the second applicant.
Since 1967 the applicants have sold more than 434 064 Mercedes Benz vehicles in South Africa with a wholesale
value of R35 billion. All these vehicles have displayed the threepoint star trade mark. In addition these trade marks
have been extensively advertised and promoted. As a result the trademarks have become wellknown and are
probably a household name today.
The first applicant is the proprietor in South Africa of trade mark numbers 1048/38/6 and 64/4160 and 778/57/6
in respect of the threepoint star device and the words "Mercedes Benz". All are registered for goods in class 12
which includes motor vehicles.
The second applicant is a South African company. It is the wholly owned subsidiary of the first applicant and is
the first applicant's licensee in South Africa in respect of the aforementioned trade marks. The second applicant has
its head office in Pretoria but has its vehicle body and assembly plant for Mercedes Benz vehicles and the assembly
of car engines and axles at East London.
The respondent is a South African company which manufactures and distributes commercial vehicles including
buses under the trademark AMC. The respondent's principal place of business is at Edenvale, Gauteng. The
respondent has been conducting business since 1994.
The dispute in this matter arose in relation to the Department of Trade and Industries' (DTI) taxi recapitalisation
project and the proposals submitted by the second applicant and the respondent in response to the DTI's request
for proposals to prospective suppliers of 18seat and 35seat passenger vehicles for the taxi industry. Both the
second applicant and the respondent submitted proposals to the DTI for the supply of 18seat vehicles. Both the
second applicant and the respondent have been shortlisted for the manufacture and supply of the 18seat buses
to the taxi industry. Eventually three proposers will be selected to manufacture and supply the 18seater buses.
The DTI will make the final selection on 1 April 2000. The applicants and the respondent are therefore in direct
competition with each other in respect of the tender process, and will be, if successful in the tender process, in the
supply of vehicles to the market. Selection as a supplier of the vehicles will be of significant commercial importance
as large numbers of vehicles will be supplied.
Page 223 of [2001] 2 All SA 219 (T)
During late January 2000 the various proposers on the shortlist exhibited their proposed vehicles at an
exhibition staged at Kyalami. This was done in accordance with the proposal process for the purpose of evaluating
the proposals. The applicants exhibited a Mercedes Benz Sprinter 18seater bus and the respondent exhibited an
18seater bus bearing the trademark AMC, the "AMC" bus.
The applicants' representatives were concerned about the appearance of the AMC bus. They thought that it was
a modified Mercedes Benz Sprinter vehicle, or at least, that it had an external shape, design and general
appearance comprising the design of and been substantially identical to a Sprinter vehicle.
There are no photographs in the record depicting the applicants' Sprinter bus. The respondent's AMC bus is
depicted in two arrays of photographs, Annexure MB21(a) at page 114 to 116 of volume 1 of the record (which is
the applicants' founding affidavit and annexures and the notice of set down) and Annexure E at page 372 to 375 of
volume 2 of the record (which is respondent's answering affidavit and annexures).
The applicants immediately proceeded to address these concerns and sought legal advice about the legality or
lawfulness of the respondent's conduct. Having received advice from their South African attorneys, Adams & Adams,
and senior counsel that the respondent's vehicle was an infringement of their intellectual property rights they
instructed Adams & Adams to address a letter of demand to the respondent. That letter sent on 11 February 2000
set out the applicants' concerns about the AMC bus and requested inter alia that the respondent undertake never in
future to use, show, or display the vehicle for any commercial purpose whether in connection with the DTI tender or
otherwise or to make, sell, or offer for sale that vehicle or any other vehicle which would be in conflict with the
applicants' intellectual property rights.
On 14 February 2000 the respondent's attorney SalomonLipschitz replied to the letter of demand. Salomon
Lipshitz dealt with the applicant's concerns in the letter of demand and pointed out that the AMC bus was nothing
more than a prototype of the respondent's proposed vehicle. SalomonLipshitz said that they were instructed to
point out that the prototype displayed at the exhibition was just that and not the vehicle which ultimately will be
manufactured and sold should their client's proposal be accepted and will not necessarily be identical to that
prototype.
On 16 February 2000 Adams & Adams requested that Salomon Lipshitz give a specific and clear indication as to
whether the vehicle that would be manufactured by the respondent in due course would be the same as or similar
to the prototype ie whether the external design and appearance of the commercial vehicle manufactured and
marketed by the respondent would be the same as the prototype. On 17 February 2000 Salomon Lipshitz confirmed
that the final version of the eventual commercial bus to be manufactured and marketed by the respondent in
relation to the prototype had not yet been finalised.
This equivocation continued after the application was launched. In the respondent's answering affidavit Mr
Nicholls, the Managing Director of the respondent, says "It is important to note for the purposes of this application
that the outer appearance of the design of any AMC bus which will ultimately be made available to the public has
not yet been finalised. Insofar as the present application is founded on the applicant's concerns as to what may or
may not occur when the AMC buses are eventually made available to the public, it is premature."