Caterham principles are not retrospective in effect, says court

South Africa
In Mayo Foundation for Medical Education and Research v Theatre Mayo Clinic Company (Pty) Ltd (Case 1428/2006, September 14 2009), the High Court of South Africa has held that applicant Mayo Foundation for Medical Education and Research was not entitled to rely on the landmark 1998 case of Caterham Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd because the alleged unlawful conduct of the respondents commenced prior to 1998.

Caterham is a landmark case which established that a geographical presence in South Africa is not required for an applicant to be successful in establishing a reputation required to show passing off. Up until Caterham, foreign trademark owners with no physical presence in South Africa were unable to establish a reputation in their trademarks for passing off purposes. 
In the present case, the fifth respondent was the creator of a group of practitioners practising under the name Mayo Clinic in South Africa. The first, second and fourth respondents were juristic persons, who had, at least at some stage, adopted and made use of the MAYO and MAYO CLINIC marks during the relevant period. The third respondent was cited in its capacity as administrator of the domain names '' and ''.  
The fifth respondent commenced using the MAYO and MAYO CLINIC marks in 1974. Mayo Foundation instituted proceedings against the respondents some 32 years after the first use of the marks. Mayo Foundation sought an interdict against the first and fifth respondents restraining them from passing off their goods and services as those of the Mayo Foundation by using the MAYO and MAYO CLINIC marks. It sought ancillary relief in the form of delivery up and removal of the offending matter. Mayo Foundation further sought an order that the domain names '' and '' be transferred to it.
The main issues for determination were whether:
  • Mayo Foundation had established a reputation in South Africa in respect of the trademarks MAYO and MAYO CLINIC in 1974;
  • the fifth respondent's use of the MAYO and MAYO CLINIC marks in respect of medical services constituted a passing off of Mayo Foundation’s Mayo Clinic;
  • it was unlawful in 1974 for the fifth respondent to adopt the trademarks MAYO and/or MAYO CLINIC in light of the judgment handed down in Caterham; and
  • Mayo Foundation and the respondents shared a reputation in the trademarks MAYO and MAYO CLINIC in South Africa at the time the proceedings were instituted.
With regard to whether Mayo Foundation had established a reputation, the court held that the MAYO mark was known to a substantial number of members of the public or persons in the trade in 1974, particularly in light of the evidence given by five medical doctors who qualified in South Africa in the 1960s.
The court then examined whether the respondents had acted lawfully in adopting the Mayo name in 1974. Mayo Foundation argued that Caterham was retrospective in effect and, as a result, it was not necessary for it to establish a physical presence in South Africa in 1974. The court dismissed this contention, stating as follows:
The effect of the judgment is that henceforth the new law will prevail. It does not operate retrospectively. I do not know of any statutory provision, principle of law or judgment which states that a judgment of a court which alters the law on a question of principle has retrospective effect. None of the cases referred to suggest such a conclusion. Only the legislature can make laws having retrospective effect. The task of the courts is simply to find the law, state what the law is and apply it to the facts.
The court thus held that the lawfulness of the respondents’ adoption and use of the MAYO and MAYO CLINIC marks in 1974 was to be determined according to the law at that time. As Mayo Foundation did not have a physical presence in South Africa at that time, the court held that the respondents' adoption of the mark was not unlawful. 
The court ultimately held that, at best, the respondents enjoyed a shared reputation with Mayo Foundation, with the result that neither party may restrain the other from using the MAYO and MAYO CLINIC marks. The application was thus dismissed with costs.
Darren Olivier and Candice Spargo, Bowman Gilfillan Inc, Johannesburg

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