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Case No 547/95 IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matters between:
1.       MCDONALD'S CORPORATION   Appellant
and
JOBURGERS DRIVE-INN RESTAURANT (PTY)
LIMITED  First Respondent
THE REGISTRAR OF TRADES MARKS Second Respondent
2.       MCDONALD'S CORPORATION   Appellant
and
PAX PROP CC      First Respondent
THE REGISTRAR OF TRADE MARKS Second Respondent
3.       MCDONALD'S CORPORATION   Appellant
JOBURGERS DRIVE-INN RESTAURANT
(PTY) LIMITED    First Respondent
PAX PROP CC      Second Respondent
CORAM: CORBETT, CJ, E M GROSSKOPF, NESTADT,
SCHUTZ, PLEWMAN, JJA
HEARD: 20 May 1996 — 22 May 1996 DELIVERED: 27 August 1996
JUDGMENT E M GROSSKOPF, JA

This is a dispute about the use and continued
3 incorporate the word McDonald or McDonald's. Also used
is the letter M in the form of so-called golden arches,
with or without the word McDonald's. Others consist of
the words Big Mac, Egg McMuffin and McMuffin. There are
also two clown devices. The trade marks are registered
in respect of goods, mainly in classes 29 and 30, and
for services in class 42.
When the present proceedings commenced, McDonald's
had not traded in South Africa nor, we may assume for
present purposes, had it used any of its trade marks
here.
Joburgers Drive-Inn Restaurant (Pty) Limited
("Joburgers") is a South African company with its
principal place of business in Johannesburg. Its
managing director is Mr George Sombonos. Mr Sombonos
has been engaged in the fast food industry since 1968.
In 1979 he registered a company called Golden Fried
Chicken (Pty) Limited ("Chicken Licken"). He holds 90%

4 of the shares in the company and is its managing
director. In 1979 Chicken Licken applied for the
registration of a number of trade marks, including
Chicken Licken. Since then it has franchised the
Chicken Licken business so that to-day there are more
than 177 stores throughout South Africa. Mr Sombonos
says that Chicken Licken is the biggest fried chicken
fast food franchise chain in the world not having its
origins in the United States of America.
During 1992 Mr Sombonos on behalf of Joburgers
decided to establish fast food outlets and restaurants
using the trade marks McDonald's, Big Mac and the
golden arches design. In 1993 Mr Sombonos applied for
the registration of these and some other McDonald's
marks. At the same time he applied to the Registrar of
Trade Marks in terms of section 36(1) (a) and (b) of the
Trade Marks Act, no 62 of 1963 ("the old act") for the
expungement of the trade marks which are held by

5 McDonald's. McDonald's opposed these applications and
filed its counter-statements in the expungement
applications during August 1993. During the same period
McDonald's applied again for the registration of all
the trade marks in its name.
On 29 August 1993 there appeared an article in the
Sunday Times newspaper reading inter alia as follows:

In response to this article McDonald's wrote
through its attorneys to Joburgers's attorney inter

6 alia as follows:

On 23 September 1993 McDonald's launched an urgent

7 application against Joburgers in the Transvaal
Provincial Division for relief on the grounds of
infringement of its trade marks, passing off and
unlawful competition. I shall refer to this application
as the Joburgers application. On 28 September 1993
Swart J granted an order by agreement, the relevant
part of which read as follows:

It came to Joburgers's notice that there was a fast
food outlet in Durban trading under the name (or names)
Asian Dawn and MacDonalds. MacDonalds, it is pointed
out in passing, is spelt differently from McDonald's.
On 15 October 1993 Mrs A T Bead, a director of
Joburgers, and Mr S F Ryan, Joburgers's attorney,
travelled to Durban from Johannesburg to buy the
outlet. It is not quite clear from the papers who

8 exactly owned the business but the interested parties
were a close corporation called Asian Dawn Investments
CC, its sole member Miss Sajee Bibi Farid Khan and her
brother, Mr Rafique Khan. According to an affidavit by
Mrs Pead she approached Mr Rafique Khan in the shop and
offered to buy it as a going concern. She said she
wanted it for her son to encourage him not to leave the
country.(In fact she was acting for Joburgers and
wanted to secure the trade mark for use in the present
proceedings.) Mr Khan was prepared to sell if the price
was right, but first wanted to speak to his sister as,
he said, they were joint owners. Later he informed Mrs
Pead that he had spoken to his sister and that they
were willing to sell the business as a going concern
for R250 000. The Joburgers contingent were not happy
with the price, but asked for an option to give them
time to think about it. The parties then executed and
signed a written option at a price of R250 000. Some

