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[2011] ZAWCHC 491
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3 Jerks Manufacturing CC v Vital Health Foods (Pty) Ltd (22452/2011) [2011] ZAWCHC 491; 2011 BIP 423 (WCC) (2 December 2011)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE
TOWN)
CASE NUMBER:
22452/2011
3 JERKS MANUFACTURING CC
…...............................................................
Applicant
v
VITAL HEALTH FOODS (PTY) LTD
….......................................................
Respondent
Court
: Acting Judge J I Cloete
Heard
:
21 November 2011
Delivered
: 2 December 2011
_____________________________________________________________________
JUDGMENT
CLOETEAJ:
Introduction
[1] The applicant effectively seeks a
final interdict against the respondent to restrain it from passing
off its product ‘
Cholesterol Ease’
as the
applicant’s product ‘
CholesterolEase’
. The
applicant concedes that the get-up of the respective products is
distinguishable, but contends that the respondent’s
use of the
phrase ‘
Cholesterol Ease’
as its product name is
by itself sufficient to entitle it to the relief sought on the basis
of aural similarity between the respective
product names. The
applicant’s trade name ‘
CholesterolEase’
is
not registered under the
Trade Marks Act No 194 of 1993
, nor is any
application for registration pending. The applicant has also not
sought any patent protection for its product. The
respondent denies
that the name ‘
Cholesterol Ease’
is used otherwise
than in conjunction with its registered trade name VITAL. This is not
seriously disputed by the applicant.
[2] The applicant argues that as a
result of its advertising campaign since its product was launched in
2005, that product and its
trade name have developed both a selling
power and a reputation. It also claims that its trade name
‘
CholesterolEase’
is a distinctive and invented or
‘
fancy’
name and as such has acquired a secondary
meaning which is being eroded by the respondent’s use of it
since the latter launched
its competing product in late September
2011. The extent to which the applicant has allegedly suffered
monetary loss as a result
thereof is in dispute.
[3]
The respondent concedes that the applicant has made out a case ‘
for
some sort of reputation’
but denies that this is sufficient
to entitle the applicant to the relief sought.
[4] The delict of passing off was
defined by Nicolas J in
Adcock-Ingram Products Limited v Beecham
SA (Pty) Ltd
1977 (4) SA 434
(W) at 436H as follows:
‘
The
delict of passing off consists in a representation, direct or
indirect, by a manufacturer or supplier that his business or goods
or
both are those of a rival manufacturer or supplier.’
[5] For an applicant to obtain
interdictory relief based on passing off it must show that firstly,
the name, get-up or mark used
by the applicant has become distinctive
of his goods or services; and secondly, that the name, get-up or mark
used by the respondent
is such or is so used as to cause the public
to be confused or deceived into believing that the respondent’s
goods or services
emanate from the applicant. See
Williams t/a
Jenifer Williams & Associates and Another v Life Line Southern
Transvaal
[1996] ZASCA 46
;
1996 (3) SA 408
(A) at 418G-H.
[6]
In
South African Football
Association v Stanton Woodrush (Pty) Ltd t/a Stan Smidt & Sons
and Another
2003 (3) SA 313
(SCA) at 321B-D Harms JA said:
‘
The
starting point is that there can be no exclusive right in a name. The
position was well summarised by Stegmann J
[in
Moroka Swallows Football Club Limited v The Birds Football Club and
Others
1987 (2) SA 511
(W) at 531E-G]:
“
The
mere fact that a person has made a name famous does not give him a
right of property in the name. He cannot stop other entrepreneurs
from making such use of the famous name in the marketing of their
goods and services as they may be able to make without either
defaming any person or causing a likelihood of confusion as to the
origin of the goods or services. Provided that he does not commit
the
delicts of defamation or passing off or offend against any specific
statutory prohibition, there is no reason why an entrepreneur
should
not take the benefit of such advantage as he may be able to gain in
the marketing of his goods and services by associating
them with
names that have become famous.”’
[7] The applicant relies solely on an
alleged reputation in the name ‘
CholesterolEase’
,
contending that the respondent’s use of this phrase written in
two words as part of its mark ‘
Vital Cholesterol Ease’
would cause the public to be confused or deceived into believing that
the respondent’s goods emanate from the applicant.
