mining and Industrial Equipment Systems (Pty) Ltd (formerly Hampo
Systems (Pty) Ltd) v Audiolens (Cape) (Pty) Ltd
1987 (2) SA 961
(A), at 991
G - 992 A).
The modern law of trade mark infringement is statutory, but its
origins are to be found in the common law action for passing off (see
Esquire
Electronics Ltd v Executive Video
1986 (2) SA 576
(A), at 590 D;
Audiolens
case,
supra
, at 978 I). Passing off is a form of
unlawful competition between traders. In the case of persons dealing in goods,
it consists essentially
in a representation (generally by implication) by one
trader (A) that his merchandise is that of, or emanates from, another trader
(B). Such an implication arises where (i) B has adopted a name, trade mark or
get-up for his goods, which in the mind of the public
has become distinctive of,
or associated with, the business carried on by him; and (ii) A uses in relation
to his own goods
24
that name, trade mark or get-up or one so similar
as to be calculated to deceive or cause confusion. The law regards this as being
unlawful because it results, or at any rate is calculated to result, in the
filching by A of B's trade and an improper infringement
of B's goodwill and/or
because it may cause injury to B's trade reputation. (See
Brian Boswell
Circus (Pty) Ltd and Another v Boswell-Wilkie Circus (Pty) Ltd
1965 (4) SA
466
(A), at 478 F-J).
There are a number of differences between the rights of the proprietor of a
registered trade mark and those of the "proprietor" of
a trade mark at common
law, and between an action for the infringement of the rights of the proprietor
of a registered trade mark
and a passing off action. For example, the proprietor
of a registered trade mark does not have to prove a reputation in the trade
mark; his rights to the exclusive use of the trade mark as the badge of origin
for his goods flow
25
from the registration. Nevertheless, the basic
notion underlying the passing off action, viz the prevention of the filching of
another's
trade or the improper infringement of his goodwill or injury to his
trade reputation, applies also to an action in which the proprietor
of a
registered trade mark sues an unauthorized user of the registered mark (or one
which is deceptively or confusingly similar)
for infringement of his trade mark
rights (cf the
Audiolens
case,
supra
, at 984 H-I, 985 F).
In passing I might mention that the same general approach is to be found in
English law. In the case of
Mothercare UK Ltd v Penguin Books Ltd
[1988]
RPC 113
Bingham LJ remarked (at 120 lines 21-8):
"The legal vehicles used by the plaintiff to advance its claim are the common
law action for passing off and the statutory cause of
action for infringement of
registered trademark. The ingredients of the two causes of action are
26
significantly different, but the causes of action are closely
related, the statutory law of trademarks being a development of the
common law
relating to passing off (per Sir Wilfrid Greene M R,
Bismaq v Amblins
(Chemists) Ltd
[1940] 57 R P C 209
at 231). Both causes of action are
directed at the same wrong, which is the exploitation by one party of commercial
goodwill properly
belonging to another."
The infringement section of the Act, sec 44, provides for two forms of
infringement: (i) unauthorized use of the trade mark in question
"as a trade
mark", and (ii) unauthorized use of the trade mark "otherwise than as a trade
mark". The first of these represents the
traditional form of infringement and
the only form provided for under our trade marks legislation prior to the
enactment of the Act
in 1963. The second represents a new and different form of
infringement and was introduced by the Act (and later amended by sec 21(a)
of
27
Act 46 of 1971) for the reasons fully explained
in
Shalom
Investments (Pty) Ltd and Others v Dan River Mills
Incorporated
1971 (1) 689 (A), at 701B - 704E, and
the
Audiolens
case,
supra
, at 986D - 987B. With reference
to these two forms of infringement it was stated in
Miele et Cie GmbH
& Co v Euro Electrical (Pty) Ltd
1988
(2) SA 583 (A), at 598 F - I:
" Use of a mark 'as a trade mark' and use of a mark 'otherwise than as a
trade mark' constitute converse situations and any enquiry
as to which (if
either) of these situations obtains must generally commence with an
investigation as to whether the mark has been
used as a trade mark.
