Shoprite Checkers vs Pick n Pay: A whole herd of horses from the same stable?

Authors

Lana Giliomee
A trade mark attorney with a degree in commerce.
Hugo Prinsloo
A qualified trade mark and copyright attorney with a wide range of experience in trade marks, cop...

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18 November 2023

Typically, in the context of fast moving consumer goods, passing-off judgements deal with a single product-to-product comparison, which is why the recent judgement handed down in Shoprite Checkers (Pty) Ltd v Pick ‘n Pay Retailers (Pty) Ltd by Acting Judge President Goliath AJP in the Western Cape High Court, and in which Von Seidels acted for Shoprite Checkers (Pty) Ltd (“the Applicant” / “Checkers”), is particularly noteworthy. In casu, the Court dealt with passing-off in respect of an entire range of products.

The product lines in question, and related marketing, were ultimately found to be so similar that they are likely to be perceived by the ordinary consumer as a proverbial herd of horses, emanating from the same stable.

Consequently, Pick n Pay has been interdicted from passing-off its Crafted Collection products as those of Checkers (more particularly, its Forage and Feast range).

In times where intellectual property practitioners in South Africa have started finding it extremely difficult to gauge how any particular court / tribunal may choose to apply the law to the facts of a particular matter, Goliath AJP’s well-reasoned and decisive judgement, bolstered by recent case law, provides useful guidance.

After providing a brief background, we will discuss some of the key takeaways from Goliath AJP’s judgement.

Background

In November 2020, Checkers launched its Forage and Feast luxury range of products, which placed an emphasis on high-quality ingredients, responsible sourcing and seasonality.

Around a year later, in 2021, Pick n Pay launched its Crafted Collection premium and exclusive product range.

The marked similarities between the get-ups of these ranges (depicted below) led to this dispute:

Shoprite Checkers vs Pick n Pay: A whole herd of horses from the same stable?

As Goliath AJP’s judgement notes, Pick n Pay’s Crafted Collection range was launched after an extensive brand development process through its design and branding service provider (Daymon Design and Branding “Daymon”). Significantly, Pick n Pay noted in its design brief that Checkers had recently launched its Forage and Feast range, and that Pick n Pay was compelled to stay away from the dark blue colour or design elements that have been used by Checkers.

Looking at the photograph above, it is evident that Pick n Pay’s design direction changed materially at some point.

The judgement also notes that Checkers’ Forage and Feast range formed part of Daymon’s research and benchmarking process in conceptualising the Crafted Collection range and concludes this “incontrovertibly points in one direction, namely, that the Crafted Collection range could not have been conceptualised based purely on market trends, but appears to be a calculated imitation.

This finding calls to mind the comments by Schutz JA in Blue Lion Manufacturing (Pty) Ltd v National Brands Ltd[1] in which he stated “the fact that a participant in a market chooses to imitate his competitor’s get-up and then seeks to maintain this imitation, suggests that he believes and has had confirmation of his belief that imitation confers on him some advantage that an original get-up would not” and that “while it is perfectly true that in the end the question is whether there is passing-off, an allegation of fraud is not so lightly flicked aside […] the question why the defendant chose to adopt a particular name or get up is always highly relevant. It is a question which falls to be asked and answered […] if it is shown that the defendant deliberately sought to take the benefit of the plaintiff’s goodwill for himself, the Court will not be astute to say that he cannot succeed in doing that which he is straining every nerve to do[2].

Passing-off

Passing-off protects against deception or confusion arising from a misrepresentation by another trader concerning a trade source or business connection of the latter trader’s goods.

As quoted in the judgement, passing-off was conveniently defined as follows in the case of Capital Estate and General Agencies (Pty) Ltd and Others v Holiday Inns Inc and Others[3]:

“The wrong known as passing-off consists in representation by one person that his business (or merchandise, as the case may be) is that of another, or that it is associated with that of another, and, in order to determine whether representation amounts to passing off, one enquires whether there is reasonable likelihood that members of the public may be confused into believing that the business of the one is, or is connected with, that of another.

Goliath AJP’s judgement clarifies the following aspects of our common law in relation to the action of passing-off.

Product ranges

As mentioned at the outset, a passing-off enquiry typically involves a single product-to-product comparison which is not reduced to a comparison between principal brand names or trade marks, but which requires an assessment of the get-ups of two products in their entireties, including the way in which the products are marketed to the public.

The present matter considered passing-off in the context of a larger product range and Goliath AJP held, in this regard, that:

While it is accurate to say that not every item in the Crafted Collection range resembles an item in the Forage and Feast line, a significant proportion of the items possess a comparable visual and tactile experience, rendering them nearly indistinguishable from the Forage and Feast line”.[4]

The judgement therefore shows that an enquiry into passing-off can be broad enough to take an entire range of products into account, where contextually appropriate.

