Beecham Group plc v Southern Transvaal Pharmaceutical Pricing Bureau (Pty) Ltd and Another

• Jurisdiction: South Africa

Beecham Group plc v Southern Transvaal Pharmaceutical Pricing Bureau (Pty) Ltd and Another
1993 (1) SA 546 (A)

1993 (1) SA p546

Citation	1993 (1) SA 546 (A)
Court	Appellate Division
Judge	Corbett CJ, EM Grosskopf JA, Goldstone JA, Nicholas AJA and Kriegler AJA
Heard	November 6, 1992
Judgment	November 25, 1992

Flynote : Sleutelwoorde

Trade and trade mark — Trade mark — Infringement — Infringement under s 44(1)(b) of Trade Marks Act 62 of 1963 — Words 'use in the course of C trade' in s 44(1)(b) — Such words having reference to trade in goods falling into class for which trade mark registered or to goods so closely associated therewith that use of mark by alleged infringer, in manner otherwise than as trade mark, would enable alleged infringer to prey upon or take advantage of reputation and goodwill of trade mark proprietor — D Alleged infringer marketing computer software system providing information as to generic alternative medicines available after expiry of patent in active ingredient of medicine — Such information enabling pharmacist to supply alternative medicines containing same active ingredient at lower price than original patented medicine — Software system not an E infringement of trade mark in medicine under s 44(1)(b) of Act.

Headnote : Kopnota

The approved name for the active ingredient in medicines prescribed for human use is also known as its 'generic' name. Upon the expiry of the F original patent, manufacturers other than the original patentee may commence producing and marketing, under different brand names, medicines containing the active ingredient formerly protected by patent. Such medicines are referred to as 'generic alternatives'. What is essentially the same medicine may consequently be marketed by various competitors, including the original patentee, under various brand names. Even after the expiry of the patent, the original patentee continues to enjoy a commercial advantage because of the preceding years of unopposed promotion of his brand name. Generic alternatives are generally marketed at a price lower than that of the original product.

G The Pharmaceutical Society of South Africa operates a contractual dispensing service system for medical schemes. An optional feature of the system is the Maximum Medical Aid Price Scheme ('MMAP'), in terms of which a medical aid scheme which has adopted MMAP undertakes to pay to the pharmacist a particular maximum price in respect of a particular generic medicine supplied to a member. Retail pharmacists are then requested by the Pharmaceutical Society to implement the MMAP system in respect of H those prescriptions to be dispensed to customers who are members of the medical aid schemes which have adopted MMAP. Retail pharmacists are thus required to know what generic alternatives there are for the prescribed medicine and also the respective prices of such medicines. Even where the MMAP scheme is not applicable, pharmacists might be called upon to advise customers as to the availability and prices of generic alternatives to the prescribed medicines.

The respondent marketed a retail pharmacy computer software package called I Super Scripts II, which had been devised partly in order to supply the means whereby the aforesaid information could be made available quickly and efficiently to pharmacists by means of the MMAP and generic equivalents options. The data files relating to these options thus contained the approved or generic names and brand names of a large number of medicines. These included the brand names constituting the seven registered trade marks which were the subject of the appellant's action.

The appellant, a large pharmaceutical company which produced and marketed, inter alia, medicines, had sought in a Local Division an interdict J restraining the respondent

1993 (1) SA p547

A from infringing seven of its registered trade marks by incorporating such marks in any electronic storage media in a manner which caused the registered marks to be displayed for the purposes of comparing the appellant's products with other parties' similar products and indicating that such other parties' products might be utilised in substitution for those of the appellant. Its case was founded upon s 44(1)(b) of the Trade Marks Act 62 of 1963, which prohibits the unauthorised use of another's trade mark other than as a trade mark 'if such use is in relation to or in connection with goods or services for which the trade mark is registered B and is likely to cause injury or prejudice to the proprietor of the trade mark'. It had submitted that, by marketing a system which, when its trade marks were entered into it, made a comparison between the price of its products and the prices of various generic alternatives, the respondent had infringed its marks in contravention of s 44(1)(b) in that the respondent's conduct constituted unauthorised use in the course of trade C of the appellant's trade marks otherwise than as trade marks and that such use was likely to cause injury or prejudice to the appellant. It submitted, further, that the phrase 'use in the course of trade' was clear and unambiguous; that it meant use in the course of any trade and that this could include the trade carried on by the respondent. The application had been dismissed in the Local Division. In an appeal,

Held, that it was appropriate to interpret the phrase 'use in the course of trade' in the light of the language of the rest of the statute, the D subject-matter with which it was concerned, and its apparent scope and purpose.