In terms of the definition of 'trade mark' in s 2 of the Act, use of a mark
in relation to goods or services 'as a trade mark' means
use for the purposes of
indicating a connection in the course of trade between the goods or services and
the proprietor of the mark
(because of non-relevance I leave out of account the
registered user) and of distinguishing
28
those goods and services from the same kind of goods and services connected in
the course of trade with other persons (See
Herman Brothers
case
supra
at 236F;
Protective Mining
case
supra
at 987G -988B.)
Use of a mark ' otherwise than as a trade mark' refers to user where these
purposes are not present, but where the
mark is used for other purposes such as,
for example, in order to compare the user's goods or services with those of the
proprietor
of the mark (
Protective Mining
case
supra
at 986F) or
to indicate that the goods or services may be utilised in substitution for those
of the proprietor of the mark (see
Klep Valves (Pty) Ltd v Saunders Valve Co
Ltd
1987 (2) SA 1
(A) at
41J-42C)."
In this connection it is
instructive to refer to the case which may be regarded as the raison
d'être of sec 44(1)(b) and of
a similar provision introduced in the
English trade marks legislation, viz
Irvinq's Yeast-Vite Ld v F A Horsenail
(trading as The Herbal Dispensary
)
29
[1934] 51 RPC 110
(HL); and also to certain cases
in which sec 44(1)(b) or the English statutory provision have been
considered.
In the above-named case the plaintiff (appellant) was the proprietor of a
trade mark consisting of the invented word "Yeast-Vite",
registered for goods
described as "medicinal preparations of yeast for human use"; and it
manufactured and sold a medicinal preparation
of yeast in tablet form under this
trade mark. The respondent carried on business at a shop named the "Herbal
Dispensary" and sold
a preparation in tablet form in bottles, the label on which
bore the following inscription: "YEAST TABLETS a substitute for YEAST-VITE".
The
appellant sought an injunction to restrain the respondent from infringing its
trade mark. The trial judge refused relief, holding
that respondent had not used
the registered mark "as a trade mark" and that consequently there had been no
infringement. This
30
decision was upheld on appeal by both the Court
of Appeal and the House of Lords. In the Lords, Lord Tomlin (in whose reasons
the
other members of the Court concurred) held that sec 39 of the then
subsisting English legislation, the Trade Marks Act of 1905, which
provided that
the registration of a person as the proprietor of a trade mark gave that person
"the exclusive right to the use of
such trade mark" upon or in connection with
the goods in respect of which it was registered, carried with it the implication
of "use
of the mark for the purpose of indicating in relation to the goods upon
or in connection with which the use takes place, the origin
of the goods in the
user of the mark" (at 116, lines 40-44). Unless there were such an implied
limitation sec 39 would be given a
meaning 'extending its operation altogether
outside the scope of the Trade Marks Act" (at 116 lines 35-39). He also held
that the
respondent's use of the word "Yeast-Vite" on its preparations was to
indicate the
31
appellant's preparation and to distinguish
respondent's preparation from it. This did not amount to the use of a word "as a
trade
mark", that is to indicate the origin of the goods in the respondent; and
accordingly there was no infringement (at 115, lines 36-40,
117, lines 1-4).
In 1938 there was enacted in the United Kingdom a new Trades Marks Act, which
contained, inter alia, in section 4(1), a definition
of the rights of the
proprietor of a registered trade mark and of what constituted infringement
thereof. Sec 4 provided for two forms
of infringement. The ambit of these two
forms was considered for the first time in
Bismag, Ltd v Amblins (Chemists),
Ltd
.
[1940] 2 All ER 608
(CA). In that case the appellant, which carried on
business in the marketing of medicinal and pharmaceutical preparations, was the
registered proprietor of the trade mark "Bisurated" and under this mark the
appellant manufactured and sold
32
tablets and powders described as "Bisurated
magnesia
tablets" and "Bisurated magnesia powders". The
respondent, also a
manufacturer of, and dealer in,
medicinal preparations, produced and marketed
tablets and
powders under the descriptions "Bismuthated magnesia
tablets" and "Bismuthated magnesia powders". Respondent
advertised its
wares by means of a poster and a booklet.
