HARMS JA
[1] This is a passingoff case and concerns the exclusive right to manufacture, market and sell reproductions of the
Lotus Seven Series III sports car. The appellant (the plaintiff, "Caterham") claims exclusivity for its product, the
Caterham Seven or Super Seven, and alleges that the Birkin Seven, the product of the first respondent (the first
defendant, "Birkin") is being passed off as that of Caterham's. Both these sports cars are replicas of this particular
Lotus model, a
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car with a classic and distinctive shape and appearance. (I use the term "replica" to mean a copy or reproduction
made by someone other than the original designer.) Even an expert finds it difficult to distinguish between these
three cars from a relatively short distance.
[2] The essence of Caterham's contention on appeal is that the use of the numeral Seven has become distinctive of
a sports car having the particular shape and external configuration of the Lotus Seven Series III and that the use of
a Seven in relation to a sports car having this shape and configuration serves to identify the car as emanating from
Caterham or its predecessor. Caterham, at the hearing of the appeal, abandoned any claim for damages and limited
the relief sought to an interdict restraining the respondents from manufacturing, marketing, selling and exporting
from South Africa a sports car having the said shape and configuration which uses upon or in relation thereto the
numeral Seven in either alphabetic or numeric form. There are no registered trade marks, designs or patents that
have a bearing on Caterham's rights. It is no longer argued that Birkin was guilty of the general delict of unfair
competition as set out in Schultz v Butt 1986 (3) SA 667 (A). More importantly, the application of the principles
concerning passingoff in relation to a getup shorn of a distinctive name do not form part of Caterham's case on
appeal (cf.WeberStephen Products Co v Alrite Engineering (Pty) Ltd and others 1992 (2) SA 489 (A); Reckitt & Colman
Products Limited v Borden Inc and others [1990] RPC 341 (HL)). The reasons will become apparent. Initially
Caterham's main claims related to copyright infringement. All the original claims were dismissed by the trial judge,
Howard JP, in the Durban and Coast Local Division. He refused leave to appeal on copyright but granted leave on
passingoff.
[3] For the background facts I rely heavily upon the judgment of Howard JP, and what follows is in part a quotation
from it. The Lotus Seven sports car was designed by the late Colin Chapman and developed, manufactured,
marketed and sold from about 1957 to 1972��by one or more companies in the Lotus group which Chapman
founded. Nothing turns on the structure of the Lotus group and I shall refer to these companies singly and
collectively as "Lotus". The Lotus Seven was
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designed as a relatively cheap sports car which would appeal to motor racing enthusiasts. Four models were
designed and built consecutively and they were identified as the Series I (1957), Series II (1960), Series III (1968)
and Series IV (1970) respectively. There is a suggestion that Chapman did not have a hand in the design of the last
model and that it was marketed somewhat against his will, but that is of no consequence. Of importance to this
case is the Series III.
[4] Caterham is a company incorporated and registered in England and it carries on business as a motor dealer
and manufacturer of sports cars at Caterham in Surrey. It became a distributor of Lotus cars in 1959 and the sole
distributor of Lotus Seven sports cars in the United Kingdom from about 1965. Lotus ceased manufacturing any car
in the Seven series in 1972, by which stage the version then in production was the IV. In terms of a written
agreement dated 28 February 1973 the plaintiff purchased from Lotus, inter alia,
"(i)
the exclusive right to manufacture, sell and distribute Lotus Seven Series IV cars (and subsequent series thereof) in
the United Kingdom and certain European countries;
(ii)
the right to manufacture, sell and distribute spare parts for Lotus cars of whatever series and the exclusive right to
describe itself as 'Lotus Seven Spares Distributor', and
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(iii)
the right to use the Lotus symbol in connection with the manufacture, sale and distribution of spare parts but not
otherwise."
(My underlining.)
[5] Pursuant to this agreement Caterham manufactured and sold about 30 Series IV cars. Thereafter it began
manufacturing the earlier Series III, using jigs, tools and drawings which it had received from Lotus, presumably for
the purpose of manufacturing spare parts for that model. Lotus acquiesced in the manufacture and sale of the
Series III cars and accepted payment of royalties in respect of them as though they had been manufactured
pursuant to the agreement. Since then Caterham has continued to manufacture the Series III, with modifications
and improvements from time to time, and to market and sell it as the Caterham Super Seven car. (The evidence is
not always consistent and reference is also made to the car as a Caterham Seven.) Subsequently, during the period
1985 to 1988, Lotus and Caterham entered into a number of agreements in which copyright and, more importantly
for purposes of this case, the alleged rights to goodwill and to the unregistered trade marks Seven, Super Seven
and Super 7 were assigned to Caterham. There was an initial assignment during 1985 relating to the UK and
Europe, but it was superseded in 1988 by an assignment of all the rights to and in these trade marks together with
the goodwill in the business of manufacturing and selling Lotus Seven cars in all countries in the world excepting
North America.