Nandos "Yello Hummer" / MTN / 10381
Ruling of the : ASA Directorate
In the matter between:
Mobile Telephone Networks (Pty) Ltd MTN Group Management Services (Pty) Ltd	Complainant(s)/Appellant(s)
Nandos Brand Corporation (Pty) Ltd Chickenland (Pty) Ltd	Respondent

19 Dec 2007

MTN lodged a competitor complaint against Nando’s “Yello’ HUMMER” advertising campaign, which included print advertisements, in-store promotional material and radio commercials.

The advertising contains, inter alia, the following elements:

• The phrase “Yello’ HUMMER”;
  
  
• Yellow backgrounds;
  
  
• Arial font in black and red;
  
  
• References to “Top up;
  
  
• Separate depictions of the different components of the “Festive Meal”, together with a picture of each component;
  
  
• The phrase “Nando’s Celebrating 20 Years” within a white keyline against the yellow background at the bottom right hand corner of the advertisement;
  
  
• “Terms and conditions” at the bottom of the page, including the sentence, “Buy your Festival Meal and you could look like the real deal, every where you go”;

Another in-store advertisement carries the heading “Starter pack”.

COMPLAINT
The complainant argued, in essence, that the respondent’s advertising campaign exploits its advertising goodwill and is an imitation of its advertising.

It submitted that it would be appropriate for the ASA to impose a pre-clearance sanction on the respondent in terms of Clause 14.3 of the Procedural Guide.

RELEVANT CLAUSES OF THE CODE OF ADVERTISING PRACTICE
The complainant identified the following clauses of the Code as relevant:

• Section II, Clause 8 – Exploitation of advertising goodwill

• Section II, Clause 9 – Imitation

• Procedural Guide, Clause 14 – Sanctions

RESPONSE
The respondent addressed the Directorate at length on the matter. The relevant issues will be dealt with below.

ASA DIRECTORATE RULING
The ASA Directorate considered the relevant documentation submitted by the respective parties.

Points in limine

• The respondent complained that it did not have sufficient time to submit a proper response and that the ASA acted unfairly by not granting an extension as requested. The matter should not be treated as urgent because the complainant submitted its complaint to the ASA only two weeks after its attorneys first addressed the matter with the respondent.
  
  Clause 8.2.2.2 of the Procedural Guide states, “in the case of competitor complaints, the respondent shall generally be given three days to respond”. However, in terms of Clause 8.2.2.4, the Directorate may specify shorter deadlines, depending on, inter alia, the nature and urgency of the complaint. It is worth noting that the Directorate did not shorten the respondent’s deadline, but merely complied with procedure. In fact, the respondent was afforded additional time to respond, only not as much as it wished.
  
  Therefore, the respondent was not prejudiced as it was afforded the stipulated amount of time to respond, as well as some additional time.
  
  
• The respondent submitted that it was unclear whether the ASA assessed the complaint in order to comply with its obligations in terms of Clause 8.2.1. The Directorate presumes the respondent’s intention was to refer to Clause 8.2.1 of the Procedural Guide.
  
  Clause 8.2 of the Procedural Guide reads as follows:
  
  “…On receipt of a complaint, or where the Directorate otherwise decides to consider an issue, it shall:
  
  8.2.1 Consider the complaint and decide whether the complaint is –
  
  8.2.1.1 vexatious taking into account factors such as malicious motive and bad faith; or
  
  8.2.1.2 prima facie without merit;
  
  and, if so, inform the complainant of its decision and of the fact that the ASA will not entertain the complaint…”.
  
  From this it is clear that there is no obligation on the Directorate to inform the parties except where it is decided that the complaint is vexatious or prima facie without merit.
  
  By virtue of the fact that this did not occur and that the respondent was called on to submit formal arguments on the merits of the matter, the respondent would be adequately informed that the complaint was not regarded as vexatious or without merit.
  
  Accordingly, there has been no prejudice suffered and procedure was complied with.
  
  
• The respondent submitted that the ASA is required to indicate the provisions of the Code under which it will consider the complaint. Because it did not do this, the respondent was severely prejudiced.
  
  Clause 3.1.3 of the Procedural Guide states, inter alia, “If possible, the sections of this Code to which the complaint relates, should be identified. Should the complainant not be able to do so, the ASA will consider the complaint in terms of the sections it regards as relevant and deal with the complaint as if it had been lodged in terms of those sections”.
  
  Paragraph 7 of the complaint states, inter alia, that “The Nando’s Promotion breaches the following provisions of the Code of Advertising Practice…clause 8 of Section II of the Code – exploitation of advertising goodwill; …and clause 9 of Section II of the Code – imitation…”. Throughout paragraphs 7, 8 and 9, the complainant elaborates on its argument on why these clauses have been contravened.
  
  It is also clear from paragraph 10.2.3 that the complainant requested the imposition of a pre-clearance sanction in terms of Clause 14.3 of the Procedural Guide.
  
