Herbal Zone (Pty) Ltd and others v Infitech Technologies (Pty) Ltd and others
[2017] 2 All SA 347 (SCA)
Division:
SUPREME COURT OF APPEAL
Date:
10 March 2017
Case No:
204/2016
Before:
A CACHALIA, BH MBHA, JB SHONGWE, MJD WALLIS JJA AND A
SCHIPPERS AJA
Sourced by:
Z KANKU
Summarised by:
DPC Harris
. Editor's Summary . Cases Referred to . Judgment .
[1] Delict Defamation Claim for interdict against future publication of defamatory matter Where accusation of
distribution of counterfeit goods was found to be justified, entitlement to interdict granted was not established.
[2] Intellectual property Passing off Passing off occurs when one entity represents, whether or not deliberately or
intentionally, that its business, goods or services are those of another entity, or are associated therewith, and is
established when there is a reasonable likelihood that members of the public in the marketplace looking for that type of
business, goods or services may be confused into believing that the business, goods or services of one business are
those of another Proof of passing off requires proof of reputation, misrepresentation and damage.
Editor's Summary
The second appellant was the sole shareholder of the first appellant ("Herbal Zone"). He became involved with a
Malaysian company ("Herbal Zone International") which manufactured capsules containing a root extract believed to
have aphrodisiacal properties that enhanced male sexual performance. He called the product in capsule form "Phyto
Andro". From 2009 until 2014 the first respondent ("Infitech"), was the sole distributor of Phyto Andro in South
Africa in terms of a distribution agreement concluded with Herbal Zone. Before the termination of that sole
distributorship, the third and fourth respondents, who were shareholders of Infitech, formed the second
respondent ("Herbs Oils"). Since 2014, Herbs Oils distributed a product in South Africa, also under the name "Phyto
Andro for Him", in competition with the product imported by Herbal Zone. Although neither Herbal Zone nor Herbs
Oils had secured registration of "Phyto Andro" as a trademark, the packaging that each uses for its own product
includes after the words "Phyto Andro" the standard symbol ® used to indicate such registration.
The appellants responded to the respondents' actions by publishing an advertisement stating that the product
sold by Infitech was a counterfeit product. Herbal Zone also instigated a search and seizure operation by the police
at the premises of Infitech and Herbs Oils.
Eventually, the respondents launched proceedings in the High Court seeking a number of interdicts against the
appellants. The latter counterapplied for an interdict restraining the respondents from marketing, selling,
advertising, promoting or presenting consumable herbal capsules using trademarks, labels or names including the
words Phyto Andro or packaging confusingly similar to that being used by Herbal Zone and its distributors. They
contended that Infitech and its associates were passing off their product as that of Herbal Zone. Some of the
interdicts sought by Infitech were granted on the basis that the
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statements made about Infitech and Herbs Oils in the advertisements and circular were defamatory. The counter
application was dismissed on the basis that Herbal Zone failed to discharge the onus of proving that the reputation
and goodwill attaching to Phyto Andro, as marketed in South Africa, vested in Herbal Zone, as opposed to Herbal
Zone International, which was not a party to the application.
On appeal against that decision, the primary issue was the passing off claim, and the defamation claim was the
secondary issue.
Held Passing off occurs when one entity represents, whether or not deliberately or intentionally, that its business,
goods or services are those of another entity, or are associated therewith. It is established when there is a
reasonable likelihood that members of the public in the marketplace looking for that type of business, goods or
services may be confused into believing that the business, goods or services of one business are those of another.
Proof of passing off requires proof of reputation, misrepresentation and damage.
The packaging of Herbs Oils' product used the same name, Phyto Andro, to describe the product and the
packaging was very similar. The name Phyto Andro was not descriptive of the product, but was an invented mark
attached to it. In calling their product Phyto Andro, there was plainly a representation to the public by the
respondents that when they bought Herbs Oils' product it was the product that enjoyed a reputation in South Africa
under that name. The crucial question then was whether Herbal Zone enjoyed the reputation attaching to Phyto
Andro in South Africa.
The Court dispensed summarily with Herbs Oils' claim that the reputation in the Phyto Andro mark vested in it.
Infitech's role in regard to the product sold under that mark was that of a distributor. It acquired that role in terms
of a distribution agreement that said that Herbal Zone was the owner of all rights, title, trademarks and logos in
respect of the product. Turning to Herbal Zone's claim that proprietorship in the mark and the reputation attaching