GALA Gazette: LIP-SMACKING RULING BY SOUTH AFRICA’S ADVERTISING STANDARDS AUTHORITY

EUROPE, MIDDLE EAST & AFRICA: SOUTH AFRICA

LIP-SMACKING RULING BY SOUTH AFRICA’S ADVERTISING STANDARDS AUTHORITY
Authors: Kelly Thompson & Lindie Serrurier, Adams & Adams

On 16 July 2007 the Final Appeal Committee of the South African Advertising Standards Authority handed down a lip-smacking ruling in the matter between Carma Laboratories Inc. (the Complainant) and Avid Brands SA (Pty) Ltd (the Respondent) which makes it clear that South African businesses should be wary of copying the advertising of internationally sold products.

The dispute concerned the packaging of the Respondent’s LIPSANO lip balm product, which the Complainant alleged was marketed in packaging so similar to that of its own that it would be likely to deceive or confuse substantial numbers of consumers into believing that it was the Complainant’s product or that there was some form of connection with the Complainant’s product. The Complainant relied on Clauses 8 (exploitation of advertising goodwill) and 9 (imitation) of Section II of the ASA Code of Advertising Practice.

The Complainant has sold its CARMEX lip balm product since 1937. The product is currently sold in a yellow and white container, and has been since 1973. It has marketed and advertised its product in this packaging extensively throughout the world over the years and, in 2005 alone, it spent R3.5 million in promoting its CARMEX product.

The Complainant’s product was launched in South Africa in April 2004 in a white jar with a yellow screw top with black print on the lid. In addition, promotional and point-of-sale advertising contains the trade mark CARMEX in red and white. It was not disputed that the Complainant enjoys an enormous reputation and goodwill around the world in its product, packaging and label.

The Respondent sells its lip balm product in South Africa under the name LIPSANO, also in a white jar with a yellow screw-on lid. The product packaging has exactly the same dimensions and proportions as the jar in which the Complainant’s CARMEX product is sold and the LIPSANO trade mark and other descriptive matter appear on the lid in black script. The sleeve in which the Respondent’s product is sold, in other words the point of sale material, features the colour red.

The Final Appeal Committee quickly disposed of the complaint under Clause 8 (exploitation of advertising goodwill), finding that confusion would be unlikely, as the price of the LIPSANO product is greater than the CARMEX product and the trade marks LIPSANO and CARMEX are clearly placed on the lids of each product in black lettering. The Final Appeal Committee went so far as to state that even an illiterate hypothetical reasonable consumer would notice the difference between the two jars. This is an important precedent insofar as the use of different trade marks on similar packaging or in similar advertisements is concerned.

In dealing with Clause 9, the Final Appeal Committee discussed the evolution of the Respondent’s packaging and considered the thought process that had gone into the changes. The Committee held that the decisions made by the Complainant regarding its packaging and the changes made to it were evidence of original intellectual thought and crafting, which the Committee has previously held is a prerequisite for a successful complaint under Clause 9 of Section II.

The Final Appeal Committee then examined the intention of the Respondent and concluded that “it is a matter of great probability that the Respondent knew of the packaging of the Appellant [Complainant]. It is also a matter of probability that in sourcing the world [which the Respondent admitted it had done prior to launching its product] in regard to its product, that it must have come across the Appellant’s product and the way it was packaged before it launched the product”. The Respondent failed to supply the Committee with any reasons for having chosen its particular packaging.

The Final Appeal Committee then concluded that that “the inference of copying of this original intellectual thought is the more probable one”.

Even though such an inference may be drawn, it must be remembered that it is possible to rebut such an inference, if affidavit evidence to the contrary is provided. For example, the Final Appeal Committee has previously held that if the creatives in charge of advertising swear under oath that they were unaware of the prior advertising, and came up with the concept of their own accord, this will suffice as evidence that imitation did not occur.

In this particular matter, the fact that Clause 9 of Section II applies to both local and international advertisements was very relevant, as the Complainant’s advertising history was predominantly international. It is therefore important to remember that international advertisements are also “out of bounds” when it comes to imitation.

The Final Appeal Committee concluded as follows “We have consequently concluded that there was an intentional copying of the packaging of the Appellant with the white jar, the yellow cap and the black label, the packaging being part of an advertisement. At the very least, there was an imitation of part of the packaging, which is recognisable or clearly evokes the existing concept contained in the Appellant’s packaging. This may well result in the likely loss of potential advertising value. It is quite clear that the Appellant spent much money developing its advertising value.”

The Final Appeal Committee accordingly ruled that the Respondent’s packaging was in breach of Clause 9 of Section II of the Code and ordered the packaging to be withdrawn within 3 months.