It’s personal: Discovery vs Liberty on the use of personal information

Authors: Marco Schepers, and Andrew Attieh

Services: Litigation & Dispute Resolution, and Regulatory

The Johannesburg High Court handed down a judgment in a matter involving an application instituted by Discovery seeking to interdict Liberty for the alleged unlawful infringement of its Discovery Vitality and Discovery trademarks, also seeking damages related to unlawful competition through Discovery's use of their Vitality programme.

We are all familiar with how a medical aid wellness programme like Discovery Vitality works. The programme encourages members to lead a healthy lifestyle and in return, members of the programme receive benefits in varying degrees depending on the number of points a member earns. In order to calculate the benefits awarded to each member, the medical aid collects information on the habits and lifestyle of the member, such as their exercise, recreational eating patterns.

On 15 April 2020, Keightley J in the Johannesburg High Court handed down a judgment in a matter involving an application instituted by Discovery Ltd, Discovery Life Ltd, and Discovery Vitality (Pty) Ltd (collectively referred to as Discovery) seeking to interdict Liberty Group Ltd (Liberty) for the alleged unlawful infringement of its Discovery Vitality and Discovery trademarks and furthermore, sought damages for the alleged unlawful competition stemming from the unlawful and unfair use of the Discovery Vitality programme.

Focus on trademark infringement, unlawful competition and the ownership of personal information

On the face of it, the facts surrounding this dispute reflect a typical trademark infringement and unlawful competition dispute. However, contained within this judgment there is possibly new authority on how the Court views the ownership of personal information. This article will focus primarily on this feature of the judgment.

The Facts

Liberty competes with Discovery Life Ltd in the sale of life insurance and related products. As part of its on-boarding process for its Liberty Lifestyle Protector Plan, Liberty offered its prospective clients the opportunity to disclose an existing wellness programme status. This is then used to evaluate any benefits that accrued to Liberty’s clients after four years.

Liberty does not operate its own wellness programme but does recognise external wellness programmes like Discovery Vitality and Momentum Multiply. Discovery’s complaint against Liberty was two-fold. As to the first complaint, Discovery is of the view that the use of the words “Discovery Vitality”, which appear on Liberty’s online quotation and instruction document are unlawful in terms of the Trade Marks Act 194 of 1993.

As to the second complaint, Discovery claimed that Liberty was making use of Discovery’s innovation (the Vitality programme) for its own commercial purposes and to attract Discovery’s customers, therefore amounting to unlawful competition.

The Judgment

Ultimately, the Court found that Liberty’s conduct neither constituted a trade mark infringement, nor did it amount to unlawful competition. The Court proceeded to dismiss the application accordingly.

What constitutes personal information?

In the judgment, Keightly J significantly points out that a client’s Vitality status does not form part of Discovery’s confidential proprietary information and instead is the member’s personal information that a member is free to make public.

Section 1 of the Protection of Personal Information Act of 2013 (POPIA) provides an open list of what is defined as information relating to an “identifiable, living, natural person, and where it is applicable, an identifiable, existing juristic person”.

The list does not include “membership status”, but it does include:

(c) any identifying number, symbol, e-mail address, physical address, telephone number, location information, online identifier or other particular assignment to the person.

Although the Court does not refer to POPIA and tackle this point in detail directly, it may mean that your wellness programme membership status could be regarded as personal information for the purpose of POPIA. It is however at this stage unclear to which information beyond the membership status this applies, but we may find that in the future, members of a wellness programme or the like would be covered by the data protection mechanisms offered by POPIA.

To whom does this personal information belong?

The Court points out that Vitality members pay for their membership and there is no lawful restriction on a member voluntarily disclosing their Vitality status, even if that disclosure is to their own insurer or a competitor of Discovery, like Liberty.

What this implies is that preventing Liberty from using personal information of Vitality members would amount to preventing those members from exercising the choice to use the personal information as they wish and therefore restricting their own proprietary interests in their Vitality status.

This view of personal information is unique in the sense that it contemplates personal information as something that can be monetised by the owner of the information and acquired by a third party by purchasing it from the owner. It is unusual in the sense that information that is regarded as the “property” of a commercial entity is usually information that is used by the entity in the production of a product or a body of work, and not the personal information of a third party. It must be noted that the view to be taken in this regard would in most instances have to be determined in light of the facts of each case.

POPIA is aimed at protecting personal information, but it does not treat personal information as property. Treating personal information as property, may lead to several legal consequences attaching to that information as a result.

By distilling the judgment, when:

  1. the shared information does not comprise the confidential proprietary information of another product developer;

  2. the information shared with a receiving company is personal in nature and belongs to the member or client;

  3. the personal information is voluntarily shared by the member;

  4. the firms are not competing in the same market; and

  5. the receiving company uses its own personal expertise and know how to develop its product when using the information, then

the use of the information can be deemed lawful by the receiving party.

With the looming implementation of POPIA on the horizon, personal information and data protection will become a major focus of many corporations. This judgment raises several interesting questions as to what effect the judgment will have on the definition of personal information and how it can be used by a data subject or a third-party entity.