South Africa : Chapter 9

• DOI: 10.10520/EJC74003
• Published date: 01 January 2002
• Date: 01 January 2002
• Author: Adelheid Janse van Rensburg
• Pages: 62-116

CHAPTER 9

SOUTH AFRICA

1. Introduction

2. Common Law

2.1 Foundations of South African Law of Delict

2.1.1 Actio Iuriarum

2.1.2 Actio Legis Aquiliae

2.2 Unlawful competition

2.2.1 The right to goodwill

2.2.2 The criteria for unlawfulness

2.2.2.1 Fairness and honesty in competition

2.2.2.2 Boni mores

2.2.2.3 Competition principle

2.2.3 Grounds of justification

2.2.3.1 Private defence

2.2.3.2 Necessity

2.2.3.3 Public interest

2.2.4 Deception or misrepresentation as to competitor’s own

performance

2.2.5 Passing-off

2.2.6 Leaning-on

2.2.7 Appropriation of competitor’s business ideas: acquisition and use

of competitor’s trade secrets or confidential information: misap-

propriation of competitor’s performance

2.2.8 Disparagement of competitor’s undertaking, goods or services

3. Statutory law

3.1 Trade Marks Act

3.2 Copyright Act

3.3 Designs Act

3.4 Business Names Act

3.5 Merchandise Marks Act

3.6 Counterfeit Goods Act

3.7 Harmful Business Practices Act

3.8 Free State Consumer Affairs (Unfair Business Practices) Act

4. Self-regulation

4.1 Introduction

4.2 Advertising Standards Authority

4.3 Association of Marketers

4.4 Association of Advertising Agencies

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1. Introduction

With regard to the position in South Africa, a relevant and related study of

the common law and the statutory law is undertaken.

Regarding the common law almost all the applicable forms of unlawful

competition1are discussed and in each of these cases the question is

considered as to whether a comparative advertisement may constitute

unlawful competition, and if so what the advertiser must avoid in order to

safe-guard an advertisement from being classified as unlawful competi-

tion.

The grounds of justification that are available to an advertiser are also dis-

cussed.

The study also included the various statutes that could find application in

the case of a comparative advertisement. This legislation was scrutinized

in order to determine when a comparative advertisement will infringe a

statutory provision.

Lastly an overview of the advertising world’s self-regulatory bodies is

given.

Tanya Woker2states as follows:

“The modern advertiser operates in an increasingly complex and

demanding market, therefore it is necessary for the law in its leg-

islative, common-law and self-regulatory form to provide a com-

prehensive framework of principles which function in such a way

that advertising is effectively regulated without being unnecessari-

ly stifled.”

The related legal effect of the Constitution of the Republic of South Africa,

1996, is considered infra in a separate chapter.

2. Common law

2.1 Foundations of South African Law of Delict

2.1.1 Actio iniuriarum

This action can, in principle, find application in comparative advertising, in

so far as it is used as a remedial action for the protection of fama, corpus

or dignitas.3

In the Jackson case4two requirements were set for an action based on the

actio iniuriarum, namely-

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1 See definition under 2.2.

2 1999: 19.

3 Neethling, Potgieter, Visser 1995: 55 et sqq. Cf Van Heerden & Neethling

1995: 54.

4Jackson v SA National Institute for Crime Prevention and Rehabilitation of

Offenders 1976 3 SA 1(A)11.

1. that there was indeed an infringement of a personality interest which

is worthy of legal protection (fama or reputation in this instance) and

2. that the perpetrator had the necessary animus iniuriandi.

In SABC v O’Malley5the court ruled that the publication of defamatory

matter6gives rise to two presumptions:

1. that the publication was wrongful and

2. that the publisher intended to injure the reputation of the victim.7

This means that one of the following defences are available to the defen-

dant in a comparative advertising case, that:

a) the matter was true8and in the public interest,

b) it was a fair comment or

c) that it was communicated in jest.

In Multiplan Insurance Brokers (Pty)Ltd v Van Blerk9it was held that even

though the applicant (trading corporation) did not have any feelings which

were capable of being hurt by the adverse publicity, it did have an interest

in preserving and maintaining its business reputation. This reputation

should be granted protection even in the absence of proof of “special , i.e.

financial, damages”.

It can be deduced from the above case that the actio iniuriarum could pro-

vide a remedy for a plaintiff business in a disparaging comparative adver-

tising case,10 where a comparative advertisement tarnishes the reputation

of such a business.

Van Heerden and Neethling contend that the actio iniuriarum

“... is of no importance to the field of unlawful competition”,

furthermore, their contention being that

“[t]he right which is relevant in this regard - the right to goodwill - is

an immaterial property right and thus a patrimonial right.”11

Although it is submitted that the actio iniuriarum will seldom be invoked in

the course of comparative advertising, this does not detract from the fact

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5 1977 3 SA 394 (A). See also Neethling v Du Preez and Others; Neethling v

The Weekly Mail and Others 1994 1 SA 708 (A).

6 In order to determine whether an advertisement is defamatory, the courts use

an objective test in that they ask if the competitor’s reputation was lowered in

the eyes of the reasonable reader, hearer or viewer.

7 The only exception being the media, which is liable even in the absence of

intention to defame, because of the powerful position it occupies. See Pak-

endorf v De Flamingh 1982 3 SA 146 (A).

8 In the case of Post Newspapers (Pty) Ltd v World Printing and Publishing Co.

Ltd 1970 1 SA 454(W), the court found that a denigrating statement that is true

is in principle allowed, but the court also ruled:

“…comparison – yes; but disparagement – no”.

9 1985 3 SA 164 (D).

10 De Jager 1992: 28.

11 Van Heerden & Neethling op cit 1995: 55-56.