Case Comments

Trade-mark Protection and Freedom of

Expression

BR RUTHERFORD
University of South Africa

1 Introduction
Trade marks are names, designs, logos, or other signs or symbols used to
market products. A trader uses his trade mark in relation to his goods or services to
identify and distinguish them from similar products of others (see the definition
of a ‘trade mark’ in s 2(xxiii) of the Trade Marks Act 194 of 1993). At the same
time, a trade mark enables the consumer to identify the product of a particular
trader and to distinguish it from a range of competing products (Ruth Annand
& Helen Norman Blackstone’s Guide to the Trade Marks Act 1994 (1994) at
9-13; William Cornish & David Llewelyn Intellectual Property: Copyright,
Trade Marks and Allied Rights 5 ed (2003) in pars 15-23-6; WR Cornish &
Jennifer Phillips ‘The Economic Function of Trade Marks: An Analysis with
Special Reference to Developing Countries’ (1982) 13 International Review of
Industrial Property and Copyright Law 41 at 42-3 and 49).
A trade-mark registration confers a limited monopoly on the trade-mark
proprietor. It entitles him to the exclusive use of his trade mark in relation
to the product for which it is registered for the purpose of distinguishing his
product from others. As a corollary, it entitles him to prevent others from using
his trade mark, or a confusingly similar mark, in the course of trade in relation
to the same or similar products (s 34(a) and (b) of the Trade Marks Act). As
Dan Shanahan (‘The Trademark Right: Consumer Protection or Monopoly?’
(1982) 72 The Trademark Reporter 233 at 234) points out, trade-mark law,
by conferring a limited monopoly on the trade-mark proprietor, serves two
complimentary policy objectives – it protects the proprietor’s business interests,
and it protects consumers against deception or confusion in the marketplace.
During the last century, changes in commercial practices (such as new
communication methods, improved manufacturing and distribution, large-
scale retailing, and modern advertising techniques) have led to the so-called
consumer society where trade marks have acquired an increased significance
as both distinguishing and advertising signs (Annand & Norman op cit at 13-
4). This development, in turn, has seen an increase in demands by trade-mark
proprietors for greater protection of their trade marks against imitation. Many
of these demands have been acceded to, and trade-mark law now provides

© 2006. All rights reserved.

Cite as: (2006) 18 SA Merc LJ 355–367 355
356 (2006) 18 SA Merc LJ

for extended infringement protection that proscribes the unauthorised use of a

trade mark even in the absence of deception or confusion (s 34(1)(a) and (c);
Cornish & Llewelyn op cit in pars 15-02-3). It is the interests of the trade-mark
proprietor rather than those of the consumer that underpin these provisions
(see Moseley v V Secret Catalogue, Inc 123 S Ct 1115 (Sup Ct 2003) at 1122;
Tanuja V Garde ‘The “Whittling Away” of the Federal Trademark Dilution
Act’ (2003) 34 International Review of Industrial Property and Copyright Law
614 at 615; contra FW Mostert Famous and Well-Known Marks 2 ed (2004) at
1-98n238).
One such extension is the protection against so-called dilution. The proprietor
of a well-known trade mark is entitled to prevent any unauthorized use of his
mark that takes unfair advantage, or erodes or dilutes the distinctive character
or repute, of his mark. A likelihood of confusion or deception is not required.
These provisions typically do impose some important limitations on the
rights of the trade-mark proprietor. They require, among other things, that the
infringing use must be in relation to goods or services, and that such use must
be in the course of trade (see Laugh It Off Promotions CC v South African
Breweries International (Finance) BV t/a Sabmark International 2005 (2)
SA 46 (SCA) at 57; GC Webster & NS Page South African Law of Trade
Marks, Unlawful Competition, Company Names and Trading Styles 4 ed by
CE Webster & GE Morley (2004) in pars 12.10 and 12.29; also Emmanuel
Baud ‘The Damage Done’ (2005) 176 Trademark World 29 at 33-4). Still, they
do raise the potential for conflict with the constitutionally guaranteed right
to freedom of expression (see Cornish & Llewelyn op cit in pars 15-01B3;
Cornish & Phillips op cit at 44-5).
Recently, the South African Constitutional Court was confronted with
such a conflict in Laugh It Off Promotions CC v South African Breweries
International (Finance) BV t/a Sabmark International & Another (2006 (1) SA
144 (CC)). This decision has far-reaching implications for the rights of trade-
mark proprietors. Unfortunately, it has also left some important questions
unanswered.
Here I will discuss this decision of the Constitutional Court, and its impact
on the future rights of trade-mark proprietors. In particular, I will address issues
such as the evidence required to establish infringement in terms of s 34(1)(c)
of the Trade Marks Act and the possible implications of the decision for claims
of dilution by blurring, taking unfair advantage of the distinctive character of a
well-known trade mark, and other forms of infringement, such as comparative
brand advertising.

