Passing Off in South African Law - International Law Office

International Law Office

Intellectual Property - South Africa

Passing Off in South African Law

September 04 2006


South African trademark law is derived from and is closely related to English law. However, when applying doctrines of common law, many South Africans overlook the fact that the English tort of 'passing off' is not identical to the wrong of 'passing off' in South African law, which is a genus of the delict of unlawful competition (a separate tort in English law). This is due to the fact that, while English common law recognizes a number of separate well-defined torts as specific wrongs, South African common law is Roman Dutch and does not recognize these torts. South African common law of civil wrongs is known as delict. Most actions in delict are based on the developments of the Roman lex aquilia. Delict involves an unlawful act committed deliberately or negligently (culpa or dolus) which causes or is likely to cause patrimonial loss.

In the case of Dunn & Bradstreet (Pty) Limited v SA Merchants Combined Credit Bureau (Cape) (Pty) Limited(1) Justice Corbett (as he then was) stated that "the broad and ample basis of the lex aquilia is available in this field for the recognition of rights of action, even where there is no direct precedent in our law". South African and English law agree that rival traders may not mislead the public by passing off or, in other words, misrepresenting that the goods of one company are those of another. However, the analyses used to reach this conclusion differ.

Acting Judge of Appeal Nicholas explained in Schultz v Butt(2) that:

"In order to succeed in an action based on unfair competition, the plaintiff must establish all the requisites of aquillian liability, including proof that the defendant has committed a wrongful act. In such a case, the unlawfulness which is a requisite of aquillian liability may fall into a category of clearly recognized illegality…namely: trading in contravention of an express statutory prohibition; the making of fraudulent misrepresentations by the rival trader as to its own business; the passing-off by a rival trader of its goods or business as being that of its competitor; the publication by the rival trader of injurious falsehoods concerning its competitor's business; and the employment of physical assaults and intimidation designed to prevent a competitor from pursuing its trade; but it is not limited to unlawfulness of that kind."

This statement makes it clear that South African law is not as restricted as English law, which has sought latterly to extend definitions of the tort of 'passing off' beyond all recognition - and beyond logical bounds - in order to offer a remedy for actions which are felt to be wrongful, but which do not fall within the classic formulation of the tort. In South African law, confusion alone is insufficient. In Hoescht Pharmaceuticals (Pty) Ltd v The Beauty Box (Pty) Ltd (in liquidation)(3) Nicholas stated:

"Confusion per se does not give rise to an action for passing off. It does so only where it is the result of a misrepresentation by the defendant that the goods which it offers are those of the plaintiff or are connected with the plaintiff. This has not been shown. The cause of any confusion is probably to be found elsewhere."

The authors of Webster & Page(4) explain this situation by stating that "confusion may arise from the mere fact that the parties are conducting the same trade and using descriptive titles of which neither can claim any legitimate monopoly".

The authors go on to quote Justice Van Reenen in Kellogg Co v Bokomo Co-operative Limited, pointing out that, even where the trademarks used by the competitors are acknowledged to be confusingly similar, under common law there would be no delict of passing-off in the absence of proof of deception. This conflicts with the position in Capital Estate and General Agencies (Pty) Limited v Holiday Inns Inc, where, as the authors point out, "likelihood of confusion" is sufficient to give rise to passing-off proceedings. Van Reenen thus clearly overstated the situation, but the fact is that a certain amount of copying is legitimate and lawful.

Thus, while under English common law it is conceivable that a passing-off action will lie where there was an innocent misrepresentation that resulted in confusion, it will not lie under Roman Dutch common law, as an innocent misrepresentation - unless demonstrably negligent - can never be unlawful.


For further information on this topic please contact Ron Wheeldon at Ron Wheeldon Attorneys by telephone (+27 11 646 6666) or by fax (+27 11 646 8895) or by email (ron@brands-man.com).


Endnotes

(1) 1968 (1) SA 209.

(2) 1986 (3) SA 667 Act 678.

(3) 1987 (2) SA 600.

(4) Fourth edition.



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