The parties’ products are sold exclusively in their respective stores only – does this make a difference?

In summary, no.

It was found here that it is normal for retailers to stock product ranges from third-party suppliers and, as such, there is a reasonable inference to be made by consumers that the two product ranges could have emanated from the same manufacturer or source.

In arriving at the conclusion that “consumers are likely to mistake the two product lines for horses from the same stable, with the sole distinction being the retailer from which they purchase the merchandise”, Goliath AJP made the following remarks in comparing the parties’ respective product ranges[5]:

“The products in respect of which the marks pertain are identical or comparable. Both product lines are competing ranges in the same premium and luxury consumable market. It is evident that the get-ups are visually, and conceptually similar. A cursory look at the respective products reveals that the visual similarities between the get-ups are remarkable. The colour combination of navy blue and gold is being used in similar proportions. The packaging and bottling of the products are identical. The artistic layout of the products is also remarkably similar. Both products labels display the dominant use of the navy background, the use of white and gold fonts in the descriptors, and the suspiciously similar placement of the images of the ingredients. The similarities in the get-up incorporate the same basic identical, fundamental elements. Having regard to the degree of similarity, the respondent’s inconspicuous Pick n Pay logo renders the common elements in the get-ups more prominent. Complicating the perplexing resemblance is the lack of the Checkers label appearing on the “Forest and Feast” products.”

This judgement therefore follows the reasoning of the Supreme Court of Appeal in Adidas AG & Another v Pepkor Retail Ltd, where the Court also, in the context of consumer goods, found that markets are not divided into watertight compartments.[6]

Beware – artificial dissection of get-up is not permissible

As reputation is the cornerstone of a successful case for passing-off, counter-arguments in these matters are often aimed at the individual components of the get-up which are, so the argument goes, not independently distinctive or unique enough to fulfil a source-denoting function, i.e. that consumers do not associate these individual elements exclusively with the proprietor claiming the reputation.

These counter-arguments need to be approached with caution and need to be borne out by the facts and the evidence advanced.

The relevant assessment requires an evaluation of the respective get-ups in their entirety – contrived and artificial dissections thereof are impermissible as Goliath AJP found when she stated the following:

“The manner in which the Respondent dissected the overall get-up of the Forage and Feast range is artificial and contrary to the well-established test to be applied in matters of this nature.”[7]

Furthermore, and to the same point, the judgement illustrates that use of completely dissimilar primary trade marks or brand names (i.e. FORAGE AND FEAST and CRAFTED COLLECTION) do not necessarily save a rival from a finding of passing off where there are overwhelmingly similar elements on the overall packaging that could lead to an association, in the minds of consumers, between the respective products.

This is in line with the same Court’s decision in the matter of Sea Harvest Corporation (Pty) Ltd v Irvin & Johnson Ltd and another[8], where it found that there was a reasonable likelihood that members of the public would be confused with respect to the I&J and SEA HARVEST products depicted below (despite the presence of entirely dissimilar primary trade marks):

Shoprite Checkers vs Pick n Pay: A whole herd of horses from the same stable?

This is also in line with Beshe J’s reasoning in a full bench appeal in the Eastern Cape High Court in the matter between Swartkops Seas Salt (Pty) Ltd v Cerebos Ltd[9],  that peering too closely at the rival products is not permissible in determining whether the products are confusingly similar. The get-ups considered in this particular matter also featured completely dissimilar primary trade marks, namely MARINA vs BUFFALO.

Conclusion

As we know, the basis of any claim for passing-off is reputation.

Proving a protectable reputation in a particular get-up may be challenging as the evidentiary burden is high. As held in Reckitt and Colman SA (Pty) Ltd v SC Johnson & Son (SA) (Pty) Ltd[10] the present judgement reaffirms that reputation can be inferred with reference to extensive sales and marketing and strong market presence.

This judgement has shown that passing-off remains a robust remedy to protect against improper misrepresentations by rival traders and resultant damage that this could cause.

The enquiry into passing-off should be holistic, take the products into account as they would be perceived by ordinary consumers, and get-ups should not be artificially dissected unless the facts and evidence advanced render it appropriate to do. It matters little whether primary trade marks are dissimilar, when the remaining features making up the respective get-ups / packaging share a remarkable resemblance, as Goliath AJP puts it.

If your product can be perceived by consumers as a horse (or, like we had in this matter, a herd of horses), from another’s stable, it’s best to think twice before you saddle-up.

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