Pepsico Inc and Others v United Tobacco Co Ltd

• Jurisdiction: South Africa
• Judge: Van Niekerk J
• Judgment Date: 11 September 1987
• Citation: 1988 (2) SA 334 (W)
• Court: Witwatersrand Local Division

Van Niekerk J:

On 4 September 1987 I granted an order in this J application in terms of which the respondent was, under an interim

Van Niekerk J

A interdict, interdicted and restrained from using the brand name 'Ruffles', or any name or mark substantially similar thereto in relation to potato chips or any snack food or food products of any description whatsoever. I stated at the time that I would provide reasons for the order given and the reasons are set out below.

B The application launched by the applicants was based largely on an alleged passing off or the unlawful competition by the respondent in the field of potato crisp manufacture. The applicants alleged that they had made much use internationally and locally of the trade name or mark 'Ruffles', relating to a particular cut and form of a potato crisp used in that industry. It was alleged that the respondent had unlawfully made C use of the name, alternatively had passed off its product in respect of this crisp, whereas the third applicant had, with the consent of the first and second applicants, previously made use of, and in fact traded in, the name 'Ruffles' in the Republic of South Africa.

D The basis of the application was that late in 1986 the first and second applicants had consented to the use by the third applicant of the mark or symbol referred to in the Republic of South Africa, and that a concentrated campaign had then been mounted in the country with a view to launching the crisp under the mark 'Ruffles' in October 1987. It was contended, further, that in fact during the course of this launch E various steps had been taken to introduce and present the form of chip to all the large retail suppliers in the country. There had been detailed demonstrations of the type of chip as well as samples produced, and full and complete arrangements had been made for the marketing of the chip to the retail suppliers. In essence the complaint was that immediately after these demonstrations and samples had been made F available to a substantial proportion of the trade, the respondent had launched from its marketing organisation a similar type of chip, referred to specifically as 'Ruffles', and marketed it through the medium of some hundreds of cafés. The respondent's contention then was that in the field of chip manufacture it had acted lawfully and properly G and had entered the market prior to the launch by the applicants, and that consequently it had infringed no rights, caused no passing off, and that there was no ground of confusion which could be raised. The defendant's contention was that it was first on the market; that the applicants had not yet come onto the market and that consequently there were no established rights to protect.

H The applicant accordingly launched the application for either a permanent or an interim interdict on the basis that they had two causes of action available to them. The first action on which they relied was passing off and, in addition, that of unlawful competition.

The requirements in a situation such as the present before an interdict, either final or of an interim nature, should be granted were I conveniently summarised by Corbett J, as he then was, in L F Boshoff Investments (pty) Ltd v Cape Town Municipality; Cape Town Municipality v L F Boshoff Investments (Pty) Ltd 1969 (2) SA 256 (C) at 267B - D. There the learned judge stated the following:

'Briefly these requisites are that the applicant for such temporary J relief must show -

Van Niekerk J

(a)

that the right which is the subject-matter of the Main action and A which he seeks to protect by means of interim relief is clear or, if not clear, is prima facie established, though open to some doubt;

(b)

that, if the right is only prima facie established, there is a well-grounded apprehension of irreparable harm to the applicant if the interim relief is not granted and he ultimately succeeds in establishing his right;

(c)

that the balance of convenience favours the granting of interim B relief; and

(d)

that the applicant has no other satisfactory remedy.'

Various authorities are referred to.

In dealing with a patent infringement and the requirements before the issue of an interdict, Franklin J, in Beecham Group Ltd v B-M Group C (Pty) Ltd 1977 (1) SA 50 (T) at 52E - G, commented as follows:

'The first question which I consider should be dealt with is the test to be applied in cases in which a temporary interdict is sought to restrain the infringement of a patent pending action. The Commissioner stated the requirements which must be shown by an applicant in such cases as follows:

"The legal principles to be applied in a case such as this are D reasonably clear. In order to obtain a temporary interdict, the applicant must show (i) a strong prima facie case for the validity of its patent; (ii) an infringement or threatened infringement of the patent by the respondents; and (iii) the absence of any other adequate remedy, eg by way of damages."