9 days later, after further negotiations, the parties
agreed telephonically on a price of R225 000. The
Khans' attorney was to draw up a written contract.
The contract was not forthcoming. Mrs Pead phoned
Mr Khan to find out what was happening. He told her
that he had been approached by attorneys acting for
McDonald's and that the price he had agreed with Mrs
Pead was made to look "not only like peanuts but dried
peanuts". He now wanted offers that were "telephone
figures". No amount of persuasion could change his
attitude, and Joburgers brought an urgent application
to restrain Mr and Miss Khan and her close corporation
from selling, alienating or otherwise disposing of the
business. An order to this effect was granted.
Ultimately, on 22 November 1993, the parties entered
into a new contract of sale at a price of R350 000.
In the meantime the proceedings between McDonald's
and Joburgers were continuing. On 15 November 1993

franchises. These are all in KwaZulu Natal. Mr
Charalambous is responsible for the management of all these businesses.
No such undertaking was given.
13 an interdict preventing Dax from infringing its trade
marks.
14 Joburgers and Dax be interdicted and restrained from
imitating, reproducing or transmitting those marks in
the Republic of South Africa. I shall call this the
"well-known marks application".
15 expungement granted; in the Dax application, Dax's
application for expungement was granted and the
counter-application by McDonald's for an interdict
refused; and the well-known marks application by
McDonald's was refused. In all cases appropriate costs
orders were made.
Joburgers had originally applied for registration. The
The general principle is that, in deciding an
17 in respect of the evidence relating to the recent
business activities of Dax and McDonald's and the
resultant litigation between them. Concerning
Joburgers's assignment of its rights in or to the
McDonald's trade marks, it was contended that the
evidence was relevant for the purposes of sec 21A of
the Supreme Court Act, 59 of 1959. This section
empowers a court of appeal to strike an appeal off the
roll if it is of the opinion that, in the
circumstances, a judgment in favour of the appellant
will have no practical effect or result. This argument
is misconceived. The new evidence does not suggest
that a judgment in favour of McDonald's would have no
practical effect or result, and the last thing that
McDonalds would want is that the appeal be struck off
the roll. At most the evidence tends to show that one
of the respondents no longer has an interest in the
appeal. Sec. 21A of the Supreme Court Act provides no

18 remedy for such a situation. Moreover the new evidence
is controverted by further evidence tendered by
Joburgers and Dax, The evidence relating to the
assignment should accordingly also be refused. It
follows that the application to adduce further evidence
should be dismissed with costs.
I turn now to the arguments on the merits. For
convenience I start with the well-known marks
application. Sec 35 of the new act reads as follows:

There was a large area of agreement between the
parties about the meaning and application of this
section. Thus it was common cause that McDonald's in
fact is a person such as is described in paragraphs (a)
and (b) of sub-section (1). The parties were also
agreed on what it is that has to be "well known" in the
Republic. In this regard the court a quo had said:
This seems to suggest that the section only
applies if what is well known is not only the mark

itself but also the nationality, domicile or place of
21
background to the section.
The Paris Convention, to which reference is made
in sec 35, is the Paris Convention on the Protection of
Industrial Property of 20 March 1883 as revised or
amended from time to time (sec 2 of the Act). For
present purposes art 6bis(l) of the Convention is
apposite. Its relevant portion reads as follows:
"The countries of the Union undertake, ex officio
if their legislation so permits, or at the request
of an interested party, to refuse or to cancel the
registration, and to prohibit the use, of a trade
mark which constitutes a reproduction, an
imitation, or a translation, liable to create
confusion, of a mark considered by the competent
authority of the country of registration or use to      
be well-known in that country as being already the
mark of a person entitled to the benefits of this
Convention and used for identical or similar
goods."
Although art 6bis was inserted into the convention as
far back as 1925, neither Britain nor South Africa gave
legislative effect to it until recently - South Africa
in sec 35 of the new act, and Britain in sec 56 of the
Trade Marks Act, 1994 (42 & 43 Elizabeth 2 C. 26). The

