Philip Morris Inc and Another v Marlboro Shirt Co SA Ltd and Another

• Jurisdiction: South Africa
• Judge: Corbett CJ, E M Grosskopf JA, F H Grosskopf JA, Goldstone JA and Kriegler AJA
• Judgment Date: 22 March 1991
• Citation: 1991 (2) SA 720 (A)
• Court: Appellate Division

Goldstone JA:

The first appellant is Philip Morris Incorporated ('Philip Morris'). It is a company incorporated in terms of the laws of the State of Virginia in the United States of America. Its head office is at 120 Park Avenue, New York. It manufactures and sells a brand of cigarettes D known as 'Marlboro'. A predecessor of Philip Morris, an English company, first used the Marlboro name as long ago as 1883. It is not in issue that when these proceedings were launched Marlboro cigarettes were the largest selling cigarettes in the world and in the United States of America. They were first marketed in South Africa in 1956. Between that date and 1986 many millions were sold in this country. Sales declined E after 1986 for reasons referred to below.

In 1954 Philip Morris reformulated its market strategy in relation to Marlboro cigarettes. At that time the brand was directed at the 'sophisticated female market'. In terms of the new strategy Marlboro cigarettes became a 'full flavour man's cigarette'. The image and F packaging of the product was changed. According to Mr William J O'Connor, a former vice-president of Philip Morris:

'The composition of the mark was expressly designed to project a strong masculine image for the purpose of overcoming then prevailing prejudices men smokers had about effeminate connotations associated with filter cigarettes.'

The trade mark then adopted by Philip Morris has as its distinctive G features a 'red roof' and a form of lettering which includes an elongated 'l' and 'b' in the name 'Marlboro'. It looks like this (the roof being red and the lettering black): H

Goldstone JA

A For convenience I shall refer to this trade mark as 'the Philip Morris mark'.

The advertising concept employed by Philip Morris for Marlboro cigarettes has been the 'Marlboro Man', a cowboy figure designed to be associated with masculine tastes. Then, from 1972 Philip Morris enhanced B its masculine image by its sponsorship of Grand Prix motor racing. Since that time it has had at least one team of drivers on the annual international Grand Prix circuit. At least two of the 20 cars that usually race in the Grand Prix circuit meetings have prominently borne the 'Marlboro' name. These motor races are widely covered by the South African media, including television.

C According to Ms Karen Green, a vice-president of the advertising agent employed by Philip Morris, the Philip Morris mark

'is the most pre-eminent and exceptional trade mark in the world'.

That bold claim is well supported by independent and uncontradicted evidence adduced by Philip Morris.

D Philip Morris is a wholly-owned subsidiary of Philip Morris Companies Incorporated, which was restructured in December 1987, ie after these proceedings had been launched in the Court a quo. Pursuant to that restructuring, the business of Philip Morris outside the United States of America was sold to another subsidiary of Philip Morris Companies Incorporated, namely Philip Morris Products Incorporated. Without E opposition, the last-mentioned company was joined as a second applicant in the Court a quo. It is now the second appellant. Its joinder was a formality and it will be unnecessary again to refer to it. The first respondent is Marlboro Shirt Company SA Ltd ('Marlboro Shirt'). It is a company incorporated in South Africa and has its registered office in Cape Town. It is a member of the Burlington Group of Companies. That F Group is engaged in the manufacture of clothing for men, women and children. In 1954, the chairman of the board of directors of Marlboro Shirt, Mr Philip Kawitzky ('Kawitzky'), during a visit to the United States of America, was introduced to the Marlboro Shirt Company Inc of Baltimore ('the Baltimore Company'). Kawitzky obtained from the G Baltimore Company a licence to manufacture and sell garments in South Africa under the 'Marlboro' label. Subsequently that licence was extended to cover sales of Marlboro garments in the United Kingdom and Ireland.

Pursuant to the licence agreement with the Baltimore Company, and also during 1954, Marlboro Shirt was incorporated in order to manufacture and market articles of clothing under the Marlboro label. It was a term of H the agreement with the Baltimore Company that the Marlboro trade mark would be registered in South Africa in the name of the Baltimore Company. Trade mark 2306/54 Marlboro and device was duly registered on 28 July 1954 and Marlboro Shirt was recorded as a registered user of I that trade mark. The following is a representation of the trade mark:

Goldstone JA

The words appearing beneath the name are 'Shirts and Sportswear'. With effect from 28 April 1968, Marlboro Shirt took assignment of trade mark E 2306/54 from the Baltimore Company.

