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with the object of disrupting the business of legal competitors, while protecting the Peter Stuyvesant brand.
But in the very next paragraph of his judgment he went on to say that he accepted her evidence that the
latter was indeed the intention of BATSA in launching the PARLIAMENT brand of cigarettes.
[29] Philip Morris accepted that an appeal court does not lightly overturn credibility findings by a trial court, but
nonetheless in its heads of argument launched a forthright and direct attack on Ms Heglund's credibility. It
said that she was an "unsatisfactory witness", and that there were various aspects of her evidence "which
are not credible", in particular where her oral evidence did not coincide with the contents of her affidavit. She
was criticised for her failure to make concessions in crossexamination and some of her evidence was
described as manifestly false. Her evidence that the initial launch was a test was debunked. In conclusion it
was submitted that:
"Faced with the damaging discovered documents which were clearly at odds with the original answering affidavit of Ms
Heglund, the Appellant was forced to 'invent' a more plausible explanation for the use. But even the version ultimately
advanced in oral testimony as to the intent behind those 'test' launches cannot survive scrutiny, and is false in
material respects."
More forthrightly it was said that "the intent to disrupt is fictitious".
[30] The attack on Ms Heglund's credibility was couched in terms that could only be understood to suggest that
she was a dishonest witness and that her version, of using PARLIAMENT as a brand directed at the low price
sector of the market on a tactical basis to disrupt the activities of low price competitors, was untruthful.
However, in oral argument, leading Counsel for Philip Morris disavowed any attack on Ms Heglund's honesty.
The concession was correctly made, but it made it difficult to maintain the argument that PARLIAMENT was
introduced for the sole purpose of protecting the marks. Her evidence during the trial could not be dismissed
as an error of recollection or attributed to mistake occasioned by the passage of time. Either the PARLIAMENT
brand was launched for the reasons she described, however imperfectly implemented, or those reasons were
nothing but a facade to disguise the true purpose, which was protecting the trade marks. If the latter was the
case then she, as the person responsible for the launch of the brand and its marketing, must have been a
party to the deceit and her evidence was untruthful.
[31] There is no reason to depart from Louw J's acceptance of Ms Heglund's oral evidence concerning the reasons
for the launch of the PARLIAMENT brand. In paragraph 23 I drew attention to the fact that the circumstances
of the discovery and disclosure of the memory stick and the presentation to the AME group reflected well on
her honesty. The legitimate criticisms directed at her evidence arose from the attempt to suggest that her oral
evidence was compatible with her answering affidavit. That was an unfortunate, if all too human, approach.
[32] The decisive evidence in support of Ms Heglund's credibility lay in Ms Steyn's summary of the decisions taken
at the AME meeting in December 2006 and in the very documents that Ms Fleming analysed and criticised in
her witness statement. The summary reflected a decision that the approach to be adopted in the low price
segment of the market was
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not to introduce a brand to compete across the sector in the conventional way, but to engage in "tactical
execution". The documents show that this decision was not ignored. The production of PARLIAMENT cigarettes
commenced from July 2007 with differing product specifications and pack designs for filter and lights being
commissioned. In September 2007, the brand was entered with SARS for excise purposes.
[33] The purpose of this was dealt with in a presentation on the launch of PARLIAMENT dated 14 December 2007.
It set out three objectives other than the launch itself, namely, to protect the trade mark, to test the
commercial viability of a low price offer and finally, to gain insight into the low price segment. Presumably the
author of the presentation thought that all three objectives mattered. None was prioritised ahead of the
others. There is no suggestion that the latter two were subtly slipped in to provide plausible protection at a
later stage against an application for expungement of the marks. Any such suggestion would have required
the collaboration of a number of individuals, both high and low in the hierarchy. It would have required
approval to launch a lossmaking product for no greater purpose than to stop an attack on two marks that
had never been used and that had no brand reputation in South Africa. Mr Joubert legitimately, and with
cogent reasons, poured cold water on that idea. There is not the slightest indication in the documents of this
being the case.
[34] A further presentation in January 2008, after the launch in Upington, set out as background the two goals of
protecting the trade mark and gaining insight into low price segment dynamics. It said that the sales rate in
the 20 outlets chosen by Mr Nel was too slow and that there was an opportunity to extend the test market
and further illustrate use of the trade mark. This was to be done by a "tactical price promotion", echoing the
decision taken at the AME meeting. It identified a tactical price promotion in the Free State at "low price hot
spots" supplied from the Bloemfontein distribution centre. One of the goals was to provide a healthy retail
margin to ensure retailer buyin and offtake. It closed with the recommendation for the national deployment
of the brand "but tactical usage in low hot spots (clear strategic intent)". The Upington test market was to be
closed at the end of July.
[35] On 25 January 2008, at a Sales Operational Planning meeting the PARLIAMENT brand was discussed. Its
launch was said to have been successful, which accorded with the reports received by Mr Nel, and the
decision taken at the meeting was that:
"Viability of increasing the brand's distribution to be evaluated and a decision to be taken based on findings."