22
two sections are very similar. Section 35(1) and (2) of
the new act, in particular, is, for practical purposes,
identical to sec 56(1) of the British Act, save for the
substitution of "the Republic" for "the United Kingdom"
wherever it appears. The reason why Britain did not
legislate earlier was that previously it claimed to be
honouring the article by means of its common law of
passing off. See Richard C Abnett, AIPPI: Famous Trade
Marks Require A New Legal Weapon, Trademark World,
Dec 1990/Jan 1991, p 23.
The protection granted to foreign marks by the law
of passing off was limited, however, by the requirement
that a plaintiff had to establish a goodwill in the
country. In a well known passage from The Commissioners
of Inland Revenue v Muller & Co's Margarine Ltd [1901]
AC 217 (HL) at 223-4 Lord Macnaghten defined goodwill
as follows:
"It is a thing very easy to describe, very difficult to define. It is the benefit and

The "attribute of locality" mentioned in this passage
led to a result described as follows in Kerly's Law of
Trade Marks and Trade Names, 12th ed (1986) p 358 para
16-18:
24
Examples of such cases are Alain Bernardin et Compagnie
v Pavilion Properties Ltd [1967] RFC 581 (the "Crazy
Horse" case). The Athletes Foot Marketing Associates
Inc v Cobra Sports Ltd and Another [1980] RPC 343 (Ch)
and Anheuser-Busch Inc v Budejovicky Budvar HP (trading
as Budweiser Budvar Brewery) and Others [1984] FSR 413
(CA).
In the Alain Bernardin case the plaintiff was the
proprietor and operator of a bar and cabaret in Paris
known as the "Crazy Horse Saloon". The bar had been
continuously and extensively publicised in the United
Kingdom for sixteen years. The defendant commenced a
place of entertainment in London under the name of
"Crazy Horse Saloon" and issued an advertisement

stating "Crazy Horse Saloon comes to London". The
plaintiff applied for an interlocutory injunction
against the defendant on the grounds of passing off.
The application was refused. The court referred inter
alia to the Muller case (supra) and stated (at 584
lines 30-47)
In the Athletes Foot case the plaintiffs carried
on in the United states of America and elsewhere, but
not in Great Britain, an extensive business in which
they granted franchises to independent stores to sell
footwear for athletes under the name "The Athlete's
Foot". During 1978 and 1979 they had taken steps to
secure a franchise agreement for the United Kingdom and
a prospective franchisee had gone so far as to order
goods and stationery with a view to establishing a
chain of stores under the name "The Athlete's Foot".
However, no franchise contract had been concluded and
no sales had in fact been made under that name. There
was nevertheless an awareness of the plaintiffs' trade
name and trading activities in a substantial section of
the public in England as a result of over-spill
publicity through American journals circulating there.

27 An application for injunctive relief against a trader
who sought to use the name in England was refused.
After a full review of the earlier cases, the court
(Walton J) held as follows at 350, lines 13-20:

In the Anheuser-Busch case the plaintiffs and their
predecessors were brewers of beer in the United States
of America. Their beer had been sold since 1875 under
the "Budweiser" trade mark. The first defendants were
from 1895 brewers of beer in Ceske Budejovice, a town
in Czechoslovakia formerly known by its German name of
Budweis. In sales in Europe the first defendants used
the word "Budweiser" in relation to their beer.
Before 1973, when the first defendants first sold

a significant quantity of beer in the United Kingdom,
29
In 1979 the plaintiffs issued a writ by which they
30 of visits to the United states and spill-over
advertising. Such reputation was, however, not enough.
What was required was a goodwill in the United Kingdom,
which could not exist without a business there. This
was expressed by Oliver L J as follows (p 470):
And O'Connor L J said (at p 471)
On the facts the Court of Appeal held that the
activities of the plaintiffs in the United Kingdom did not amount to the carrying on of a business there.
Kriegler J as follows (at 445C-D:
For present purposes it is not necessary to
determine whether these cases were correctly decided
either in the United Kingdom or in South Africa. In
Australia, for instance, the Federal Court went the
other way. See Conagra Inc v McCain Foods (Aust) Pty
Ltd [1992] FCA 159; 23 IPR 193. However, whether the above cases were
right or wrong, they demonstrate that the courts in
this country and the United Kingdom have in fact not
protected the owners of foreign trade marks who did not
have a goodwill within the country. To that extent the
common law of passing off has not been sufficient to