In effect this advertising told the public that although
respondent stocked and was prepared to sell, inter alia,
appellant's "Bisurated" tablets and powders, it offered
and recommended to the public its own "Bismuthated"
tablets and powders; and that the latter were the exact
equivalent of, and as efficacious as, but lower in price
than, appellant's "Bisurated" remedies. In his judgment
the Master of the Rolls, Sir Wilfrid Greene, commented
(at 614 H - 615 A):
"In short, the respondents are using the appellant's trade mark for the
purpose of advertising and compendiously describing
33
the virtues of their own goods, and are thus obtaining for
themselves a benefit from the reputation enjoyed by the appellant's goods
sold
under, and identified by, the appellant's registered trade mark."
The Court, by a majority, held that under the law as it stood at the time of
the
Yeast-Vite
case and in terms of the first form of infringement
defined in sec 4 the facts disclosed no case of infringement; but that in terms
of the second form of infringement, which brought about a "radical alteration"
of the law, an infringement had taken place.
This brings me to the
Ravok
case,
supra
. The plaintiff in that
case was the proprietor of the trade mark "Weatherite", registered in respect of
weatherproof clothing and
sportswear. The defendant published a directory of
trade marks in which they listed the mark Weatherite but, by mistake, gave a
name
other than the
34
plaintiff's as the proprietor of the mark. The
plaintiff sued for infringement of the trademark. Sec 4 of the English Act
requires,
as far as both forms of infringement are concerned, that the alleged
infringer should have used the mark (or a colourable imitation
thereof) "in the
course of trade". Goddard CJ held that those words meant ''in the course of
trade in those goods". Here, it seems
to me, the learned Chief Justice was
referring to the goods in respect of which the trade mark was registered for, in
non-suiting
the plaintiff, he went on to say (at 623 D - E):
"The defendants themselves are not applying the trade mark to goods because
they are not dealing with goods; and, certainly, they
are not 'using' the trade
mark 'in the course of trade' and 'in relation to those goods'. They are using
it in the course of their
own trade, which is that of a publisher of a trade
directory."
35
(See also
Bestobell Paints Limited v Bigg
[1975] FSR
421
, at 426-7, 428-9; cf the
Mothercare
case,
supra
, at 118-119,
122-3.)
It is perfectly correct, as emphasized by appellant's counsel, that
sec 4 is very differently worded from sec 44 of the Act. For this
reason the
English cases are of limited value as authority. Nevertheless there are certain
parallels. The English Act of 1938 and
the Act both introduced a bifurcated
definition of infringement, the first branch reproducing the traditional form of
infringement
and the second branch a new and extended form. It is to be inferred
that, in both instances, this extension was motivated by a desire
to provide a
remedy in circumstances such as those revealed by the
Yeast-Vite
case.
The English decisions indicate a resolve to keep this extension within
reasonable bounds and, it would seem, to limit it
36
to cases where the defendant is a trade
competitor. As I shall show, our Courts appear to have adopted a similar
approach.
In the case of
Klep Valves (Pty) Ltd v Saunders Valve Co Ltd
1987 (2) SA 1(A)
the respondent was the proprietor of a trade mark "Saunders"
registered in various classes and it manufactured and marketed diaphragm
valves
under this mark. The appellant, also a manufacturer and seller of diaphragm
valves but under the name "Klep", advertised its
product by saying that all Klep
diaphragm valve parts were "interchangeable" with Saunders diaphragm valves. The
Court of first instance
held that this constituted an infringement of sec
44(1)(b) of the Act. This finding was not challenged on appeal and was endorsed
by this Court. Here, it is to be noted, the parties were in direct competition
with one another and it is clearly a
Bismag
type of case.
37
In the
Miele
case,
supra
, the
appellant's trade mark "Miele" was registered under the Act in respect of a
number of classes covering a wide range of domestic
and other electrical
appliances. The appellant manufactured domestic electrical appliances and
marketed them under this trade mark.
The respondent conducted a retail business
in domestic electrical appliances, in the course of which it sold Miele products
and those
of other manufacturers. Respondent used the name "Miele" as a trading
style and "Miele Appliances" as the name of its shop. This
was done originally
in terms of a distributorship agreement with appellant, but it continued to do
so after the cancellation of the
agreement and after appellant had called upon
it to cease doing so. Appellant sued for infringement of its trade mark under
sec 44(1)(b)
of the Act. This Court held that there had been such infringement.
