across the bar

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.