33 constitute compliance with art 6bis of the Paris
Convention.
It seems clear that sec 35 of the new act and the
corresponding provision in the United Kingdom were
intended to remedy this lack. Thus sec 35(1)
pertinently extends protection to the owner of a
foreign mark "whether or not such person carries on
business, or has any goodwill, in the Republic". And
the type of protection which is granted by sub-sec (3)
is typical of that which is available under the common
law of passing off: a prohibition on the use of the
mark in relation to goods or services in respect of
which the mark is well known and where the use is
likely to cause deception or confusion.
It is against this background that the expressions
"well-known trade mark" and "well known in the
Republic" must be interpreted. Counsel for McDonald's
contended that the legislature intended to impose no

34 more than the ordinary requirement for passing off
actions, namely that the reputation must extend to a
substantial number of members of the public or persons
in the trade in question. See Webster and Page, South
African Law of Trade Marks, 3 ed, 417; Kerly's Law of
Trade Marks and Trade Names, supra, para 16-10; John
Craig (Pty) Ltd v Dupa Clothing Industries (Pty) Ltd
1977 (3) SA 144 (T) at 150 in fin and the Conagra case,
supra, at 237 lines 14 to 37.
Of course, the mere fact that the legislature
intended to provide some protection for a foreign
trader who does not have a goodwill or a business
inside the country does not necessarily mean that such
protection must be coterminous with that afforded to
local businessmen. It is accordingly conceivable that,
in order to receive protection, the foreigner might
have to prove a greater public awareness of his mark
than is required of a local businessman claiming a

remedy against passing off. And, indeed, the
This argument raises two questions, namely
36 who did not have a business here. The South African
population is a diverse one in many respects. There are
wide differences in income, education, cultural values,
interests, tastes, personal life styles, recreational
activities, etc. This was obviously known to the
legislature when it passed the new act. If protection
is granted only to marks which are known (not to say
well-known) to every segment of the population (or even
to most segments of the population) there must be very
few marks, if any, which could pass the test. The
legislation would therefore not achieve its desired
purpose. Moreover, there would not appear to be any
point in imposing such a rigorous requirement. In
argument we were referred as an example to a mark which
might be very well known to all persons interested in
golf. Why should it be relevant, when deciding whether
or not to protect such a mark, that non-golfers might
never have heard of it? I consider therefore that a

37 mark is well-known in the Republic if it is well-known
to persons interested in the goods or services to which
the mark relates.
The next question then is: how well should it be
known to such persons? (question (b) above). On behalf
of McDonald' s it was argued that the test in this
regard is a qualitative and not a quantitative one. The
question is not, it was argued, how many of the
relevant persons know the mark, but how profound the
knowledge of the mark is among those who do know it. In
my view this argument is untenable. I suppose that
knowledge of a mark could be so vague or superficial as
hardly to count as knowledge at all, but apart from
that I would not have thought that there would normally
be great differences in the degree of knowledge of the
mark by members of the public, or that such
differences, if they existed, would be of any
relevance. In the present context the important

38 practical question is not whether a few people know the

39 legislative force to article 6bis of the Paris
Convention. To this end it was natural to repeat the
language of the Convention, leaving it to the courts to
give practical effect to the vague expressions used.
40 well-known in the Republic. It seems logical to accept
that the degree of knowledge of the marks that is
required would be similar to that protected in the
existing law of passing off. The concept of a
substantial number of persons is well established. It
provides a practical and flexible criterion which is
consistent with the terms of the statute. No feasible
alternative has been suggested.
In coming to a different conclusion the court a
quo relied heavily on the Canadian case of Robert C
Wian Enterprises, Inc v Mady (1965) 49 D L R (2d) 65.
Sec 16 of the Canadian Trade Marks Act provided inter
alia:
41
used in Canada or made known in Canada by any other person;"
The expression "made known in Canada" was defined in
sec 5, which, in so far as relevant, read as follows:
(b) such wares or services are advertised in association with it in
and it has become well known in Canada by reason
of such ... advertising."
insufficient weight. It therefore held (at p 81) that
the plaintiff had failed to establish that its trade
marks were "well known in Canada" by reason of radio
advertising.
Despite having decided the matter in issue, the
court proceeded to state the following in a passage (at
p 81) relied upon by the court a quo:
It should be noted that the court in the Wian case

