Cochrane Steel Products (Pty) Ltd v MSystems Group (Pty) Ltd and another
[2015] 2 All SA 162 (GJ)
Division:
GAUTENG LOCAL DIVISION, JOHANNESBURG
Date:
29 October 2014
Case No:
39605/13
Before:
CH NICHOLLS J
Sourced by:
T Nzimande
Summarised by:
DPC Harris
. Editor's Summary . Cases Referred to . Judgment .
[1] Intellectual property Absence of registered trade mark Action based on unlawful competition Leaning on Court
had to consider whether the common law prohibits the use of another's good name in terms of unlawful competition
Court found that leaning on (albeit described somewhat differently) had been dealt with in our law and rejected as courts
have unanimously held that in the absence of passing off, no proprietary rights can be enjoyed in an unregistered trade
mark.
[2] Intellectual property Absence of registered trade mark Action based on unlawful competition Passing off
Passingoff consists of a false representation made by one trader to members of the public that the goods of a rival trader
either belong to him or are connected in the course of trade with his own business Requirements for a successful
interdict for passing off are reputation and deception, as well as injury to the plaintiff's business.
Editor's Summary
The applicant and respondents were competitors in the industry of perimeter security and fencing. Objecting to the
respondents' use of the applicant's trade mark "ClearVu" for its internet advertising, the applicant sought a final
interdict restraining the respondent from using the trademark "ClearVu" as a keyword in the Google AdWords
System, or as a metatag. There was no trade mark registered over "ClearVu" and, accordingly, the relief was based
not on a statutory infringement, but on the common law interdict of unlawful competition. The respondent denied
that it is using the word "ClearVu" as a metatag but admitted that it bid on the word on Google AdWords, which it
said was a lawful and common business practice. In light of this concession, the case was argued only on the issue
of keywords. The Court began by explaining how the Google AdWords Systems operated.
Held When an internet user performs a search on the basis of one or more words on the Google search engine,
the results which best correspond to that word in decreasing order of relevance will be displayed. The second type
of link is a sponsored link, which constitutes a form of advertising where a commercial entity has paid for their
advertisement to appear once certain words, known as keywords, are entered into the search engine. The
applicant's complaint was that although internet users searching via Google for "ClearVu" would be looking for the
applicant's product, such search would actually result in the respondent's advertisement being displayed because it
had selected "ClearVu" as a keyword.
The applicant relied on two common law causes of action, passing off and "leaning on". While the latter does not
form part of our law, the applicant urged the court to develop the common law in terms of section 173 o f t h e
Constitution. Passingoff consists of a false representation made by one trader to
Page 163 of [2015] 2 All SA 162 (GJ)
members of the public that the goods of a rival trader either belong to him or are connected in the course of trade
with his own business. The requirements for a successful interdict for passing off are reputation and deception, as
well as injury to the plaintiff's business.
In deciding whether leaning on can constitute a cause of action in our law, independent of passing off or a
statutory claim for trade mark infringement, the Court had to consider whether the common law prohibits the use of
another's good name in terms of unlawful competition. The Court found that leaning on (albeit described somewhat
differently) had been dealt with in our law and rejected. The courts have unanimously held that in the absence of
passing off, no proprietary rights can be enjoyed in an unregistered trade mark.
The applicant was also unsuccessful on the passing off claim, as it was unable to satisfy the requirements of
deception or confusion. Its case was dismissed with costs.
Notes
For Unlawful Competition see:
LAWSA Second Edition Replacement Volume (Vol 2(2) paras 263273)
·
Cases referred to in judgment
South Africa
Adidas AG and another v Pepkor Retail Ltd [2012] 1 All SA 636 (2013
JDR 3) (WCC) Referred to
172