Marlboro Shirt has used the 'Marlboro' name and trade mark continuously in South Africa since 1954. It is not in issue that Marlboro Shirt has acquired a substantial repute in its Marlboro trade mark in South Africa. In 1959 it also commenced exports of its Marlboro F clothing to the United Kingdom.

The second respondent is the Registrar of Trade Marks. He did not oppose the proceedings in the Court a quo and was not represented at the hearing of the appeal. No further reference need be made to him.

It would appear that the disputes between Philip Morris and Marlboro Shirt have their origin in a report which appeared in the September 1976 G issue of a South African trade publication called The Buyer. It is read by persons interested in the retail and wholesale clothing trade. It is seldom read by members of the purchasing public. It was reported in the article that an English company had produced a range of menswear items under the name 'Marlboro Leisurewear'. The report associated the H manufacturer with Marlboro cigarettes. What Marlboro Shirt considered to be its prior rights in respect of the use of the name 'Marlboro' for clothing in the United Kingdom was brought to the attention of the English manufacturer. Shortly thereafter the English company ceased its use of the 'Marlboro' name.

In 1974 Philip Morris in fact moved into the clothing business and I caused the Philip Morris mark to be modified for use as a label in that business. This modified form is represented below (again, the roof being red and the lettering black):

Goldstone JA

a For convenience I shall refer to this trade mark as 'the Philip Morris modified mark'. In passing, I might mention that in 1976 Philip Morris acquired the trade mark registrations for clothing of the Baltimore Company in the United States of America and 10 other countries (not D South Africa).

According to Kawitzky, Marlboro Shirt resolved to take steps to protect its rights in the use of the name 'Marlboro' in relation to clothing. In 1977 it applied for the registration of the word 'Marlboro' per se. That application has been opposed by Philip Morris and is still E pending. Also during 1977, Marlboro Shirt applied for the registration of a trade mark for clothing. That trade mark incorporated the Philip Morris modified mark. In 1978 Marlboro Shirt announced the launch of its new 'leisurewear range'. It did so in the March 1978 issue of The Buyer. The Philip Morris modified mark was portrayed and in an accompanying article it was stated, inter alia, that: F

'The much-heralded Marlboro Leisurewear clothing range that proved so popular in Europe is now to make its appearance in South Africa.

Burlington Industries Ltd, who have been marketing Marlboro shirts and sportswear in this country since 1959, have confirmed the release of their leisurewear range under the Marlboro Leisurewear label.

... G

Direct public advertising such as bill boards, various sports sponsorships, as well as magazine and newspaper advertising, will further promote Marlboro Leisurewear.'

On the page facing the article, there appeared an advertisement for Marlboro Leisurewear which again portrayed the Philip Morris modified H mark together with a photograph of a Grand Prix motor racing driver.

During the period 1978 - 1982 Marlboro Shirt advertised its clothing in The Buyer. On four occasions it used the Philip Morris mark. On another three occasions it advertised its shirts without the red roof device but used the lettering style of the Philip Morris mark, including the elongated 'l' and 'b'. I

In a supplement to the September 1982 issue of The Buyer, a photograph appeared of the Marlboro Shirt stand at a menswear exhibition held in London. In the foreground, on a table next to an ashtray, there is a packet of Marlboro cigarettes. In the same supplement there appeared a photograph of the exterior of the building of Marlboro Shirt in Cape J Town. In large letters on an external wall of the building are the words

Goldstone Ja

'Marlboro Shirts and Leisure Wear'. the Name 'Marlboro' Appears in the Lettering of the Philip Morris Mark with the Elongated 'L' and 'B'.

In another supplement to The Buyer in December 1980, there appeared a list of South African clothing manufacturers. The word 'Marlboro' under the name of an associate company of Marlboro Shirt appears in the B lettering style of the Philip Morris mark with the elongated 'l' and 'b'. During the 1978 - 1982 period Marlboro Shirt used swing tags on its clothing which portrayed the Philip Morris modified mark. One of them also showed a Grand Prix racing driver.

In 1982 Marlboro Shirt ceased using the red roof device. However, on some of its labels it continued to use a lettering style similar to that C used in the Philip Morris mark, sometimes with and sometimes without the elongated 'l' and 'b'.

In about 1980 Philip Morris applied for the registration of trade marks in South Africa incorporating the words 'Marlboro' and 'Leisurewear' in respect of a wide range of goods unrelated to its D business in this country...