National Brands had been selling its "Tennis" coconut biscuits since 1911 in distinctive white packaging with red and gold lettering. In July 1998, National Brands reverted to its pre-1990 package size of 140x60x60 mm (200g net weight). Some months before July 1998, Blue Lion commenced selling its "Tea Lovers" coconut biscuits in a package of the same size with strikingly similar get-up: lustrous white background, similar biscuit scatter on the right, red letters edged in gold, similar placement of brand names, and both commencing with an identically shaped red "T" and "e". The old Tea Lovers packaging had been completely different (mauve, blue and yellow leaves, different layout). A witness, Mrs Cassim, a qualified pharmacist and regular Tennis buyer, mistakenly purchased three Tea Lovers packets thinking they were Tennis biscuits. Blue Lion refused to disclose its design brief when challenged. The products were sometimes displayed side-by-side in supermarkets where even National Brands' manager had difficulty distinguishing misplaced packets.
The appeal was dismissed with costs, including costs for two counsel. The interdict granted by Southwood J in the court a quo was upheld, and its enforcement pending appeal was confirmed.
When assessing passing off by imitation of get-up, the court must consider the perspective of an average purchaser who has a general idea of what they seek but not exact recollection, may not see products side-by-side, will not be alerted to fine distinctions, and may be illiterate. While some copying is permissible, a party who copies escapes liability only if they make it "perfectly clear" to the public that the articles being sold are not the other manufacturer's products, such that there is no probability of deception of an ordinary purchaser. Evidence of fraudulent intent and deliberate imitation, while not essential elements of passing off, is highly relevant - if it is shown that a defendant deliberately sought to take advantage of plaintiff's goodwill, the court will not be astute to say he cannot succeed in doing what he is straining every nerve to do. Where substantial overall similarity exists in get-up (colours, arrangement, lettering) and the distinguishing word marks are themselves confusingly similar or rendered inconspicuous, passing off is established when combined with proof of reputation and likelihood of deception. Unlawful competition cannot be used as an alternative cause of action to create passing off with requirements less exacting than those required by common law.
Schutz JA made several obiter observations: (1) He lamented the unnecessary inflation of the record (720 pages) and heads of argument (57 pages) for what was essentially a matter of first impression comparing two wrappers, attributing this partly to the impermissible running of unlawful competition in tandem with passing off; (2) He expressed regret that the appellant did not seek a special costs order regarding the alternative unlawful competition claim; (3) He suggested that in the related Romany Creams case (which had been argued on trade mark infringement and decided against National Brands on 16 March 2001), passing off "might have been a better horse to ride than trade mark"; (4) He noted evidence of other alleged instances of Blue Lion passing off its EET-SUM-MOR shortbread and Lemon Creams as National Brands products, which could potentially constitute evidence of fraudulent design or system (such evidence being admissible under Hoffmann and Zeffertt), but declined to address these further as they might be subject to future litigation and had received only passing attention; (5) He observed that the restraints common law places on passing off actions (particularly the need to prove likelihood of deception and confusion) are important in preventing creation of impermissible monopolies.
This case is significant in South African passing off law for several reasons: (1) It reaffirms that unlawful competition cannot be used as an alternative basis to circumvent the stricter requirements of common law passing off, following Payen Components SA Ltd v Bovic CC; (2) It clarifies that fraudulent intent and deliberate imitation, while not essential elements of passing off, are highly relevant factors that courts will consider - where a defendant deliberately seeks to benefit from plaintiff's goodwill, courts will not be astute to find no passing off; (3) It demonstrates the application of the "average purchaser" test in the context of fast-moving consumer goods and impulse buying; (4) It confirms that adverse inferences may be drawn from refusal to disclose design briefs when fraud is alleged; (5) It illustrates that even single instances of actual confusion from credible witnesses carry significant evidentiary weight; (6) It reaffirms that while some copying is permissible, competitors must make it "perfectly clear" their products are not those of another manufacturer to avoid liability. The case provides important guidance on assessing overall get-up similarity beyond mere word mark differences.