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[2015] ZAWCHC 137
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Nestle Nespresso S.A v Secret River Trading CC t/a Caffeluxe Distributors (20147/2014) [2015] ZAWCHC 137; 2015 BIP 413 (WCC) (5 October 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
CASE NO: 20147/2014
DATE: 05 OCTOBER 2015
Reportable
In the matter between:
NESTLE NESPRESSO S.A
….................................................................................................
Applicant
And
SECRET RIVER TRADING CC t/a
CAFFELUXE DISTRIBUTORS
...........................
Respondent
JUDGMENT: 05 October 2015
DAVIS J
Introduction
[1] Applicant seeks an interdict
restraining respondent from infringing copyright in an original
artistic work depicting the external
design of the Nespresso Essenza
espresso coffee machine (“the machine”) in terms of 23
(2) of the Copyright Act 98
of 1978 (“the
Copyright Act&rdquo
;)
[2] From the papers, it appears that
there is no dispute that copyright in the Essenza drawings, which are
central to this dispute,
vests in applicant. The dispute between the
parties concerns whether, in fact, there has been an infringement of
applicant’s
copyright.
[3] For the relief sought applicant
relies on
s 23
(2) of the
Copyright Act which
provides as follows:
‘(2) without derogating from the
generality of subsection (1), copyright shall be infringed by any
person who, without the
licence of the owner of the copyright and at
a time when copyright subsists in a work-
(a) imports an article into the
Republic for a purpose other than for his private and domestic use;
(b) sells, lets, or by way of trade
offers or exposes for sale or hire in the Republic any article;
…
If to his knowledge the making of that
article constituted an infringement of that copyright or would have
constituted such an infringement
if the article had been made in the
Republic.’
Applicant’s Case
[4] According to Mr Weston, who
describes himself as a director and general counsel of applicant,
respondent has imported and distributed
coffee machines to various
retail outlets in South Africa which are clearly intended to compete
directly with the sale and distribution
of applicant’s machine.
Applicant is said to import a machine described as a Sienna Espresso
Coffee Machine, which Mr Weston
claims has been sold by Checkers
Supermarkets.
[5] Mr Weston also refers to an
accompanying affidavit by a design expert, Mr Neil Grantham, who
performed an analytical comparison
between the two designs. Mr
Grantham concluded thus:
‘Both the Essenza and Sienna
coffee machines have basic features that make then recognisable as
products that produce coffee.
Both machines, like other coffee
machines available on the market, have a coffee outlet component, a
drip tray, coffee volume
buttons and a water tank to name but a few
common features. However, it is apparent, after my investigation,
that the Sienna
machine has design features that match and are almost
indistinguishable from the equivalent design features the Essenza
machine.
These closely similar features and characteristics have
been illustrated and are referred to above. Elements such as
dimension,
proportion, position and shape of components and function
are nearly all very similar.
It is significantly improbable,
bordering on impossible, that the designer of the Sienna coffee
machine did not have the Essenza
design available as a reference when
designing the Sienna. The resemblance is simply too close. It is my
opinion, based on my
examination, that the design of the Sienna
machine has been created so that substantial features of the Essenza
remain recognisable
in the Sienna machine.’
[6] Thus, Mr Weston claims that the
imitation of and direct competition between applicant’s machine
and the Sienna Espresso
machine is in breach of the
Copyright Act.
In
his view, the designer and manufacturer of the Sienna Espresso
machine would have had access to artistic work showing the external
features of the design of applicant’s machine, work which had
been made available to the public in various ways and in publications
in many countries in the world. Thus applicant contends that the
Sienna Espresso machine incorporated design features which were
clear
reproductions of substantial parts of the design features of
applicant’s artistic work and accordingly the manufacture
of
the Sienna Espresso machine amounted to an infringement of
applicant’s copyright in terms of
s 21
of the
Copyright Act.
[7
] Although applicant accepts that
respondent was not the manufacturer of the Sienna Espresso machine,
it contends that, with sufficient
knowledge of the facts regarding
applicants’ copyright, it has imported and distributed these
machines in South Africa with
knowledge that it is in breach of the
provisions of
s 23
(2) of the
Copyright Act.
