Branding tussle in court

A case testing a provision of the Industrial Property Act will be heard in the High Court this week.

12 August 2019 | Business

Customers are likely to be confused into purchasing [Bokomo’s] vetkoek flour. – Namib Mills

YANNA SMITH - A landmark case will be heard before Deputy Judge President Hosea Angula in the Windhoek High Court this week. Namib Mills has sued Bokomo Foods Namibia for what they term “dishonest practises in industrial or commercial matters”.

Namib Mills is asking the court to interdict Bokomo from selling its wheat flour vetkoek mix, and all its rebranded products, in their current packaging.

It is the first time that this section, 194 (1) of the Industrial Property Act of 2012 will be tested. The section, ‘acts of unfair competition’ reads that “any act of competition contrary to honest practices in industrial or commercial matters is unlawful”.

As Namibia develops its manufacturing sector with a drive for value addition at home, the outcome of this case will be pivotal to future locally produced shelf products.

At the heart of the issue is the packaging of the Bokomo vetkoek flour. Namib Mills says that it was Bokomo’s “intention to take advantage of the reputation” of their packaging. Namib Mills launched its vetkoek mix in January 2018 and Bokomo, its product, in August of the same year. Both feature the mustard-yellow design.

‘Stalingrad tactics’

In its heads of argument, Namib Mills accuses Bokomo of using “Stalingrad tactics”, describing these as “wearing the plaintiff down by tenaciously fighting anything the plaintiff presents by whatever means possible, and appealing every ruling favourable to the plaintiff”.

Namib Mills says that its decision to focus on pasta sales caused Bokomo’s white bread flour to become “the market leader to vetkoek, especially in the north where most consumers are based”.

“Market research conducted in 2017 revealed the need for an affordable vetkoek flour and research indicated that consumers prefer vetkoek with a golden yellow outside once fried, but which is light and fluffy on the inside, and that does not absorb a lot of oil.”

The company says that by the time Bokomo launched its vetkoek flour, with the same mustard-yellow slash in August 2018, sales for Namib Mills stood around 3.7 tons, “almost 400 000 bags”.

Bokomo’s packaging, Namib Mills says, “imitates the essential elements” of its product, saying the colour scheme chosen is that of Namib Mills.

“This adoption was not accidental.”

‘Vetkoek ladies’

Bokomo’s market research, Namib Mills says, indicated that the colour purple was preferred by the so-called ‘vetkoek ladies’ following a focus group investigation.

Communications between Hubertus Hamm, CEO of Bokomo and his marketing team, discovered during the pre-trial period, indicate that Hamm preferred the yellow colour and an image of the vetkoek on a wooden board. Namib Mills indicates that the emails show that colleagues had warned Hamm that if the vetkoek was depicted on a wooden board “it would be identical to the competitors”.

The Bokomo focus group team had reported back indicated that the majority of consumers had preferred the purple pack but that Hamm had responded he preferred the yellow colour.

Bokomo’s “executives overruled the consumer’s preference”, Namib Mills says.

A branding expert reported that Bokomo had “simply imitated” Namib Mills’ packaging.

Tom Schilperoort writes that both packs are rectangular and divide the print design area into three equal horizontal zones. “Both packs align all their design elements on a central vertical line, using the image at the same angle and ratio on a white background and both packs colour the bottom third yellow.” He adds that both packs use the same wording in roughly the same size and font, reversed out of the yellow background. “Even the weightage is recorded on the same area.” He made mention of the wooden board used on the picture.

Imitation

“What is clear is that [Bokomo] set out to imitate the get up of [Namib Mills’] packs to the extent of being one small change short of – in its own designer’s words – ‘identical’,” Namib Mills says.

Research by both itself and Bokomo, Namib Mills says, has shown that colour is an integral part of a brand’s identity and moreover, it is “an important feature relied upon”.

Namib Mills says Bokomo’s research, according to its discovered documents, shows that 22% of people sent to buy flour were instructed what to get on the basis of the colour of pack; 24% of those interviewed referred to Namib Mills’ packaging based on colour, 23% referred to Bokomo’s pack based on colour and Bokomo’s clients (‘vetkoek ladies’) responded that colour was most important, the least important being the brand – Bokomo, Snowflake or Bakpro.

Thus, Namib Mills says, “customers are likely to be confused into purchasing [Bokomo’s] vetkoek flour”.

But, Namib Mills has taken exception to the rebranding of Bokomo’s full range of products. It tells the court that “the entire range mimics its corresponding pack”.

“This new packaging appropriates benefit from the substantial reputation subsisting in the get-up of [Namib Mills]. We submit that all of the packaging is unlawful.”

‘Lifeblood of competition’

In its answering heads of argument, Bokomo relies on “passing off” in its arguments.

Bokomo writes that “imitation is the lifeblood of competition” and quotes a legal matter stating: “For these reasons and with these limitations the bare imitation of another’s product, without more, is permissible. And it is true regardless of the fact that the courts have little sympathy of a wilful imitator.”

In terms of passing off, Bokomo defines it a “representation by one person that his business or mechandise, or both, are connected with those of another. Thus, in the context of this case, Namib Mills must present proof that Bokomo made a representation that the Bokomo vetkoek pack is the vetkoek pack of Namib Mills”.

Bokomo also states that the heart of the matter is the likelihood that members of the public, or a substantial portion thereof, may be confused or deceived”.

In terms of the colouring of the pack, Bokomo writes: “Appropriated? What colour? With respect Namib Mills does not own the yellow portion of the rainbow, or its different shades. With respect, purple is more associated with cake flour. But purple vetkoek? Who eats purple vetkoek? That sounds revolting.”

It moreover, asks for evidence of confusion, deception and dishonesty. It also disputes that colour was the predominant choice in product choice saying that 82% of its research respondents mentioned the logo, and the words vetkoek and cake. In terms of colour, Bokomo says yellow had the least amount of mentions behind white, blue and red.

“When looking for Bokomo products, respondents look for the distinctive red colour of the Bokomo logo and then the category. Namib Mills knows it has no evidence of confusion, deceit or dishonesty.”

The matter is set down for trial for the week. Engling, Stritter and Partners appears for Bokomo while Theunissen, Louw and Partners appears for Namib Mills.

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