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

• Jurisdiction: South Africa
• Citation: 1991 (2) SA 720 (A)

Philip Morris Inc and Another v Marlboro Shirt Co SA Ltd and Another
1991 (2) SA 720 (A)

1991 (2) SA p720

Citation	1991 (2) SA 720 (A)
Court	Appellate Division
Judge	Corbett CJ, E M Grosskopf JA, F H Grosskopf JA, Goldstone JA and Kriegler AJA
Heard	February 25, 1991; February 26, 1991
Judgment	March 22, 1991

Flynote : Sleutelwoorde

Trade and trade mark — Trade — I Passing off — Respondent manufacturing and distributing shirts under licence using Marlboro Shirt trade mark since 1954 — Respondent using 'Marlboro' name and trade mark in South J Africa continuously since 1954 and acquiring

1991 (2) SA p721

A substantial goodwill in Malboro trade mark in South Africa — Philip Morris (appellant) manufactured and sold 'Marlboro' cigarettes which, in 1987, were largest selling brand in world — Philip Morris adopting new trade mark for Marlboro cigarettes in 1954 — Distinctive features being 'red roof' device on white background, with name 'Marlboro' printed B below in distinctive black lettering, with elongated 'l' and 'b' — Philip Morris sponsoring Grand Prix racing team each year since 1972 — Grand Prix racing receiving wide media coverage in South Africa — Philip Morris commenced manufacture of clothing in 1974 — Modifying its mark for such purpose by addition, below 'Marlboro', of words 'Leisure C Wear' printed in white lettering outlined in black — No resemblance between Marlboro Shirt trade mark and Philip Morris mark and modified mark — During 1978 — 1982 Marlboro Shirt advertised its clothing in trade magazine not read by general purchasing public, using Philip Morris modified mark on four occasions, once accompanied by picture of D Grand Prix driver; on three further occasions, advertised without 'red roof' device, but using distinctive Philip Morris mark lettering style, including elongated 'l' and 'b' — In 1982, Marlboro Shirt ceased use of 'red roof' device, but continued, on some labels, to use lettering style similar, but not identical, to that used on Philip Morris mark, sometimes with and sometimes without elongated 'l' and 'b' — Philip E Morris launched proceedings in 1987, seeking to interdict Marlboro Shirt from using word 'Marlboro' as trade mark or trade name in relation to clothing and from representing that Marlboro Shirt or its products in any way associated with business of Philip Morris in its Marlboro cigarettes or in its sponsorship of Grand Prix racing — Application F dismissed — On appeal, Philip Morris claiming relief for passing off on basis that, by using Philip Morris mark and modified mark during 1978 — 1982, Marlboro Shirt misrepresenting that latter's clothes connected with Philip Morris, causing South African public to confuse source of Marlboro Shirt's goods — Cessation of use of 'red roof' G device in 1982 not disconnecting source of Marlboro Shirt's goods from Marlboro cigarettes in minds of purchasing public — Marlboro Shirt arguing that, while Philip Morris had reputation in South Africa for Marlboro cigarettes, it had no goodwill in clothing industry, since its H clothes never sold in South Africa — Court holding that, while Philip Morris' goodwill diminished by its having ceased directly to deal in South Africa, its reputation might have continued with its former notoriety by reason of media advertising locally and abroad — Passing off action designed to protect claimant's property in territorial goodwill, ie business, which misrepresentation likely to injure — Court I pointing out that, even assuming that during 1978 — 1982 a passing off action against Marlboro Shirt would have succeeded, interdict not a remedy for past invasion of rights — To succeed, Philip Morris required to prove that in 1987 Marlboro Shirt still represented that its merchandise associated with Marlboro cigarettes, and reasonable J likelihood that members of public might be confused into believing

1991 (2) SA p722

A that merchandise of Marlboro Shirt connected with Philip Morris — Evidence indicating that, even during 1978 — 1982, Marlboro Shirt's use of Philip Morris mark and modified mark confined to publication not seen by general purchasing public, and that over period 1954 — 1987 Marlboro Shirt had established reputation in South Africa in name 'Marlboro' in B relation to its merchandise — Marketing surveys carried out in 1986 for Philip Morris to prove alleged success of 'parasitic use' of its mark and of continuing confusion between Marlboro cigarettes and Marlboro Shirt's clothing rejected — 'Red roof' device, which Marlboro Shirt ceased using in 1982, used in two of three surveys — Question posed in C third survey tacitly suggesting that something other than shirts associated with name 'Marlboro' portrayed with elongated 'l' and 'b' — Further reason for rejecting results of surveys being that, if there had been confusion, such not necessarily direct consequence of D misrepresentations made by Marlboro Shirt during 1978 — 1982 — Court concluding that Philip Morris had failed to prove public confusion as to source of Marlboro Shirt's merchandise and dismissed appeal.