Respondent
’s answer
[8] Respondent, by way of an affidavit
disposed to by Mr Kevin Katz, contends that it no longer imports or
distributes the Sienna
machine and indeed ceased doing so after
September 2012. It also contends that it has a complete defence in
terms of
s 15
(3) A of the
Copyright Act as
the Sienna machines are
allegedly three dimensional reproductions or adaptations of the
applicant’s relevant artistic work.
Further Mr Katz states:
‘During 2012, the respondent was
approached by Shoprite Checkers with a view to procuring a
substantial number of Sienna Espresso
coffee machines. For
commercial reasons, the respondent declined to supply Shoprite
Checkers on the terms that were proposed,
but elected to put Shoprite
Checkers in contact with the manufacturer, with a view to Shoprite
Checkers obtaining these coffee
machines directly from the
manufacturer.’
[9] In reply, Mr Weston states that,
although it may be that no further machines had been imported or
distributed after 2012, respondent
has never given an undertaking,
written or otherwise, that it had ceased importing or distributing
the machines or that it will
not import again in the future.
Further, the Sienna Espresso machine contains the name Caffeluxe on
the side of the machine.
Furthermore, respondent continues to offer
and deal in warranties on these machines, thereby linking itself
directly to the importation
and distribution of these products in
South Africa. Accordingly, the consumer is entitled to assume that
the respondent is responsible
for the import of this product into
South Africa and sells it to the public through a retailer such as
Shoprite Checkers.
[10] In his answering affidavit Mr Katz
explained the reason for the branding by way of the Caffeluxe name as
follows:
‘Despite the fact that the
respondent played no further part in the importation and sale of the
Sienna Espresso coffee machines,
the respondent consented to the
packaging of these machines continuing to display its Caffeluxe
branding, and also consented to
offer a warranty on these machines.
The commercial rationale for the respondent consenting to the
abovementioned arrangement is
that eh respondent’s primary
business is the sale of coffee capsules for use in coffee machines;
and to this end it is beneficial
to the respondent that as many of
these coffee machines are sold to the public and that its name is
associated with these coffee
machines in the mind of the purchasers
of the machines. Further, the respondent wants purchasers to these
machines to contact
it as a supplier of compatible coffee capsules;
hence it is advantageous for the respondent for its contact details
to be displayed
on the packaging. Furthermore the packaging invites
purchasers to register on the respondent’s website to upgrade
their warranty
and receive a free pack of capsules. This benefits
the respondent in that the respondent gets the purchaser’s
contact details.
Ultimately, the machines are sufficiently reliable
and inexpensive that the abovementioned benefits and advantages
outweigh the
costs of providing the warranty.
The only coffee machine now imported
and sold by the respondent is the Verona Espresso coffee machine.’
[11] By the time of the completion of
the series of replying affidavits, it would appear that the real
dispute has resolved into
whether the respondent was adding or
abetting a copyright infringement, by a Chinese manufacturer, of the
Sienna machine, together
with a South African importer, being
Shoprite Checkers, which needless to say is not joined in this case
and has played no part
therein.
The question of an undertaking: its
significance
[12] Much of respondent’s
argument, save for that which dealt with
s 15
(3) (A) of the
Copyright Act, turned
on the question as to whether applicant was
entitled to any relief when there was a clear statement in
respondent’s answering
affidavit that since 2012 they had no
longer imported any of these machines.
[13] Mr Marriot, who appeared on behalf
of the applicant, correctly submitted that
an interdict may be granted where the
applicant’s rights are being infringed or where there exist
reasonable grounds for apprehending
that respondent will infringe
applicant’s rights unless restrained by a court order. In
other words, an interdict can be
granted not only for injuries
actually committed but also those reasonably apprehended.
[14] In support of this submission, he
relied on the dictum in NCSPCA v Openshaw
[2008] ZASCA 78
;
[2008] 4 All SA 225
(SCA)
at para 21 where the court said:
‘The test in regard to the second
requirement is objective and the question is whether a reasonable
man, confronted by the
facts would apprehend the probability of harm.
