and the trade marks would be also be known to many South Africans who had travelled abroad. The general level
of knowledge in South Africa about the operations of McDonald's was also demonstrated by the fact that
McDonald's had received 242 requests from South Africans between 1975 and 1993 to conclude franchising
agreements with it. The fact that Joburgers and Dax had gone to considerable trouble and expense to obtain
control over the McDonald's trade marks confirmed the reputation attaching thereto. There was also the evidence of
the managing director of a South African company which gave advice on franchises that he had received numerous
enquiries regarding McDonald's. The activities of McDonald's in other countries also received coverage in the South
African press.
There was also evidence of two market surveys regarding the awareness of the public of the name and trade
marks of McDonald's. Regarding the admissibility of this evidence, the Court held that even if such evidence was
hearsay, it should be admitted under one of the exceptions provided in section 3(1)(c) of the Law of Evidence
Amendment Act 45 of 1988. No substantial disadvantage flowed from admitting the market surveys and there was
no prejudice to the other parties. In any event, Joburgers and Dax had not seriously contended that the results of
the surveys were unreliable; their main contention was that the results had no probative value as being limited to
too small a universe (i.e. the class of persons tested). As the Court disagreed with this view, it held that the
evidence should have been admitted. The Court rejected the argument that the court a quo had exercised a
discretion in refusing to allow the evidence and that its decision in that regard could only be set aside if the Court
considered that such discretion was not judicially exercised; the Court held that a decision on the admissibility of
evidence was generally one of law, not discretion, and that it was entitled to overrule such a decision by a lower
court if it considered it to be wrong.
On the effect to be given to the evidence, the Court held that the approach of the court a quo to analyse each
item of evidence and to show that it, by itself, had little or no probative value was the wrong approach. The Court
held that it was dealing with circumstantial evidence and that it had to weigh the cumulative effect of all the
evidence.
The Court found that at least a substantial portion of persons who would be interested in the goods or services
provided by McDonald's knew its name which was also its principal trade mark; this mark was well known for the
purposes of section 35 of the new Act. The Court held that if the McDonald's mark was used as contemplated by
Joburgers and Dax in relation to the same type of fast food business as that conducted by McDonald's, it would
cause deception or confusion within the meaning of section 35(2) of the new Act.
Page 5 of [1996] 4 All SA 1 (A)
The Court dismissed the argument of Dax that its use of the mark MacDonalds in respect of its Durban business was
permitted by section 36(2) of the new Act in that Dax or its predecessor in title had made continuous and bona fide
use of the mark from the relevant date in the subsection. The Court held that bona fide use of a trade mark within
the meaning of section 36(2) was use for the purpose of distinguishing the goods or services provided under that
mark from the same kind of goods and services connected in the course of trade with any other person. In casu, the
Court found on the facts that Dax's predecessor in title, Joburgers, did not use the mark MacDonalds bona fide and
section 36(2) therefore did not provide any defence to McDonald's claim under section 35(3).
The Court concluded that the wellknown marks application should have succeeded in the court a quo, at least in
respect of the mark "McDonald's".
The Court held that it was not necessary to consider the applications for removal of the trade marks from the
register under section 36(1) of the old Act in view of the fact that the wellknown marks application had succeeded
in respect of the mark "McDonald's". Even if the applications succeeded, they would not benefit Joburgers or Dax as
they would still be interdicted from using the mark "McDonald's".
The Court held that it retained a general or residual discretion to refuse to remove a trade mark from the register
even where section 36(1)(a) or (b) was applicable. A party showing that it was entitled to relief under the section
would not be deprived of such relief by the exercise of a general discretion unless there were exceptional
circumstances. The Court found that the present circumstances were exceptional.
The Court held that while the Joburgers and the Dax applications had to be decided under the old Act, that Act
empowered the Court to refuse applications in the exercise of a general discretion; in deciding whether to exercise
that discretion, the Court had to have regard to all relevant facts and circumstances. In this case, it was a relevant
circumstance that it would serve no purpose to allow the applications because Joburgers and Dax were in any
event not entitled to use the relevant trade marks by reason of legislation other than the old Act (i.e. the new Act).
In making use of these circumstances, the Court was not deciding the removal applications according to any other
statute than the old Act, it was merely applying the principles of the old Act to the facts and circumstances relevant
to the exercise of its discretion.
The conclusion of the Court that the wellknown marks application ought to have succeeded in the court a quo
mean that the lower court had exercised its discretion in respect of the other applications on a basis that was
fundamentally wrong; the Court could therefore express its own views on whether those applications ought to
have been granted.
The appeals in all three matters were accordingly allowed with costs.
Notes
For Appeals, see LAWSA (Vol 3, paragraphs 396432)
For Evidence, see LAWSA Reissues (Vol 9)