Vari-Deals 101 (Pty) Ltd t/a Vari-Deals and Others v Sunsmart Products (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Harms ADP, Nugent JA, Ponnan JA, Combrinck JA and Hurt AJA
• Judgment Date: 27 September 2007
• Citation: 2008 (3) SA 447 (SCA)
• Docket Number: 503/06
• Hearing Date: 03 September 2007
• Counsel: LG Bowman SC (with CJ van der Westhuizen and G Marriott) for the appellants. CE Puckrin SC (with C Harms) for the respondent.
• Court: Supreme Court of Appeal

Hurt AJA:

Introduction

[1] The respondent, Sunsmart Products (Pty) Ltd (Sunsmart), is the proprietor of a registered patent and a registered design. Since 2004 E various courts have dealt with applications for interdicts and related relief, claimed by Sunsmart on the basis that the patent and design have been infringed. It is convenient at the outset to recount the history of this litigation for the purpose of clarifying certain of the issues which require to be dealt with in this appeal.

[2] During November 1997 applications for registration of the patent F and the design were lodged under numbers 97/10535 and 97/1155, respectively, with the Registrar of Patents and the Registrar of Designs. Both applications related to what was described as a 'flag construction'. During 2002 the original proprietors of the patent and the registered design executed assignments of their rights in both to Sunsmart. In 2004 G Sunsmart brought two applications for interdicts restraining the infringement of the patent and the registered design against various alleged infringers. The respondent in the first of these was a company called Flag and Flagpole Industries (Pty) Ltd. In that case simultaneous applications were lodged in the Court of the Commissioner of Patents (under case No H 97/10535) and in the High Court, Pretoria (under case No 7385/04). In a second (later) application, the five appellants in this appeal were amongst seven cited respondents who were alleged to have infringed the patent and the registered design. The second application was likewise launched in the Commissioner's Court (also under case No 97/10535) and in the High Court (under case No 21061/04). In each of these I applications a judge sat in the dual capacity of the commissioner and of a judge of the High Court. In what has become known (and will be referred to in this judgment) as 'the Flag and Flagpole case' the presiding judge was Southwood J, and in the court from which this appeal emanates, RD Claassen J presided. J

Hurt AJA

A [3] In the Flag and Flagpole case the respondent denied infringement, and in the alternative contended that both the patent and the design were invalid for want of novelty. Southwood J held that Sunsmart had failed to prove infringement of the patent because one of the essential elements of the invention claimed in the patent was not incorporated in B the Flag and Flagpole product. He therefore found it unnecessary to deal with the issue of validity of the patent. In regard to the design, Southwood J held that a 'sail flag' described and illustrated in a 1992 United States patent ('the Rehbein patent') constituted an anticipation of the registered design and he accordingly dismissed the application for an interdict on that score. Southwood J granted leave to appeal against C his judgment. [*]

[4] The applications that were dealt with in the court a quo by Claassen J came before him after they had been referred for the hearing of oral evidence in regard to a factual dispute relating to the issue of whether D certain of the cited respondents had been guilty of 'contributory infringement'. The matter proceeded before Claassen J while the appeals against the decisions by Southwood J were still pending. I should mention that, on the papers before Claassen J, there was a counter-application for revocation of the patent on the basis that it was invalid.

E [5] After hearing evidence Claassen J held that Sunsmart had established infringement of the patent and of the design. In the course of reaching his conclusions as to infringement, Claassen J found himself constrained to disagree with the construction placed on the claims in the patent by Southwood J, and with Southwood J's finding that the design was not F novel. He found that there had been infringement (both 'direct' and 'contributory') of the design and the patent and granted the customary relief. In addition, he granted an unusual order, directing the respondents to disclose to Sunsmart the names of other possible infringers to whom the respondents had sold their products. Insofar as his finding was to the effect that there had been contributory infringement (the issue G which had been referred for the hearing of viva voce evidence), his conclusion was that the first, third, fourth and fifth respondents had colluded to procure the infringement. As there had apparently been no mention, in the course of argument before him, of the counter-application for revocation, Claassen J made an order dismissing it. His H judgment was delivered on 30 January 2006. He, too, granted leave to appeal to this court.