The following explanation of the meaning of ‘reasonable
apprehension’
was quoted with approval in Minister of Law and
Order and others v Nordien and another:
“A reasonable apprehension of
injury has been held to be one which a reasonable man might entertain
on being faced with certain
facts. The applicant for an interdict is
not required to establish that, on a balance of probabilities flowing
from the undisputed
facts, injury will follow: he has only to show
that it is reasonable to apprehend that injury will result. However
the test
for apprehension is an objective one. This means that, on
the basis of the facts presented to him, the judge must decide
whether
there is any basis for the entertainment of a reasonable
apprehension by the applicant.”’
[15] Respondent has refused to give
such an undertaking.Mr Seale, who appeared on behalf of the
respondent, submitted that, given
the relief in paragraph 2 of the
notice of motion, no purpose would be served by giving an undertaking
specifically dealing with
the importation of any further machines.
Applicant had sought to bolster its case with a claim based upon
aiding and abetting;
hence there was no point in seeking to terminate
the litigation by offering an undertaking that did not cover the
entire basis
of the relief sought by applicant.
[16] Turning to the implications in
principle of a failure to give an undertaking, the case law supports
Mr Marriot’s argument.
In Glenton and Mitchell v French Tea
and Coffee Works Ltd
1927 WLD 272
at 275, the court held that, as the
respondent had infringed an applicant’s trademark, an
expression of intention not to
infringe in the future did not
constitute an answer to an application for the interdict:
‘There must be some threat or
probability that the infringement will be commenced, continued, or
repeated, or the Court will
not interfere; but if an actual
infringement is shown to have occurred that is usually sufficient,
and the plaintiff is not bound
to wait until it has been frequently
repeated, or until warning has been given and has been disregarded,
for the life of trademark
depends upon the promptitude with which it
is vindicated. So an injunction has been granted where the defendant
had altered the
device and discontinued the use of the labels
complained of, and offered to undertake not to use any more of them,
although in
some circumstances, the undertaking of an innocent
infringer has been accepted by the Court. Without deciding that the
law as
there stated is the same as our law, it seems to me that the
present case is one where an interdict should be granted.’ (at
277)
[17] A similar finding was reached by
Diemont J in Oude Meester Group v Stellenbosch Wine Trust
1972 (3) SA
152
(C) at 164. Although an assurance was given by the respondent
that it would no longer infringe applicant’s copyright by
using
a particular label, Diemont J said that, given that there had been a
clear breach of copyright, ‘it appears to me that
applicant
cannot be expected to be content with respondent’s assurances
and more particularly if I accept as I do that respondent
deliberately copied the design on applicant’s label.’
[18] The source of this dictum can be
traced to an earlier judgment of Schreiner J (as he then was) in
Peter Jackson (Oversees)
Ltd v Rand Tobacco (1936) Ltd
1938 TPD 450
at 453, to the effect that ‘where there has been a deliberate
copying of the applicant’s mark by the respondent, this
in
itself casts such doubt upon the bona fides of the respondent as to
entitle an applicant to an order, whatever undertaking may
be given.
Application of this principle
[19] This principle however is subject
to one important qualification, which is evident from the facts of
this case. Aware that
the importer of the Sienna machine was
Shoprite Checkers, Mr Marriot contended that the respondent has aided
and abetted Shoprite
Checkers in its importation and sale of the
Sienna machine into South Africa. It did so in the full knowledge
that the applicant
enjoys copyright in the design of the machine and
hence that the conduct of Shoprite Checkers constituted a clear
infringement
of this copyright. As it is common cause that Shoprite
Checkers is the current importer of the Sienna machine, Mr Seale
noted
that it was significant that the latter was not a party to
these proceedings and that there was no indication that any step had
been taken against Shoprite Checkers to interdict the importation of
these machine.
[20] Even if the undertaking was
otherwise relevant to the relief in this case, applicant’s
argument was based on the fact
of an alleged close commercial
involvement in the importation and distribution of the Sienna
machine. The products continued to
display the Caffeluxe branding and
the respondents provided a warranty for these Sienna machines.
Hence a case based on a failure
of an undertaking must be viewed
within the prism of the claim that respondent was aiding and abetting
in the infringement of the
Copyright Act.
