Koni Multinational Brands (Pty) Ltd v Beiersdorf AG

Beiersdorf AG, a German multinational company, is the proprietor of the well-known NIVEA trademark since 1911, using a distinctive blue and white colour combination since 1925. In 2008, it re-launched its NIVEA MEN range with a blue, white and silver get-up. By December 2015, NIVEA MEN shower products held 49.8% of the male shower gel market and by September 2017, 58.5%. Koni Multinational Brands (Pty) Ltd, a South African company established in 2012, launched a women's product range in June 2014 and a men's range called "CONNIE MEN" in December 2015, including a shower gel. The product featured a blue container with a silver lid, a wave-styled label with the name "CONNIE" in white against a blue background with silver outline, green lettering for the word "ACTIVE", and a white splash-like device. In July 2017, Beiersdorf discovered Koni's product and in September 2017 sent a letter alleging passing-off. Koni denied the allegation. Beiersdorf then applied for an interdict in the Gauteng High Court.

• Whether Beiersdorf had established sufficient reputation in its NIVEA MEN get-up to support a passing-off claim
• Whether Beiersdorf retained residual reputation in its discontinued wave-label
• Whether Koni's CONNIE MEN shower gel was confusingly similar to Beiersdorf's NIVEA MEN products so as to constitute misrepresentation
• Whether there was a reasonable likelihood that members of the public would be confused or deceived into believing Koni's products were associated with Beiersdorf

1. The appeal was dismissed with costs, including the costs of two counsel where so employed. 2. The Registrar of the Supreme Court of Appeal was directed to forward a copy of the judgment to the Legal Practice Council, Pretoria, to investigate the circumstances in which Beiersdorf's attorneys (Mr Gerard du Plessis and Ms Elizabeth Serrurier) failed to disclose Ms Serrurier's association with the respondent's attorneys when filing an affidavit by her purportedly as a member of the public, both in the High Court and the Supreme Court of Appeal.

The binding legal principles established are: 1. To succeed in passing-off based on get-up, a claimant must prove: (a) reputation in the get-up such that the public associates it with the claimant's goods; (b) misrepresentation by the defendant through use of confusingly similar get-up; and (c) likelihood of damage. 2. Reputation in get-up must be proved at the date of the conduct complained of and may be inferred from extensive sales, marketing, market share, and consumer recognition. 3. A trader may retain residual reputation in discontinued elements of get-up where substantial goodwill has been established, provided the business continues and has not abandoned the goodwill. 4. Assessment of likelihood of confusion is a value judgment based on overall impression, considering how products are likely to be encountered in the marketplace, rather than by excessive analysis or side-by-side comparison. 5. The notional consumer is the average purchaser who relies on perception or recollection without the opportunity of direct comparison, particularly in the context of impulse purchases. 6. Where similarities in get-up are combined with appropriation of distinctive indicia associated with the claimant (even if discontinued), the inference may be drawn that the defendant designed its product to connect with the established brand, constituting misrepresentation.

Schippers JA made important obiter observations regarding: 1. The interrelationship between goodwill and reputation, citing Boppert's description of goodwill as "the attractive force which brings in custom" and noting that goodwill can only be enforced while the business exists (citing Star Industrial Co Ltd v Yap Kwee Kor). 2. The distinction between abandonment of goodwill (which extinguishes rights) and mere discontinuation of use while the business continues (which may preserve residual reputation). 3. Professional conduct of attorneys, emphasizing that attorneys must discharge their duties with "integrity, probity and complete trustworthiness" and that non-disclosure of a material fact (that an affidavit deponent was employed by the applicant's attorneys) prima facie falls below required standards. Makgoka JA's dissenting judgment contains extensive obiter on: 1. The distinction between reputation in a trademark and reputation in get-up, emphasizing the need to prove that visual elements of packaging have become distinctive specifically of the plaintiff's goods. 2. The principle that a certain measure of copying is permissible in competition law, and that adopting similar get-up does not automatically constitute passing-off if products are adequately distinguished. 3. The significance (or lack thereof) of actual confusion evidence, noting that absence of confusion over a lengthy period (almost three years) is material unless satisfactorily explained. 4. The need to balance a claimant's rights to protect commercial advantages against a competitor's right to attract purchasers without misrepresentation and consumers' rights to select between competing goods without being deceived.

This case is significant in South African passing-off law as it: 1. Clarifies the requirements for establishing reputation in product get-up (as distinct from trademarks) in the context of unlawful competition. 2. Affirms that reputation can be established through market dominance, extensive use, sales figures, and consumer recognition surveys. 3. Confirms that residual reputation can subsist in discontinued elements of get-up where there has been substantial goodwill built up, even after trademark registration lapses. 4. Emphasizes that in passing-off cases, the court must consider the overall impression created by the get-up rather than individual elements in isolation. 5. Recognizes that likelihood of confusion should be assessed from the perspective of the average consumer making impulse purchases, who relies on recollection rather than side-by-side comparison. 6. Illustrates the court's willingness to refer attorneys to the Legal Practice Council for professional misconduct where there is non-disclosure of material facts to the court.