Trade and trade mark — Trade mark — Expungement — From register in terms of s 33(1) read with s 16(1) and in terms of s 36(1) (b) of Trade E Marks Act 62 of 1963 — Applicant for expungement arguing that words 'to register' in s 16(1) refer not only to initial entry in register, but also to continuance of entry — Arguing, thus, that although trade mark sought to be expunged did not offend against s 16(1) when entered on register in 1954, later 'use' of registered mark became likely to F deceive or cause confusion, and therefore contrary to law — Mark submitted to be not lawfully on register at date of application for expungement, thus justifying expungement in terms of s 33(1) — Court holding that, even assuming correctness of applicant's interpretation of s 16(1), application for expungement to be dismissed because of failure by applicant to prove confusion, by reason of continued use of trade G mark, at date of application — Application under s 36(1) (b) dismissed because of applicant's failure to establish that, at time of application for expungement, use of registered mark unlawful and not bona fide.

Interdict — Generally — Interdict not remedy for past invasion of rights.

Headnote : Kopnota

H The first respondent, Marlboro Shirt, had since 1954 manufactured and sold garments in South Africa under licence from a similarly-named American company based in Baltimore. The Marlboro trade mark was registered in South Africa in the name of the Baltimore company, and Marlboro Shirt was recorded as a registered user of the mark. Marlboro Shirt's licence to sell garments under the Marlboro mark was subsequently extended to cover the United Kingdom and Ireland. Marlboro Shirt had used the 'Marlboro' name and trade mark in South Africa I continuously since 1954. It was not disputed that it had acquired a substantial repute in its Marlboro trade mark in South Africa. The first appellant, Philip Morris, manufactured and sold the Marlboro brand of cigarettes which, in 1987 when the proceedings against Marlboro Shirt were launched, was the largest selling brand of cigarettes in the world and the United States of America. Marlboro cigarettes had been manufactured and sold by Philip Morris and its predecessor since 1883. In 1954, as part of its reformulated marketing strategy for Marlboro J cigarettes, Philip Morris adopted a

1991 (2) SA p723

A new trade mark, having as its distinctive features a 'red roof' on a white background, with the word 'Marlboro' printed in distinctive black lettering with the 'l' and 'b' elongated. From 1972, and to further the masculine image of Marlboro cigarettes, Philip Morris each year sponsored at least one team of drivers on the annual Grand Prix motor racing circuit. At least two cars each year, for 20 years, prominently bore the 'Marlboro' name. The Grand Prix races enjoyed wide media coverage in South Africa, including on television. The Marlboro Shirt trade mark and the Philip Morris Marlboro cigarette trade mark bore no B resemblance to one another.

In 1974 Philip Morris moved into the clothing business and caused its mark to be modified for use as a label in that business. The modified mark was similar to the cigarette mark, but had the words 'Leisure Wear' printed beneath the word 'Marlboro' in white lettering outlined in black. In order to protect its rights in the use of the name 'Marlboro' in relation to clothing, Marlboro Shirt in 1977 sought registration of C the word 'Marlboro' per se, and sought a registration of a trade mark, incorporating the Philip Morris modified mark, for clothing. Philip Morris opposed the application, and the matter was still pending at the hearing of the appeal. During the period 1978 - 1982 Marlboro Shirt advertised its clothing in The Buyer, a trade magazine read by persons in the wholesale and retail clothing trade, but not by members of the purchasing public. On four occasions Marlboro Shirt used the Philip Morris modified mark, once accompanied by a photograph of a Grand Prix racing driver; on three further occasions it advertised its shirts D without the 'red roof' device of the Philip Morris mark, but using the distinctive Philip Morris mark lettering style, including the elongated 'l' and 'b'. In 1982 Marlboro Shirt ceased using the red roof device, but continued, on at least some of its labels, to use the lettering style similar to that used on the Philip Morris mark, sometimes with and sometimes without the elongated 'l' and 'b'.

In 1987 Philip Morris launched proceedings against Marlboro Shirt in E which it sought to interdict Marlboro Shirt from, inter alia, using in any manner the word 'Marlboro' as a trade mark or trade name in relation to clothing; from representing that Marlboro Shirt or its products...