2 The Constitutional Court Decision in Black Label

Laugh It Off Promotions v South African Breweries ((CC) supra) concerned
the interface between the protection afforded to the proprietor of a well-known
registered trade mark by s 34(1)(c) of the Trade Marks Act and the right to
freedom of expression as entrenched in s 16(1) of the Constitution of the
Republic of South Africa, 1996.
TRADE-MARK PROTECTION AND FREEDOM OF EXPRESSION 357

Laugh It Off reproduced Sabmark’s well-known CARLING BLACK LABEL

trade mark on its T-shirts and adapted it to comment about the perceived
exploitation of black labour. It replaced the words ‘Black Label’ with the words
‘Black Labour’, the words ‘Carling Beer’ with the words ‘White Guilt’ and the
slogan ‘America’s lusty, lively beer – Brewed in South Africa’ with the words
‘Africa’s lusty, lively exploitation since 1652 – No regard given worldwide’.
Sabmark instituted action against Laugh It Off for infringement of its trade
mark in terms of s 34(1)(c). To succeed under this provision, a trade-mark
proprietor must establish (i) the unauthorised use by the defendant of a mark
identical or similar to his registered trade mark, (ii) in the course of trade in
relation to goods and services, (iii) that his registered trade mark is well known
in South Africa, and (iv) that the use complained of would be likely to take
unfair advantage of, or be detrimental to, the distinctive character or repute of
the his registered trade mark.
Laugh It Off conceded that Sabmark had established the first three
requirements for infringement, but denied that its use of the CARLING
BLACK LABEL trade mark would be likely to take unfair advantage of, or be
detrimental to, the distinctive character or repute of such mark. It contended
that the right to freedom of expression protects its comments and that s 34(1)(c)
should be interpreted restrictively in a way that gives adequate protection to
this right.
Moseneke J, writing for the majority of the Constitutional Court, pointed out
that the purpose of s 34(1)(c) is to protect the trade mark and the commercial
interests of the proprietor of a well-known registered trade mark by prohibiting
use which, although not giving rise to confusion or deception, still materially
undermines the repute of the mark (see in par 40). The provision is aimed at
preventing the dilution of a well-known trade mark by blurring as well as by
tarnishment. The present case concerned dilution by tarnishment.
The Court criticised the two-stage approach adopted by the Supreme Court
of Appeal (see in par 43). (The Supreme Court of Appeal had first enquired
whether the conduct complained of amounted to infringement in terms of
s 34(1)(c), and then whether such infringement was justified by a claim to
freedom of expression (see Laugh It Off Promotions v South African Breweries
(SCA) supra at 58C and 63B).) According to Moseneke J, such an approach
precluded a proper evaluation of the guarantee of freedom of expression and
prevented an understanding of the requirements of s 34(1)(c) consistent with
the Constitution. He held that the correct approach is first to determine whether
the expression is protected by s 16(1) (see in par 44). If it is, the requirements
of s 34(1)(c) must be construed in the light of the Constitution and applied in
a manner that does not unduly restrict freedom of expression. This involves a
balancing of the constitutional guarantee of freedom of expression against the
rights of the trade-mark proprietor for the purpose of determining whether the
use complained of is unfair and materially harmful to the repute of the mark
(see in par 44). Justice Moseneke added (in par 48):
‘The anti-dilution provision must bear a meaning which is least destructive of other entrenched
358 (2006) 18 SA Merc LJ

rights and in this case free expression rights. The reach of the statutory prohibition must be
curtailed to the least intrusive means necessary to achieve the purpose of the section. Courts
must be astute not to convert the anti-dilution safeguard of renowned trade marks usually
controlled by powerful financial interests into a monopoly adverse to other claims of expressive
conduct of at least equal cogency and worth in our broader society.’

