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EASTER EGG MANUFACTURERS GO TO BATTLE PRIOR TO THE EASTER SEASON

Thursday, June 07, 2007
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EASTER EGG MANUFACTURERS GO TO BATTLE PRIOR TO THE EASTER SEASONBy Gaelyn Scott and Marumo Tshesane

Mister Sweet (Proprietary) Limited lodged a competitor complaint against Tiger Food Brands Limited (Beacon) in terms of Clauses 8.1 and 9.1, Section II of the Advertising Standards Authority Code of Advertising Practice based on Beacon’s proposed use of "Mini Speckled Eggs" on a new Easter product intended for its 2007 Easter range.

Mister Sweet have manufactured and distributed a candy coated egg with chocolate and jelly centres under the name "Speckled Eggs" since 1998. In addition, Mister Sweet are the registered proprietor in South Africa of the trade mark SPECKLED EGGS.

Mister Sweet claimed that Beacon, by using the phrase "Mini Speckled Eggs" would be exploiting and taking advantage of its advertising goodwill relating to its SPECKLED EGGS trade mark. In addition, Mister Sweet claimed that Beacon were copying its use of the term "Speckled Eggs".

Beacon put forward several arguments in response to the claims made by Mister Sweet.

* Beacon is the market leader in South Africa in Easter confectionery products. Consumers have a very strong brand loyalty towards the BEACON trade mark and it makes no commercial sense for Beacon to copy Mister Sweet and, in so doing, to dilute its own reputation and goodwill.

* Beacon has, over the years, manufactured several Easter eggs resembling birds’ eggs. Beacon describes its product which resembles a hen’s eggs as "Hen’s Eggs" and describes its product which resembles a bantam’s egg as "Bantam Eggs". In much the same way, and purely for descriptive purposes, Beacon describes its mini egg product which is speckled as "mini speckled eggs".

* Mister Sweet cannot monopolise the term "speckled eggs" as the common and accepted way of referring to a bird’s egg which has markings on it is "speckled". Beacon referred to several bird publications in support of this claim.

* Beacon argued further that, as a consequence, several confectionery manufacturers / retailers have, in the past, referred to their Easter eggs (which resemble birds’ eggs having markings on them) as "Speckled Eggs". These included Megga Candy, Shoprite Checkers, Cadbury and Woolworths.

* The "Speckled Eggs" product sold by Woolworths is, in fact, manufactured for Woolworths by Mister Sweet and, by permitting Woolworths to market its product under the "Speckled Eggs" name, Mister Sweet has diluted its rights in the term "Speckled Eggs" which Beacon showed to be generic in the confectionery trade.

* To succeed in its claim, it was incumbent on Mister Sweet to show that the term "Speckled Eggs" constitutes the signature or badge of origin of its product. Beacon refuted this claim by arguing that it was, in fact, the distinctive and well-known trade mark MISTER SWEET which has always featured prominently on the packaging that fulfilled this function and that the term "Speckled Eggs" was purely a product descriptor and is not distinctive. There can be no monopoly in product descriptors.

* Mister Sweet attempted to infer an extensive reputation and goodwill in the term "Speckled Eggs" from large sales of its product. Beacon argued that it had been held in similar matters before the ASA that extensive use of a term does not on its own render the term distinctive.

* Mister Sweet alleged that Beacon had imitated it and its packaging through Beacon’s use of "Mini Speckled Eggs" and that Beacon’s packaging brought to the consumer’s mind Mister Sweet’s product and trade mark SPECKLED EGGS. Beacon argued that this was not the case given the very significant differences between the respective product packagings. The only feature which is common to both packs is the purely descriptive term "Speckled Eggs".

The ASA Directorate held that Beacon had neither exploited the advertising goodwill of Mister Sweet nor had they imitated an existing advertisement of Mister Sweet. The Directorate found in favour of Beacon based on the following:

* Mister Sweet did not show that Beacon had consciously copied its original intellectual thought in that the term "Speckled Eggs" is a generic term which refers to birds’ eggs having a mottled colour. In addition, the Directorate referred to the other Easter egg manufacturers which had made use of the term. The claim by Mister Sweet of imitation accordingly failed.

* Mister Sweet have not shown that the term "Speckled Eggs" has acquired its own goodwill independent from the house brand MISTER SWEET. To succeed, Mister Sweet would have had to establish that a consumer hearing the words "Speckled Eggs" would immediately think of its brand of speckled eggs. There was no evidence to prove this.

Mister Sweet’s complaint was dismissed.

The effect of the ruling by the ASA is that Beacon, and other competitors, may continue to use the term "Speckled Eggs" to describe their products. Beacon’s "Mini Speckled Eggs" product will therefore form part of its Easter 2007 product range.

But what about the fact that Mister Sweet are the registered proprietor in South Africa of the trade mark SPECKLED EGGS in class 30 in relation to confectionery? Mister Sweet did not institute trade mark infringement proceedings against Beacon in the High Court to interdict Beacon’s use of the term but instead lodged a complaint with the ASA. Unless Mister Sweet proceeded on an urgent basis with a claim of trade mark infringement in the High Court, the matter would not have been decided in time to prevent Beacon’s launch of its product for the Easter 2007 season. The cost of High Court proceedings was no doubt also a factor in determining whether Mister Sweet instituted trade mark infringement proceedings or lodged a complaint with the ASA.

The ASA, in its ruling, found that it was of no consequence, for its purposes in determining the matter before it, that Mister Sweet were the registered owner of the trade mark SPECKLED EGGS. The ASA’s jurisdiction relates solely to the content of advertising and the ASA will not involve itself in the question of trade mark registration in considering a matter, but will limit itself to the enquiry in terms of its Code.

We are of the view that trade mark infringement proceedings would, in any event, have resulted in a similar outcome. Should Mister Sweet have instituted High Court proceedings against Beacon based on its trade mark registration, Beacon would have counter-claimed for the cancellation of Mister Sweet’s trade mark registration on the basis that it is an entry wrongly made on the Trade Marks Register in that the trade mark SPECKLED EGGS is non-distinctive and is wholly descriptive of the goods in relation to which it is used. Mister Sweet were no doubt mindful of this possibility in selecting its forum. Beacon are able to make application to cancel Mister Sweet’s trade mark registration at any time . . .