Payen Components SA Ltd v Bovic Gaskets CC and Others

• Jurisdiction: South Africa
• Judge: van Zyl J
• Judgment Date: 18 June 1993
• Docket Number: 92/05972
• Court: Witwatersrand Local Division

Van Zyl J:

The applicant, which is a member of the Payen Group of Companies based in the United Kingdom, is the manufacturer and supplier of G a variety of gaskets for use in motor vehicle engines. It also imports gaskets which are packaged locally. Its products are distributed throughout South Africa both through its own distributor outlets and through wholesalers. The applicant avers that it is the largest gasket manufacturer in South Africa, having captured more than 60% of the H automated replacement market for gaskets.

The first respondent likewise supplies and sells gaskets, some of its products being imported and packaged locally while others are manufactured locally. The applicant and first respondent are in competition with each other.

The remaining respondents are cited in their capacity as members of the I first respondent and are alleged to be 'jointly responsible for the acts and infringements committed by the first respondent', an allegation which is denied by the respondents.

The relief sought by the applicant is, firstly, for an order interdicting the respondents from infringing the applicant's copyright vesting in its catalogue, price list and identifying code system as used by it in the J sale of

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A its gaskets. During the course of argument on behalf of the applicant, Mr Puckrin indicated that the applicant was relying principally on the alleged infringement of its identifying code system by virtue of the respondents' having reproduced or published its identifying codes on the first respondent's gaskets and gasket sets.

B Secondly, an interdict is sought preventing the respondents from competing unlawfully with the applicant by making wrongful use of the applicant's numbering system in the first respondent's price list dated 4 March 1991 and in the identifying codes on the first respondent's gaskets and gasket sets.

Further relief claimed on the basis of alleged infringements in terms of C the Trade Practices Act 76 of 1976 and the Merchandise Marks Act 17 of 1941 was not proceeded with.

The basis of the applicant's case is that it is the co-author and publisher of a catalogue and price list which includes a unique computer-based coding system of which it is the exclusive licensee. This D system was devised during 1971 by the applicant's associated company in the United Kingdom, Payen International Ltd, through one of its subsidiary companies, Engineering Components Ltd, with a view to identifying each individual gasket. It was the brainchild of one J L Machin, whose proposals were set forth in a so-called 'table of significance' which, in essence, tabulated the mathematical principles of the system. One B H E Butler thereafter devised a computer program, based on the 'table of significance', for the purpose of allocating new reference numbers to gaskets previously identified by other numbers. All the relevant data, including the description, category and old reference number of each individual gasket, were then captured on computer, whereafter Butler F produced a cross-reference list which recorded both the old and the new reference numbers. This was published in catalogue form during October 1972.

The system makes use of five characters, the first two being letters of the alphabet and the last three being numbers. The advantage of the system has been its functionalism and efficiency. Existing stock of any G particular gasket could be identified instantly by the computer, price changes could be introduced and the rate of sales of particular items could be monitored with great facility.

In 1988 copyright in the 'numbering system' was assigned to Payen International Ltd. The 'works' assigned are described as the 'table of H significance', the cross-reference list, as manifested in computer printout, and the said catalogues as updated from time to time. The applicant became exclusive licensee thereof in 1989. It has, however, been preparing its own catalogues and price lists on the basis of the 1972 catalogue and its updates.

The events giving rise to the present proceedings commenced in 1988, when I the applicant became aware that the first respondent was publishing a price list containing a portion of the applicant's price list and catalogue. Furthermore the applicant's reference numbers were being reproduced on the first respondent's gasket sets. Correspondence passed between the parties and, in a letter dated 1 June 1989, the first respondent's attorneys informed the attorneys of the applicant that the J first respondent had

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A complied with the various demands made, but without admitting liability or undertaking to pay damages.

During August 1991 the applicant discovered that, despite the said undertaking, the first respondent was reproducing the applicant's numbering system in a price list published by it and was once again B 'reproducing and publishing' the applicant's numbering system on its gasket sets. Further correspondence passed, culminating in a letter dated 18 November 1991 in which the first repondent's attorneys denied this allegation. The applicant was apparently not satisfied with this denial and hence instituted the present application. In this regard reference is made to the first respondent's price list which contains the applicant's code number for each item, subject to the insertion of the letter 'D' as a C prefix to each such number. This also appears from an invoice attached to the founding affidavit and on a label appended to one of the first respondent's gasket sets.

The applicant now avers that the respondents have applied 'its identifying D marks, in the form of its unique and distinctive code number', to the products of the first respondent, which products are of an inferior quality to those of the applicant. This, the applicant submits, will cause it to suffer damage to its reputation and goodwill. At the same time it is regarded as unfair and unlawful competition, in that the respondents have acquired an 'unlawful advantage over the applicant in the marketplace' by simply copying the items in the catalogue and price list of the applicant, E thereby saving themselves the considerable time and expense which would be required should they wish to devise their own numbering system.

The respondents contend that the applicant has not established the subsistence of copyright in any work constituting an identifying code or F numbering system. The only relevant work which may be protected by copyright is the computer program devised for creating such code or system and the applicant has not claimed copyright in any computer program.

As for the allegation of unfair competition on the basis of the first respondent's price list of 4 March 1991, it is pointed out that such list G is no longer being used and the first respondent has undertaken not to do so in the future. The first respondent presently communicates its prices to its customers by inscribing them on price lists supplied by the customers.

It is furthermore denied that the respondents have indulged in unfair or unlawful competition, in that the first respondent has produced and H distributed its own catalogue at considerable expense. In addition the applicant's identifying numbers are no longer distinctive since they are used widely as 'a generic identification of automotive gaskets'. They are hence in the public domain while the applicant's catalogues are freely available in the trade. In this regard the second respondent observes that the 'Payen Coding System', as he calls it, has become 'the standard way of I identifying automotive gaskets' here and elsewhere. He refers to it as 'a type of standardised language which virtually had to be used if any business was to be conducted in the field of automotive gaskets'. It is in fact impossible not to work with it.

It would appear that, if the first respondent could have avoided using the J applicant's system, it would have done so. Its attempt to devise its own

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A numbering system during 1989, however, was unsuccessful and it was compelled to resort once again to the applicant's established code, albeit by making use of the identifying system of a British company, Clough and Wood (Gaskets) Ltd, which employed the applicant's code but appended a prefix 'D' before each number. It is in fact this number which appears on B the labels attached to the first respondent's products.

In the replying affidavit on behalf of the applicant, W D Galloway denies that the computer program devised by Butler created the new coding system and he hence denies that the protected work is such program. According to him the relevant literary work which is protected is the 'written C compilation' and the published price lists and catalogues. The program as such was merely 'a tool to facilitate the generation of the new numbers', something which...