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November 2016

Recent case sheds light on internet
keywords, comparative advertising
Comparative advertising, when
properly regulated, promotes
competition: however, it is still
a relatively new concept in SA
and is influenced by factors
such as the Trade Marks Act;
the provisions relating to
unlawful competition; and the
Code of Advertising Practice of
the Advertising Authority of SA
(ASA code).
Eben van Wyk, partner at
Spoor & Fisher Cape Town,
says the ASA code specifically
permits comparative
advertising, subject to a number
of requirements including,

among others, that all legal

requirements must be adhered
to (specifically the provisions of
the Trade Marks Act); that only
facts capable of substantiation
can be used; that one or more
material, relevant, objectively
determinable and verifiable
claim is made; that the claims
must not be misleading or
confusing; that no infringement
of advertising goodwill or
disparagement takes place; that
the facts or criteria used are fair
and that the products or
services compared have the
same or similar characteristics

and are intended for the same

or a similar purpose.
The South African courts
have recently adopted a lenient
approach towards comparative
brand advertising, namely
when goods or services
compared are referred to by the
respective trademarks under
which they are sold.
The Supreme Court of
Appeal (SCA) in BMW v
Verimark held that Verimarks
unauthorised use of a clearly
identifiable BMW logo in its
advertisement was incidental
and that it did not constitute


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Roodt Inc
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SA is recognised for its legal
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practitioners. This years Best
SA Lawyers have, as always,
been selected following an
exhaustive peer review survey.
Best lawyer Johan Roodt,
director at Roodt Inc, is
recognised internationally as a
leading specialist in local and
cross-border mergers and
acquisitions, corporate
governance, securities law,
energy and resources law,
competition and regulatory law.
Commenting on the M&A
environment, he says the South
African economy is subdued at
present and this places a

constraint on the usual levels of

M&A deal flow.
In addition, the rand has
suffered some volatility due to
both political and economic
uncertainty which has
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At the same time, he says
recent local government
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conditions and monetary and
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This should bode well for
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He says Roodt Inc provides a
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trademark use (and accordingly

not trademark infringement).
This had a significant effect
on comparative advertising,
changing SA trademark law to
such an extent that the use of a

The acquisition by the listed

KAP group of Safripol for R4.1bn
was announced and the firm is
acting as corporate advisor on
the sell side, and as antitrust
advisor to the transaction.
The firm is also acting on
the buy side and as antitrust
and regulatory advisor to the
transaction for the acquisition
by listed Phumelela Gaming
and Leisure of a stake in
Supabets. In 2015 the firm acted
on the sell side in the R7bn
acquisition by the listed
Growthpoint of a commercial
property portfolio from the
Tiber Group, Roodt says.
Achieving this level of
success is not easy, especially
in a challenging and
competitive market and Roodt
says the firm takes a hands-on
approach at senior level and
ensures it has a clear
understanding of the clients
strategic needs.
Staying at the forefront in
this environment requires
staying close to the client,
becoming directly and
proactively involved in the
clients business, providing

Williams we
ourselves in
the breadth
and depth of
our expertise.

Webber Wentzel
Webber Wentzel
Allen & Overy
Spoor & Fischer
Werksmans Attorneys
Bowman Gilfillan
Norton Rose Fulbright South Africa
Fasken Martineau DuMoulin
Cliffe Dekker Hofmeyr

third-party trademark in a
comparative advertisement is
now unlikely to constitute
trademark infringement.
A more recent, topical form
of comparative advertising

Recognition for SAs

outstanding legal talent
Top lawyers


value adding services in the

fields of the firms own areas of
expertise, and managing the
service delivery by providers of
legal services outside the firms
areas of expertise, Roodt says.
Brent Williams, CEO of Cliffe
Dekker Hofmeyr (CDH), says
the firm once again features
prominently in the eighth
edition of Best Lawyers in SA;
he adds that this recognition
reflects the firms commitment
to assisting clients in navigating
tough economic conditions.
As a firm, we pride
ourselves on the breadth and
depth of our expertise as these
attributes translate into an
advantage for our clients.
Among other indicators such as
our client list and high profile
transactions, our lawyers
prominence across a number of
prestigious accolades shows
CDH boasts some of SAs most
respected legal minds,
Williams says.
Three of the firms lawyers
received Lawyer of the Year
awards Emil Brincker (tax),
Pieter Conradie (arbitration and
mediation) in Joburg, and
Francis Newham (mergers and
acquisitions) in Cape Town. Its
real estate practice was named
the Law Firm of the Year.
Attie Pretorius, chairman,
CDH Real Estate National
Practice head and director, says
the slowdown in China is
having dramatic ripple effects
throughout Africa, but this does
not mean there are not avenues
for expansion. Despite the
headwinds, demand for
property development pipelines
continues at a healthy pace.

centres around internet

keywords and, in particular,
Googles Adwords. This is a
system which allows
advertisers to secure a
keyword by purchasing or
bidding on it to ensure that,
when the keyword is entered
into Googles search engine,
their advertisement is displayed
in the sponsored links section

of the search results. The

issues get complicated when an
advertiser bids on a keyword
comprising their competitors
trademark, Van Wyk says.
The recent judgment in
Cochrane Steel Products (Pty)
Ltd v M-Systems Group (Pty)
Ltd handed down by the SCA in
May 2016 has provided clarity,
effectively adopting a position
similar to that in the European
Union and New Zealand.
The relevant question when
dealing with comparative
keyword bidding and
advertising is, according to the
SCA, whether the advert
enables normally informed and
reasonably observant internet
users to determine whether the
goods or services referred to in
the sponsored advertisement
originate from the trademark
proprietor (whose trademark is
used as a keyword) or,
alternatively, from a third party.
The SCA held that a

reasonable consumer would

know that every result obtained
from a Google search would
not relate to the trademark
owners product or services
and would assume that they
have to separate the wheat
from the chaff in deciding what
hyperlinks appearing in the
search results to click.
The sponsored adverts are
also clearly distinguished from
the natural search results.
Keyword advertising is
accordingly regarded as an
acceptable commercial practice
and there is no likelihood of
deception or confusion where
an advertiser uses another
traders (even a competitors)
trademark as a keyword.
The important factor is
whether the advertitself gives
rise to the likelihood of
confusion and not whether the
bidding by a competitor on a
trademark of another is
unlawful, Van Wyk says.

"We understand our clients strategic and

commercial objectives in each transaction
and are directly involved from inception to
final closure of each deal."


Tel (+27 11) 685 0000 Email



The 8th edition of Best Lawyers in South Africa

recognised 36 of our lawyers and honoured three of our
lawyers with Lawyer of the Year Awards: Emil Brincker
(Tax), Pieter Conradie (Arbitration and Mediation) and
Francis Newham (Mergers and Acquisitions). Adding to
these notable achievements, our firm was named the
Law Firm of the Year in Real Estate Law.

Cliffe Dekker Hofmeyr.

The legal partner for your business.