Stellenbosch Wine Trust Ltd and Another v Oude Meester Group Ltd; Oude Meester Group Ltd v Stellenbosch Wine Trust Ltd and Another

• Jurisdiction: South Africa
• Judge: Diemont J
• Judgment Date: 21 April 1972
• Citation: 1972 (3) SA 152 (C)
• Court: Cape Provincial Division

Diemont, J.:

There are two applicants before the Court - both for an interdict and ancillary relief.

The two applicants in the first case are the Stellenbosch Wine Trust Ltd., and the Stellenbosch Farmers' Winery Ltd. The Stellenbosch Wine A Trust Ltd. is the holding company of a large number of subsidary companies including the Stellenbosch Farmers' Winery Ltd., and is described in the papers before the Court as the largest wine-producing group in the Republic of South Africa.

Oude Meester Group Ltd. is the respondent in the first case and is also B the holding company of a number of subsidiary companies which carry on the business of producing and selling wine in the Republic.

In the second case the rolls are reversed: the respondent is now the applicant and the two applicants are the first and second respondents respectively. Both applications were heard at the same time since the two disputes arose out of the same set of facts. In order to avoid confusion I shall follow the example of counsel and refer in this C judgment to the Stellenbosch Wine Trust Group as the applicant and to the Oude Meester Group as the respondent.

The dispute in this case turns on the production and marketing of a wine known as Paarl Perlé. Perlé wine is a light wine charged with carbon dioxide which has in recent years attained great popularity among many D sections of the community. It is claimed that this type of wine was first produced in about 1963 by a group of companies commonly known as the Moni's group. An amalgamation took place between the applicant and Moni's group in 1966 and thereafter Perlé wine was marketed by the applicant. In January, 1970, a subsidiary of the respondent commenced E marketing a low-priced light Perlé wine under the name Paarl Perlé. Two months later in March, 1970, one of applicant's subsidiaries began to market a low priced Perlé wine under the name 'Moni's of Paarl Perlé'. It is not necessary to set out in detail the changes in names and labels which followed save to state that, inevitably, a dispute arose in regard F to the use of the name 'Paarl Perlé'. This dispute culminated in proceedings in this Court in August, 1971, when Distillers Corporation (S.A.) Ltd. (a subsidiary of respondent) sought to interdict Moni's of Paarl Ltd. (a subsidiary of applicant) from marketing its product under the label 'Paarl Perlé'. These legal proceedings were terminated on 3rd September, 1971, when applicant and respondent entered into a written G agreement of settlement which was

'intended to regulate the marketing and get-up of Paarl Perlé wines produced by the two groups'.

I shall refer to certain provisions in this agreement at a later stage in this judgment.

H The next development took place in November, 1971, when applicant decided to place on the market a Perlé wine which would sell under the name 'Selected Paarl Perlé'. Special new bottle labels (consisting of a neck and a main label) would be designed and an extensive advertising campaign would be launched on 31st January, 1972, to mark the first appearance of this wine. The decision was taken in secrecy and the confidential nature of their assignments was firmly impressed on the printers, and the marketing and advertising agents. It was therefore with

Diemont J

dismay that the applicant learned on 19th January, 1972, that the respondent was marketing a new wine, 'Grand White Paarl Perlé', and that there was

'such a remarkable resemblance between the respondent's labels and applicant's labels... that... it appeared... that the A respondent must have procured samples of the applicant's labels whilst they were still in the course of printing and at a stage when the whole of the composition of and design of the applicant's labels were confidential and a closely guarded secret'.

Copies of the labels were annexed to the affidavit made by Lothar Barth, the managing director of applicant - annexures C and D - and it was B submitted that respondent had deliberately imitated the composition and design of applicant's labels, and that the similarity could not have occurred by coincidence.

I am not surprised that applicant's managing director came to this conclusion. There is a striking resemblance between the two sets of C labels; save the colour background they are as like as two peas in the proverbial pod. Regard being had to subsequent events it is not necessary for me to set out in detail the many points of resemblance between the two sets of labels.

Applicant claimed (I quote from Barth's founding affidavit) that:

'32. (a)

Respondent's use of the applicants' labels was wrongful and unlawful and constituted a deliberate invasion of applicants' rights.