[21
] A further observation flowa from
the founding affidavit. It is clear that no case was made out with
regard to respondent’s
aiding and abetting Shoprite Checkers
(Pty) Ltd to import the Sienna machine in alleged breach of
applicant’s copyright.
This case was made out in reply.
[22] The background to this component
of the case can be summarised thus: In his answering affidavit Mr
Katz averred that respondent
has played no further part in the
importation and sale of the Sienna coffee machine since September
2012. In his reply Mr Western
contends that ‘the respondent
remains closely commercially involved in the importation and
distribution of the Sienna machines
as described in paragraphs 10.2
to 10.5 of the Mr Katz’s affidavit.’ He further avers:
‘the respondent continues
and offers to deal with warranties on
these machines and thereby directly links itself to the importation
and distribution of these
products in South Africa from the point of
view of the relevant public.’ Attached to Mr Weston’s
affidavit is an
affidavit deposed to by Mr Jordaan, in which the
latter states that on 09 February 2015 he observed a Sienna machine
being available
for sale on the shelves of a Checkers’ store
with an accompanying warranty being provided by respondent. In a
further affidavit
Mr Kats insists however that ‘the last
importing of Sienna Espresso coffee machines by the respondent was
during September
2012’.
The reconfigured case
[23] If all applicants’
affidavits are now read together, its case now appears to be based on
an undertaking not to further
aid and abet Shoprite Checkers to
breach applicant’s copyright.
[24] This argument firstly necessitates
an evaluation of ‘aiding and abetting’.
Aiding and Abetting
[25] The question of aiding and
abetting has received a definitive treatment in Cipla Medpro (Pty)
Ltd v Aventis Pharma SA
2013 (4) SA 579
(SCA). In this case the
respondent sought to interdict the appellant from infringing a patent
for a cancer drug by marketing
a cheaper generic equivalent. The
evidence suggested that the appellant had imported the constituents
of the drug, but that local
health workers would mix the constituents
to make the infringing drug.
[26] Respondent’s claim
necessitated an examination by Nugent JA of the question of
contributory infringement within the context
of a breach of a patent.
Although the learned judge of appeal found that there was no
provision in the South African Patent Act
which would support such an
action, he went on to say: ‘Our law would be most deficient if
it had no remedy against intentionally
aiding and abetting
infringement of a patent and in my view there is indeed no such
deficiency.’ (para 33)
[27] Referring to McKenzie v Van der
Merwe
1917 AD 41
, Nugent JA noted that for almost a century it had
been accepted that a person is delictually liable if he or she aids
and abets
another to commit a delict. Accordingly, based on
ordinary delictual principles, it is unlawful to incite or aid and
abet the
commission of a civil wrong, irrespective of whether it is
sourced in common law or in a statute. On the facts, the court held
that appellant’s product was to be imported and disposed of
with the specific and sole intention and that it would be used
in a
manner that would infringe the respondent’s patent. Its
conduct in doing was therefore unlawful. (para 34)
Evaluation
[28] Leaving aside the defence raised
against a breach of
s 23
(2) of the
Copyright Act and
which is
sourced in terms of
s 15
(3) A of the Copyright Act, applicant is
required to negotiate an imposing hurdle. It is to whether it
negotiated it that I must
now turn. Assuming for the purposes of
evaluation, at this stage, that a s 15 (3) (A) defence stands to be
dismissed, applicant’s
case for an interdict can be summarised
thus: The applicant seeks an order restraining respondent from
infringing the copyright
in its original artistic work for the
external design of the Nespresso Essenza, espresso coffee machine by
importing and/or selling
and/or by way of trade offering or exposing
for sale and/or distributing in the Republic its Sienna Espresso
Coffee machine.
[29] Secondly, in terms of an amendment
of its notice of motion, it seeks an order restraining the
respondent:
‘From infringing the copyright of
the applicant in its original artistic work for the external design
of its Nespresso Essenza
coffee machine, as identified in annexure
“NN1” to the founding affidavit of Daniel Weston, in
terms of sections 23
(1) and/or 23 (2) and 24 (1) of the
Copyright
Act, by
causing another person to make unauthorised reproductions
and/or adaptations of the applicant’s original artistic work,
and/or
to import, and/or sell, and/or by way of trade offer or expose
for sale, and/or distribute, in the Republic, the Sienna espresso
coffee machines as identified in annexures “NN6” and
“NN10” to the aforesaid affidavit, and/or from adding
and/or abetting any other person to perform any of the aforesaid
acts.’