[8] The respondent argues that
although the applicant has no trademark rights in the phrase
‘
Cholesterol Ease’
it seeks to claim rights akin
to trade mark rights under the guise of passing off. In
Stellenbosch
Farmers Winery Limited v Stellenvale Winery (Pty) Ltd
1957 (4) SA
234
(C) at 240B-E Van Wyk J described the difference between
trademark infringement and passing off as follows:
‘
Inasmuch
as the registration of a trade mark confers exclusive rights to the
use of such trade mark the enquiry whether such rights
of exclusive
use have been infringed does not necessarily involve an enquiry as to
whether the public is likely to be misled. In
passing-off cases the
complaint is not based upon any property rights in a mark as such; it
is based on the likelihood that the
similarity of another’s
get-up may mislead the public (Halsbury, 2nd ed Vol 32 p 614). The
result is that in passing-off
actions the comparison is between the
whole get-up of the applicant and the whole get-up of the respondent
… whereas in
infringement of trade mark actions the enquiry is
confined to a comparison of the registered trade mark with that
portion of the
respondent’s get-up which is alleged to infringe
the applicant’s registered rights.’
[Followed in
Adidas
SportschuhfabrikenAdi Dassler K.G. v Harry Walt & Co Ltd
1976
(1) SA 530
(TPD) at 531H-532B.]
[9]
In
Caterham Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd
[1998] ZASCA 44
;
1998 (3) SA 938
(SCA) at 947A Harms JA held that the elements of
the delict of passing off consist of the ‘
classical trinity’
of reputation (or goodwill); misrepresentation; and damage. It is
thus necessary to consider these in the context of the present
matter.
Reputation
[10] It is trite that in order to
establish the requisite reputation the applicant 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’
. See the
Adcock-Ingram Products
case at 437A. Where an applicant claims a reputation based on a
descriptive slogan or phrase, special rules apply and even more
is
required from the applicant to prove the requisite reputation. Unless
it does so it cannot claim a monopoly over the use of
a descriptive
phrase. In
Sea Harvest Corporation (Pty) Ltd v Irvin & Johnson
Ltd
1985 (2) 355 (C) it was common cause that the respondent knew
about the applicant’s use of the descriptive phrase ‘
prime
cuts’
in the marketing of its fish products. (I mention
this since in the present matter the respondent claims that it did
not know about
the applicant’s use of the name
‘
CholesterolEase’
. This is disputed by the
applicant but in the context of what follows it is my view that
nothing much turns on this.) At 359G Aaron
AJ said:
‘
In
particular, it has been settled that the mere fact that a trader is
the first in the field to use a particular phrase or slogan
gave him
no monopoly (save possibly in the field of copyright), and also that
a competitor would not be prevented from using ordinary
descriptive
words.’
[11]
At 360B-D he said:
A
long line of decisions in passing-off and trade mark cases has
established that where descriptive words, as opposed to invented
or
fancy words, are used in a trade name or trade mark, the Courts will
not easily find that such words have become distinctive
of the
business or products of the person using them, and will not give what
amounts to a monopoly in such words to one trader
at the expense of
others.Cellular Clothing vMurray,
1899 AC 326
(HL); Patlansky &
Co Ltd v
Patlansky
Bros,
1914
TPD 475
at
492
;
Selected
Products
(Pty) Ltd vEnterprise Bakeries 1963 (1) SA 237(C) at
242F-243B; Rovex Ltd and Another v Prima Toys, 1982 (2) SA 403
(C).’
[12] As mentioned above the applicant
claims that the term ‘
CholesterolEase’
is a ‘
fancy
name’
and that the rules relating to the use of
‘
descriptive terms’
as names would accordingly not
apply. The reason for this, according to the applicant, is that the
phrase ‘
CholesterolEase’
is not descriptive of the
product itself which is nothing other than a combination of vitamin
supplements. Accordingly the applicant
argues that the present matter
is distinguishable from the facts in the
Sea Harvest
case
where the court found that the two words ‘
prime cuts’
taken together were nothing more than ‘
a convenient and
natural way of describing a selected piece of fish of superior
quality’
(at 360G-H).