  In light of this, it cannot be argued that the respondent was prejudiced, as the complainant clearly identified the relevant provisions of the Code. The respondent was afforded an opportunity to scrutinise the complaint and was therefore adequately informed.
  
  The respondent’s objection is therefore without merit.

The merits
Print advertisements
The complainant submitted, inter alia, that the respondent copied the following elements from its advertising:

• The colour yellow, which is pronounced and dominates all MTN’s advertising,
  
• The word “Y’ello”,
  
• The term “Y’ello Summer”,
  
• The registered trade mark “everywhere you go”,
  
• The Arial font lettering,
  
• Red and black writing,
  
• The term “top up”,
  
• The term “real deal”,
  
• The white keyline around the MTN logo, which is generally positioned at the bottom, right hand corner of MTN’s print advertisements,
  
• The placement of terms and conditions at the bottom of the page and set out in a specific manner.

It submitted that these elements are prominently and frequently used in its advertising of the Y’ello brand. It submitted examples of various advertisements displaying these elements.

Clause 9 of Section II states, inter alia, “An advertiser should not copy an existing advertisement…or any part thereof in a manner that is recognisable or clearly evokes the existing concept and which may result in the likely loss of its potential advertising value. This will apply notwithstanding the fact that there is no likelihood of confusion or deception or that the existing concept has not been generally exposed…In considering whether or not an infringement has taken place consideration will be given to, inter alia, the extent of exposure, period of usage and advertising spend, whether the concept is central to the theme, distinctive or crafted as opposed to in common use. Furthermore the competitive sphere will also be taken into account.”

It has repeatedly been held that the central issue is conscious copying of crafted elements (refer the Gillette Group v Aspen Pharmacare)

The respondent submitted, in essence, that:

• the identified elements are not original, unique or a signature of the complainant’s advertising,
  
• the complainant has not proven consistent and extended use of the elements or its advertising spend,
  
• the parties are not competitors,
  
• the complainant did not prove likely loss of potential advertising value,
  
• the elements were not copied,
  
• the respondent had regard to the complainant’s advertising for the purposes of parody.

Both parties referred to the decision of the Constitutional Court in Laugh It Off Promotions CC v SAB International (Finance) BV t/a Sabmark International 2006 (1) SA 144 (CC). The Court held, inter alia, “The relationship between the trademark and the parody is that if the parody does not take enough from the original trademark, the audience will not be able to understand the humour.”

In Kulula.com / Cell C / 8294 (12 January 2007), the Directorate held that “[p]arody and spoof are…not a defence to a breach of Clause 9 of Section II”. It is accepted, however, that the mere presence of parody does not automatically imply imitation in terms of Clause 9 of Section II. It is the nature of the communication that is relevant, and Clause 4.2.3 of Section II clarifies that parody would be acceptable “provided that [it is] clearly to be seen as humorous or hyperbolic…”.

The problem with the respondent’s argument is that parody is useless if the object of your parody is unknown to the public. It is an inherent requirement for successful parody that the public must be aware what you are referring to. It is therefore nonsensical for the respondent to argue that the elements of the respondent’s advertising are not unique or original, or that they have not been proven to be so. If this were the case, the respondent would have nothing to parody.

The Directorate accepts that certain elements of an advertising campaign might be commonplace or generic in themselves. However, it is possible that a combination of generic elements in a particular manner may nonetheless amount to original intellectual thought. For example, in Kwality Biscuits / National Brands (20 June 2003) the Appeal Committee considered similar packaging and ruled that the “positioning of the logo, the name of the product, the positioning of the biscuits and the colour blue all point to an intention to copy”. This finding was confirmed in Caprica / Wild Island (9 March 2006).

Similarly, in the present matter, the combination of all the elements has become a signature of the complainant’s advertising in relation to its “Y’ello Summer” concept.

The respondent used several elements from the complainant’s advertising with little or no amendments. It combined the following elements to create an advertising campaign that, as a whole, looks strikingly similar to the complainant’s advertising:

• The word “Yello” as used by the respondent is spelt exactly the same as the complainant’s “Y’ello”. The only difference is a change of the position of the apostrophe; the respondent used it after the “o”, (Yello’)
  
  
• In addition, it combines this word with the name “HUMMER”, to create a phrase “Yello’ HUMMER” that is almost exactly the same as the complainant’s “Y’ello summer”;
  
  
• It uses the same font that is used throughout the complainant’s advertising;
  
  
• It uses a similar colour scheme, being a yellow background with black and red lettering;
  
  
• It uses separate depictions of the different parts of the “Festive Meal” in a manner resembling cell phone advertising, which often lists each deal’s benefits and each phone’s capabilities;
  
  
• It uses the complainant’s trade mark, “everywhere you go” in its terms and conditions printed at the bottom of the print advertising.

The combination of these elements in this particular manner recalls the complainant, and the respondent has deliberately copied it in a recognisable manner.

