Automated Summary
Key Facts
The Supreme Court of Appeal of South Africa considered Herbal Zone (Pty) Limited and others v Infitech Technologies (Pty) Limited and others (Case No: 204/2016). The appellants claimed the respondents were selling counterfeit Phyto Andro capsules, while the respondents argued they had established reputation for the Phyto Andro mark. The court found Herbal Zone failed to prove reputation in Phyto Andro vested in them rather than Herbal Zone International (a Malaysian company), so the passing off claim failed. Regarding defamation, the respondents failed to establish that damages would be an inadequate remedy, so the interdict against Herbal Zone was not properly granted. The appeal was partially successful, with the court amending the high court order to dismiss both the application and counter-application with costs.
Issues
- The court examined whether Herbal Zone had established a reputation for the 'Phyto Andro' mark in South Africa such that it could claim passing off against Herbs Oils' competing product. The court found that Herbal Zone failed to prove the reputation vested in it rather than Herbal Zone International, and thus the passing off claim failed.
- The court considered whether Herbal Zone's statements labeling Herbs Oils' product as 'counterfeit' were defamatory, and whether an interdict should be granted against such statements. The court found that Herbal Zone had a colorable defense based on the public interest, and that the interdict should not have been granted.
Holdings
- The court dismissed the passing off claim as Herbal Zone failed to prove the reputation in 'Phyto Andro' vested in them rather than Herbal Zone International. Packaging consistently identified Herbal Zone International as the manufacturer.
- The court ordered each party to pay their own costs of the appeal, noting Herbal Zone had limited success but failed on the main passing off claim.
- The court refused the defamation interdict as Herbal Zone failed to prove reputation in 'Phyto Andro' vested in them. Interdicts against defamation are rarely granted without clear evidence of no defense.
Remedies
- The respondents' application for an interdict was dismissed, with costs awarded to the appellants.
- The court ordered that each party bear their own costs for the appeal.
- The appellants' counter-application for an interdict was dismissed, with costs awarded to the respondents.
Legal Principles
- The court held that interdicts against defamation are only rarely granted as they impinge on freedom of speech. An applicant must show a clear right and that the defendant has no sustainable defence, not merely assert that a defence will be proven at trial.
- The court applied the established legal principles of passing off, requiring proof of reputation in the mark, misrepresentation that the goods are those of the plaintiff, and damage. The court found Herbal Zone failed to prove reputation vested in it rather than Herbal Zone International.
Precedent Name
- Pioneer Foods v Bothaville Milling
- Caterham Car Sales v Birkin Cars
- Capital Estate and General Agencies v Holiday Inns
- Hix Networking Technologies v System Publishers
- Lendalease Finance v Corporacion De Mercadeo Agricola; The Shipping Corporation of India v Evdomon Corporation
- Verimark v BMW AG
- Midi Television v Director of Public Prosecutions
Cited Statute
- Act governing search and seizure of counterfeit goods
- Constitutional right to freedom of speech
Judge Name
- Mbha
- Shongwe
- Schippers
- Cachalia
- Wallis
Passage Text
- [36] The short answer to these submissions is that they were inconsistent with established authority on the proper approach to an application for an interdict to prevent the publication of defamatory matter. Such an interdict is directed at preventing the party interdicted from making statements in the future. If granted it impinges upon that party's constitutionally protected right to freedom of speech. For that reason such an interdict is only infrequently granted, the party claiming that they will be injured by such speech ordinarily being left to their remedy of a claim for damages in due course.
- [10] If Herbal Zone had the requisite reputation in South Africa then the other requirements of passing off were satisfied. The packaging of Herbs Oils' product uses the same name, Phyto Andro, to describe the product and the packaging is very similar. The name Phyto Andro is not descriptive of the product, but is an invented mark attached to it in order to distinguish it from other products of a similar type. By calling their product Phyto Andro there is plainly a representation to the public that when they buy Herbs Oils' product it is the product that enjoys a reputation in South Africa under that name. And, if customers buy Herbs Oils' product in the belief that it is the product they have previously bought or known under the Herbal Zone mark, there will be damage. The crucial question was therefore whether Herbal Zone enjoyed the reputation attaching to Phyto Andro in South Africa.
- [25] I am unable to draw that conclusion. An immediate difficulty is that documents emanating from Herbal Zone International also bear the spiral logo with the words 'Herbal Zone' beneath it. If this were a logo devised in South Africa for South African packaging, why would it appear on the letterhead of the Malaysian company? What is more, the home page of Herbal Zone International's website shows the spiral logo above the words 'Herbal Zone' and says that: 'Phyto Andro is Malaysia's leading natural health company. Established at 2003 and manufactured or Founder by Herbal Zone International Sdn Bhd …'