Most Read Contributor in South Africa, September 2016
There's been quite a bit in the news about Rolls Royce going
after a rapper in the USA. The rapper goes by the name of
Royce Rizzy, but the complaint is apparently not limited to the
singer's name, but extends to the fact that he's also made
some use of the Rolls Royce name and logo.
As the rapper is presumably not in the business of making
aircraft engines or luxury motor vehicles, we can probably assume
that the parties aren't in competition, and that the complaint
deals with what many of us simply refer to as
'dilution'. The term isn't strictly accurate
because it refers to a form of trade mark protection that covers
any unauthorised use of a registered trade mark that is well known,
if that use either dilutes or tarnishes the registered trade mark,
or takes unfair advantage of its reputation. Confusion as to
the origin of the products is not a requirement.
After adopting a low profile for a number of years, dilution is
suddenly back in the news in South Africa. Let me explain.
Although the South African Trade Marks Act of 1994 makes provision
for what I'll refer to in this article as 'dilution
infringement', the Constitutional Court put a serious
dampener on things in 2005. In the case of SAB v
Laugh-it-off, the court held that SAB's trade mark
registration for the Black Label logo had not been infringed
(through tarnishing) by a small company that sold a t-shirt that
commented unfavourably on SAB's labour practices through the
use of a similar-looking logo that featured the term Black Labour,
on the basis that it's necessary to prove a likelihood of
economic loss, something that SAB had failed to do.
Many in the field interpreted this as the death-knell for dilution
infringement. Leading IP judge, Louis Harms, declared it dead
in the water.
Things changed in December 2014 when the Supreme Court of Appeal
gave its judgment in the long-running case of Nestle v
Iffco. One of the issues there was whether Iffco had
infringed trade mark registrations for the shape of the Kit Kat
chocolate by selling chocolate that looked very similar, and in
packaging that showed a representation of the product. Not only did
the court find that there was conventional infringement (what
I'll refer to in this article as 'confusion
infringement'), but it went on to hold that there was
dilution infringement too.
The court said that this form of protection had been introduced
in 1994 to 'protect the commercial value that attaches to
the reputation of a trade mark, rather than its capacity to
distinguish the goods or service of the proprietor from those of
others.' It accepted that the court 'must be
satisfied by evidence of actual detriment or unfair
advantage', but it went on to say that in some cases this
may be 'self-evident'. This, it felt,
was such a case: 'The loss of the unique shape of
Nestlé's Kit Kat bar as a distinctive attribute will
inevitably result in a loss of advertising or selling power to
Nestle... this will clearly result in "blurring" of
Nestlé's finger wafer shape trade mark...economic harm
to Nestlé is consequently self-evident.'
So will our courts now be more inclined to grant claims for
dilution infringement? Time will tell, but it is worth bearing in
mind that in the Nestlé case the parties were
direct competitors. The finding that there was dilution
infringement didn't really add anything in practical terms,
because the court had already found that there was confusion
infringement. Things will, I think, become really interesting when
someone claims dilution infringement in a case where the parties
don't compete and there's no likelihood of confusion. Will
a court be prepared to accept that there's a likelihood of
economic harm? We'll see!
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It has always been the practice of the Industrial Property Institute of Mozambique to prohibit the refiling of trade marks that have been finally refused, which has posed a serious obstacle to trade mark applicants...
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