[13] The respondent however argues
that the name used by the applicant is not a ‘
fancy name’
but clearly constitutes a ‘
descriptive term’
. The
respondent relies on the distinction drawn by Wadlow:
The Law of
Passing Off – Unfair Competition by Misrepresentation
, 3
rd
Ed. (Sweet and Maxwell) 2004 at para 8-63, p625:
‘
A
fancy word is one which has no obvious relevance to the character or
quality of the goods or business in relation to which it
is used such
as
“Eureka”
for
shirts,
“June”
for
toiletries and
“Puffin”
or
“Penguin”
(names
of unpalatable seabirds both) for chocolate coated sandwich biscuits.
It is of an arbitrary and fanciful nature in that context.’
[14] The term ‘
Ease’
is defined in the New Oxford Dictionary of English when used as a
verb as follows: ‘
(to) make (something unpleasant, painful
or intense) less serious or severe’
. In my view the
respondent correctly argues that the phrase ‘
CholesterolEase’
describes the function of the applicant’s product and is
thus nothing more than descriptive. The name used by the applicant
is
not a fancy name, nor is it an arbitrary or invented or fanciful
name. It merely constitutes the use of ‘
descriptive terms’
.
Put differently, it seeks to describe the claimed function of the
product. It is simply a convenient and natural way to describe
a
product which is intended to lower cholesterol.
[15] In the
Sea Harvest
case at
360I-361F Aaron AJ said:
‘
As
stated in Kerly’s Law of Trade Marks & Trade Names (11th
Ed.) in para. 16.50-
“
where
a trader adopts a trading name containing words in common use, some
risk of confusion may be inevitable, and that risk must
be run unless
the first trader is allowed an unfair monopoly in those words”.
That
principle was reaffirmed by the Full Bench decision of this Court in
Rovex Ltd & AnovPrima Toys (Pty) Ltd 1982 (2) SA 403
(C), where SCHOCK, J adopted with approval the following passage from
the Australian case of Hornsby Building Information Centre
(Pty) Ltd
vSydney Building Information Centre
[1978] HCA 11
;
(1978) 52 ALJR 392
, approved by
the Privy Council in the case of Cadbury Schweppes (Pty) Ltd &
Others vPub Squash Co(Pty) Ltd
[1981] 1 All ER 213
at 218:
“
There
is a price to be paid for the advantages flowing from the possession
of an eloquently descriptive trade name. Because it is
descriptive it
is equally applicable to any business of a like kind, its very
descriptiveness ensures that it is not distinctive
of any particular
business and hence its application to other like businesses will not
ordinarily mislead the public. In cases
of passing off, where it is
the wrongful appropriation of the reputation of another or that of
his goods that is in question, a
plaintiff which uses descriptive
words in its trade name will find that quite small differences in the
competitor’s trade
name will render the latter immune from
action.The risk of confusion must be accepted, to do otherwise is to
give to one who appropriates
to himself descriptive words an unfair
monopoly in those words and might even deter others from pursuing the
occupation which the
words describe.”
Mr
van Schalkwyk sought to place reliance on the fact that respondent’s
conduct had been deliberate, but, while that may sometimes
be a
factor to take into account, it is not sufficient to render
respondent’s conduct “unlawful competition”
in this
particular case. Our law recognizes the freedom to trade
competitively, and competition more often than not involves a
deliberate intention to benefit oneself at the expense of a rival
business. A trader is entitled to use ordinary descriptive or
laudatory words, which are appropriate to his product to describe his
product: it does not become unfair to do so because another
trader
first realised that they were appropriate, and made extensive use of
them, even though he deliberately adopts them for his
own product.’
[16] Since I have found that the words
used by the applicant to market its product are descriptive words
only, it is necessary to
consider whether the applicant has
nonetheless shown that the words used by it have become so identified
with its product that
they have acquired a secondary meaning in the
sense that they are associated in the minds of the public with the
applicant’s
product only and no-one else’s. See
Selected
Products Ltd v Enterprise Bakeries (Pty) Ltd
1963 (1) SA 237
(CPD) at 242F-243F;
Van der Watt v Humansdorp Marketing CC
1993
(4) SA 779
(SECLD) at 783A.
