From the desk of Andrew Papadopoulos (KISCH IP) comes this guest post which is a timely update on what's happening at the Advertising Standards Authority (“ASA”) in South Africa. The ASA was/is experiencing financial difficulty and recently went into business rescue. This, coupled with the damning decision in Herbex (discussed below and which is currently on appeal), left many to doubt the future of this traditional forum of choice for packaging and advertising disputes. Here he analyses its predicament and the recent ruling in the BAT case.
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"There have been many reports about the future of
ASA in the recent months but it appears
that the ASA is alive and kicking, with no hint of it going anywhere. If
anything, the ASA is poised at obtaining more power.
The first supposed blow to the ASA was a May 2016
High Court judgment in the case between Herbex (Pty) Ltd and the ASA.
This judgment placed in question the ASA’s ability to adjudicate matters over
advertisers who are not members of the ASA. This matter is currently on
appeal before the Supreme Court of Appeal (“SCA”) and therefore the effect of
this is that the High Court decision is suspended pending the SCA’s ruling.
Following this judgment and in the latter part of
2016, the ASA went into voluntary business rescue in an effort to restructure
the industry regulating body. Comment out of the ASA on this process was
that it was a strategic decision and would not affect the operations of the
organisation.
These two events did not instil much hope in the ASA
and attracted many questions surrounding the relevance of the ASA as an
industry watchdog. However, it would seem that the ASA had different
thoughts.
A proposed advertising industry code and ombudsman
scheme has been published for public comment, in terms of which the ASA is to
be recognised and accredited as an ombudsman for alternative dispute resolution
of complaints pertaining to advertising. In other words, the ASA has applied
for formalisation of its “Industry Code” in terms of the Consumer Protection
Act, which would thereby give the ASA the teeth it has been missing in its
current form. This would also remove any question about the ASA’s
jurisdiction and avoid cases like the Herbex judgment.
The proposed Industry Code mainly concerns the
consumer-centric provisions (for example, those relating to misleading claims
and untruthful advertisements) and omits those competitor provisions relating
to advertisements which imitate and take advantage of another’s advertising
goodwill. Therefore, once the Industry Code is enacted, it is proposed
that all provisions which have been excluded in the Industry Code will be dealt
with in terms of the ASA’s current advertising code. It is further
proposed that the Industry Code (or some other legislation) will later deal
with the competitor protection provisions in the same way.
So change appears to be on the horizon for the ASA…
but what is happening in the meantime? Surely would-be advertising
infringers don’t just pause their unlawful activities while the ASA gets its
house in order? Well, following a recent judgment out of the Final Appeal
Committee of the ASA, it would appear that the ASA has not missed a step.
Since December 2015, tobacco manufacturers Leonard
Dingler (part of the Philip Morris group) and British American Tobacco (“BAT”)
have been embroiled in a bitter battle over the latter’s entrant to the pipe
tobacco market, AFRICA GOLD. The dispute went through all levels of the
ASA (together with numerous interlocutory applications being launched) and has
concluded in a ruling handed down on 7 March 2017, with BAT being ordered to
immediately cease use of its AFRICA GOLD advertisements and packaging on
account of them being too close to Leonard Dingler’s famous BOXER pipe tobacco
packaging.
Leonard Dingler’s original complaint was on the
grounds that the AFRICA GOLD packaging and get-up is too close to the
well-known BOXER pipe tobacco.
The Final Appeal Committee of the ASA agreed with
Leonard Dingler and found that BAT’s AFRICA GOLD packaging, which was launched
in August 2015, imitates and takes advantage of the advertising goodwill
subsisting in the BOXER product and packaging design. The ASA held that
BAT had intentionally designed the AFRICA GOLD packaging to utilise the same
combination of key elements to those of the BOXER packaging which has been in
the South African market for over 95 years, with hardly any changes to the pack
design.
An earlier decision by the Advertising Industry
Tribunal of the ASA also found that BAT’s use of the words “Original”, “Makoya”
and “No. 1” on the AFRICA GOLD packaging was likely to mislead the relevant
consumers and likely to exacerbate the impact of the imitation.
During proceedings BAT attempted to challenge the
ASA’s jurisdiction to adjudicate the matter (following the Herbex judgment),
but BAT later withdrew this defence on account of it being a member of the
Consumer Goods Council of South Africa (“CGCSA”) which is a member of the
ASA. The CGCSA actively advocates for the ASA, stating on its website
that “the regulation of advertising is essential for the
country and ASA has been the voluntary regulator… The CGCSA members place
consumer protection at the heart of its business, recognizing that consumers
have the right to transparency, to fair business practices and to the right of
redress amongst others…”
The ASA ruled that BAT’s current packaging, which
includes all of its point of sale material, must be withdrawn, and the process
to withdraw the packaging must be actioned with immediate effect. BAT was
also ordered to pay Leonard Dingler’s costs in the proceedings."
Thanks Andrew, and very encouraging indeed.