43 was faced with different problems from those arising in
our case. In the Canadian legislation there was no
uncertainty about the class of persons to whom the
trade mark had to be well known. Section 5(b) (ii) of
the Act in effect defined the class as being "potential
dealers in or users of such wares and services" (i e,
the wares or services in association with which the
trade mark was used by the plaintiff). The further
question, i e, when a mark must be regarded as well
known to such a class, also did not arise in the Wian
case. The only matter dealt with in the above passage
was the geographical area within which the mark had to
be well known. This is not a question which arises in
the present case. Moreover, the court's views in this
regard were based on the Canadian legislation which
differs from ours. In all these circumstances I do not
find the Wian case of any assistance. I may note in
passing that the reasoning in the above passage has in

44 any event not been accepted unreservedly in Canada. See
Valle's Steak House v Tessier et al. (1974) 49 CPR (2d)
218 at 226.
I turn now to the evidence concerning the extent
to which the McDonald's trade marks are known in the
Republic. As I have stated earlier, McDonald's is one
of the largest, if not the largest, franchiser of fast
food restaurants in the world. At the end of 1993 there
were 13 993 McDonald's restaurants spread over 70
countries. The annual turnover of McDonald's
restaurants amounts to some $23 587 million. McDonald's
trade marks are used extensively in relation to its own
restaurants as well as to those that are franchised.
The level of advertising and promotion which has been
carried out by McDonald's, its subsidiaries, affiliates
and franchisees in relation to McDonald's restaurants
exceeds the sum of $900 million annually. Their
international marketing campaigns have included

45 sponsorship of the 1984 Los Angeles and 1992 Barcelona
Olympics. McDonald's has also been a sponsor of the
1990 soccer World Cup Tournament in Italy and the 1994
World Cup Soccer Tournament in the United States of
America. Mr Paul R Duncan, the vice president and
general counsel of McDonald's, stated on affidavit
that, in view of the vast scale of his organisation's
operations, the McDonald's trade marks are in all
probability some of the best known trade marks in the
world. This was not denied. Although there was no
evidence on the extent to which the advertising outside
South Africa spilled over into this country through
printed publications and television, it must, in all
probability, be quite extensive. In addition the
McDonald's trade marks would be known to many South
Africans who have travelled abroad. This again would
not be an insignificant number.
Spontaneous acts by South Africans have confirmed

46 that there is a general level of knowledge in this
country about the operations of McDonald's. Thus
McDonald's disclosed that, between 1975 and 1993 it
received 242 requests from South Africans to conclude
franchising agreements. Some of these applicants were
prominent companies. For reasons which are not relevant
at present, none of these applications were acceded to.
The conduct of Joburgers and Dax in the present
case confirms the reputation attaching to the
McDonald's marks. Intrinsically the word McDonald has
no attractive force. It is a fairly common surname. Had
it not been for the reputation it has acquired over the
years nobody would wish to appropriate it. It is
therefore significant that Joburgers and Dax have gone
to considerable trouble and expense to obtain control
over the McDonald's marks. Joburgers announced its
intention of operating under the name McDonald's in a
provocative manner through an article in the Sunday

Times which was bound to stimulate legal action against
it. It may be noted in passing that the article in the
Sunday Times, which is quoted above, itself clearly
presupposes that its readers would be aware of
McDonald's, its business, products and marks.
After an interdict was obtained against Joburgers,
it purchased the business of MacDonalds in Durban. I
have already referred to the litigation between
Joburgers and the Khans arising out of that purchase.
In her affidavit in those proceedings Mrs Pead, who, it
will be recalled, is a director of Joburgers, made it
quite clear what the purpose of the transaction was.
She said:
When the court held that Joburgers was in breach of the
interdict by conducting the MacDonalds business in

