and Second Respondents from utilising the name "Nino" or any derivative thereof as a trading name or in order to
describe any restaurant, coffee shop or similar business conducted by them within 40 kilometres of the centre of the
city of Cape Town. The basis of the action was that the operation of Nino's Cavendish Square and Nino's Internet
Café amounted to passingoff and unlawful competition. The Applicant initially sought an interim interdict pending
the institution of an action wherein a final interdict was to be sought and pending an application to be instituted by
the Applicant with the Registrar of Trade Marks for the registration of the trade name "Nino's" in the Western Cape.
On 6 August 1997 the First Respondent brought an application ("the second application") as a matter of urgency
for an interim interdict, pending the final determination of this application, interdicting and restraining the Applicant
from infringing the first Applicant's trade mark by using the trade mark "Nino" in Camps Bay.
Held The first application: The alleged passing off
The Applicant had sought a final interdict. In order to succeed, the Applicant had to prove: (i) a clear right that
had been infringed; (ii) an injury actually committed or reasonably apprehended; and (iii) the absence of any other
adequate remedy. The Applicant's interdict was based on the contention that the Respondent's conduct amounted
to a wrongful passingoff.
In terms of the case law the test for passing off was whether there was a reasonable likelihood that ordinary
members of the public may be confused or deceived into believing that the business of the alleged wrongdoer was
connected to that of the aggrieved party. The Court held that passingoff was a form of wrongful competition. It is
unlawful because it results or is calculated to result in the improper filching of another's trade, an improper
infringement of his goodwill and/or because it may cause injury to that other's trade reputation. In casu the fact
that the First Respondent was the proprietor of the trade mark did not in itself provide a defence to a passingoff
action.
In order to succeed with a claim based on an unlawful passingoff the Applicant had to establish that: (i) It had
acquired a reputation or goodwill in the sense that the name, getup or mark used by it had become distinctive of
the goods or services by virtue of the fact that the public associates the name, getup or mark with the goods or
services supplied; (ii) that the First Respondent was by the name, getup or mark used by him, expressly or
impliedly, misleading the public into thinking, that the goods or services are those of the Applicant or that there is
an association between them; and (iii) such conduct resulted, or was calculated to result in damage to the Applicant
as a consequence of the infringement of his goodwill, reputation or trade. In casu the Applicant accepted that the
First Respondent did have an established reputation and goodwill but disputed that this extended to Cape Town
and its neighbouring suburbs.
The sale of the Braamfontein Nino's Coffee and Sandwich Bar and its consequences
In terms of the written contract of sale the business was defined as a business conducted as a going concern
under the name of Nino's Coffee and Sandwich Bar, and it included, inter alia, the goodwill and the name thereof.
What was sold therefore was the business, goodwill and name. Goodwill is an incorporeal movable property and is
capable of being sold.
The legal position with regard to the sale of the goodwill and name of a business is clear. In the absence of any
term to the contrary a sale and transfer of goodwill confers upon the transferee the exclusive right to carry on the
business transferred and the exclusive right to represent himself as carrying on such
Page 530 of [1998] 3 All SA 527 (C)
business. It also confers upon him the exclusive right to use the name under which the business had been
conducted. In the present case both the goodwill and the name itself were sold and there was no term in the
contract of sale which reserved to the seller the right to continue to use the name. The seller was, in the absence of
a contractual restraint to the contrary, entitled lawfully to compete in the same business as the purchaser under a
name other than the one that he has disposed of.
The effect of the sale by Zanasi to Korkorris was to confer upon the latter the exclusive right to carry on the
business and to use the name Nino's Coffee and Sandwich Bar.
The Respondents' use of the name Nino was lawful. In the circumstances the conduct of the Respondents did not
amount to an unlawful passingoff, even though there may have been some confusion between the businesses in
the eyes of the public. The Respondents were also not competing with the Applicant unlawfully. The Court held that
a further reason for the failure of the first application was that the Applicant had not established that the
Respondents' conduct had resulted or was likely to result in any harm to it. With respect to the Applicant's
contention that the public had confused the Respondents' businesses with that of the Applicant, the Court held that
confusion per se does not give rise to an action for passing off. In the circumstances the Applicant had failed to
establish actual harm or a reasonable apprehension thereof which justifies the grant of a final interdict.
The second application: the alleged trade mark infringement
The First Respondent was, subsequent its acquisition of the coffee shop from the Applicant, the proprietor in
South Africa of a registered trade mark in respect of Nino's Italian Coffee and Sandwich Bar.
The Applicant had been aware that the First Respondent was the proprietor of the trade mark when it instituted
the first application on 30 May 1997 and when it opened Nino Camps Bay on 6 August 1997.
The Trade Marks Act 194 of 1993 ("the Act") does not expressly provide that a registered proprietor of a trade
mark is entitled to the exclusive use of the mark. Section 34 of the Act sets out the circumstances in which the rights