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The ‘distinctiveness’ of a trade mark: an important factor

by Ashley - Posted 27 October 2011

 

 
The Apartheid Museum which is located near Gold Reef City in Johannesburg was launched in 2001 and since then has become a well-known institution.
It has also been the subject matter of intense litigation, the most recent of which came before the South Gauteng High Court in South African Apartheid Museum at Freedom Park v Stainbank and Another.
Prior to the establishment of The Apartheid Museum the trade mark THE APARTHEID MUSEUM was registered in Arnold Stainbank’s favour in 1998. Arnold Stainbank accused the South African Apartheid Museum of stealing his idea of an apartheid museum and alleged that they were infringing the trade mark registered in his favour.
The South African Apartheid Museum challenged Stainbank’s rights to the exclusive use of the words THE APARTHEID MUSEUM and asked the court to order the Registrar of Trade Marks to expunge the registered trademark from its records.
Stainbank tried to argue that “the apartheid museum” had been his very own, original idea for several decades and, adoringly, he should enjoy exclusive use of the expression contained in the trademark. The Court was quick to point out that apartheid had formed part of the ‘collective consciousness’ of all South Africans and that the ‘memory’ was owned by all the people of South Africa, collectively. Therefore it could not be the subject of ownership by private persons and the memory was incapable of being stolen.
In terms of section 9 of the Trade Marks Act a trade mark must be capable of distinguishing the goods or services of a person in respect of which it is registered or proposed to be registered from the goods or services of another person either generally or subject to limitations. Should a trade mark fail the distinctiveness test it will not be registered.
The Court turned to consider whether the words “the apartheid museum” had the quality of distinctiveness.
The Court held that the words “the apartheid museum” did not stand apart from the ordinary, everyday use which members of the public have adopted or were likely to adopt to describe a similar service provided by another trader. Instead members of the public were likely, naturally and spontaneously, to adopt the words “the apartheid museum” when referring to any museum established with a view to focusing on apartheid. Therefore the words “the apartheid museum” were inherently incapable of distinguishing one apartheid museum from another.
The Court therefore found that Stainbank’s claim to have the exclusive use of the words “the apartheid museum” could not be justified and ordered that the trade mark be expunged from the Registrar of Trade Marks records.

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Goodwill of a business-something worth protecting

by Ashley - Posted 20 October 2011

 

Recent court cases have emphasised the importance of protecting the goodwill of a business, particularly when that business is sold as a going concern. 
The term ‘goodwill’ has proved difficult to define and is capable of different meanings, depending on the context.  However, in most instances it means the following:  ‘the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which lures or entices clients or potential clients to support a particular business.’ 
Buying a business is an exciting new chapter in any businessman’s life. It can however, quickly turn into a nightmare if the seller of that business opens up shop around the corner to compete with you. The law creates the necessary mechanism to protect the buyer in this situation and the cases below demonstrate why a Restraint of Trade Agreement is vitally important.
In RICAMA CC v Twynham, a case which came before the Eastern Cape High Court in June 2011, RICAMA CC had purchased the business of a restaurant under the name and style of ‘Bella Vita’ and a bed and breakfast business from Ms. Twynham.
A restraint of trade clause was included in the Agreement of Purchase which prohibited Ms. Twynham from directly or indirectly engaging in a business or activity similar to the business carried on by RICAMA CC, within the City of Grahamstown and Makana Municipal area for a period of three years.
Shortly after Twynham sold her business to RICAMA CC she opened up a sushi bar within a radius of 3 kilometres of “Bella Vita” restaurant.
RICAMA approached the Court in an attempt to enforce the restraint of trade. The court held that the sushi bar opened by Twynham operated as a restaurant and was therefore subject to the restraint of trade clause. The Court found further that Twynham’s conduct amounted to a breach of the restraint and an interdict was granted against Twynham.
In September 2011 another matter came before the Supreme Court of Appeal whereby the Court had to decide whether a restraint of trade was enforceable or not. In Van Der Watt and Another v Jonker and another, Mr. Jonker had established the following businesses:
1.       Agriwen (Pty)Ltd, which specialised in the sale of agricultural products to farmers and the distribution of Engen Petroleum Products in certain areas of the Free State province;
2.       Agri-petroleum which specialised in the sale and distribution of Engen Petroleum products under the Zenex brand within certain areas of the Free State namely, Bothaville, Bultfontein and Virginia; and
3.       Agri-diesel, which specialised in the sale and distribution of Engen Petroleum Products to areas of the Free Stat not serviced by Agri-petroleum.
In 2005 Jonker and Van Der Watt started a new business in Randfontein selling and distributing Sasol Petroleum Products, mostly to industrial clients (the Agri group business distributed Engen petroleum products, mostly to farms).
In terms of a written agreement concluded between Jonker and Van Der Watt it was agreed that Van Der Watt would become the sole shareholder of the company which owned the Randfontein business and Jonker would become the sole shareholder of the Agri Group.  Jonker would pay Van Der Watt R 2 million and the agreement would include a restraint of trade clause.
In terms of the restraint of trade Van Der Watt was restrained for a period of 10 years from being involved in a business entailing the trading, storage, handling, sale, marketing or distribution of fuel, oil and/or related products in the areas serviced by the Agri group i.e. those particular parts of the Free State, for a period of 10 years.
Despite the restraint of trade Van Der Watt solicited customers of the Agri Group and he traded in areas serviced by Agri group under the name of Dynamic Fuel on both the distribution and retail sides. The Court held that the purpose of the restraint was to protect the goodwill of the business and that it was enforceable. The Court held further that Van Der Watt’s conduct constituted a breach of the restraint and the interdict granted against him was upheld.  
 

