The first applicant first launched its Smirnoff Ice product in the United Kingdom in 1999 and thereafter in South
Africa in April 2000. It is common cause that Smirnoff Ice acquired a substantial reputation within a relatively short
period. It became the first ranked flavoured alcoholic beverage in South Africa in 2002, with sales in excess of
205 million units between April 2000 and February 2003. During the period September 2002 to March 2003 (after
the launch of this application) sales in excess of 5 million units were allegedly made. Smirnoff Ice's major market
share was amongst young adults, and then specifically young females. The applicants then sought to broaden their
market to include a greater male and more adult market. Smirnoff Spin was conceptualised and developed after
extensive and intensive market research through the period June 2002 to its launch on 14 October 2002 at a cost in
excess of R3 million. It remained the intention to retain the "essential and distinctive" features of the highly
successful Smirnoff Ice product.
According to the deponent to the applicants' founding affidavit Smirnoff Spin sold over 40 million units, and spent
R8 million on prelaunch research and publicity and a further R7 million on postlaunch publicity.
According to the respondent, and this appears to be common cause, rapid growth was experienced in the RTD
("Ready To Drink") market at the time when it was decided to replace Smirnoff Ice. There is some dispute as to
whether there was going to be a complete withdrawal of Smirnoff Ice and a replacement with a similar beverage, or
whether Smirnoff Ice would remain on
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the market alongside the new product. For the moment it does not matter. The fact is that the respondent was at
the time looking for an opportunity to enter this obviously lucrative and expanding market. It had previously in
September 2000 attempted to enter the market with a product called "PO10C" (pronounced "potency") but this was
unsuccessful, and the product was withdrawn. The withdrawal of Smirnoff Ice presented the respondent with an
opportunity to enter the market with a cloudy lemonflavoured vodka product. The respondent had at that stage
another product on the market called Nordic Ice. The respondent became the registered proprietor of the name
"Nordic Ice" in 1996 and in December of that year a product was launched under that trade mark. This was not,
however, a RTD, but a natural fruitflavoured high alcohol vodka cocktail. This product did not even closely resemble
the current Nordic Ice: not in appearance, getup or presentation. It was sold in an elongate, pyramidshaped 500
ml bottle and served in "tot" glasses as bracers or chasers, ie "consumed from a small glass in a single motion". The
market targeted by that product was quite different from the market catered for by the vodka/lemon coolers such
as are here under consideration. However that may be, it is the respondent's case that having identified the
opportunity, it merely adapted its established Nordic Ice range of high alcohol (24%) vodka "shooters" to a low
alcohol (5%6%) vodka/lemon spirit cooler with a getup entirely different from the product it then had on the
market.
The respondent launched its competing vodka/lemon "spirit cooler" to its sales force on 5 October 2002 ie 9 days
before the launch of the applicants' Smirnoff Spin vodka/lemon "spirit cooler" and it was presented to the market
within a couple of days thereafter.
The respondent apparently developed the getup for its Nordic Ice "spirit cooler" range during September 2002
and it was finalised by the second or third week of September 2002. It is common cause that there was no pre
launch publicity campaign for this Nordic Ice product and very little postlaunch publicity.
Counsel were agreed on the general principles governing passingoff. It is not required to say anything more on
the subject. Counsel were similarly agreed upon the requirements which the applicants have to meet in pursuit of
the relief claimed, those requirements being:
(i) proof of a reputation ie that the getup of the applicant has become distinctive in the sense that it is
regarded by a substantial number of members of the public or in the trade as coming from a particular
source;
(ii) proof of a direct or indirect representation by the respondent, whether intentionally, negligently or even
innocently made, that its product is that of the applicants or that it is at least associated with that of the
applicants, and in order to determine whether the representation amounts to a passingoff, the enquiry is
whether the adoption and use of a getup by the respondent so resembles the applicants' getup as to be
reasonably likely to confuse or deceive the members of the public into believing that the respondent's goods
emanate from the applicants or that there is an association between such goods and the applicants'
business;
(iii) proof that the representation is or was made by the respondent to prospective customers or the ultimate
consumers of those goods in the course of trade; and
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(iv) proof of a threat of actual or prospective damage to the applicants' reputation.
It is common cause that the applicants and the respondent target the same consumer market and that the
representation by the respondent is made in the course of trade with the same product, namely vodka/lemon cooler
products. Should the second requirement be met damage to the applicants' reputation follows as a matter of
course. It is therefore necessary for the applicants to prove their reputation and the representation amounting to a
passingoff in the sense previously described.
I return to the requirements, the first being proof of a reputation. The question to be asked and answered is
whether: