Payen Components SA Ltd v Bovic Gaskets CC and Others 1995 (4) SA 441 (A) 29

Payen Components SA Ltd v Bovic Gaskets CC and Others 1995 (4) SA 441 (A) 29

Facts

Payen Components SA Ltd (Payen) was a South African company that manufactured and sold gaskets. Bovic Gaskets CC (Bovic) was a South African company that also manufactured and sold gaskets.

Payen had developed a number of unique gasket identification codes, which were used to identify different types of gaskets. Bovic began using Payen's gasket identification codes in its own price lists and catalogues.

Payen sued Bovic for passing off. Payen claimed that Bovic's use of its gasket identification codes was likely to deceive or confuse consumers into thinking that Bovic's gaskets were associated with Payen.

Issues

The main issue in the case was whether Bovic's use of Payen's gasket identification codes was a passing off.

Reasons

The Supreme Court of Appeal held that Bovic's use of Payen's gasket identification codes was a passing off. The court found that the gasket identification codes were distinctive and that Bovic's use of the codes was likely to create the impression in the minds of consumers that Bovic's gaskets were associated with Payen.

Passing off

The court held that the following elements of passing off were present in the case:

• Goodwill: Payen had goodwill in its gasket identification codes.
• Misrepresentation: Bovic's use of Payen's gasket identification codes was likely to misrepresent to consumers that Bovic's gaskets were associated with Payen.
• Damage: Payen was likely to suffer damage as a result of Bovic's misrepresentation.

Conclusion

The court granted an interdict restraining Bovic from using Payen's gasket identification codes.

Summary

The case of Payen Components SA Ltd v Bovic Gaskets CC and Others 1995 (4) SA 441 (A) 29 is a landmark case in South African law. The case is particularly important for its analysis of the following issues:

• The law of passing off;
• The concept of goodwill;
• The elements of passing off; and
• The application of the law of passing off to product identification codes.

Law of passing off

The case established that the law of passing off protects the goodwill of businesses by preventing businesses from misrepresenting their goods or services as being those of another business.

Concept of goodwill

The case established that goodwill is the reputation and standing of a business in the minds of consumers. Goodwill can be attached to a business's name, trade marks, product identification codes, and other business assets.

Elements of passing off

The case established that the following elements must be present in order for a passing off claim to succeed:

• The plaintiff must have goodwill in a particular business asset, such as a trade mark, product identification code, or get-up.
• The defendant must misrepresent its goods or services as being those of the plaintiff.
• The plaintiff must be likely to suffer damage as a result of the defendant's misrepresentation.

Application of the law of passing off to product identification codes

The case established that the law of passing off can be applied to product identification codes. The case also established that the courts will consider a number of factors in determining whether the use of a product identification code is a passing off, including the distinctiveness of the code, the extent to which the code is used by the plaintiff and other businesses, and the likelihood of confusion among consumers.