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google victory in the you tube copyright lawsuit

by Steve - Posted 26 June 2010

Google have successfully defended the lawsuit brought against them by Viacom and its co-plaintiffs for direct and secondary copyright infringement involving copyright protected material being uploaded to You Tube. The New York district court ruled that Google were entitled to safe harbour protection under the Digital Millenium Copyright Act, and that general knowledge of copyright infringement on its site did not disqualify it from such protection. Viacom have said that they will appeal the decision.

Check out the ruling.  

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google adwords decision expected next week

by Steve - Posted 19 March 2010

Online advertisers will be waiting anxiously for the decision of the EU's Court of Justice next week in the Google Adwords case. The court will rule on whether or not a company that buys Google adwords for a rival's trade marks are committing trade mark infringement. Google's adWords system currently lets the highest bidder choose any search term to display its ads.

The case involves luxury brand, Moët Hennessy Louis Vuitton (LVMH), who noticed that adverts for counterfeit product suppliers were being displayed on Google when searching under various LVMH trade marks.

The case will have major repercussions for online advertising that is based on a context-sensitive ad model. It will also provide some much needed clarity on the application of traditional trade mark protection into the online world.

Watch the space.

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first decided case involving ISP liability for copyright infringement

by Steve - Posted 11 February 2010

Judgment was handed down by the Austrailian Federal Court on 4 February 2010 in the landmark case of Roadshow Films (Pty) Limited v iiNet Limited. 

The case raised the question whether an internet service provider or ISP authorises the infringement of copyright by its users when they download copyrighted movies and TV shows on the internet. The general principle In Australian copyright law is that a person who authorises the infringement of copyright is treated as if they themselves infringed copyright directly.

The court found that the ISP did not authorise copyright infringement for the following reasons:

  • The infringement of copyright was done using the BitTorrent system and not simply from the internet services provided by the ISP. The ISP did not create or control the BitTorrent system.
  • The ISP did not have the relevant power to prevent those infringements occurring.
  • The ISP did not sanction or approve copyright infringement.

The judge said that he could not be compelled to make a finding against the ISP simply because "something had to be done" about internet piracy, which on the evidence presented appeared to be occuring on a large scale worldwide.

He also said that an ISP provides a legitimate communication facility which is not intended to infringe copyright. It is only when users choose to make use of file sharing tools such as BitTorrent that copyright infringements take place.

This judgment will have persuasive authority if a similar case comes before a South African court. Although copyright holders may be disappointed by the outcome, it looks like common sense has prevailed in a situation which could have had dire consequences for the ongoing development of the internet if the decision had gone the other way.

A summary of the case is available here (we are trying to access the full judgment which is a 200page monster).

