Mercury Fittings (Pty) Ltd and Another v Doormax (Pty) Ltd and Another

The deceased (Mr Andrew Osborne-Young) and Mr Martin Humphries established a joint venture in 2002 to import and distribute 'QS' branded door handles and ironmongery goods in South Africa. They conducted business through their respective entities: the first applicant, Mercury Fittings (Pty) Ltd (formerly Mercury Fittings CC), and the second respondent, Doorware CC. The JV operated on a geographic split: Mercury had exclusive rights to sell 'QS' products in the Northern, Western and Eastern Cape, while Doorware had exclusive rights in the rest of South Africa. The JV operated successfully for over 22 years. After the deceased passed away in July 2021, his widow, Ms Charmaine Osborne-Young (second applicant), stepped in. Mr Mark Engel, a former general manager of Mercury for 17 years, resigned and took employment with Doorware in Johannesburg. In late 2022/early 2023, Doorware established premises in Cape Town, contravening the geographic split. Mercury obtained an interdict from the South Gauteng Division enforcing the geographic split. On 1 May 2023, Doorware sold its Cape Town business to the first respondent, Doormax (Pty) Ltd. Mr Engel now works for Doormax. Doormax began importing and distributing 'QS' products directly from China, without the consent of Mercury or Ms Osborne-Young. Doormax refused to provide an undertaking to cease and desist.

• Whether Doormax has standing to refer the joint venture agreement to the Competition Tribunal on the basis that it constitutes cartel conduct under section 4 of the Competition Act 89 of 1998.
• Whether the 'QS' brand constitutes a common law trademark forming part of the goodwill of Mercury's business.
• Whether Doormax's importation and distribution of 'QS' products without Mercury's consent amounts to unlawful competition.
• Whether the requirements for a final interdict are satisfied: (a) clear right; (b) injury committed or reasonably apprehended; (c) absence of any other satisfactory remedy.

The court granted a final interdict restraining Doormax from importing, distributing, offering to sell, making available to sell, supplying or otherwise dealing with any product in the 'QS' product range or bearing the 'QS' branding without the written consent of the first applicant (Mercury) or alternatively the second applicant (Ms Osborne-Young). Doormax was ordered to pay costs on party and party Scale C, including the costs of two counsel. No costs order was made against the second respondent (Doorware).

1. Where a mark has been adopted and used by parties to the extent that it has gained a reputation indicating that goods belong to them, a common law trademark is established and forms part of the goodwill of the business, giving rise to a protectable right. 2. A person who is not a party to a contract cannot rely on the terms of that contract, nor does such a person have standing to challenge the contract's validity. 3. The unauthorised use of a common law trademark by a third party constitutes a wrongful interference with business goodwill, amounting to unlawful competition and justifying final interdictory relief where no other suitable remedy is available.

The court noted that Mr Engel, who was employed at Mercury for 17 years and learned about the business from the deceased, subsequently went to work for Doorware and is now at Doormax importing and distributing 'QS' Products from China in the Western Cape. The court observed that this 'in a way, adds to the unlawful competition angle' but noted that this issue was not pursued with any vigour by the applicant.

This case is significant in South African intellectual property and unlawful competition law as it clarifies the protection of common law (unregistered) trademarks and the associated goodwill. The judgment confirms that entities trading under a brand for an extended period develop their own protectable rights and goodwill in the mark, distinct from any underlying license arrangements with the original originators of the mark. It also provides guidance on the interplay between unlawful competition claims and the Competition Act, holding that a party who is not privy to an agreement cannot invoke the Competition Act as a shield. The case further illustrates the application of the Plascon-Evans rule in the context of common law trademark disputes and demonstrates how final interdictory relief is available to protect unregistered trademark rights where the requirements of a clear right, actual or apprehended injury, and absence of an alternative remedy are met.