## Facts

- McDonald’s Corporation registered 52 trademarks in South Africa between 1968 and 1985, including numerous marks containing “McDonald” or “McDonald’s,” as well as “Big Mac” and the “golden arches” device.
- Despite these registrations, McDonald’s had not operated restaurants or conducted business in South Africa during the relevant period.
- In 1992, Joburgers Drive-Inn Restaurant (Pty) Ltd began operating a fast-food restaurant in South Africa using several of McDonald’s registered marks and get-up, including “McDonald’s,” “Big Mac,” and golden-arches signage.
- Joburgers applied to register similar marks and also sought to have McDonald’s earlier registrations removed (expunged) from the register; a related respondent, Dax Prop CC, was also involved in applications and disputes concerning McDonald’s-related marks.
- McDonald’s opposed the respondents’ applications, sought to maintain or restore its registered rights, and brought proceedings for orders restraining the respondents from using the marks in South Africa.
- McDonald’s relied on statutory protection for “well-known” marks under section 35 of the Trade Marks Act 194 of 1993, and the respondents raised, among other arguments, a prior-use defence linked to section 36(2).
- To show that its marks were well known in South Africa notwithstanding the absence of local restaurants, McDonald’s tendered circumstantial evidence and market-survey evidence aimed at proving recognition and likely deception or confusion.
- The court a quo refused material relief and excluded certain survey evidence; McDonald’s appealed to the Appellate Division.

## Issues

1. Whether a mark may qualify as “well known in the Republic” under section 35 of the Trade Marks Act 194 of 1993 even if the proprietor has not traded in South Africa.
2. What degree of recognition among people in South Africa satisfies the “well known in the Republic” requirement.
3. What the scope of protection under section 35 is, including whether it operates in a manner comparable to passing off by focusing on deception or confusion.
4. Whether the respondents could rely on a “bona fide use” defence under section 36(2), and what constitutes bona fide trade mark use for that purpose.
5. Whether the market-survey evidence was admissible (including under section 3(1)(c) of the Law of Evidence Amendment Act 45 of 1988), and when an appeal court may interfere with an evidentiary ruling.

## Decision

- The Appellate Division allowed McDonald’s appeals in material respects and granted interdictory relief against the respondents’ use of McDonald’s marks and closely similar indicia.
- The court held that McDonald’s marks were “well known in the Republic” for purposes of section 35 even though McDonald’s did not operate in South Africa at the time.
- The court held that section 35 protection is directed at preventing use of a well-known mark in circumstances likely to cause deception or confusion in relation to the goods or services for which the mark is well known, in a manner comparable to common-law passing off.
- The court rejected the respondents’ reliance on section 36(2), finding that the earlier use relied upon was not bona fide trade mark use for purposes of the statutory defence.
- The court held the excluded survey evidence was admissible under the Law of Evidence Amendment Act and should have been received; the appeal court was entitled to overturn the incorrect exclusion of evidence.
- The court reaffirmed that appeals are generally decided on the facts as they existed when the original judgment was given; evidence of later events is admitted only in limited situations where an exception is justified.

## Legal Principles

- A trade mark can be “well known in the Republic” under Trade Marks Act 194 of 1993 section 35 even if the proprietor has not traded locally.
- “Well known in the Republic” is satisfied if the mark is known to a substantial portion of the persons interested in the relevant goods or services; it does not require that the mark be known to the entire public.
- Section 35 protects against use of a well-known mark in relation to goods or services for which it is well known where that use is likely to cause deception or confusion as to origin, association, or commercial connection.
- A section 36(2) defence requires bona fide trade mark use: genuine use of the sign as a badge of origin distinguishing the user’s goods or services from those of others.
- Market-survey evidence, even if hearsay in form, may be admitted under section 3(1)(c) of the Law of Evidence Amendment Act 45 of 1988 where admission is in the interests of justice and unfair prejudice is not shown.
- A ruling on admissibility is a question of law; an appeal court may interfere where the exclusion (or admission) of evidence was wrong.
- As a general rule, an appeal considers whether the judgment was right or wrong on the facts existing at the time; proof of later events is ordinarily not received.

## Conclusion

The Appellate Division held that McDonald’s marks were well known in South Africa within the meaning of section 35 despite McDonald’s lack of local trading, treated the statutory remedy as aimed at preventing deceptive or confusing use in a manner similar to passing off, rejected a section 36(2) prior-use defence for lack of bona fide trade mark use, and accepted that properly supported survey evidence could be admitted to prove reputation and likely confusion, leading to interdicts restraining Joburgers and Dax Prop from using McDonald’s branding.


McDonald's Corporation v. Joburgers Drive-Inn Restaurant, 1997 (1) SA 1 (1996)