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FIFA 1 - ambush marketers 0

by Steve - Posted 21 April 2009

FIFA has won its first court case against ambush marketing which used some of the World Cup 2010 trademarks. The Pretoria High Court has ordered the Eastern Tavern to take down external signage which features the words "World Cup 2010" and displays the flags of various soccer nations. The pub was also ordered to pay FIFA's legal costs.

As this is the first case dealing with this issue ahead of July's Confed Cup and next year's World Cup, FIFA obviously wanted to send a strong message that it will be jealously guarding its intellectual property.   

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Writing software at work - new SCA judgment

by Steve - Posted 07 December 2008

The Supreme Court of Appeal in King v SA Weather Service was asked to decide who was the owner of certain software written by an employee (King). The main question to be answered was whether he had written the programs within the course and scope of his employment? 

The court held that although King's job description (as a meteorigical technical officer) did not formally include computer programming when he was employed, his job had evolved to the point where he was spending 50% of his employment time on system development and programming (this contradicted King's evidence that he had developed the programs at home and in his own time).

The court also found that the relevant software was directly related to the employer's business and had been developed by King so that he could do his job better. He had also been asked to write other programs by his employer according to a prescribed format which had to be approved before the programs were implemented. None of the programs developed by King were used or exploited outside his employment. 

The court held that King had written the programs within the course and scope of his employment and that the employer was the owner of the software.

The court did not want to set down any rules relating to this issue and instead said that each case would need to be decided according to its own facts. The court also said that the creating the work at home would not be conclusive in deciding who was the owner of the work.           

Our R0.02

Because there are no hard and fast rules on this, you should probably agree with your employer upfront before you start a project on your own time, that they will not assert ownership over any copyright that comes of it (good luck with that!).

You would probably be well advised to avoid writing anything which is remotely useful to your employer's business or from which they can gain some form of advantage. 


   

 

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Cape Town - one word or two?

by Steve - Posted 26 November 2007

The owners of the Town Lodge motel chain in SA recently took a shot at the owner of the Cape Town Lodge for trademark infringemnt and passing-off. Before legal action was instituted, the Town Lodge applied to the Registrar of CC's to have the cc name "Cape Town Lodge CC" changed on the grounds that it was confusingly similar to their trade mark. The Registrar agreed and the owners were ordered to change the cc's name. Application was then made to the High Court to set the Registrar's decision aside (Cape Town Lodge CC v  Registrar of Close Corporations & another). Town Lodge also brought a counter-application for trade mark infringement and passing off.

The court was asked to decide, among other things, whether the words "Cape Town" could be seen as two seperate words rather than being read together as the geographical indicator for the city. I.e. if the Town Lodge group wanted to open up a motel for the Cape, would it be called Cape Town Town Lodge or Cape Town Lodge. The court held that Cape Town must seen as one word and not two. If it could be seen as two seperate words, then the argument was that the Cape Town Lodge CCcc's contained the town lodge registered trade mark.  The Town Lodge also argued that  the registration of this cc name was calculated to  unlawfully  pass off  the goodwill of the group onto its own hotel.

The court decided that Cape Town could not be seen as two seperate words and that the words "Town" and "Lodge" were generic and descriptive words used in the hospitality industry. The Registrar's decision was set aside and the counter-application for TM infringement was dismissed.

Our R0.02:
When you register a company name or trade mark using words which describe your services or goods and which, on their own, are not unique, it will be very difficult to enforce your rights against other players in the same industry who register names using the same descriptive words but in a different way.        

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85% of tech executives say IP will increase in importance over next 3-5 years

by Steve - Posted 22 June 2007

In a recent online survey by PriceWaterhouseCoopers, it was found that over 50% of technology companies do not extract the full value from their IP. Tech companies recognise that in a time when IP is fast becoming the most important currency, they need to do more to account for, protect and exploit their intangible assets.

The report recommends that companies should treat IP as a seperate portfolio with the company and its IP professionals working together to look for existing or emerging opportunities and to prepare for litigation against competitors.  

A full copy of the report is available here.   

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Bootleggers and teenage lovers beware

by Steve - Posted 30 May 2007

Malaysian cinemas are getting crafty in the crackdown on the illegal practice of bootlegging (making a real time copy of a movie while it is playing using a cellphone or video camera). Ushers are now strapping on military style night vision goggles to seek out the nasty pirates.

This serves as a warning to the teenagers in the kissing corner.

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