The Court stressed that the section requires that any detriment relied upon
by a trade-mark proprietor must be unfair (see in par 49). Also, it must be
substantial in the sense that it must be likely to cause substantial harm to the
uniqueness and repute of the mark. The trade-mark proprietor bears the burden
of proving a probability of substantial harm or detriment which, seen in the
context of the case, amounts to unfairness (see in par 50). An interpretation of
s 34(1)(c) that conforms to the Constitution requires that the likely detriment
must be material harm in the commercial sense – economic and trade harm
(see in par 51).
Turning to the message on Laugh It Off’s T-shirts, Moseneke J observed that
the mere fact that the comment may indeed stir discomfort in some and appear
to be morally reprobate or unsavoury to others, is not ordinarily indicative of
such harm (see in par 55). Even accepting that the message may be unsavoury
or degrading, he found that Sabmark had failed to provide any evidence that
the message has attached to or tarnished, or is likely to attach to or tarnish, the
selling power of the mark (see in par 58).
Reversing the decision of the Supreme Court of Appeal, the Constitutional
Court held that Laugh It Off’s use of the CARLING BLACK LABEL trade
mark did not constitute an infringement in terms of s 34(1)(c).
In a separate but concurring judgment, Sachs J sought to avoid the
implication that the appeal was upheld simply because of a lack of evidence
to establish a measure of detriment. He was of the view that the appeal should
have been upheld on more substantial grounds (see in par 74). According to
Justice Sachs, the question is whether the allegedly infringing use is legally and
constitutionally permissible (see in par 75). This does not involve a limitation
of a right but rather a balancing of competing rights (see in par 83). He stated
(in par 82):
‘The question to be asked is whether, looking at the facts as a whole, and analysing them
in their specific context, an independent observer who is sensitive to both the free speech of
the Constitution and the property protection objectives of trademark law, would say that the
harm done by the parody to the property interests of the trademark owner outweighs the free
speech interests involved. The balancing of interests must be based on the evidence on record,
supplemented by such knowledge of how the world works as every judge may be presumed to
have.’

In the balancing process, the Court should consider factors such as the nature
of the use complained of, in particular whether it is primarily communicative or
primarily commercial, the medium used and the context of its use, and whether
the fact that the conduct is deemed unsavoury should deprive it of free-speech
protection. But none of these factors is decisive (see in par 89). In balancing
the competing interests of the parties, Sachs J found that Laugh It Off’s right
to freedom of expression should prevail. In such a case, the issue of trade-mark
infringement does not arise (see in par 101).
TRADE-MARK PROTECTION AND FREEDOM OF EXPRESSION 359