Durban, the business was sold to Dax, a business
49 from 1983 to 1992. He has addressed numerous meetings,
conferences and seminars on various aspects of
franchising. During such addresses he has on numerous
occasions held up the business format adopted by
McDonald's as the model for efficient franchising.
During seminars he was questioned about McDonald's and
its business system. Moreover, since becoming Vice
Chairman of the South African Franchise Association, he
says, he has received "numerous requests, too numerous
even to have counted" from prospective franchisees and
ordinary members of the public for advice as to how to
become a McDonald's franchisee. He also notes that the
South African press regards McDonald's as newsworthy.
Thus coverage was for instance given when McDonald's
opened its first outlets in Russia and continental
China. Objection was taken to the admissibility of Mr
Collins's affidavit, but at least the items of evidence
mentioned above must be admissible. I discuss their

50 weight later.

51 questions individuals from that universe. The
confidence that one has in a projection from the
samples to the universe varies according to the number
of persons interviewed in the survey, the sampling
technique used and the level of response. Statisticians
commonly use the term "inference" to denote the process
of generalising sample evidence to the universe from
which the sample is selected. The basis of inferential
statistics is probability theory. A theorem in
probability theory, namely the Central Limit Theorem,
which applies in this case, states that if a large
number of independent samples are drawn from a
universe, the individual results will be different, but
that they will have a "normal" distribution around the
real value being measured in the universe. Based on
this theorem, and standard and accepted statistical
tables in relation to normal distribution, one can
calculate the probability of the real value in the

universe being within a specific interval or variation,
which Mr Corder referred to as the confidence level.
in houses in higher income suburbs of Pretoria,
Verwoerdburg, Johannesburg, Bedfordview, Randburg and
Sandton. A sample of 202 persons was taken. Mr Corder
gave details about the manner in which the sample was
selected. I need not repeat them - there is no
suggestion that the sampling was not scientifically
correct. The fieldwork was conducted from 7 December to
24 December 1993 by trained interviewers under the
supervision of field supervisors. Twenty-one percent of
the interviews were back checked in order to ensure
reliability. Affidavits of supervisors and interviewers
were filed to confirm their actions. Mr Corder, who was
in overall control, also confirmed that the survey was
properly conducted.
The relevant conclusions were set out as follows:
During January and February 1995 a similar survey
was conducted among white males and females, aged 16
years and over, living in selected higher income
suburbs of Durban. The conclusions were stated as
follows.
56 of 1988 provides that hearsay evidence is inadmissible,
subject to certain exceptions. Sec 3 (4) defines
"hearsay evidence" as
In the present case, evidence was given by Mr
Corder as well as by the supervisors and interviewers.
The only people involved in the survey who did not
testify were the interviewees. The question then is:
does the probative value of the evidence depend on the
credibility of the interviewees? On behalf of
McDonald's it was contended that it did not. The
evidence should be admitted, it was argued, because it
is opinion evidence of a scientific nature, or,
alternatively, that it relates to a state of mind. In
support of the latter proposition reliance was placed
on Hollywood Curl (Pty) Ltd and Another v Twins
Products (Pty) Ltd (1) 1989 (1) SA 236 (A) at 251J to

57 252G.
I doubt whether either leg of this argument is
correct. It is true that an expert may sometimes refer
to hearsay sources in support of his views. However, if
his views are entirely based on assertions which he
obtained from somebody else, it is difficult to contend
that the probative value of his evidence does not
depend on the credibility of such other person. And in
so far as the evidence is said to relate to a state of
mind, this may be true in respect of some of the
replies. It may be that in some cases the mere fact
that an interviewee made a certain utterance may be
relevant as indicating his state of knowledge (e g by
his associating McDonald's with hamburgers). In some
other cases it does seem to me, however, that it is the
assumed truth of what is said by the interviewees which
is ultimately reflected in the results of the survey.
It is not necessary, however, to pursue this

58
matter any further since I consider that, even if it is
hearsay, the evidence should have been admitted under
one of the exceptions provided in the statute. Sec
3(1)(c) allows hearsay evidence to be admitted if
"the court, having regard to -
(i) the nature of the proceedings; (ii) the nature of the evidence; (iii) the purpose for which the evidence is tendered;
(iv) the probative value of the evidence; (v) the reason why the evidence is not given by the person upon whose credibility the probative value of such evidence depends; (vi) any prejudice to a party which the admission of such evidence might entail; and (vii) any other factor which should in the opinion of the court be taken into account, is of the opinion that such evidence should be admitted in the interests of justice."
In the present case the evidence is tendered,
broadly speaking, to show the extent to which the name
McDonald's and its trade marks are known amongst the
public. In theory the best way of doing this would
probably be by calling a representative sample of the
public as witnesses. Expert evidence would explain how