[17] The short answer is that the
applicant expressly bases its case on the allegation that the name
which it uses is a ‘
fancy’
name, not that the
name, if held to be descriptive, has replaced the original meaning of
the descriptive words. Although the ‘
secondary meaning’
issue was raised by the applicant’s counsel in argument there
does not appear to be anything of substance on the applicant’s
papers to support this argument. What the applicant says is the
following:
‘
In
the present matter, the trade name CholesterolEase as one word is a
distinctive and invented name and not a descriptive name
as contended
for by the Respondent. To the extent that it is alleged that the
Applicant’s product’s trade name is a
general descriptive
term, and, as the Respondent appears to do, contends that it is at
liberty to use the term Cholesterol Ease,
it is respectfully
submitted that the Applicant has established that it has acquired a
secondary meaning and has come to designate
the Applicant’s
product.’
[Para 48, founding affidavit].
[18]
In support of this contention the applicant says that:
‘
Now,
and I have personally experienced this, when I have requested of a
pharmacist to provide me with CholesterolEase I have been
greeted
with the responses of: “Which one?”, and, more
disturbingly: “Would you prefer the cheaper option?”…
The Applicant’s brand has been established in the public’s
perception and is sought after by name, and not by package
differentiation. There is with respect, nothing on the packaging or
get-up which effectively distinguishes the two brands…The
ordinary customer in this matter is a person who suffers from
cholesterol problems, and who is seeking a health product and a
non-pharmaceutically based product to alleviate his symptoms or to
control his cholesterol problem. In other words, the ordinary
customer is a person who more or less knows what the particular and
peculiar characteristics of the article he wants is, and as
a result
of the oral and aural marketing efforts of the Applicant seeks a
product known as CholesterolEase… In most instances
the
purchaser of CholesterolEase is not aware of the get-up and
presentation of the product but is focused on its trade name.’
[Paras
36, 39, 51-52, founding affidavit].
[19]
Possibly being mindful of the difficulties which the applicant faced
in proving a ‘
secondary meaning’
it sought, in
reply, to introduce the affidavit of a pharmacist which sells its
product. However it is not necessary to deal with
that affidavit
since the applicant was successful in having the paragraph of that
affidavit in which the pharmacist concerned expressed
an opinion
struck out. Accordingly all that is left to support the applicant’s
contention as to a ‘
secondary meaning’
are those
portions of the applicant’s affidavit which I have quoted
hereinabove. To my mind the applicant’s contentions
in those
paragraphs as to the establishment of a ‘
secondary meaning’
fall far short of what the applicant is required to prove.
[20] In the
Selected Products Ltd
case at 242F-243A Theron AJ said
‘
Now
it has been stated over and over again by the Courts that if a trader
has applied to his merchandise ordinary descriptive words,
he will
have great difficulty in proving that such words
constitute
a
trade name designating his goods as opposed to those of others. Save
in the most exceptional circumstances no individual can be
allowed to
monopolise words which are the common heritage of us all and which
provide a convenient and natural method – even
if not the only
or the most correct method – of describing an article. The
reluctance of the Courts to find that words primarily
descriptive
have acquired among the public or that class of the public likely to
deal with the article designated thereby, a subsidiary
or secondary
meaning denoting or connoting a particular origin, is well
illustrated by the following passage from the judgment
of Lord Shand
in
Cellular
Clothing Co., Ltd. v. Maxton,
1899
A.C. 326
… at p.340;
“
Of
that case, i.e. Reddaway v Banham, 1896 A.C. (199) I shall only say
that it no doubt shows it is possible where a descriptive
name has
been used to prove that so general, I should rather say so universal,
has been the use of it as to give it a secondary
meaning and so to
confer on the person who has so used it a right to its exclusive use
or, at all events, to such a use that others
employing it must
qualify their use by some distinguishing characteristic. But I
confess that I have always thought, and I still
think, that it should
be made almost impossible for anyone to obtain the exclusive right to
the use of a word or term which is
in ordinary use in our language
and which is descriptive only – and, indeed, were it not for
the decision in Reddaway’s
case, I should say this should be
made altogether impossible.” ’
[21]
In
Online Lottery Services (Pty) Ltd v National Lotteries Board
and Others
2010 (5) SA 349
(SCA) at 360A-C Heher JA said:
‘
If
a term is descriptive, in the sense that it is the name of the goods
themselves, it cannot simultaneously denote any particular
trade
source. Therefore, a party cannot be prevented from unambiguously
using a descriptive term in its original descriptive sense,
unless it
has wholly lost that descriptive sense and become distinctive of the
claimant in every context: Wadlow, The Law of Passing
Off 3ed at
616.Even if the claimant succeeds in proving that a
prima
facie
descriptive
term has acquired some degree of secondary meaning, the scope of
protection for the mark is narrower than for a wholly
arbitrary term.
