Pepkor’s dream of shutting the doors of the first three Mr Tekkie stores, has been deferred. Not only did they not obtain the urgent interdict they asked for this week to restrain the Mr Tekkie management from trading, but they seemed to have dropped this application in exchange for a new request. Instead of restraining the former Tekkie Town owners from keeping the Mr Tekkie doors open – and adding more stores – they asked judge Elizabeth Baartman to prevent Mr Tekkie from stocking lifestyle footwear.
More specifically, the same shoe lines that are sold in Tekkie Town (TT). Pepkor Speciality, which now owns TT, first wanted to prevent Mr Tekkie from selling the lines that were in TT in October 2016, at the time of the chain’s share swop with Steinhoff (or swindle, as they call it.) This would not have presented much of a problem – after all, who wants to stock 2-year old footwear? But, Pepkor then amended the request to prevent Mr Tekkie from selling the same shoes TT is currently stocking and will stock over the next six months. They could, however, not produce a list of the shoe lines stocked by TT in the past, or present, for the judge to consider.
Judge Baartman will probably rule on these requests early in December. This will be around the time when the adversary’s will be back in the Cape High Court to argue whether the Mr Tekkie name is an intellectual property breach of the Tekkie Town trademark – or alternatively, is so similar as to cause confusion in the market.
While it is indisputable that Mr Tekkie was registered as a retail store by Reinhard Barnard of the former Model Sport store in Worcester in 1999, two years before Tekkie Town was founded, Pepkor argues that the name had not been in use over the past five years and that it is therefore no longer valid.
This illustrates a lack of knowledge about the market in which the TT stores trade by the applicant Corne Klem, head of Speciality at Pepkor, where TT now resides, Barnard said in an affidavit. On 5 October 2018, the day he was deposed, there was a Mr Tekkie store operating 50m from the TT store in the Phillipi Plaza in Michell’s Plain. Even though this was as part of the Ye! Fashion store, the Mr Tekkie signage is very prominent. As proof, he included photos in his affidavit.
The Ye! Fashion stores have accommodated Mr Tekkie “store-in-stores” since 2012, and until recently brochures and advertisements also depicted the Mr Tekkie trademark, including a “tekkie” or sneaker, which is also seen on the current, updated Mr Tekkie trademark. TT argues that this depiction of the tekkie in the Mr Tekkie logo causes confusion with the Tekkie Town logo.
Barnard also introduced a Mr Tekkie line of shoes, that were sold in various TT stores, , without anybody confusing the two brand names, he says. A Mr Tekkie mascot, also registered by Barnard, was used in various TT promotions.
“From time to time, the Mr Tekkie logo was prominently displayed in Tekkie Town stores such as that in Atterbury. This was possible because neither Barnard nor (Braam) Van Huyssteen has ever considered these marks to be confusingly similar,” added Mr Tekkie CEO Bernard Mostert in his affidavit.
Sir Walter Scott’s words Oh, what a tangled web we weave… comes to mind when trying to unpack all the developments around TT and Mr Tekkie. The application of the former TT owners to have their retail chain returned to them because they consider the share swop deal with Steinhoff to have been fraudulent, is also looming in the background. The first South African legal action against Steinhoff, as this application is also dubbed, made its first appearance in counter-arguments during this week’s restraint of trade application by Pepkor.
The former TT shareholders say that TT rightfully belongs to them, because they were swindled when Steinhoff bought it for fool’s gold (shares that Steinhoff knew was vastly overvalued). Yet, TT is now trying to interdict them from operating as retailers, and especially running a new Mr Tekkie chain … which they say they ultimately want to run as a lifestyle chain complimentary to footwear chain TT, once they get TT back.
Interspersed are arguments about whether the restraint of trade agreements they signed with Steinhoff was transferred to STAR/Pepkor – especially since Pepkor claims that other agreements they made with Steinhoff, like the earn out bonuses, were not transferred to them. Another argument is around the issue whether people can be prevented from earning a living in the only career and industry they’ve ever known (retail), as in the case of some of the respondents.
Other arguments centred around whether the shop fittings by Ian Stevenson for Mr Tekkie resembled those he previously designed for Tekkie Town. He said he designed everything new to fit the punchy Mr Tekkie image.
Many of these issues will have important implications for the rest of the industry as well. It will therefore be with interest that the outcomes of the various tekkie fights will be awaited. Hopefully the first answers will be giving before the busy December trading period begins.