Here again the parties were effectively in competition with one
another
38
and, as the Court found, the respondent used the
mark as
its trading style in order to indicate that its business
was asociated
with that of the appellant. The Court
stated (at 600 A-B) that in the interpretation of certain
words in the
section:
"General guidance may no doubt be derived from the apparent object of
s44(l)(b) which was to extend the scope of infringement to cases
where the
infringer's use of the mark, though not use as a trade mark, was in order to
prey upon or take advantage of the reputation
and goodwill of the proprietor of
the mark."
In my opinion, the history of the legislation and this general object must be
borne in mind in interpreting and determining the scope
of sec 44(1)(b).
I revert now to the facts of this case. The parties are not in competition
with one another; indeed the types of business conducted
by them differ toto
caelo
39
from one another. Appellant manufactures and
markets medicines and uses its trade marks as brand names for its products.
Respondent
manufactures and markets computer systems for pharmacists. It is true
that the data files relating to two options of the Super Scripts
system, the
MMAP option and the generic equivalent option, contain within them magnetic
patterns which, when the pharmacist who has
acquired the system operates the
options, will result in appellant's trade marks appearing on the computer screen
and on any printout
which is made thereof; but that in my view does not bring
respondent's conduct within the ambit of sec 44(1)(b). Accepting that this
would
amount to use of appellant's trade marks by the respondent (cf
Esquire
Electronics Ltd v Executive Video
,
supra
, at 590 B-G), I do not
consider that it constitutes use of these trade marks "in the course of trade",
within the meaning of sec
44(1)(b). in my opinion, this phrase must be
understood as having
40
reference to a trade in goods falling into the classes for
which the trade mark is registered or to goods which are so closely associated
therewith that the use by the alleged infringer of the trade mark, in a manner
otherwise than as a trade mark, will enable the alleged
infringer to prey upon
or take advantage of the reputation and goodwill of the proprietor of the mark.
That this is the correct view
is, in my opinion, reinforced by a consideration
of the far-reaching consequences that would result from an acceptance of the
submission
of appellant's counsel, viz that use in the course of
any
trade is sufficient for the purposes of sec 44(1)(b).
As I have mentioned, the information about the different brands of medicine
under their approved names and the names of generic alternatives
(including
appellant's trade marks), together with their respective prices, is to be found
in various publications.
41
Respondent annexed to its answering affidavit
extracts from seven such works, which either alone, or in conjunction with
published
price lists, provide the type of information to be found in the MMAP
and generic equivalent options of the Super Scripts system.
If the appellant's
submission is correct, these publications, or at least some of them, also
constitute infringements of appellant's
trade marks. Indeed, a pharmacist who
for the purposes of conducting his dispensing business compiled his own list of
brand names
and prices would also, as I understood counsel's argument, infringe.
The conduct of these parties is far removed from an exploitation
of or preying
upon the goodwill and reputation of appellant's business.
As I see it, it must be a logical extension of appellant's submission that
the MMAP and generic equivalent options - and indeed the
various
compilations
42
and publications referred to in the previous paragraph
-equally constitute the infringement (under sec 44(1)(b) ) of every registered
trade mark owned by all the relevant proprietors listed in the appropriate data
files, except possibly in the case of the cheapest
or MMAP-recommended products,
where it might be said that no injury or prejudice resulted. This borders on the
absurd.
Appellant's counsel were not able to cite any relevant precedent for the
interpretation which appellant seeks to place on sec 44(1)
(b) and my researches
have failed to reveal any. The authority all goes the other way.
Finally, I would mention that there is before us an application (which is not
opposed) for condonation of the late filing of the appeal
record in this case.
The fault for this non-compliance with the AD Rules of Court lies with
appellant's attorney, who apparently
thought that the three-month period
prescribed for the
43
lodging of the record commenced to run only after
the allocation of a date for the hearing of the appeal. In spite of this
fundamental
and somewhat elementary error, I think that this condonation should
be granted, appellant to pay the costs thereof.
The appeal is nevertheless dismissed with costs, including the costs of two
counsel.
M M CORBETT
E M GROSSKOPF, JA) GOLDSTONE, JA) CONCUR. NICHOLAS, AJA) KRIEGLER, AJA)