South Africa: Muhlberg's Brief

Last Updated: 10 May 2013
Article by Hans Muhlaberg

The ugly face of IP shows itself from time to time. It did when SAB Miller tried (unsuccessfully) to stop a young man from producing a t-shirt that parodied/commented on its Black Label brand – despite the Constitutional Court's judgment, there are people in IP who still cannot accept that something as touchy feely as the right of free expression can ever override something as solid as a trade mark right. Who still believe that spoof t-shirts actually harm corporate reputations. Who really believe that people seeing a Walocaust t-shirt suppose that Walmart supported the Nazis, rather than seeing it as a bit of culture jamming, a playful allusion to the fact that shopping sucks.
This ugly face has shown itself again, this time in a posting on Stellenbosch University's IP law blog, www.blogs.sun.ac.za/iplaw. The piece, entitled Trade Marks Going Up In Smoke, suggests that if the SA government invokes Australian-style legislation that bans the use of any name or logo on cigarette packs, it will be guilty of expropriating property, and liable to pay huge sums in compensation to brand owners (Rothmans, Dunhill and Peter Stuyvesant get special mention). It's premised on the argument that a step like this will prevent brand owners from using their trade marks, making the registrations vulnerable to cancellation for non-use. Don't do it is the message, it'll end up in the Constitutional Court: 'Does it (government) feel sufficiently strongly about this issue to pay millions of Rands in compensation to the proprietor of each registered trade mark which is prevented from being used in this manner and thus condemned to a certain demise?'
Where to start?

It's worth noting that Stellenbosch's Chair of IP Law is Rupert-funded. And the expropriation argument isn't the most compelling argument ever advanced. Is a restriction of use really an expropriation? Not according to constitutional lawyers, Currie and De Waal, who in The Bill of Rights Handbook argue that there's a difference between deprivation of property, which does not require compensation, and expropriation, which they say requires an acquisition of ownership. Even if it is an expropriation, the purpose of the expropriation (public health) will be considered when deciding compensation, so perhaps not quite the 'treasure trove' claimed in the posting. And does the proposed legislation really contemplate zero use of the brand name (my understanding has always been that some minimal use of the name will be allowed, without logos or other branding)? So will this really amount to complete non-use? In any event, it's a defence to a cancellation action to show that you've been prevented from using your mark by special circumstances.

Then there's the posting's tone: 'While it is often claimed that smoking can retard the physical growth of children, there can be no doubt that inhibiting the use of cigarette trade marks limits their growth as items of intellectual property and as commercial assets.' To suggest that trade mark health is as important as public health is to invite public ire. Especially as the public saw straight through BAT's recent transparent attempt to circumvent the smoking advertising ban by sponsoring an anti-illegal cigarette campaign which used brand elements (colours) of BAT's products - the very idea that all colours and logos should be removed from cigarette packs does, of course, flow from the 'neuromarketing' research done by people like Martin Lindstrom, which suggests that simple brand elements like colour stimulate the urge to smoke.
The posting ends: 'Perhaps the government should put this issue in its pipe and smoke it!' Arrogance may be appropriate in some cases, but probably not when you're as unpopular as the tobacco industry is. Far better to make nice, to tell people that the use of your product can prevent Parkinson's - see posting of 16 May 2012 on www.brandchannel.com . Which is good to know, as long as you're OK with heart disease or lung cancer!

ADVERTSING LAW

Telling it as it isn't: On 10 May 2012 the ASA dealt with claims made about a Patrick Holford product called Smart Kids Brain Boost. The ASA ruled that the claim that taking the product 'could assist your child to perform at the top of their own capacity /ability' (a toned down version of the original, which was that it would put the sprog 'top of the class') was unacceptable, as there was no proof that it boosted scholastic performance. It also ruled that the evidence of a Professor Veldman - who said it was OK to describe Phospholipids (something provided by the product ) as 'the intelligent fats' - was not good enough because he provided no proof, so this claim had to be withdrawn. The name of the product had to be changed too because it created an 'unsubstantiated expectation'.

BRANDS/ TRADE MARKS

Botox: The EU's highest court recently held that cosmetic trade mark registrations for Botocyl and Botolist - belonging to L'Oreal and Helena Rubinstein respectively - were invalid because they took advantage of the distinctive character and repute of Allergan's pharmaceutical trade mark registration for Botox. It found that the trade mark Botox enjoys a huge reputation and awareness, and it rejected the argument that the term common to the marks, bot, is a descriptive term. L'Oreal and Helena Rubinstein did themselves no favours by admitting that, although their products did not include the active ingredient of Botox (botulinum toxin), they had chosen their names to take advantage of the image associated with Botox - wrinkly opposition party leaders who refuse to acknowledge reality... sorry that should read youthfulness. Reported in www.ipkitten.blogspot.com 13 May 2012.

COPYRIGHT

Oracle v Google: A US jury found that Google infringed Oracle's copyright when it used Java's APIs (Application Programming Interfaces) in Android. It rejected Google's defence that APIs, 'like grammar, are uncopyrightable aspects of a language'. US law, like US football, is of course totally incomprehensible to anyone who didn't grow up there. It's now apparently necessary for a judge to decide whether APIs can actually be copyrighted - whether the 'structure, sequence and organisation' are sufficiently complex to merit protection - and whether Google can raise a defence of 'fair use'. Reported in www.infoworld.com on 7 May 2012.

Discovery Gored: On 17 May 2012 Business Day reported that the Board of Healthcare Funders (BHF) succeeded in a copyright case against Discovery Health. Judge Jody Kollapen held that BHF has copyright in a 13-digit code numbering system that covers every medical practice in SA and that's used in the processing of medical claims, because the creation of the database involved skill and effort. He also held that Discovery infringed the copyright when it created its own database because it used a substantial part of BHF's database. He went on to order Discovery to pay damages of some R1.2 million per year. In a similar recent case involving Transunion and Autobid, a KZN court held that a vehicle numbering system enjoys copyright.

PATENTS

Valuable Assets: BBC News recently reported that AOL had sold 800 patents to Microsoft for US$ 1.06 billion, who in turn sold some of the patents on to Facebook for US$550 million. AOL kindly distributed the proceeds of the sale to its shareholders. Another illustration of how patents, and more particularly patent portfolios, have become extremely valuable assets for tech companies.
Too Many Laws: In an article that appears in the May 2012 issue of De Rebus – Why Two Is Not Better Than One - Spoor & Fisher consultant, Alison Dyer, bemoans the fact that in order to know patent law these days you now need to consult obscure acts like the Nuclear Energy Act and the National Environmental Management: Biodiversity Act. She also points out that the Commissioner created by the Companies Act of 2008 to oversee companies and IP (including patents) is not the same Commissioner created by the Patents Act to oversee various aspects of patent law.

QUOTE OF THE WEEK

'Patent law is perceived by many as a fascinating branch of the legal profession' - the opening line of an article dated 11 May 2012 on the Adams & Adams website, www.adamsadams.com, entitled Don't forget the goose. Not sure about the goose, but the line's likely to be remembered!

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