Held, further, that the appellant and the respondent were not in competition with each other: the appellant manufactured and marketed medicines and used its trade marks as brand names for its products, whereas the respondent manufactured and marketed computer systems for pharmacists.

Held, further, that, while it was true that the data files relating to the E MMAP and generic equivalents options of the Super Scripts system contained within them magnetic patterns which, when the pharmacist who had acquired the system operated the options, would result in the appellant's trade marks appearing on the computer screen and on any printout which would be made thereof, and accepting that this would amount to use of the appellant's trade marks by the respondent, that it did not constitute use of the trade marks 'in the course of trade' within the meaning of s 44(1)(b).

F Held, further, that, having regard to the history and general object of s 44(1)(b), the phrase 'use in the course of trade' had to be understood as having reference to a trade in goods falling into the class for which the trade marks was registered or to goods which were so closely associated therewith that the use by the alleged infringer of the trade mark, in a manner otherwise than as a trade mark, would enable the alleged infringer to prey upon or take advantage of the reputation and goodwill of the G proprietor of the mark.

Held, further, that the correctness of the above view was reinforced by a consideration of the far-reaching consequences that would result from an acceptance of the submission that use in the course of any trade was sufficient for the purposes of s 44(1)(b). The appeal was accordingly dismissed.

The decision in Beecham Group plc v Southern Transvaal Pharmaceutical Pricing Bureau (Pty) Ltd 1992 (2) SA 213 (W) confirmed. H

Case Information

Appeal from a decision in the Witwatersrand Local Division reported at 1992 (2) SA 213 (Streicher J). The facts appear from the judgment of Corbett CJ.

C E Puckrin SC (with him A N Goodman and M M Jansen) for the appellant referred to the following authorities: M Ravok (Weatherwear) Ltd v I National Trade Press Ltd [1955] 1 QB 554; Miele et Cie GmbH & Co v Euro Electrical (Pty) Ltd 1988 (2) SA 583 (A) at 600A; Esquire Electronics Ltd v Executive Video 1986 (2) SA 576 (A) at 589H; Protective Mining and Industrial Equipment Systems (Pty) Ltd (formerly Hampo Systems (Pty) Ltd) v Audiolens (Cape) (Pty) Ltd 1987 (2) SA 961 (A) at 982D-984F; Irving's J Yeast-Vite Ltd v Horsenail [1934] RPC 110 (HL); Bismag v Amblins

1993 (1) SA p548

A (Chemists) Ltd [1940] RPC 209 at 237; Shalom Investments Ltd v Dan River Mills Inc 1971 (1) SA 689 (A); Webster and Page South African Law of Trade Marks 3rd ed at 256-60; Klep Valves (Pty) Ltd v Saunders Valve Co Ltd 1987 (2) SA 1 (A) at 41J-42A; Capital Estate and General Agencies (Pty) Ltd v Holiday Inns Inc 1977 (2) SA 916 (A); Mothercare UK Ltd v Penguin Books B Ltd [1988] RPC 113 at 118-19; Aristoc Ltd v Rysta Ltd [1945] 62 RPC 65 (HL); Gallaher (Dublin) Ltd, Hergall (1981) Ltd and Another v The Health Education Bureau [1982] FSR 464 at 473; Rolls Royce Motors Ltd v Dodd [1981] FSR 517; Ind Coope Ltd and Another v Paine & Co Ltd [1983] RPC 326; Nitedals Taendstikfabrik v R Lehmann & Co Ltd [1908] 25 RPC 793; Kerly Law of Trade Marks and Trade Names 12th ed para 14.06 at 265-6; Berman Bros C (Pty) Ltd v Sodastream Ltd 1986 (3) SA 209 (A); Le Stanc 'Comparative Advertising in French Law' (1985) 2 EIPR 35 at 36; P J Kaufmann 'Passing Off and Misappropriation' IIC Studies vol 9 'Is Better Worse than Best?' at 45 et seq; Shanahan Law of Trade Marks and Passing-off 2nd ed at 26; D Ricketson The Law of Intellectual Property (1984) at 703 sub cap 'In the course of trade'; D W and H O Wills (Aust) Ltd v Rothmans Ltd (1955) 92 CLR 131; (1956) 94 CLR 182; Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA (1987) 10 IPR 402 at 417 (SC of Vic) and (1988) 12 IPR 321 (Full FC); Update Trade Marks [1979] 8 RPC 166; Hospital World Trade Mark [1967] RPC 595; Ferodo Ltd's Application [1945] 62 RPC 111; The Shell Co of Australia E (Ltd) v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407; Behean on Montana Wines Ltd v Villa Maria Wines Ltd Trade Mark Infringement and Comparative...