He then added the following qualification:

"Even if those three requirements be established it does not, of course, follow that a temporary interdict will necessarily be granted. E That is a discretionary remedy and in the exercise of its discretion the Court will have regard to such matters as the balance of convenience." '

The learned judge goes on to state that these principles were in accord with the decisions in Webster v Mitchell 1948 (1) SA 1186 (W) and Ndauti F v Kgami and Others 1948 (3) SA 27 (W).

At 54, still dealing with the question as to whether an injunction should or should not be granted, the learned judge stated at 54E - G:

'I consider that both the question of the applicant's prospects of success in the action and the question whether he would be adequately compensated by an award of damages at the trial are factors which should G be taken into account as part of the general discretion to be exercised by the Court in considering whether to grant or refuse a temporary interdict. Those two elements should not be considered separately or in isolation, but as part of the discretionary function of the Court which includes a consideration of the balance of convenience and respective prejudice which would be suffered by each party as a result of the grant H or the refusal of a temporary interdict.'

Various authorities are then quoted.

The learned authors, Van Heerden and Neethling in Onregmatige Mededinging, comment as follows about the remedies at 116 para 2125:

'Staan dit vas dat die eiser se reg op die onderskeidingsteken aangetas is (of dat daar 'n dreigende aantasting is) kan hy na gelang van die I geval òf op 'n interdik aansoek doen òf skadevergoeding met die actio legis Aquiliae verhaal. Wat die interdik betref, kan die volgende gestel word. Skuld, hetsy in die vorm van opset, hetsy in die vorm van nalatigheid aan die kant van die dader, word nie as 'n vereiste vir die verlening van 'n interdik gestel nie. 'n Onskuldige aanklamping fundeer dus die interdik. Indien die verweerder wel opsetlik aangeklamp het, sal die Hof 'n interdik toestaan, al gee die verweerder 'n oënskynlike J bevredigende

Van Niekerk J

A onderneming om nie sy regmatige aktiwiteite voort te sit nie. Voorts hoef 'n aansoekdoener wat 'n interdik aanvra, nie te bewys dat hy inderdaad benadeel is nie, maar slegs dat benadeling waarskynlik is.'

Their note 74 in this regard at 117 reads as follows:

'Hierdie beginsel hang saam met die vereiste dat die aansoekdoener nie B hoef te bewys dat enige potensiële klant werklik mislei of verwar is nie, maar slegs dat verwarring of misleiding waarskynlik is, vgl die gewysdes aangehaal in voetnota 62. Vgl ook Capital Estate and General Agencies (Pty) Ltd and Others v Holiday Inns Incorporated and Others 1977 (2) SA 916 (A) op 929 en 930 - 2. In Adcock-Ingram Products Ltd v Beecham SA (Pty) Ltd 1977 (4) SA 434 (W) op 437 - 8 stel die Hof dit ook duidelik dat bewys van werklike benadeling nie nodig is nie. Volgens C die Hof is die vraag slegs of die beweerde aanklamping "was likely or calculated to deceive, and thus cause confusion and injury, actual or probable, to the goodwill of the plaintiff's business".'

The learned authors continue at 117:

'Uit die aard van die saak versoek die eiser deurgaans dat die D verweerder belet word om sy (die eiser) onderskeidingsteken aan te matig of na te boots.'

Dealing then with the question of passing off, I refer to a decision in which the Appellate Division dealt with an appeal which concerned the right of a person to trade under his own name. In Brian Boswell Circus (Pty) Ltd and Another v Boswell-Wilkie Circus (Pty) Ltd 1985 (4) SA 466 (A) E at 478 and 479 Corbett JA at 478I - 479D says the following:

'Passing off is a form of wrongful competition. It is unlawful because it results, or at any rate is calculated to result, in the improper filching of another's trade and an improper infringement of his goodwill and/or because it may cause injury to that other's trade reputation (Capital Estate case supra at 930H - 931C).

In a passing off action factors of importance are: F (1) whether the defendant is engaged in the same field of business activity as the plaintiff, and (2) whether the plaintiff's trade or business name has acquired a reputation, ie has become distinctive of, or in the minds of the public is associated with, the business carried on by the plaintiff.

Engagement in the same field of business activity is not a prerequisite G to success (Capital Estate case supra at 929E - G), but clearly the existence of this factor would tend to enhance the likelihood of confusion or deception as far as the general public is concerned. The importance of the acquisition by plaintiff of a reputation in the trade name is twofold. Firstly, whether the general public will be confused or deceived into thinking, because of identity or...