59 the sample was selected and what conclusions could be
drawn from the results. This would, however, not be a
practical course to follow. First, it would require the
evidence of a large number of people. Second, the
persons comprising such a sample should of course have
no interest in the outcome of the proceedings. It is
consequently unlikely that such persons, or most of
them, would be prepared to become involved in the
litigation. A properly conducted market survey places
the replies of such people before the court without
requiring affidavits from them. No substantial
disadvantage flows from this course. It seems most
unlikely that any interviewee would lie in a matter
such as his or her knowledge of McDonald's, and in any
event the theories underlying such surveys make
allowances for a certain margin of error. There can be
no prejudice to the other parties. They are given a
full opportunity to check the results of the survey. In

fact in the present case Joburgers and Dax did not
61 this situation.
I turn now to the effect to be given to the
evidence. The approach of the court a quo was to
analyse each item of evidence and to show that, by
itself, it has little or no probative value. In my view
this is a wrong approach. We are dealing here with
circumstantial evidence. In the well known case of R v
De Villiers 1944 AD 493 Davis AJA, dealing with a
similar argument in a criminal case, said (at 508-9):
Apart from the nature of the onus, the same rules apply

62 of course in civil cases.
As I have said above, I consider that it would be
enough for McDonald's to show that its marks are known
to a substantial number of persons who are interested
in the goods or services provided by it. On behalf of
McDonald's it was contended, correctly in my view, that
there are two categories of such persons - potential
customers and potential franchisees. Potential
customers would cover a wide field. It would include
all persons who like fast food of this type and have
the money to buy it. Since the cost is not high there
would be many such people. Potential franchisees would
be a smaller group, namely persons who can finance and
run a McDonald's franchise, or consider that they can.
The evidence adduced by McDonald's leads, in my
view, to the inference that its marks, and particularly
the mark McDonald's, are well known amongst the more
affluent people in the country. People who travel,

63 watch television, and who read local and foreign
publications, are likely to know about it. They would
have seen McDonald's outlets in other countries, and
seen or heard its advertisements there or its spillover
here in foreign journals, television shows, etc.
Although the extent of such spillover has not been
quantified it must be substantial. Moreover, as has
been shown, McDonald's has also received publicity in
the local media. The market survey evidence
specifically related to two groups of adult white
persons living in relatively affluent suburbs of
Gauteng and KwaZulu Natal. It is reasonable to suppose
that much the same results would be achieved elsewhere
among persons of all races who have a similar financial
and social background. These are also the type of
people who would have heard about McDonald's and its
marks from Collins, or who would have discussed these
matters with him, or would have written to McDonald's

64 to solicit a franchise agreement.

poor people are not likely to patronise McDonald's
66 food business as that conducted by McDonald's, it would
67 evidence about the name under which the business was
carried on in Durban before Joburgers bought it. Much
of it is contested. I do not think it is necessary to
traverse it. In my view this point may be decided
simply on the requirements of bona fide use. The
meaning of this concept was considered by Trollip J in
Gulf Oil Corporation v Rembrandt Fabrikante en
Handelaars (Edms) Bpk 1963 (2) SA 10 (T). He was
dealing with sec 136 of the Patents, Designs, Trade
Marks, and Copyright Act, 9 of 1916. That section read
in part:
At p 23H to 24E Trollip J said:
69 The Gulf Oil case went on appeal (Rembrandt
Fabrikante en Handelaars (Edms) Bpk v Gulf Oil
Corporation 1963 (3) SA 341 (A). At p 351 E-F Steyn CJ,
who delivered the judgment of the court, stated that he
did not propose to attempt a comprehensive definition
of what the expression "no bona fide user" meant. He
then added:
70 considered in the above quoted cases. Nevertheless I
consider the reasoning to be entirely applicable. A
"trade mark" is defined in sec 2 of the new act as
Bona fide use of a trade mark within the meaning
of sec 36(2) must therefore be use for the purpose of
distinguishing the, goods or services provided under
that mark from the same kind of goods and services
connected in the course of trade with any other person.
In the instant case Joburgers was the immediate
predecessor in title to Dax. I have already set out the
circumstances in which Joburgers acquired the
MacDonalds business in Durban. Briefly, Joburgers was
interdicted from using the McDonald's trade marks. It
then bought the MacDonalds business and traded under

