of a document in the days immediately preceding the commencement of the trial. I will deal with the change in
due course, but at this stage will consider the case as originally advanced by BATSA. The answering affidavit
was deposed to by Ms Heglund, who was at the time a marketing manager (Southern African markets) of
BATSA with responsibility for its portfolio of cigarette brands in the mid and low price ranges at the relevant
times.11 She said that, at the time of her affidavit in 2009, midprice cigarettes were priced at between R14
and R18 for a pack of 20 cigarettes. The low price range was between R10 and R14 for a similarsized pack.
BATSA faced particular issues in the low price segment of the market because of the presence of counterfeit
cigarettes and illicit cigarettes, that is, those that had been introduced into the market unlawfully without the
payment of excise duties. BATSA already held the three dominant brands in the midprice range, in the form of
ROYALS, EMBASSY and PRINCETON. But it had no brand in the low price sector of the market, where there
were some 20 brands of which, according to her, ASPEN and LD were the leading brands. In fact another
brand, VOYAGER, featured prominently in the evidence.
[11] Ms Heglund explained the introduction of the PARLIAMENT brand in the following terms:
"The PARLIAMENT cigarette brand has been positioned by BATSA as an important new brand in the Low price sector.
A key factor in the Value portfolio is pricing. It is imperative to set the pricing strategy correctly to compete properly
in the legitimate Mid and Low price sectors. The price must be low enough to be attractive to the consumer while, at
the same time, providing a meaningful margin to the retailer. BATSA has a separate Anti Illicit Trade (AIT) operation
which deals with the illicit cigarette market. While BATSA is well positioned in the Value portfolio (Mid price products)
with its brands ROYALS, EMBASSY, and PRINCETON, it would not be good practice to recategorise one of the existing
brands into the Low sector. Best practice is to introduce a new brand and PARLIAMENT was chosen for this purpose."
Page 395 of [2017] 2 All SA 389 (SCA)
[12] Ms Heglund described the initial launch of PARLIAMENT cigarettes in Upington and said that this was aimed at
gaining insights into and enhanced understanding of PARLIAMENT in the low price segment, in order to
develop "longterm sales and marketing strategy" for the brand. She explained that, after the initial launch,
sales of the brand were extended to the Bloemfontein and Welkom areas and, in August 2008, to Gauteng.
After referring to the fact that sales figures nationally were in the region of one million cigarettes, she
concluded as follows:
"Considering that the PARLIAMENT brand was only launched in January 2008, and has since then progressively been
introduced to the national market through targeted low price outlets, the objectives behind the Respondent's launch
strategy have been realised. The insights gained from this introductory period have contributed immensely to the
Respondent developing a commercially viable longterm strategy for the PARLIAMENT brand."
[13] A somewhat different picture was painted in a witness statement for the legal Counsel to companies in the
BATSA group, Mr Joubert. This statement was delivered during preparation for the trial, in terms of an order
that witness statements be exchanged between the parties. He explained in some detail that there was a
problem in South Africa with counterfeit and illicit cigarettes and that this problem had worsened between
2005 and 2008. According to his statement:
"The exploitation of the PARLIAMENT product was aimed at curbing this trend."
[14] Philip Morris' response to this was to deliver a witness statement by an employee, Ms Fleming, apparently on
the basis that she was an expert in the correct or normal approach to the launch of a new brand of cigarettes
in the market. In a detailed analysis of the discovered documents she expressed forthright criticism of Ms
Heglund's explanation in her answering affidavit concluding that:
" . . . this was not a genuine launch to further the legitimate commercial interests of the Respondent and to gain any
insight into the low price sector".
I have my doubts as to the admissibility of much of Ms Fleming's evidence, which appeared in many respects
to be an attempt to provide the court in advance with an outline of Counsel's argument and to answer the
very question that it was for the court to decide, but no point was made of this in argument and ultimately
there was virtually no reference to her evidence for the purposes of this appeal.
[15] Much of the crossexamination in the High Court, as well as the evidence lead by Philip Morris, was directed at
showing that these explanations for the launch of PARLIAMENT cigarettes were spurious and that the true
reason was to protect the trade marks and nothing more. Likewise the heads of argument in this Court
included an extensive analysis of the evidence with a view to demonstrating that these explanations could
not be truthful. The conclusion was that:
"Examination of the actual 'test' market for PARLIAMENT cigarettes reveals that the Appellant's stated objective was a
fiction and was in fact not carried out. The Appellant's very account of the launch is not bona fide as demonstrated
hereunder."
Page 396 of [2017] 2 All SA 389 (SCA)
A further analysis of the evidence with extracts from documents and oral testimony, attached as a schedule to
the heads of argument, pursued the same theme and concluded that:
" . . . as is evident from the above summary of the evidence presented in the matter, the only inference that can be
drawn is that BATSA's use of the PARLIAMENT trade mark was solely for the purposes of avoiding the trade mark
being cancelled on the basis of nonuse."
[16] Had the case rested on the original explanations by Ms Heglund and Mr Joubert, BATSA may well not have
discharged the onus that rested upon it of showing bona fide use of the marks. Those explanations were
inconsistent with BATSA's own documents and the concessions these two witnesses made under cross
examination in regard to them. In the absence of a plausible explanation for the launch of the PARLIAMENT