[30] Respondent has averred in its
answering affidavit that it has not imported the Sienna Espresso
machine into South Africa since
September 2012 and does not sell new
machines of this kind. Further, to the extent that the machines were
imported into the country,
they were imported by Shoprite Checkers
(Pty) Ltd, which is not a party to this case. Hence, applicant in
its replying affidavit
has now sought to base its case on the
argument that respondent aids and/or abets “any other person”
(which in this
case is Shoprite Checkers) to perform an act which is
in contravention of
s 23
(1) and (2) read together with
s 24
(1) of
the
Copyright Act.
[31
] Given that the respondent has
stated on oath that it does not import machines and has shown no
involvement therein since September
2012, the applicant was
constrained to rely on the approach adopted in Glenton and Mitchell v
French Tea and Coffee Works
1927 WLD 272
and Stellenbosch Wine Trust
Limited and another v Oude Meester Group Ltd; Oude Meester Group v
Stellenbosch Wine Trust Limited
and another
1972 (3) SA 152
(C) to
the effect that where the respondent has deliberately copied the
property of applicant, assurances by the respondent to
the effect
that it no longer would do so did not stand as a sufficient defence
to the granting of an interdict prayed for by an
applicant. To
recapitulate on the dicta in Glenton and Mitchell supra, the court
accepted that in order to succeed applicant
had to show a
well-grounded apprehension of a continued infringement of their
trademark. The court then went on to say:
‘It is true that the respondent
says that it has no intention of using label “B” in
future, but there is no admission
on affidavit that such user would
be wrongful, and I think applicants cannot, under all the
circumstances be blamed in not attaching
to much value to the
expressed intention. Respondent has infringed applicant’s
trademark at least until December 23, 1926
and respondent’s
mere expression of intention not to infringe it in the future seems
to be no answer to an application for
the interdict.’ at 276
[32] In the present case, there are two
very important distinctions that require elucidation. In the first
place in Glenton and
Mitchell, supra the infringement continued to
take place, at least, until the 23 December 1926 which was less than
three months
before the application for an interdict was sought.
Secondly, it was clear from the facts in Glenton and Mitchell, supra
case
that the breach of the trademark had been committed by
respondent, in that the latter was the primary infringer.
[33] In the present case, three years
have passed since the respondent, on its version, played any role in
the importation of the
Sienna machine, a point that has only been
placed in dispute in an indirect fashion by way of the Jordaan
affidavit. Secondly,
the party which appears to import these
machines and, on the assumption that applicant’s copyright has
been breached, is
the primary party committing the breach is not
before the court. The only case which applicant now seeks to make,
based on the
substance of the papers, is that respondent has aided
and abetted Shoprite Checkers (Pty) Ltd in its infringement of the
Copyright Act.
>
[34] I accept that there should be no
reason in principle why the same dicta which were applied in Glenton
and Mitchell and in Stellenbosch
Wine Trust Limited, supra should not
have traction in a case where a party aids and abets the primary
infringer of a copyright.
But, in this case there is nothing on the
papers which justifies the conclusion by a court of a reasonable
apprehension of a continued
infringement of the copyright by way of
aiding and abetting. The only piece of evidence which is suggestive
thereof is a short
affidavit by Mr Jordaan to the effect that he
found one of these machines with respondent’s name on it in a
Shoprite Checkers
store on 09 February 2015. On its own and without
more, this cannot substantiate the relief sought by the applicant.
[35] It is for good reason that our
courts have laid down a rule that applicant must make out its case in
a founding affidavit.
See Bayat v Hansa 1955 (3) SA 547 (N) at 553;
Shakol Investments (Pty) Ltd v Town Council of the Borough of Stanger
1976 (2)
SA 701 (a) at 704 F – G :
‘In proceedings by way of motion
the party seeking relief ought in his founding affidavit to disclose
such facts as would,
if true, justify the relief sought and which
would, at the same time , sufficiently inform the other party of the
case he was required
to meet.’
