South Africa: Survey Highlights The Importance Of Being Earnest: About Trade Marks

Last Updated: 28 August 2014
Article by Manisha Bugwandeen-Doorasamy

Most Read Contributor in South Africa, September 2018

A recent report in Fin24 entitled 'MTN named SA and Africa's strongest brand' listed South Africa's top 50 brands in terms of brand value. It was based on research done by the brand valuation company, BrandFinance. As the title suggests, MTN came out on top, followed by Sasol, Vodacom, Standard Bank, Absa, Nedbank, FNB, Mediclinic, Investec and Woolworths. Of the top 50 brands, 16 are in the food and beverages sector, 13 in financial services, and five in telecoms. I am also very happy to add that the trade mark management of 9 of the 50 is in the capable hands of ENSafrica's IP Department.

The report said that MTN's value had risen by some 31% over the past year, and that other big risers included Investec with 67% - 'Investec is threatening to turn our Big Four banks into a Big 5' said the report - and Mediclinic with 19%. In fact the trend was positive across the board, with the top 50 having gained 18% in value over that period. BrandFinance MD, Oliver Schmitz, had this to say about the growth: 'You don't see that growth globally. That's why people from overseas are coming to invest here.'

On a regional level, the report said that the Brand Africa 100 Most Valuable Brands in Africa survey showed that South Africa had a 72% share of these brands, followed by Nigeria with 26%, and Kenya with 2%. And in the context on nation branding, the report said that South Africa's national brand value had increased by 116% over the past five years, going from 36th position to 29th.

BrandFinance Africa chairman, Thebe Ikalafeng, drew this interesting link between South African brands and the country's future prospects: 'A thriving "Made in South Africa" and entrepreneurship spirit was what built South Africa's wealth, reputation and competitiveness... For Africa and certainly South Africa to grow independent, create jobs and reduce inequality, it will need to invest in the attributes that built these brands – on top of increasing intra-Africa trade – to challenge global brands in Africa.'

The report, of course, highlights what all top businesses know - that success is linked to having strong brands, that brands are assets that can be extremely valuable, that it's possible to attach a financial value to a brand, and that it may be a good idea to do this exercise if you want a true reflection of your company's worth. Incidentally, there's nothing new in any of this - more than 100 years ago the CEO of Quaker, John Stuart, said this: 'If this business were to be split up, I would be glad to take the brands, trade marks and goodwill, and you could have all the bricks and mortar – and I would fare better than you.'

So how do top businesses take care of their brands? Simple, they take them extremely seriously at every stage of the branding process. A process that starts with brand creation. Top businesses know that a brand can be far more than just a name - that it can be a logo, a stylization, a slogan, even a colour, a store lay-out or a product shape. They also know that the best brands are not those that are descriptive or commonplace, but those that stand out from the crowd. Not only are distinctive brands more likely to succeed commercially, but when it comes to the legal side they're also easier to protect and enforce.

Top businesses take trade mark clearance seriously, making sure that the trade mark is available for use in every country where the product is likely to be sold or offered, bearing in mind any online use that may occur. Where necessary these businesses enter into negotiations with companies that may own conflicting rights, and even engage in legal proceedings to remove troublesome registrations for trade marks that may not actually be in use.

Top businesses take brand protection very seriously, registering their trade marks in all those countries where the products will be sold or offered, and in all the formats in which they may be used and in respect of all the goods or services for which they are likely to be used. But top businesses are also savvy enough to know that there are ways of keeping trade mark registration costs down. They make use of the regional registrations systems that exist in Africa and Europe, they may make use of the international trade mark registration system if they have foreign offices, and they may even minimise the number of trade marks that they need to protect by adopting a monolithic approach to branding, one which entails the use of one or perhaps a few major trade marks which are used in conjunction with a host of descriptors for specific products.

Top businesses use their trade marks smartly, making sure that there's no risk of their trade marks becoming generic, or their registrations becoming open to attack for non-use. They make sure that there's proper licensing in place whenever they authorise third parties to use their trade marks. They monitor the markets they operate in very carefully, looking out for any signs of counterfeiting, infringement or harmful parody, and taking action when necessary. And they keep meticulous records of what trade mark registrations they have, ensuring that they are renewed when required, and that they're in a position to prove use of their trade marks when necessary.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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