McDonald's. Also used is the letter M in the form of socalled golden arches, with or without the word McDonald's.
Others consist of the words Big Mac, Egg McMuffin and McMuffin. There are also two clown devices. The trade marks
are registered in respect of goods, mainly in classes 29 and 30, and for services in class 42.
When the present proceedings commenced, McDonald's had not traded in South Africa nor, we may assume for
present purposes, had it used any of its trade marks here.
Joburgers DriveInn Restaurant (Pty) Limited ("Joburgers") is a South African company with its principal place of
business in Johannesburg. Its managing director is Mr George Sombonos. Mr Sombonos has been engaged in the
fast food industry since 1968. In 1979 he registered a company called Golden Fried Chicken (Pty) Limited ("Chicken
Licken"). He holds 90% of the shares in the company and is its managing director. In 1979 Chicken Licken applied
for the registration of a number of trade marks, including Chicken Licken. Since then it has franchised the Chicken
Licken business so that today there are more than 177 stores throughout South Africa. Mr Sombonos says that
Chicken Licken is the biggest fried chicken fast food franchise chain in the world not having its origins in the United
States of America.
During 1992 Mr Sombonos on behalf of Joburgers decided to establish fast food outlets and restaurants using
the trade marks McDonald's, Big Mac and the golden arches design. In 1993 Mr Sombonos applied for the
registration of these and some other McDonald's marks. At the same time he applied to the Registrar of Trade Marks
in terms of section 36(1)(a) and (b) of the Trade Marks Act, no 62 of 1963 ("the old act") for the expungement of
the trade marks which are held by McDonald's. McDonald's opposed these applications and filed its counter
statements in the expungement applications during August 1993. During the same period McDonald's applied again
for the registration of all the trade marks in its name.
On 29 August 1993 there appeared an article in the Sunday Times newspaper reading inter alia as follows:
"Big Macs may soon be eaten all over South Africa, but not because American hamburger giant McDonald's is entering the
market. Nor will they be on sale before judgment in which could be SA's biggest trade mark battle.
Chicken Licken franchise owner George Sombonos plans to start his own national McDonald's hamburger chain. Sites have
been chosen and an advertising campaign is being prepared.
Mr Sombonos's lawyer Shaun Ryan of Ryans Attorneys, says the first restaurant will open in Johannesburg 'as soon as
physically possible'.
View Parallel Citation
The chain will serve McMuffins and Big Mac burgers. Restaurants will also be decorated with a large M device similar to two
joined arches."
In response to this article McDonald's wrote through its attorneys to Joburgers's attorney inter alia as follows:
"We are instructed that the intended use of McDonald's trade marks [which were listed in an annexure to the letter]
constitutes an infringement of our client's trade mark rights. Your client has unequivocally expressed a clear intention to use
such trade marks.
We have been instructed to demand as we hereby do that your client unequivocally undertake that it will not use our client's
registered trade marks or
Page 8 of [1996] 4 All SA 1 (A)
any other marks which are deceptively or confusingly similar to our client's registered trade marks."
Failing an undertaking as demanded in this letter McDonald's threatened legal proceedings.
Joburgers's reply was uncompromising. It read, inter alia,
"We are aware that your client is the Registrant for the trade marks listed in the Annexure to your letter. Your client is not
the Proprietor of these trade marks. The true proprietor of the subject matter of these registrations is Joburgers DriveInn
Restaurant (Pty) Limited. You may take it that it is our client's intention to both use and register its trade marks in the
Republic of South Africa ... Your client is invited to take legal proceedings as threatened."
On 23 September 1993 McDonald's launched an urgent application against Joburgers in the Transvaal Provincial
Division for relief on the grounds of infringement of its trade marks, passing off and unlawful competition. I shall
refer to this application as the Joburgers application. On 28 September 1993 Swart J granted an order by
agreement, the relevant part of which read as follows:
"The respondent undertakes pending the determination of this application and the proposed counterapplication, not to
infringe the applicant's registered trade marks ... which undertaking is made an order of court."
It came to Joburgers's notice that there was a fast food outlet in Durban trading under the name (or names) Asian
Dawn and MacDonalds. MacDonalds, it is pointed out in passing, is spelt differently from McDonald's. On 15 October
1993 Mrs AT Pead, a director of Joburgers, and Mr SF Ryan, Joburgers's attorney, travelled to Durban from
Johannesburg to buy the outlet. It is not quite clear from the papers who exactly owned the business but the
interested parties were a close corporation called Asian Dawn Investments CC, its sole member Miss Sajee Bibi
Farid Khan and her brother, Mr Rafique Khan. According to an affidavit by Mrs Pead she approached Mr Rafique Khan
in the shop and offered to buy it as a going concern. She said she wanted it for her son to encourage him not to
leave the country. (In fact she was acting for Joburgers and wanted to secure the trade mark for use in the present
proceedings.) Mr Khan was prepared to sell if the price was right, but first wanted to speak to his sister as, he said,
they were joint owners. Later he informed Mrs Pead that he had spoken to his sister and that they were willing to
sell the business as a going concern for R250 000. The Joburgers contingent were not happy with the price, but