Advertising Regulatory Board NPC & others v Bliss Brands (Pty) Ltd: Advertising regulatory code's constitutional dimensions clarified

Earlier in April, the Supreme Court of Appeal of South Africa (SCA) ruled on the appeal brought by the Advertising Regulatory Board (ARB) against the decision of the High Court (discussed on the IPKat here), which held inter alia that the certain provisions of the ARB’s Code of Advertising Practice (the “Code”) were unconstitutional. One of the reasons proffered by the High Court for its decision was that the certain provisions of the Code were “directed at the same mischief as trade mark infringement, passing-off or copyright infringement causes of action”, but and do not afford “a respondent the common-law and statutory defences which are available in such proceedings”.

The SCA upheld the appeal and held that if left to stand, the decision of the High Court “effectively dismantled the system of self-regulation of advertising in South Africa in its entirety”.

Issues raised on appeal

The appeal challenged the decision of the High Court declaring part of the ARB’s Memorandum of Incorporation (MOI) unconstitutional, void and unenforceable, together with further declaratory and interdictory reliefs. The key issues on appeal related to the following: 

Whether the ARB’s powers including the power to make decisions on matters bordering on IP, were lawful?

Constitutional dimensions...

The court answered this question in the affirmative and considered that an administrative body such as sports professional bodies, professional associations, etc. may validly exercise public functions or public powers without any empowering statute so long as it does so within the boundaries of “empowering provisions” issued by its members. See para. 17.

The scope of the right to freedom of expression and association vis-a-vis the ARB Code

The SCA held that the right to freedom of expression and opinion extends to the right “not to hold and not to have to express opinions”. Essentially, the court took the view that publishing or refusing to publish an advertisement was within the meaning and scope of the right to freedom of expression. ARB members were therefore entitled to refuse to publish advertising as part of their right to freedom of expression under South Africa’s Constitution. See paras 35-38. [At the High Court, Bliss Brands had argued that the provisions of the Code that entitles the ARB to issue ad alerts to its members to refuse to carry the advertisement of an offending advertiser that has ignored a reasonable request for co-operation, was unconstitutional and infringing on its right to freedom of expression]

Regarding the scope of the right to freedom of association, the court held that it had two important components: the right of self-regulation; and the right to choose not to associate. The right to self-regulation includes the “right of associations to adopt rules and standards to regulate their conduct in their dealings with the outside world”. See paras 42 and 43. [Expressed this way, this right of association may help actualise the operation of copyright limitations and exceptions. Stakeholders in specific copyright-related sectors may formulate industry codes that explain the workings of copyright limitations and exceptions as they relate to their industry]. In this regard, the court held that the ARB’s power to consider advertising complaints for the benefit of its own members advances the right to freedom of association.

As for the other component of the right to freedom of association (i.e. the right to choose not to associate), the SCA held that that includes the right to dissociate from something one earlier associated with. See para 46. Bliss Brands has exercised its right to not associate by choosing to not join the ARB and such exercise of their right does not give them the unfettered right to dictate how ARB and its members should exercise their rights of association.

The right of access to court

The SCA held that this right is not limited by the existence of an adjudicative administrative tribunal such as the ARB especially seeing as dissatisfied parties are entitled to apply to court for an injunction pending a challenge to the ARB’s decision and also given that ARB decisions are subject to judicial review. 

Comment 

This Kat had expressed the same sentiments as has now been stated by the SCA. According to the SCA, the fact that Bliss Brands had submitted to the jurisdiction of the ARB should have stopped the court from raising and considering the issue of constitutionality and jurisdiction of the Code and the ARB, respectively. See paras 9-13. In holding thus, the SCA pointed out that the question of the constitutionality of the ARB’s powers was raised by the court suo motu contrary to the principle that a court should decide only the issues before it, as pleaded by the parties save in exceptional circumstances.

One may have mixed feelings about the SCA's decision on the question of whether the ARB's jurisdiction should extend to matters which courts are called upon to consider in cases dealing with passing off and contraventions of copyright and trade marks. The SCA held that the fact that there is an overlap between elements of a complaint before the ARB and matters that could be pursued in court does not mean that the ARB  ousts the court's jurisdiction. But the SCA did not address the question of the defences and exceptions that may or should be available to a respondent in cases involving passing off and copyright infringement and trade marks infringements and the fact that those are not available in ARB's processes.