they be empowered to remove and destroy them, provided the respondents have not removed them within
the specified time. In this regard the second and third respondents are required to take all reasonable steps
to ensure that the first respondent complies with the terms of the order sought.
[5] The applicants further seek a declaratory order that the manufacture and distribution by the respondents of
the aforesaid Sovereign boats, in their present form and appearance, constitutes unfair competition with the
second applicant.
[6] Finally the applicants seek costs against the respondents jointly and severally, the one paying the other to be
absolved.
[7] The respondents deny passing off the boats of the first respondent as those of the second applicant and
likewise deny the allegations of unfair competition.
Factual background
Case for the applicants
[8] According to the first applicant he is the only shareholder in and director of the second applicant, a company
with limited liability trading as "Falcon Inflatables", being a reference to the rigid inflatable boats designed by
the first applicant and manufactured and distributed by the second applicant. The first respondent, in turn, is
a close corporation of which the second and third respondents are members. They have been joined as
respondents in that they are allegedly the "master brains" ("meesterbreine") behind the conduct ascribed to
the first respondent.
Page 387 of [2005] 2 All SA 382 (C)
[9] The first applicant has been involved with inflatable boat racing as a sport since 1982. He was in fact a
founder member of the South African Inflatable Boat Association of which he was, for a period of three years,
the technical officer. At that stage inflatable boats were either fully inflatable, as regards their hull (the major
portion below water) and pontoon (the major portion above water), or were partially inflatable in that the hull
was made substantially of glass fibre while the pontoon was inflatable. For this reason the latter were known
as "rigid inflatable boats" ("ribs"). All such inflatable boats were initially imported from abroad. The applicant,
however, began to modify them for use in peculiarly South African circumstances and, as from 1985,
commenced designing and manufacturing them from scratch. Over the next three years he produced
approximately five different designer models from which the presentday 575SR and 640SR Falcon models
developed. It was a complicated and timeconsuming process requiring considerable technical skill and
precision but eventually giving rise to a unique and exceptional product. More particularly the pontoons of the
Falcon boats were clearly distinguishable from those of similar boats in regard to their appearance, size,
positioning, design and quality.
[10] The first applicant averred further that the logo, distinguishing features and general aesthetic appearance of
the Falcon models have developed since 1993 to their present state as illustrated in annexed documentation.
The logo and decorative lining have, indeed, been applied in their present form, composition and colour since
2000, unless a particular client required a different colour scheme. In the process the boats have developed a
reputation, both in South Africa and in other countries where they are sold, as a product of outstanding
quality and a leader in its class. The "Falcon" trademark is currently in the process of registration.
[11] The second applicant is presently producing six different models of Falcon boats, including the 575SR and
640SR aforesaid. They have different functions but, according to the first applicant, they all boast an array of
special qualities, making them attractive to the South African and foreign market. The applicants do not
themselves market or distribute the boats. They make use of independent contractors, such as the first
respondent, to do so.
[12] The relationship between the applicants and respondents dates back to 1997 when the first respondent
commenced selling Falcon boats purchased from the second applicant. During the period up to 2002 it sold
some ninetyfive boats in Cape Town alone. This constituted a substantial proportion of the three hundred
and thirtytwo boats sold in the Western Cape and of the six hundred and six boats sold world wide during
such period. The sales were largely attributable to effective advertising, including a website on the worldwide
web, and successful participation and involvement in local motor boat races. In this regard the first applicant
averred that he and the respondents had, at the time they commenced marketing and selling Falcon boats,
concluded an oral agreement that provided expressly that the second applicant would place the necessary
advertisements relating to the sale of Falcon boats. All queries arising therefrom would be referred to the first
respondent, to which the second respondent would regularly make financial contributions.
Page 388 of [2005] 2 All SA 382 (C)
[13] Sales of the Falcon boats progressed so well that the respondents insisted that they be given the sole right
to distribute and sell the boats in Cape Town. The second applicant, represented by the first applicant, gave
the first respondent such right without determining a fixed period during which the sole right could be
exercised.
[14] The first applicant thereupon conveyed to the respondents all the technical aspects concerning the design
and construction of the boats. This information was confidential, having been acquired during years of
experimentation and the gleaning of practical experience. The respondents were hence understandably
conversant with the technical specifications of Falcon boats and the influence thereof on their handling, safety
and performance. This constituted information within the unique knowledge and skill of the first applicant and
contributed fundamentally to the reputation and goodwill of the boats in the trade. The potential purchaser,