LML4802 PORTFOLIO MEMO - MAY/JUNE 2023 - SEMESTER 1 - UNISA - (DETAILED ANSWERS - DISTINCTION GUARANTEED!)

LML4802 PORTFOLIO MEMO - MAY/JUNE 2023 - SEMESTER 1 - UNISA - (DETAILED ANSWERS - DISTINCTION GUARANTEED!) QUESTION 1 Uni Pharma (Uni) is a large pharmaceutical retailer that sources its products from Mega Pharma Manufacturers (Mega), one of the largest pharmaceutical manufacturers in South Africa with an 80% market share. When South Africa experienced its first case of COVID 19 pandemic, Uni, Mega and other pharmaceutical manufacturers and retailers witnessed a vast increase in demand for facial masks, sanitizers and disinfectants (these products). As a result, South Africa experienced a shortage of these products. Mega had to increase its production to meet the demand from pharmacies. At the same time, Uni had to procure more stock to meet the demand from consumers. To ensure the continued supply of these products to consumers, Uni unilaterally increased the prices of these products by 300%. In addition, Uni, with a market share of 40%, approached other pharmaceutical retailers and thereby agreed to charge the same price for these products. Many consumers were disgruntled by the increase, as they could not afford these products when they are in so much need of them. 1.1 You are the principal investigator of Uni’s conduct. Write a report wherein you outline in detail the provisions contravened by Uni, grounds of justification if any, and sanctions that may be imposed by the Competition Commission. (10) 1.2 Upon investigation, it transpires that Mega entered into a supply agreement with Uni. Since Uni has the most significant market share at 40%, Mega instructed Uni to increase its prices by 300%. The agreement further provided that if Uni failed to increase the prices, Mega would stop supplying Uni any of its products. As a result, Uni complied with Mega’s request. Write a report wherein you discuss whether Uni and Megas’ supply agreement contravenes the provisions of the Competition Act and any defence that may be available to either of the parties. (10) 1.3 MTN, one of South Africa’s largest network operators, has shown interest in acquiring Telkom, another South Africa’s network operator. As a representative of the Competition Commission, you are required to assess this merger by identifying the type of the merger, the applicable procedure and factors to consider and decide on this merger. You will have to research the companies to make your answer meaningful and relevant. (10) [30] Page 7 of 10 LML4802 May/June 2023 QUESTION 2 Section 29 of the Consumer Protection Act of 2008 provides that: A producer, importer, distributor, retailer or service provider must not market any goods or services – (a) In a manner that is reasonably likely to imply a false or misleading representation concerning those goods or services, as contemplated in section 41; or (b) In a manner that is misleading, fraudulent or deceptive in any way, including in respect of – i. The nature, properties, advantages or uses of the goods or services; ii. The manner in or conditions on which those goods or services may be supplied; iii. The price at which the goods may be supplied, or the existence of, or relationship of the price to, any previous price or competitor’s price for comparable or similar goods or services; iv. The sponsoring of any event; or v. Any other material aspect of the goods or services Perco and Lorel are rival producers of coffee products. Lorel markets a blended coffee under the name Goue Medalje. The product is sold in a package bearing a large picture of a windmill and a pair of Dutch clogs. (Imported Dutch coffee is generally perceived by local consumers to be of better quality than its locally produced equivalent.) Perco lodges a complaint with the National Consumer Commission and alleges that Lorel is falsely representing to the public that its product is produced in Holland. The National Consumer Commission’s investigation reveals that the product in question is made from coffee beans grown in Mpumalanga, and is produced and packed at Lorel’s factory in Johannesburg. The National Consumer Commission then concludes that Lorel’s conduct is in contravention of the Consumer Protection Act. 2.1 Can Perco institute an action for unlawful competition against Lorel merely because Lorel’s conduct is contravening a statutory provision, namely section 29 of the Consumer Protection Act? Discuss fully, with reference to relevant case law. Further, discuss what relief a court may grant, should Perco’s action be successful. (10) 2.2 Is there any other basis on which Perco can institute an action for unlawful competition against Lorel? Discuss fully, with reference to relevant case law. (10) [20] Page 8 of 10 LML4802 May/June 2023 QUESTION 3 Discuss whether the following proposed trademarks will be accepted for registration by the South African Registrar of Trademarks. In each instance, give reasons for your answer and identify ALL relevant sections and/or subsections of the Trade Marks Act 194 of 1993. Also, cite all relevant case law. 3.1 The mark VISTANUOVA for clothing. The applicant has filed an endorsement reading ‘the mark means ‘New View’ in Italian. There is an existing registration in class 25 for the mark NEW LOOK for ‘clothing, shoes and accessories. (5) 3.2 A mark in the shape of a bi-convex oval tablet in class 5 for pharmaceutical products. (5) 3.3 The mark ‘MARNIA’ in class 33 for whiskey and other spirits. There is an existing registration for the mark NARNIA for fruit juices in class 32, and the mark NARNIA is used on a very popular range of fruit drinks for infants. (5) 3.4 The mark ‘GETSET’ in class 25 for clothing. There is an existing registration for the mark GETSET in class 25 for footwear including boots and shoes, but this mark was registered in 2005 and the current applicant can find no record of any use of this latter mark after 2010. (5) [20] QUESTION 4 YOKO, a Japanese manufacturer of computer games, is a proprietor of the South African trademark FLASHTRASH. The trademark FLASHTRASH is registered in class 9 in respect of electronic instruments, computer software, and electronic entertainment devices and software. YOKO markets its products worldwide through a chain of national distributors. YOKO’s products are marketed in South Africa by ZOLI, YOKO’s authorized distributor. The FLASHTRASH products are the most popular brand of computer games sold in South Africa. ZOLI informs YOKO that ZELDA, a local manufacturer, is marketing a range of children’s non-computerised games under the trademark FLUSHTRUSH. 4.1 Advise YOKO whether ZELDA’s use of the FLUSHTRUSH mark in relation to non- computerised games constitutes an infringement of YOKO’s mark FLASHTRASH. Page 9 of 10 LML4802 May/June 2023 LML4802 May/June 2023 Identify the section of the Trademarks Act 194 of 1993 on which you would rely to institute action and give reasons for your answer. (10) 4.2 ZELDA applies to register the mark FLUSHTRUSH for non-computerised games in class 28 with the specification ‘games and playthings for children’. Can YOKO successfully oppose this application, and which section of the Trademarks Act 194 of 1993 will it rely on? (5) 4.3 Would your answer in 4.1 differ if YOKO has not registered the mark FLASHTRASH in South Africa? Give full reasons for your answer. (10) 4.4 Advise YOKO whether the Trademarks Act allows it to prevent ZOLI, its local distributor, from importing less expensive FLASHTRASH products from Korea, where they are manufactured by a Korean licensee of YOKO, into South Africa. FIRST EXAMINER SECOND EXAMINER EXTERNAL EXAMINER © UNISA 2023 (5) [30] TOTAL: 100 MARKS