This dictum was approved recently
National Council of SPCA v Openshaw 2008 (5) SA 339 (SCA) at para 29.
[36] This approach to affidavit
evidence is subject to a qualification. There is not an absolute
rule for the court has a discretion
to allow new matter in a replying
affidavit, giving the respondent the opportunity to deal with it in a
second set of answering
affidavits. Thus,
‘a distinction must be drawn
between a case in which the new material is first brought to light by
the applicant who knew
of it at the time when his founding affidavit
was prepared and a case in which facts alleged in the respondent’s
answering
affidavit reveal the existence or possible existence of a
further ground for relief sought by the applicant. In the latter
type
of case the court would obviously more readily allow an
applicant in his replying affidavit to utilize and enlarge upon what
has
been revealed by the respondent and to set up such additional
ground for relief as might arise therefrom.’ Erasmus Supreme
Court Practice. Looseleaf at D 1 – 66.
[37] In this dispute, the case now
advanced by applicant appears in reply. Even if this Court
exercised the greatest latitude
to a case being supplemented in a
replying affidavit, on these papers it does not appear to me that
applicant has made out a case
sufficient to justify the relief it
claims. The founding affidavit was signed on 23 September 2014. By
then, it was clear that
applicant knew of the role of Checkers (see
para 4.2 of the founding affidavit; see also supporting affidavit of
Ms Mashida).
Yet no mention of the role played by Checkers is even
suggested in the founding affidavit. On the papers, applicant appears
not
to have even bothered to correspond with respondent after
November 2012. It is small wonder that it was required to make out
its entire case in reply, for it seems to have relied on a factual
matrix of 2012 in the compilation of is founding affidavit deposed
to
on 23 September 2014 and relief sought even a year later!
[38] For these reasons it is not
necessary for me to examine the interesting arguments raised with
regards to
s 15
(3) A. In essence,
s 15
(3) (A) provides that where
the alleged infringer (the manufacturer) makes a three dimensional
reproduction of the authorised reproduction,
there is a defence to a
case made out in terms of
s 23
(2) of the
Copyright Act.
[39
] The debate between the parties
turned on whether the respondent had adduced sufficient evidence that
the Sienna machine was produced
by a process of reverse engineering
the Essenza machine rather than by way of a reproduction through the
Essenza drawings. Again,
the evidence presented in the papers is
hardly satisfactory. Critical to applicant’s case was its
expert witness, Mr Grantham,
who concluded his evidence with regard
to a comparison of the two machines by saying ‘it is
practically improbable, bordering
on impossible that the design of
the Sienna Coffee machine did not have the Essenza machine available
as a reference and draw direct
inspiration from it when designing a
Sienna machine.’ When respondent relied upon this concession
to strengthen its
s 15
(3) (A) case of reverse engineering by the
Chinese manufacturer, Mr Weston, supported by a confirmatory
affidavit from Mr Grantham,
contended that notwithstanding that the
statement was made as relied upon the respondent it ‘clearly
intended to refer to,
and only could have only referred to the two
dimensional copyright work of the applicant (the graphic design) and
not a three-dimensional
reproduction thereof. This is because, if
one has regard to Mr Grantham’s affidavit he was only
instructed and dealt with
the comparison between the two relevant two
dimensional designs… his entire analysis was based solely on
two dimensional
drawings and the designs embodied in them.’
[40] The difficulty with these passages
of evidence is that they then raised the necessity of respondent
having to submit a further
affidavit from Mr Mulder, an industrial
designer, to gainsay this qualified evidence where Mr Grantham claims
that the source of
the manufacture of Sienna machine could not have
been the drawings above.
[41] The application to have the court
condone the late finding by respondent of this affidavit was opposed
by the applicant. Given
the finding to which I have arrived, it is
not necessary for me to evaluate respondent’s application for
condonation of the
late filing of this affidavit nor to resolve the
dispute on the
s 15
(3) (A) defence, save to comment that the matter
is not free of considerable difficulty.
[42] For all of these reasons, the
application is dismissed with costs.
DAVIS J