Relatively minor differences will suffice to distinguish the
defendant’s goods or business when both use
a mark which is
descriptive of the goods or services they provide. This applies even
though the defendant is using the closely
similar term in a trade
mark sense: Wadlow, op cit, at 617, paragraph 4.’
Misrepresentation and confusion
[22] Confusion
per se
does not
give rise to an action for passing off. It does so only where it is
the result of a misrepresentation by the respondent,
in the sense
that the goods which he offered are those of the applicant or are
connected with the applicant. See
Hoechst Pharmaceuticals v The
Beauty Box (Pty) Ltd
1987 (2) SA 600
(A) at 619D-E.
[23]
In determining whether there is risk of confusion the court must
postulate the class of customers who are likely to purchase
the goods
or services and accordingly who the notional average purchaser is
likely to be. In
Pasquali Cigarette Co Ltd v Diaconicolas &
Capsopolus
1905 TS 472
at 475 Solomon J described the notional
average purchaser as ‘
a man who knows more or less the
peculiar characteristics of the article he wants; he has in his
mind’s eye a general idea
of the appearance of the article and
he looks at the article not closely, but sufficiently to take its
general appearance’.
[24]
In the present matter the applicant’s complaint is not directed
at any similar get-up of its productby the respondent.
The complaint
is directed at the aural use of the descriptive term ‘
Cholesterol
Ease’.
In my view the applicant has two insurmountable
difficulties. The first is that, even on its own version, it cannot
seriously dispute
that the respondent markets its product (including
aurally) as ‘
Vital Cholesterol Ease’
. Any ordinary
purchaser listening to an advertisement should thus readily be able
to distinguish between ‘
CholesterolEase’
and
‘
Vital Cholesterol Ease’
. The second is that the
applicant concedes that there is no authority in our law which
provides protection, in a passing off action,
to advertising value as
being worthy of protection in itself. As said by B R Rutherford:
Value of Trade Marks, Trade Names and Service Marks
(1990) 2
SA Merc LJ at p162:
‘
A
claim for misappropriation of the advertising value of a trademark
represents a significant departure from the traditional view
that the
true legal function of a trademark is to indicate source or origin.
Like the American Courts, our Courts are conservative
in their
approach and are reluctant to accord judicial recognition to the
advertising function of a trade mark. A claim for misappropriation
of
the advertising value will succeed only if the defendant’s
conduct also involves an impairment of the origin function
of the
trade mark, that is, where such conduct is likely to cause confusion
as to the origin or sponsorship of the product concerned.
Legislative
reform, therefore, appears to be the only viable alternative for the
speedy introduction of such a claim.’
[25]
Further, in the
Adidas
case at 537C-E Botha J said that in
passing-off actions‘
the enquiry is concerned with the actual
conduct of the parties, i.e. the manner in which their goods have
been marketed in fact.’
In the present matter the factual
position is that the respondent markets its product (including
aurally) as ‘
Vital Cholesterol Ease’
. The get-up
of the two respective products is entirely distinguishable. In my
view it thus cannot be said that there is a likelihood
that a
substantial number of people who buy or are interested in these
products will be confused as to whether the respondent’s
product is the product of the applicant or that there is a material
connection between the respondent’s product and the applicant’s
product. (See the test set out in the
Adidas
case at 537D). In
the words of Solomon J in the
Pasquali Cigarette Co Ltd
case
at p479:
‘
A
certain amount of imitation in these matters is perfectly legitimate.
