The South Gauteng High Court has dismissed an application by Discovery after it alleged that rival insurer Liberty was infringing on its Vitality trademark as well as unlawful use of data from its Vitality programme.
The crux of the issue focused on Liberty Lifestyle Protector Plan and a new ‘wellness bonus’ which it introduced as part of the plan on 1 May 2019.
The change meant that qualifying customers could elect to disclose an existing membership of an external wellness programme to Liberty, which would then be considered as part of the wellness bonus on their Liberty Plan policy.
Critical to the case was that the amount of the wellness bonus payback is dependent on a Liberty Wellness Score. In turn, this score is determined by the particular status that the policyholder has achieved on an external wellness programme.
This means that if a policyholder is a member of the Vitality programme and has a Blue status, she will have a lower Liberty wellness score, and will receive a lower percentage of their premiums back than another Liberty Plan policyholder who is a Diamond status member of the Vitality programme.
By introducing this programme and using this information, Discovery argued that:
- Liberty unlawfully linked its insurance offering, based on the wellness bonus, to the Vitality wellness programme. In so doing, Liberty infringed on the Vitality and Discovery trademarks;
- Liberty made unlawful and unfair use of the Vitality programme, its reputation and the “back-office” that it entails. The ‘back office’ refers to all the behind-the-scenes operations, information and know-how that goes into maintaining and developing the Vitality programme. In so doing, it argued that Liberty has committed the delict of unlawful competition.
While the High Court focused on a number of previous cases, it ultimately noted that customers’ data from Vitality belongs to them and they are free to use it how they wish.
“Vitality members pay for their membership of the Vitality programme. One of the things they get in return is their personal Vitality status. They are entitled to use this for whatever lawful reason they may wish,” the court said in its ruling.
“Liberty allows them to use their status, should they wish to do so, to obtain the benefits available under the wellness benefit add-on to the Liberty Plan. Of course, Vitality members may also wish to use their Vitality status to obtain benefits under Discovery Life’s competing plan.
“The point is that members of the public, who have paid for their Vitality membership and status, should be entitled to continue to have the choice of what they wish to use that status for.”
The court said that that this is both in the interest of customers and in the interest of competition in the insurance industry more broadly.
To prevent Vitality members from being able to exercise this choice would be to restrict their own proprietary interests in their Vitality status, it said.
It would also encourage a monopoly by the Discovery group in offerings in the insurance sector, to the detriment of Vitality members and the public.
Discovery’s application was subsequently dismissed with costs.
You can read the full judgement below: