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Adoption of Foreign Trade Marks in South Africa -The Pitfalls - By Vicky Stilwell

It is not uncommon in todays global village for South Africans travelling abroad to come across a foreign brand or trade mark and to adopt that brand or trade mark for use and registration in South Africa. Since a trade mark is territorial in nature, provided that the mark is not used or registered in South Africa, this practice is not necessarily contrary to any law.


It is not uncommon in today’s ‘global village’ for South Africans travelling abroad to come across a foreign brand or trade mark and to adopt that brand or trade mark for use and registration in South Africa. Since a trade mark is territorial in nature, provided that the mark is not used or registered in South Africa, this practice is not necessarily contrary to any law.  

It is an established principle of South African trade mark law that the fact that a trade mark is registered or used in a foreign country does not in itself constitute a bar to its adoption and registration by some other person in South Africa, provided that the trade mark is not well  known in South Africa.[1] In assessing whether a trade mark is well known, regard must be had to sections 10(6), 35(1), 35(1A) and 36(2) of the Trade Marks Act, which deal with the protection of well-known foreign trade marks.  

Although this is a sound principle in light of the territorial nature of a trade mark, it is important to bear in mind the provisions of the Advertising Standards Authority Code of Advertising Practice (the ASA Code). Clause 9 of Section II of the ASA Code deals with imitation of advertisements and states that an advertiser should not copy an existing advertisement, local or international, or any part thereof in a manner that is recognisable or clearly evokes the existing concept and which may result in the likely loss of potential advertising value. This principle will apply notwithstanding the fact that there is no likelihood of confusion or deception or that the existing concept has not been generally exposed. This provision applies for a period of two years from the date of last usage of the advertising, packaging or labelling concerned. In considering whether or not an infringement has taken place, consideration will be give to, inter alia, the extent of the exposure, period of usage and advertising spend, whether the concept is central to the theme, distinctive or crafted as opposed to in common use. The competitive sphere will also be taken into account. In the case of an international advertisement consideration will be given to, inter alia, the undue imitation thereof by local advertisers. This, however, will only apply if the advertiser is committed to start trading in the local market within a reasonable time. 

Clause 4 of Section I of the ASA Code defines an advertisement as “any visual or aural communication, representation, reference or notification of any kind which is intended to promote the sale, leasing or use of any goods or services; or which appeals for or promotes the support of any cause”. The clause goes on to state that promotional content of display material, menus, labels and packaging also fall within the definition. In terms of the Trade Marks Act a mark, in the context of the meaning of a trade mark, is defined as “any sign capable of being represented graphically, including and device, name, signature, word, letter, numeral, shape, configuration, pattern, ornamentation, colour or container for goods, or any combination of these”. It is clear that the very broad definition of “advertisement” contained in the ASA Code, read together with the definition of a mark in terms of the Trade Marks Act, means that it is certainly possible that a trade mark could amount to an advertisement. 

It is of vital importance for the provisions of the ASA Code to be borne in mind when considering adopting a foreign mark, whether it is registered or unregistered in South Africa, for use and / or registration in South Africa. The reason for this is that using a foreign trade mark in South Africa could well amount to copying an international advertisement, and provided that the foreign mark is still in use, or has been used within a 2 year period prior to the use of the mark in South Africa the such use could well fall foul of clause 9 of the ASA Code. In the case of international campaigns, the advertiser (i.e. the proprietor of the foreign mark) would also have to show that it is committed to start trading in the local market within a reasonable period, if it is not doing so already[2]. From the local perspective, if a local person is aware of a foreign trade mark and intends to start using that mark in South Africa, it is not only important to conduct pre-filing availability searches among the records of the South African Trade Marks Registry and to consider the possible implications of the provisions of the Trade Marks Act relating to the protection of well-known foreign marks, but also to consider whether the proprietor of the foreign mark could possibly rely on the above mentioned provisions of the ASA Code to restrain use of the mark in South Africa by an unrelated person.  

Not only is it important to bear the provisions of the ASA Code in mind, in particular clause 9, when considering the legality of adopting a foreign trade mark for use in South Africa, but it is also important to keep these provisions in mind when considering the possibility of successfully restraining unauthorised use of a foreign trade mark or get-up in South Africa where one would usually rely on the common law remedies of unlawful competition and / or passing-off. Unlawful competition and passing-off proceedings are notoriously costly and protracted, given that they involve an application to the High Court in which the parties are generally represented by specialist counsel. Furthermore, such proceedings generally involve the applicant having to collect, collate and present a very substantial body of evidence of use of, and reputation in, the trade mark or get-up concerned, and even then the outcome is, to say the least, uncertain. In addition, the losing party is generally ordered to pay the legal costs of the successful party. 

Clause 8 of Section II the General Principles of the ASA Code deals with exploitation of advertising goodwill and states that advertisements may not take advantage of the advertising goodwill relating to the trade name or symbol of the product or service of another, or the advertising goodwill relating to another party’s advertising campaign or advertising property in the absence of written permission from the proprietor of the advertising goodwill. The clause goes on to state that in considering matters raised under the clause, consideration will be given to, inter alia, the likelihood of confusion, deception and the diminution of advertising goodwill. Furthermore, whether the device or concept constitutes the “signature” of the product or service, is consistently used, extended throughout the media and is prominent in the mind of the consumer[3]. 

Clause 9 of Section II, as mentioned, deals with imitation of existing advertisements and states that in considering whether or not an infringement has taken place, consideration will be give to, inter alia, the extent of the exposure, period of usage and advertising spend, whether the concept is central to the theme, distinctive or crafted as opposed to in common use. Furthermore, the competitive sphere will also be taken into account[4]. 

Although these principles of comparison and assessment are akin to those that are usually applied in an unlawful competition / passing-off case, the procedure involved in an ASA complaint is far less complex, less costly and less time consuming than the procedure involved in unlawful competition / passing off matters, which are, as mentioned, brought before the High Court. 

The procedural steps and principles that must be followed in the majority of ASA complaints may be summarised as follows: 

1.      the complaint must be in writing and must clearly state the grounds of the complaint. Specific clauses of the Code should be identified, but this is not mandatory; 

2.      once the complaint has been lodged, the ASA Directorate must inform the respondent of the complaint and call upon him or her to respond to the complaint within 5 days (if it is a consumer complaint) or 3 days (if it is a competitor complaint); 

3.      if the matter requires the respondent to provide substantiation (for example, to substantiate a claim or statement in an advertisement), the respondent will generally be given 48 hours to do so; 

4.      on receipt of the written representations of the parties, and depending on the complexity, urgency and novelty of the subject matter of the complaint, the Directorate shall, at its own discretion, make a written ruling or refer the complaint to an appropriate committee for consideration. 

The procedural rules of the Code also make provision for an appeal against a ruling by the Directorate or committee, and this must generally be lodged by an aggrieved party within 10 days of having been informed of the ruling and the time periods for deciding the matter are again very short. 

Other important aspects of the ASA complaint procedure are: 

·         consumer complaints are dealt with free of charge and competitor complaints are dealt with subject to payment of a comparatively nominal lodgment fee;

·         any personal (as opposed to written) representations made by or on behalf of a party are generally limited to 10 minutes per party;

·         outside legal representation is not permitted except in exceptional circumstances and at the Appeal Committee (this substantially reduces costs);

·         corporate entities that are a party to a complaint may be represented by an employee or director, but may not be represented by independent contractors (i.e. outside legal representatives);

·         if an appeal is lodged against a ruling, the ruling must be adhered to until such time as it is reversed. 

It is clear from the points set out above that the ASA Code can provide a useful tool for restraining the unauthorised use of a trade mark or get-up in circumstances where the common law remedies of unlawful competition and / or passing-off would have been used traditionally, and that using this tool is a far quicker, easier and less expensive route to follow than employing these common law remedies.

This point is well made by the ASA complaint by Carma Laboratories, Inc. against Avid Brands SA (Pty) Ltd. In this case, the complainant was a manufacturer of lip balm products which it sold internationally under the brand name CARMEX, on a substantial basis although sales in South Africa were less substantial and were insufficient to prove the requisite reputation for purposes of proceeding on the basis of passing-off. The respondent also produced a range of lip balm products, which it sold in South Africa under the brand name LIPSANO. It is clear that the trade marks themselves are not confusingly similar, however, both product ranges were sold in containers consisting of a white tub with a yellow lid and with black print appearing on the lid of the product.

Carma Laboratories lodged a complaint against Avid Brands claiming contravention of clauses 8 and 9 of the ASA Code, and obtained a ruling in its favour on the basis of clause 9 of the Code, forcing Avid Brands to change the packaging of their products and to phase out the ‘old’ product packaging within a specified period.

In conclusion, it is very important to bear in mind the provisions of the ASA Code, in addition to the provisions of the Trade Marks Act, when considering adopting a foreign trade mark for use and registration in South Africa. It is also useful to bear in mind that the ASA Code can provide a useful, user friendly and comparatively cost efficient means of restraining unauthorised use of a trade mark or get-up, where the reputation of the aggrieved party is likely to be insufficient to rely on the traditional remedies of unlawful competition and / or passing-off.

[1] South African Law of Trade Marks, Webster & Page, 2007: 3-68

[2] Advertising Standards Authority Code of Advertising Practice, Section II, 2-9,

[3] Advertising Standards Authority Code of Advertising Practice, Section II, 2-8

[4] Advertising Standards Authority Code of Advertising Practice, Section II, 2-9,

This article was written by Vicky Stilwell a Senior Associate in the IP Trade Mark prosecution departmanent in Sandton.

 
 
   

 

In association with Bowman Gilfillan Africa GroupMember of Lex MundiMember of Employment Law Alliance