If one manufacturer sees that another manufacturer gets
up his wares
in a form which attracts the public, he is entitled to some extent to
take a lesson from his rival and to copy the
get-up
provided
that he makes it perfectly clear to the public that the articles
which he is selling are not the other manufacturer’s,
but his
own articles, so that there is no probability of any ordinary
purchaser being deceived
.
So long as it does that a certain amount of imitation is legitimate.’
(emphasis supplied)
[26] By parity of reasoning the same
must apply to the alleged aural passing off complained of by the
applicant. The respondent
has not made a misrepresentation to the
effect that its product is that of the applicant’s. In fact the
only similarity between
the respective descriptive terms is that part
of the respondent’s corresponds partly with the applicant’s.
The applicant
is not entitled to a monopoly in the use of such
descriptive words as the names have in common, i.e.‘
Cholesterol’
and ‘
Ease’
and the products themselves are clearly
distinguishable.
[27]
In addition, one cannot ignore the reputation-denoting function which
the respondent’s well-known trade markVITAL fulfils
within the
respondent’s mark ‘
Vital Cholesterol Ease’
.
Above all, where the respective get-ups of the products differ
significantly (as is the case in the present matter) the inclusion
of
a well-known trade mark immediately directs the public’s
attention to the fact that they are now dealing with the respondent’s
product and that of no-one else. (The same applies to the aural
advertising campaign). To say that the well-known trade mark would
not serve any distinguishing function in the present matter to
prevent a misrepresentation would be to ignore the essential function
of a trade mark, which is that it is a badge of origin. See
Converge
(Pty) Ltd v Woolworths Ltd
2003 BIP 292 (C) at 298 where Erasmus
J accepted
obiter
with reference to a joining of a well-known
trade mark to a descriptive word that such well-known mark could
distinguish the goods
of traders so as to avoid any misrepresentation
being made.
Conclusion
[28] To sum up, the applicant has
failed to establish that ‘
CholesterolEase’
is a
fancy name. It has failed to establish that its use of the
descriptive words ‘
Cholesterol’
and ‘
Ease’
has resulted in those words acquiring a secondary meaning sufficient
to warrant the conclusion that they have wholly lost their
descriptive sense and have become distinctive of the applicant in
every way. The applicant has also failed to establish that the
advertising value of its trade name is one worthy of protection in
itself. Finally, the applicant has failed to establish a likelihood
of deception or confusion in the minds of the public that the
respondent’s product is that of the applicant’s or that
there is a material connection between the respondent’s product
and the applicant’s product. It is thus not necessary
for me to
consider the third element of the ‘
classical trinity’
of damages allegedly suffered by the applicant.
[29]
As mentioned above the respondent successfully applied to strike out
a paragraph of one of the replying affidavits. The applicant
also
successfully applied to strike out two paragraphs of the respondent’s
opposing affidavit. For sake of completeness I
will incorporate the
orders which I made
ex tempore
during the course of argument
as part of my order hereunder.
[30]
In the result I make the following order:
‘
1. The
applicant’s application to strike out paragraphs 10.2 and 10.3
of the respondent’s opposing affidavit succeeds
with costs.
2. The respondent’s
application to strike out paragraph 3 of the affidavit of Mr Van Eyk
succeeds with costs.
3. Save as aforesaid the
application is dismissed with costs, including the wasted costs of
the postponement on 8 November 2011.
J I CLOETE
FOR
THE APPLICANT :
Adv B Dyke – Club Chambers –
0418116000
INSTRUCTED
BY
:
Andre
Vlok Attorneys – A Vlok – 0413673550
FOR
THE RESPONDENT :
Adv P A
van
Eeden
–
4246998
INSTRUCTED
BY
:
Adams
and Adams Attorneys – 4188560
DATE
OF HEARING
:
21
November 2011
DATE
OF JUDGMENT :
2 December
2011