South Africa: The Own Name Defence

Last Updated: 15 July 2015
Article by Delene Bertasso

Most Read Contributor in South Africa, September 2016

The South African Trade Marks Act creates various defences to trade mark infringement. One of these is known as the 'own name defence'. The defence is worded awkwardly, but basically provides that: you aren't infringing a registered trade mark if you make bona fide (honest or good faith) use of your own name or the name of your 'place of business' , provided that your use is consistent with fair practice. There is a proviso – if your name is that of a legal entity such as a company, the defence won't apply if you registered your company after the trade mark was registered.

Let's simplify this even more. You can safely use your own individual name or the name of your business as a trade mark provided that you are acting fairly and in good faith. If, however, you run your business through a company or some other structure, like an old close corporation, then it may depend on whether you registered your entity before the trade mark owner registered its trade mark.

There's not a great deal of case law on the own name defence in South Africa. We do know from old judgements that, in the case of a personal name, the defence only applies if the full personal name is used. Further and in the case of a company, the full name must also be used, but the company description,(Pty) Ltd or CC, can be omitted.

But how do you meet the requirements of honesty and fairness? 

There is an old UK decision involving the name Steiner, where the court held that the defence did not apply because the defendant had probably known of the plaintiff's trade mark, and also because the defendant's use was likely to cause confusion. There is a South African decision involving the name Jenni Button, where the court held that bona fide means that there should be no intention to deceive the consumer or exploit the goodwill of another.

During the preceding few years there have, however, been some interesting decisions on the own name defence in the UK. We can seek guidance from these decisions as the "own name" defence in the UK is very similar to ours, in that it talks of use that is 'in accordance with honest practices in industrial or commercial matters'. One case involved a London restaurant that called itself, "Cipriani" and promptly got sued for trade mark infringement by Cipriani Hotel of Venice. The restauranteurs, who had a company registered under the name Cipriani, raised the own name defence, but the court dismissed it. Why? Because the restauranteurs had failed to do trade mark searches before opening their restaurant, had not taken any legal advice, and had generally not applied their minds to the matter. So a certain amount of diligence is required!

In the case of Stichting v Unibank, the issue was whether the accounting group BDO could use its trade mark registration to stop a bank calling itself BDO Remit. In this case, the own name defence was upheld. The judge said that, when it comes to deciding whether or not the honesty requirement has been met, 10 factors need to be considered. These factors cover knowledge - did the defendant know of the registered trade mark, did it know there would be an objection, did it know of the registered trade mark's reputation, did it appreciate that this reputation would be affected? They cover diligence - did the defendant do trade mark searches before adopting the name, did it take legal advice? Further, they cover practical issues - does the defendant's use cause confusion, does it affect the trade mark owner's ability to exploit its trade mark? 

Recently, the UK Court of Appeal had occasion to consider the own name defence in the case of Roger Maier and Assos of Switzerland SA v. ASOS plc and Limited. This case pitted a cycling and sports clothing manufacturer against an online fashion retailer. The main issue was whether a trade mark registration for Assos had been infringed by the use of the trade mark Asos (which was also a registered company name) and, if so, whether the own name defence was appropriate.

By a majority of two-to-one, the Court of Appeal held that the defence should succeed.  The court considered various issues: the adoption of the name Asos had been honest in that it was an acronym of the previous name 'As Seen on Screen'; there  had never been any intention to confuse; a trade mark search would not have revealed the problem because of the differences in the goods; both businesses had acquired their own goodwill; there had been no confusion in the marketplace;  and the defendant had seemingly conducted its business in a way that was unlikely to cause confusion.

The dissenting judge, however, felt that the defence should not succeed. He pointed to various factors, such as,  the fact that a trade mark search had not been conducted; the fact that the defendant had, at one stage, changed its logo for Asos to one that looked more similar to the logo used for Assos; and the fact that the defendant had bid for Assos as a Google Adword.

The mentioned cases illustrate just how difficult it is to predict the outcome of matters of this nature. They also highlight a number of things that companies need to be aware of. Having a company registration is not the same as having a trade mark registration. Having a company registration does not necessarily mean that you can use the company name as a trade mark. Trade mark searching is always worthwhile. And even if you have a long-established company name you still need to act in good faith when it comes to trade mark usage – if you set out to cause confusion, you will be guilty of trade mark infringement.

If in doubt, get advice.

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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