It is also significant that the advertising agency briefs as submitted by the respondent state, inter alia, “We hear what resembles the MTN ‘Y’ello Summer jingle…”; “The girls mimic the MTN girls…”; “…do an advertisement for the promo in the style that has become synonymous with retail cell phone advertising”. This indicates an intention to copy.

The next question is whether this would result in a likely loss of potential advertising value for the complainant.

The respondent argued that the complainant ceased using the “Y’ello” and “Y’ello summer” elements. It also relied on the decision of the Appeal Committee in Uthingo Management / Nando’s (7 November 2001) for its argument that there is no likely loss of potential advertising value because the parties operate in completely different competitive spheres. It added that because there are only three licensed cellular telephone operators in South Africa, the situation is similar to the monopoly enjoyed by Uthingo Management.

In this regard it is firstly noted that, in terms of Clause 9.2 of Section II, the provisions of Clause 9 apply “for a period of two years from the date of last usage of the advertising…concerned”. From the respondent’s submissions, it appears that the decision to stop using the “Y’ello Summer” payoff only came in April 2007. Accordingly, the two year period has not lapsed yet and the argument that the complainant is no longer using this concept becomes irrelevant at this time.

In addition, the complainant’s situation cannot be likened to that of Uthingo Management. The latter enjoyed a complete monopoly with absolutely no competition, whereas the competition between the cellular phone operators is fierce. This is evident from the plethora of matters involving the three operators that the ASA has dealt with.

In addition, the Directorate notes that the Appeal Committee’s decision was based on a combination of both factors, being that the complainant enjoyed a monopoly and because the parties operated in completely different competitive spheres. The decision was not purely based on the latter consideration.

This understanding is evident from the Directorate’s decision in the Kulula.com / Cell C matter, where it was held that “[w]hile the Directorate accepts that the parties are not in the same competitive sphere, and that there will be no confusion, it concurs with the complainant that the deliberate use of its concept is likely to dilute its advertising value. The little, numbered people are no longer associated solely with the complainant, and their value to the complainant is therefore likely to be lessened.” The Directorate ruled that the respondent was in breach of Clause 9 of Section II.

Similarly in this situation, the respondent is not creating its own unique advertising concept. Rather, it copied the complainant’s advertising in a clearly recognisable manner, which will inevitably lead to the loss of advertising value for the complainant. The unique combination of elements it created is now no longer associated solely with the complainant.

In addition, the advertising communication as a whole is not overtly humorous or exaggerated and as such the argument of parody falls away.

In light of the above, the respondent’s print advertising is in breach of Clause 9 of Section II.

Radio commercial
The complainant submitted that the jingle in the respondent’s radio commercial is an imitation of the complainant’s, and exploits the advertising goodwill therein.

The respondent submitted, inter alia, a letter from Sterling Sound CC confirming it was commissioned to create a jingle that has a “similar summer feel to the MTN Summer campaign.” However, certain changes were made to set its commercial apart from the complainant’s. These include the key, tempo, chord progression, guitar hook and melody.

It must be clarified that it is not sufficient to argue that the material is not exactly the same and therefore no imitation occurred. The question is whether or not the disputed advertising likely “evokes the existing concept and…result[s] in the likely loss of potential advertising value”.

The Directorate listened to the relevant radio commercials and accepts that the melody and tune are slightly different. However, the respondent’s jingle, in combination with the focus on “Yello’ Hummer” as opposed to “Y’ello Summer” is likely to evoke the complainant’s material and result in loss of advertising value.

Accordingly, the respondent’s radio commercial is in breach of Clause 9 of Section II.

Given the above findings:

• The advertising material complained of must be withdrawn;
  
  
• The process to withdraw the advertising material must be actioned with immediate effect on receipt of this ruling;
  
  
• The withdrawal of the advertising material must be completed within the deadlines stipulated by Clause 15.3 of the Procedural Guide;
  
  
• The advertising material may not be used again in its current format in future.

The respondent’s attention is drawn to Clause 15.5 of the Procedural Guide.

The complaint is upheld.

Sanctions
The complainant requested the Directorate to impose a pre-clearance sanction on the respondent in terms of Clause 14.3 of the Procedural Guide.

Clause 14.3.1 of the Procedural Guide expressly states that “[t]his sanction may only be imposed if more than one adverse ruling against the respondent has been made by the ASA in a period of 12 months.”

A preliminary search of ASA archives indicates the respondent was only involved in one other matter over the last 12 months. This matter is referenced Nando’s / G de Bruyn & Others / 9923 (9 November 2007). In this matter, the Directorate recorded a voluntary undertaking from the respondent to stop using the advertising complained of.

While, in terms of Clause 14 of the Procedural Guide, the Directorate may take such undertakings into consideration when calculating the number of adverse rulings. This does not appear to demonstrate a flagrant disregard for the Code.

The respondent is cautioned, however, that this ruling may be taken into consideration, should further complaints of this nature be received.

Accordingly, no sanction in terms of Clause 14.3 of the Procedural Guide is imposed on the respondent at this time.