Discovery Accuses Liberty of Unlawfully Using Its Vitality Brand

(Bloomberg) -- South African insurer Discovery Ltd. is accusing a rival of using its incentive program without permission, authorization Liberty Holdings Ltd. says it doesn’t need.

Vitality offers its 1.9 million customers discounts and cash back on Discovery’s life-insurance and credit cards for exercising and buying healthy food. In May, Liberty launched its Wellness Bonus, which cuts premiums for clients who are part of a program like Vitality or Momentum Metropolitan Holdings Ltd.’s Multiply.

“If you’re a Vitality diamond or gold member put it on your CV, put it on LinkedIn and put it on Tinder,” Discovery Vitality Chief Executive Officer Dinesh Govender said in an interview. “It’s called status. That doesn’t mean we have granted a competitor the right to market a product off the back of our work and innovation.”

Discovery is asking the Johannesburg High Court to block Liberty from using Vitality, alleging that the competitor is making unlawful use of its intellectual property. Liberty denies any infringements, accusing Discovery in its court filings of attempting to stifle competition.

“While they have tried in every instance not to use our name, ultimately they do have to, to enable their product,” said Discovery Life CEO Hylton Kallner. “It’s actually core to their product that they use our trademark and that actually infers that it’s with our blessing, which it isn’t.”

Liberty identified Vitality and Multiply for reference purposes only, said David Jewell, Liberty’s managing executive of retail solutions. Liberty’s clients are within their rights to “use their health status on wellness programs, to which they pay fees, to reduce their life-insurance premiums.”

While Momentum has no intention of pursuing legal action against Liberty, it is monitoring the situation, the Pretoria-based company said in an email.

“We launched what we felt really responded to the needs and insights that we generated from our clients,” Liberty CEO David Munro said. “We need to therefore focus on making sure that it can be implemented and delivered to our customers and advisers in an effective and efficient fashion.”

To contact the reporter on this story: Roxanne Henderson in Johannesburg at rhenderson56@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels, John Viljoen

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