1 February 2008 by

A name is worth a thousand suits

The Supreme Court of Appeal recently handed down a decision confirming that a name can be protected against any unauthorised use or publication. This was the finding in the case of Grutter v Lombard. The question posed to the court was whether a name was a protectable interest in South African law. 

The facts giving rise to the case are as follows: Grutter and Lombard had agreed to practice from shared premises under the name ‘Grutter and Lombard’. They were later joined by a Ms Oosterhuizen. Some time passed before Grutter ended the arrangement. Grutter then began to practice in association with a person named Grobbelaar, while Lombard and Oosterhuizen continued to practice under the name 'Grutter and Lombard’.

After several failed attempts to get Lombard to remove the reference to 'Grutter' from Lombard's practice, Grutter brought an application to prohibit Lombard from using the name commercially. This application was dismissed in the High Court, while the Supreme Court of Appeal differed in their finding and upheld the appeal.

The High Court dismissed the application on the basis that the arrangement between Grutter and Lombard was a partnership. As such, the name of the business formed part of the partnership assets. Upon termination of the partnership, each partner could use the name of the former partnership. This was as long as such use did not result in the former partner incurring liability. The court found that such risk was not present in this case, and consequently dismissed the application. The High Court thus held that Lombard could continue to use the name 'Grutter'.

Conversely, the Supreme Court of Appeal held that the evidence showed that there was no partnership. According to the court, it was merely an arrangement between Grutter and Lombard that they would practice from shared premises while each was to run his own independent practice. This then meant that Grutter had a right to protect his name from Lombard's unauthorised use for the latter's commercial advantage.

In practical terms, this judgment means that a sole proprietor will legally be able to protect his name from the unauthorised use by anyone who intends to make use of it commercially.

A key aspect of the judgment was that Grutter was a sole proprietor and it should be noted that the present position in our law is that the protection afforded a name against unauthorised use or publication is not absolute. It may in fact be subject to the law governing the type of entity to whom the name belongs and this remedy will not in all likelihood be available to a partnership, nor a company or close corporation.

Lionel Egypt and Afton Appollis

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