71 that name in breach of the interdict. Its purpose in
using the trade mark MacDonalds was not to distinguish
its business from that of others, but rather the
converse: to use a mark confusingly similar to that of
McDonalds. This is clearly an ulterior purpose in the
sense discussed in the above cases. Joburgers continued
to trade in this way until it was declared to be in
contempt of court. It then promptly disposed of the
business to Dax. On behalf of McDonald's an attack was
launched on Dax's good faith in acquiring the business.
In my view it is not necessary to consider this
argument. Once it is found that Dax's predecessor in
title, Joburgers, did not use the mark MacDonalds bona
fide, it follows that sec 36(2) cannot provide any
defence to a claim under sec 35(3).
I consider therefore that the well-known marks
application should have succeeded in the court a quo,
at least in respect of the mark McDonald's. McDonald's

applications based cm passing-off and unlawful
competition have therefore become moot and need not be considered further.
sub-section provides inter alia:
A. great deal of evidence and argument was presented to
us on whether Joburgers and Dax have established a case
for removal under these provisions, and, if they have,
whether McDonald's has succeeded in showing that, as
far as the application under section 36(1)(b) was

74 concerned, its non-use of the marks was excusable as
being "due to special circumstances in the trade" for
the purposes of sec 36(2). In my view it is not
necessary to consider these aspects. The position now
is that the well-known marks application has
succeeded, at least as far as the mark "McDonald's" is
concerned. Although, as stated above, there are some
McDonald's marks which do not incorporate the name
McDonald's, we were assured that the marks were all in
some way associated with one another. Moreover, the
case was fought on a winner take all principle. It was
not suggested by Joburgers or Dax that, even if the
marks containing the name McDonald's were well known,
they would still be entitled to use, say, the clown
device. The prize at issue is the mark McDonald's. The
well-known marks application has effectively awarded it
to McDonald's.
In these circumstances it seems anomalous and even

futile to proceed with the applications for removal
76 practical point of view, that such a discretion should
exist. The use of the word "may" in the section appears
to grant a discretion. The weight of authority, as
discussed in Webster and Page, supra, is in favour of
its existence. We should therefore now hold, I
consider, that the court retains a general or residual
discretion to refuse to remove a trade mark from the
register even where sec 36(1)(a) or (b) is applicable.
It goes without saying that a party who has shown
himself entitled to relief under the section will not
be deprived of such relief by the exercise of a general
discretion unless the circumstances are exceptional. In
my view the present circumstances are indeed
exceptional.
It was argued on behalf of Joburgers and Dax that
the court was not entitled to have regard to the
success of the well-known marks application when
deciding the applications for removal from the

77 register. The latter applications, it was contended,
fell to be decided under the old act. Reference to the
new act was accordingly not permitted.
This argument, I consider, betrays some confusion
of thought. It is true that the applications have to be
decided under the old act (see sec 3(2) of the new
act) . The old act empowers the court to refuse the
applications in the exercise of a general discretion.
In deciding whether to exercise this discretion, the
court must have regard to all relevant facts and
circumstances. In this case it is a relevant
circumstance that it would serve no purpose to allow
the applications because Joburgers and Dax are in any
event not entitled to use the relevant marks by reason
of legislation other than the old act. In making use of
this circumstance the court is not deciding the removal
applications according to any statute other than the
old act. It is merely applying the principles of the

old act to the facts and circumstances relevant to the
exercise of its discretion.
79 refuse the applications for removal.
In the result the following order is made.
(case number 11700/95):
(2)      In the Joburgers application (case number
19719/93):
(3)      In the Dax application (case number
16493/94):
costs of two counsel.
E M GROSSKOPF, JA
CORBETT, CJ) NESTADT, JA) SCHUTZ, JA ) Concur PLEWMAN, AJA)

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