Court may have differed with ads watchdog in soda saga

Date: Apr 3, 2012 | News


The recent dispute between Frankie’s and Woolworths over certain beverages placed on the market by Woolworths has highlighted the complexities of intellectual property, specifically the difficulty of protecting an idea or concept.
Published : Business Day, 2012-03-26​

 

After a complaint to the Advertising Standards Authority (ASA) by Frankie’s that it approached Woolworths to market its goods, but that Woolworths, allegedly, turned the request down, and instead reproduced its own versions of the products, the ASA ruled in favour of Frankie’s.
The ASA emphasised that it considered only the use by Woolworths of the phrase, “good old-fashioned”. It did not consider the copying of specific flavours, vintage flavours, labels or shapes.
It relied on clause 9 of its code, which determines that an advertiser should not copy an existing advertisement in a manner that is recognisable or clearly evokes the existing concept and which may result in the likely loss of potential advertising value.
The ASA rejected the idea that “old-fashioned” is in general use in relation to sodas. The evidence was accepted that Woolworths imitated Frankie’s advertising.
The question was asked why the particular concept was copied.
It was mentioned that Woolworths could not explain how it came up with the idea of using the words, “old-fashioned”.
The final conclusion was that Woolworths was involved in intentional copying.
The ruling indicates that the bar for protecting an idea is not very high.
An earlier case that supports the current ruling is the MTN case.
MTN lodged a complaint with the ASA against a Cell C advertisement featuring a gardener who strikes oil in a vegetable patch with a small garden trowel and immediately uses her cellphone to telephone someone to tell that person of her good fortune.
MTN had a series of advertisements which “exhibited a distinctive emotive theme, namely that all strongly felt personal moments/experiences of an idiosyncratic nature, or out of the ordinary” events should be communicated via its network.
An example is a lone man on a golf course, who achieves a hole in one.
He looks around but there is nobody around to share the news with, and the suggestion is that he should use his cellphone to contact someone on the MTN network.
The MTN idea, which is of a relatively rudimentary nature having regard to cellular telephone services, was nevertheless held to qualify for protection in terms of clause 9. The Frankie’s case was in line with this ruling.
An interesting question is why Frankie’s did not approach the high court.
An application brought to the high court would no doubt have been based on the grounds of unlawful competition and/or passing off.
Unlawful competition might relate to the circumstances in which the adoption of Frankie’s concept was said to have taken place, as speculated in the media.
Our courts have, on occasion, looked at broader “moral” issues, such as in the well-known Bress Designs case, in which a businessman expressed the desire to destroy a rival by copying a lounge suite.
The court held that, although the copying of the products as such was legal, the motive of the one party coloured the conduct unlawful.
In the Woolworths matter, it was not alleged that Woolworths had such a motive and it is clearly not plausible.
However, the principle of a “broad” perspective is illustrated.
On the other hand, in the Carling decision, it was said that there must inevitably be manoeuvres, sometimes skilfully conducted, to steal the march on a competitor.
This is, however, permitted as it is part and parcel of our free-trade policy.
The Carling decision involved the pre-emption of a competitor’s marketing campaign. In this case, a beer named Colt 45 was intended to be marketed in S A and promotional materials were prepared, strategic studies were done, and a short trial run was conducted.
About a week before the launch of the beer by the appellants, however, the respondent advertised its intention to market a product to be called Stallion 54.
Advertisements were placed in various newspapers and the product was available at certain liquor stores. The Colt 45 product was not yet available.
Applying this to the Woolworths scenario, it appears that unlawful competition could have been a difficult cause of action on which to peg relief.
With regard to passing off, the visual impact of both products is very different. Frankie’s soda products are colourful and very distinctive whereas, in contrast, Woolworths’s products are more plain, with only basic product information displayed.
In addition, the trademark, Woolworths, appears, of course, on its products, thereby helping to further distinguish the products.
This leaves the copying of the product descriptors.
The question is whether there is a likelihood of confusion arising from the use of a word suggesting an “old-style” product, combined with a descriptive word.
In other words, for example, “Olde Soft Drink Co — Cinnamon Cola — The Taste of Yesteryear” versus “Good Old-Fashioned — Cinnamon Cola”.
In relation to the parties’ ginger beer products, the use of the word “fiery” by both is fairly unusual, but still has to be read in the above context of other material being used alongside it.
Here, the unlawful competition case involving Sea Harvest might be relevant. This matter related to the use of the words “prime cut” in relation to frozen-fish products.
The court held that a “long line of decisions in passing-off and trademark cases has established that where descriptive words, as opposed to invented or fancy words, are used in a trade name or trademark, the courts will not easily find that such words have become distinctive of the business or products of the person using them, and will not give what amounts to a monopoly in such words to one trader at the expense of others”. This line of thinking would have counted in favour of Woolworths.
In summary, it is trite that copyright law does not protect ideas unless they are in a material form.
The registration of a patent is really the only way in which an idea can be protected in terms of conventional legal rules.
However, the ASA code does protect ideas. The principle that the ASA seems to follow is that of not requiring a high degree of inventiveness in order to allow protection. The Frankie’s ruling underlines this. This is in stark contrast to what might have happened in a civil matter in the high court.
Rumours abound about the continued existence of the ASA.
Is there an overlap with the Consumer Protection Act?
It is suggested that a consumer body in a governmental structure would have been hard pressed to deliver this ruling in a relatively short period of time.
One can only hope the ASA will flourish, and dispense “good old-fashioned” advertising justice.
  • Scott is Director, Intellectual Property at Edward Nathan Sonnenbergs. Alberts is Special Intellectual Property Counsel to Edward Nathan Sonnenbergs and Professor of Law at the University of Johannesburg.
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