F W WOOLWORTH & CO (ZIMBABWE) (PVT) LTD V THE W STORE & ANOR 1998 (2) ZLR 402 (S)

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F W WOOLWORTH & CO (ZIMBABWE) (PVT) LTD v THE W STORE & ANOR 1998 (2) ZLR 402 (S)

Flynote

Delict — passing off — requirements c - proof of reputation — mere use of famous name not enough — user of name must establish that it has acquired business reputation that is associated with that name — proof of misrepresentation — whether reasonable probability exists that members of public will be deceived

Headnote

The appellant company was originally incorporated in this country in 1956. It was owned by Woolworth International Ltd, a British company, and associated with the similarly named British company. It had the right to use the name of F W Woolworth, the name of the person who started the original chain of stores. The company was bought from its previous owners in 1987 by a coalition of three companies. One of the conditions of sale was that the new owners acquired not only the right to the exclusive use of the name of F W Woolworth, but also an obligation to ensure that the name was not used wrongfully by others. In 1991, the holding of the entire coalition was acquired by one family. The company had 4 branches, three in Harare and one in Bulawayo.

In South Africa, there is a chain of stores known as Woolworths, operated by Woolworths (Pty) Ltd, a company incorporated in 1931. It is associated with the British retailer Marks and Spencer and is a member of the Wooltru group of companies. It has shops in several other African countries and in the Gulf. It wished to open a store in Zimbabwe and sought an agreement with the appellant regarding the use of the company name. No agreement could be reached, so the decision was made to trade under the title of "The W Store". A new store was opened in a prestigious shopping complex on the outskirts of Harare. Advertising material was distributed which brought about a clear association between the name and brand "Woolworths" and the W Store.

The W Store is a spacious and well-appointed shop, which sells expensive and good quality merchandise, every item of which is exclusive to the Wooltru group. All the goods carry a label with a trade mark "The W Store". Every garment bears a label with the name "Woolworths" and a logogram on it. The price tags and till slips are printed with the name "The W Store". Every article carries a disclaimer, stating that there is no connection with the Woolworths companies of Zimbabwe. Similar disclaimers are displayed prominently at the entrances.

The appellant's shops, on the other hand, are shabby and down-at-heel in appearance and give a general impression of neglect. There is no single house brand of clothing; and only a small proportion of the goods for sale have a "Woolworths" label.

Both parties had a logogram. That of the appellant was a stylised curve reminiscent of a W, while the respondent's was a capital W, formed of two interlinked Vs.

The appellant sought an interdict, on the grounds of passing off, restraining the respondent from opening and using the appellant's name, trade-mark, logogram or get-up; from using the name Woolworths; and from selling goods with the trade mark Woolworths. The High Court rejected the application. On appeal:

Held, that the purpose of the action for passing off is to protect a business against misrepresentation by the defendant that his business, goods or services is that of the plaintiff or associated therewith. This delict is only committed in relation to a business that has acquired goodwill. Goodwill is the totality of attributes that lure or entice clients or potential clients to support a particular business. As passing off harms the reputational element of goodwill, the plaintiff must prove that he has acquired a business reputation associated with his business name. The plaintiff must also prove that the defendant misrepresented his business, goods or services as being those of the plaintiff or associated therewith. In order to do this, he must establish that there was a reasonable probability of members of the public being deceived or confused into believing that the defendant's business was that of the plaintiff. In this regard factors such as the nature of the businesses, how they operate and the localities in which they operate will be taken into account.

Held, further, that the court a quo had been correct in holding that the appellant had failed to prove that the delict of passing off had been committed.

Held, further, that the court a quo had correctly found that although the appellant had been trading in the name of a famous international company for some time, it had not proved that it had acquired a reputation in that name, in the sense that its name attracted customers or that it had an established clientele. On the contrary, it seemed only to have a passing trade rather than a secure customer base. The lower court had also correctly found that the appellant had failed to establish that it had acquired a reputation by the use of certain marks.

Held, further, that the court a quo had also correctly concluded that in the circumstances of this case the appellant had failed to prove that there was a reasonable likelihood that members of the public would be deceived or confused into believing that the goods of the respondent were those of the appellant. There was no likelihood of ordinary members of the public being deceived or confused, as the two businesses were radically different in character.