(b)

Applicants' secret and confidential information in the form of D its label design, was appropriated and used by respondent with the deliberate intention of injuring applicants in their business and trade, and of gaining an unfair advantage as a competitor to which respondent was not in the circumstances entitled.

33.

In acting as it did, respondent deliberately attempted to create a situation whereby the public would be confused by the similarity in appearance of the two products - applicants' and respondent's.'

E Applicant contended that there were two further facts which were calculated to cause confusion in the minds of the public: the one was that respondent's product was being sold to the public at 32 cents per bottle which was the price at which applicant had intended to sell its F product. The other fact was the use of the slogan 'The Champagne of Perlé Wines' on respondent's label. This was a slogan which was likely to be confused with the slogan on applicant's label - 'The Champagne of Paarl Perlés'.

Applicant alleged that when it became apparent that respondent was introducing a product under its label onto the market in an attempt to G anticipate the applicant's product and to cause confusion in the minds of the public it became necessary for applicant to accelerate production and distribution. At the same time applicant's managing director, Barth, wrote a letter to the managing director of respondent group (annexure 'F', dated 20th January, 1972) drawing attention to the infringement of its rights and stating, inter alia:

H 'There can be no doubt from a comparison of the two labels that your Group has seen fit deliberately to imitate the label which is to be placed on our product, with a view to confusing the public.

Your label is clearly an unlawful appropriation of our design and we call upon you to take immediate steps to withdraw your product under its present name.

Unless we have your assurance by 4 p.m. on Friday, 21st January, 1972, that this will be done, application will be made to the Supreme Court as a matter of urgency for an interdict to restrain you from continuing to market your product in its present form.'

The managing director of respondent, one P. G. Steyn, replied to this

Diemont J

letter on 21st January, 1972, refusing to comply with this demand and stating that

'Neither the label nor the slogan 'The champagne of perlé wines' is likely to mislead the public in any way nor do they contain anything in which any company in your group holds proprietary rights.'

Applicant stated further that it had embarked on a substantial A advertising and sales campaign in order to stimulate the sale of Selected Paarl Perlé and that it was committed to an expenditure of over R20 000 to cover the costs of producing advertising for various media. The confusion in the minds of the public previously referred to was likely to detract from the sale of applicant's wine and applicant was B therefore entitled to the protection of the Court. Applicant stated that it intended instituting an action for damages against respondent but pending the institution of such action it sought interim relief in the form of an order:

'1.

Restraining and interdicting the respondent -

(a)

from continuing to use, and/or market its Grand White Pearl C Perlé wine under the labels or in the get up presently used by it for such purpose;

(b)

from selling and/or marketing its Grand White Pearl Perlé wine or any other wine under any other labels and/or in any get up so closely resembling that used by applicants for the marketing of their Selected Paarl Perlé wine as to be D calculated to cause confusion or deceive the public;

(c)

from printing any further such labels;

(d)

from advertising its Grand White Pearl Perlé in any advertisement which contains any representation of the said labels;

pending the outcome of an action to be instituted by applicants against respondent for a permanent interdict of the nature specified in sub-paras. (a) and (b) and for ancillary relief;

2.

Directing respondent to withdraw from all wholesale and retail dealers all stocks of its brand of Grand White Pearl Perlé wine E where stocks are kept for sale under the aforesaid label and/or get up, pending the outcome of the said action.

3.

Granting such further or alternative relief as this Court may deem necessary;

4.

Directing the respondent to pay the costs of this application.'

F Annexed to the notice of motion and the founding affidavit was a further affidavit by Barth, dated 5th February, 1972, in which he alleged that at about 6 p.m. on 1st February, 1972, respondent delivered a letter to applicant (annexure 'H') in which Steyn, the managing director of respondent group, made the following statement:

'I have investigated the matter and have come to the conclusion that an error was made. Accordingly our 'Pearl Perlé' marketed under its G present label is being withdrawn forthwith. This action is being taken without prejudice to the matters referred to hereinafter.'

The writer went on to state that the marketing of 'Selected Paarl Perlé' by applicant

'would be in clear breach of the...