with the Board? Did the business carried on by the appellant involve the selling of tickets for the National
Lottery which resulted in contraventions of sections 56 and 57 of the Lotteries Act 57 of 1997?
[2] The Board is the first respondent in the appeal. It was established in terms of section 2 of the Lotteries Act. It
is the registered proprietor under the provisions of the Trade Marks Act ("the Act") of the trade mark "Lotto"
which is registered without disclaimer in class 36 in respect of "services for and in connection with financial
transactions" and in class 41 in respect of "services for and in connection with lotteries", the respective
registration numbers being 1991/02702/1 and 1991/02702 and the date of registration in each case being 17
April 1991.1 The second respondent in the appeal,
Page 473 of [2009] 4 All SA 470 (SCA)
Uthingo Management (Pty) Ltd ("Uthingo") became the
View Parallel Citation
proprietor of the class 36 trade mark by assignment from the previous owner with effect from 9 September
1999 and on 11 February 2000 assigned its interest to the Board, becoming at the same time, by a written
agreement, a permitted user of the trade mark. Thereafter, lottery services were reclassified from class 36 to
class 41. The Board applied for and was granted an amendment to the specification of services to bring about
the present registrations.
[3] On 26 August 1999, Uthingo became the sole authorised licensee of the right to operate the National Lottery
by reason of an agreement which it concluded with the Government of the Republic, effective until 31 March
2007. Because the Minister of Trade and Industry is, by the terms of section 13 of the Lotteries Act,
empowered to issue only "one licence at one time", the rights afforded to Uthingo were exclusive to it.
[4] From 20 February 2000, Uthingo operated a game ("the Lotto game") as part of the National Lottery in terms
of its licence, using the registered trade mark.
[5] The appellant ("OnLine") was registered under the name Equistock Holdings 169 (Pty) Ltd on 14 February
2000. On 19 September of that year it changed its name by special resolution to LottoFun (Pty) Ltd.2 Its main
object was stated as "On line lotto services" but this was later changed to "electronic commerce and related
services". One of those services was initially intended to be the on line sale of tickets in the National Lottery
but the company was unable to obtain authorisation from the Board. In September 2001 the Board
complained to the registrar of companies against the use of the name LottoFun (Pty) Ltd. The registrar upheld
the objection and required the company to change it. Eventually, and ostensibly to avoid a protracted and
expensive dispute, the appellant made the change to its present name in March 2002. It has, however,
retained its trading name.
[6] Uthingo devised the Lotto game pursuant to section 14(2)(g) of the Lotteries Act. The game is played by
persons from all walks of life through the full spectrum of the South African population. During the period of its
contract Uthingo sold game tickets countrywide through a network of authorised retailers. The game could
also be played by subscription. In March 2004, Uthingo concluded an agreement with Newbucks Operations
(Pty) Ltd in terms of which that company was entitled to sell tickets for the Lotto game via its website
operation under the name and style of "Play Lotto with your ebucks".
[7] The Lotto game draw takes place on Wednesdays and Saturdays. In each draw seven balls are drawn
randomly from a machine containing 49 such balls numbered accordingly. The first six numbers drawn are the
main numbers and the seventh is the bonus number. A player marks his selected numbers manually on a
game board which forms part of a Lotto game entry coupon purchased from an authorised retailer who in turn
processes it and issues a ticket.
View Parallel Citation
[8] OnLine promoted its business as one through which tickets for the National Lottery could be ordered. It was
apparently successful in this
Page 474 of [2009] 4 All SA 470 (SCA)
venture. The Board, however, was of the opinion that the true nature of OnLine's activities was the
unauthorised sale of tickets for the National Lottery and that in doing so OnLine was infringing the Lotto
trade mark by advertising its business as Lottofun. Moreover, it believed that the business and services were
being conducted in a manner such as to create deception and confusion in the mind of the public between
those services and the services offered by the Board and Uthingo.
[9] The Board, therefore, commenced proceedings in June 2004 against OnLine. When its application was served
on Uthingo that company joined as an applicant. The relief which they sought in the notice of motion was for:
(a)
An interdict based on trade mark infringement under section 34(1)(a) of the Act of the trade marks
"Lotto" by the use of the mark Lottofun and ancillary relief.
(b)
An interdict based on passingoff by the use of the mark Lottofun.
(c)
An interdict based on unlawful conduct by the contravention of section 57(2)(c), 57(2)(f )(i), 57(2)(f )(ii)
and 57(2)(g) of the Lotteries Act.
(d)
An interdict based on unlawful competition based on the contravention of the mentioned provisions.