[6] On 16 March 2007 the appeal to this court in the Flag and Flagpole matter was heard. Judgment on the appeal (per Streicher JA) was handed down on 3 April 2007. [1] The unanimous decision of this court was that I Southwood J had erred in finding that there was no infringement of the patent. On this basis it became necessary for the court to consider the

Hurt AJA

issue as to the validity of the patent. In this regard, the contention was A that US patent 5 572 945, applied for in August 1994 ('the Eastaugh patent') described the invention in SA patent 97/10535 and rendered it invalid for want of novelty. This contention was rejected. Insofar as the design was concerned, this court dismissed various contentions to the effect that the design had been described or depicted in various earlier B documents and drawings (including the Rehbein patent). The court decided that the appeals in both the patent and design cases should be upheld and granted relief by way of interdicts, orders for delivery of infringing articles and an enquiry into damages.

[7] For some reason the second respondent in the court a quo, against C whom Sunsmart had withdrawn its claims, was cited as the second appellant in this appeal. In fact, there are only four appellants before us and, as was done in the High Court, it will be convenient to refer to them by name, viz the first appellant, Vari-Deals 101 (Pty) Ltd, as 'Vari-Deals', the third appellant, Zimstone (Pty) Ltd, as 'Zimstone', the fourth appellant, Mr Keith Arnold Munro and the fifth appellant, Mr Uwe D Fritz, by their surnames, 'Munro' and 'Fritz', respectively.

The effect of the Flag and Flagpole judgment

[8] The appellants' heads of argument were submitted to this court on 5 April 2007, only two days after the judgment in the Flag and Flagpole E appeal was handed down. The appellants, having based their original argument on the judgments of Southwood J, submitted a set of supplementary heads in order to deal with the situation which had developed as a result of the reversal by this court of those judgments. In the introduction to the supplementary heads, the appellants stated: F

These supplementary heads have been prepared in an attempt to address the judgment of this honourable court in the Flag and Flagpole matter insofar as it relates to both the patent and the design cases. The submission will be, for the reasons which follow, that this honourable court is not bound to follow its earlier decision, and that this decision notwithstanding the present appeal should succeed on both the patent G and design cases.

There followed a number of submissions by counsel for the appellants to the effect that this court erred in coming to its conclusions in the Flag and Flagpole matter -

(a)

by failing to apply the proper principles of construction of patent H claims when considering the meaning and scope which should be attributed to them;

(b)

by incorrectly rejecting the contention that the invention in the patent was not new, inasmuch as it had been 'described' (within the meaning of that expression in s 25(6) of the Patents Act 57 of 1978) in the Eastaugh patent; I

(c)

by finding that all of the essential integers in claim 1 of the patent are present in the allegedly infringing flag; and

(d)

by finding that the registered design had not been anticipated by one of the drawings in the Rehbein patent. (Section 35(5) read with s 31(c) and s 14 of the Designs Act 195 of 1993.) J

Hurt AJA

A [9] In view of these submissions it is perhaps not inapposite to bear in mind (trite though the proposition may be) that this court is not sitting as some sort of 'second court of appeal' in judgment on the Flag and Flagpole case. The judgment in that case, insofar as it concerns the interpretation of the specification and/or claims of SA patent 97/10535 B and insofar as it incorporates findings that the patent and the registered design had not been anticipated by the Eastaugh and Rehbein patents, respectively, defines rights of a statutory nature which apply as between Sunsmart and the public at large, and not merely between the parties to the litigation. Especially in this situation, this court would accordingly C only be justified in declining to follow the interpretations and the rulings on anticipation (or rather the absence thereof) in the Flag and Flagpole judgment in very restricted circumstances. These are concisely stated in Bloemfontein Town Council v Richter 1938 AD 195 at 232, viz:

The ordinary rule is that this Court is bound by its own decisions and D unless a decision has been arrived at on some manifest oversight or misunderstanding, that is, there has been something in the nature of a palpable mistake, a subsequently constituted Court has no right to prefer its own reasoning to that of its predecessors - such preference, if allowed, would produce endless uncertainty and confusion. The maxim 'stare decisis' should, therefore, be more rigidly applied in this the E highest Court in the land, than in all others.

This approach has been regularly applied in our law. [2] Counsel for the appellants, though invited to do so, refrained from contending that the judgment in the Flag and Flagpole case was...