3 Detriment: Dilution by Tarnishment

As I have indicated, dilution can take place by way of blurring and by way
of tarnishment.
Dilution by blurring occurs where a well-known trade mark is used by others
in relation to a variety of other products. This leads to the gradual consumer
disassociation of the mark from the proprietor’s products (Frank I Schechter
‘The Rational Basis of Trademark Protection’ (1927) 40 Harvard LR 813 at
825). As a result, the distinctiveness and commercial magnetism of the trade
mark becomes eroded and eventually destroyed (see Premier Brands UK Ltd v
Typhoon Europe Ltd [2000] FSR 767 at 787-8; Mostert op cit at 1-98).
Tarnishment, in turn, occurs where the trade mark is used in relation to
inferior products, or where it is used in an offensive or negative context. This
leads to an unfavourable association attaching to the mark and consequent
erosion of the repute of the mark (see Premier Brands v Typhoon supra at 798);
Triomed (Pty) Ltd v Beecham Group plc 2001 (2) SA 522 (T) at 557C; Lionel
Bently & Brad Sherman Intellectual Property 2 ed (2004) at 874; P Ginsburg
‘Trade-Mark Dilution’ in: Coenraad Visser (ed) The New Law of Trade Marks
and Designs (1993) 35 at 37 and 40; Mostert op cit at 1-101B4; Owen Salmon
‘Dilution as a Rationale for Trade-Mark Protection in South African Law’
(1987) 104 SALJ 647 at 649-50; Webster & Page op cit in par 12.24).
Section 34(1)(c) of the Trade Marks Act is aimed at preserving the
distinctiveness of a well-known trade mark and protecting it against dilution. It
covers dilution by both blurring and tarnishment. While the words ‘detrimental
to the distinctive character’ refer to dilution by blurring, the words ‘detrimental
to the repute’ refer to dilution by tarnishment (see Bently & Sherman op cit
at 874-6; Mostert op cit at 1-112; WIPO Joint Recommendation Concerning
Provisions on the Protection of Well-Known Marks (1999) Explanatory Note
4.4 on Article 4).
Section 34(1)(c) does not require actual detriment. A likelihood of detriment
will suffice. To succeed with a claim of dilution by tarnishment, the trade-mark
proprietor has to show a probability of substantial economic harm or detriment.
Also, the Constitutional Court agreed with the Supreme Court of Appeal that
a general requirement of unfairness should be read into the provision. So the
trade-mark proprietor also has to show that the detriment relied on amounts
to unfairness in the context of the case (see Laugh It Off Promotions v South
African Breweries (CC) supra in par 49). The adoption of a general fair-use
standard means that each case will have to be decided on its own merits. In
appropriate cases, it will exclude references to a well-known trade mark for
purposes of review or parody (see Mostert op cit at 1-122-7; WIPO Joint
Recommendation Explanatory Note 4.4 on Article 4).
Moseneke J pointed out that establishing a probability of substantial
economic harm is a matter of inference (see in par 54). It involves an assessment
of the impact of the defendant’s use on the average or notional consumer. Such
inference can be made only from the evidence pleaded (see Bata Ltd v Face
Fashion CC & Another 2001 (1) SA 844 (SCA) at 852H). The Constitutional
360 (2006) 18 SA Merc LJ

Court was critical of the inference of detriment made by the Supreme Court of
Appeal in the absence of any supporting evidence. The Court suggested that
to discharge the burden of proof, a trade-mark proprietor can adduce evidence,
direct or inferential, of an unfavourable association created between the well-
known trade mark and the allegedly infringing mark, or of a likelihood of loss
of sales by virtue of the reduced commercial magnetism of the mark (see in
par 58). But Moseneke J did not give any guidance as to the type of evidence
that would suffice.
In the absence of a likelihood of confusion, proving a probability of a
loss of sales attributed to the alleged infringing use will not be easy. The
only alternative is for the trade-mark proprietor to adduce evidence of an
unfavourable association attaching to the registered trade mark. In addition
to establishing a link or association in the minds of consumers between
the registered trade mark and the allegedly infringing mark, he has to
adduce evidence of a negative view of the registered trade mark amongst
a substantial number of consumers (see also Hollywood SAS v Souza Cruz
SA (Case R 283/1999-3, OHIM Third Board of Appeal, 25 April 2001;
[2002] ETMR 64 in pars 87 and 89)). One possibility is to use market-
survey evidence. This involves the conduct of a survey by a market-survey
company amongst a sample of potential consumers. Provided such a market
survey is carefully formulated and conducted, it should be admissible as
evidence (see McDonald’s Corporation v Joburgers Drive-Inn Restaurant
(Pty) Ltd & Another; McDonald’s Corporation v Dax Prop CC & Another;
McDonald’s Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd &
Dax Prop CC 1997 (1) SA 1 (A) at 26-7). But market surveys do present
a number of difficulties. To be relevant, such evidence must have sufficient
probative value and weight. Also, it will often involve considerable cost and
effort in compiling and adducing it (Webster & Page op cit & 8.39; see also
Charles Webster ‘Survey Evidence in Trade Marks and Passing-off Cases: A
Valuable Contribution or an Exercise in Futility’ 1991 De Rebus 821-5.) So
the requirement of substantial economic harm is problematic.

4 Detriment: Dilution by Blurring

As I have noted, dilution by blurring occurs where a well-known trade mark
is used by others in relation to a variety of other products. This leads to the
gradual consumer disassociation of the mark from the proprietor’s products
and the blurring or erosion of the distinctiveness of the mark.
It is not clear how a proprietor can establish that the distinctiveness of his
trade mark has been eroded. As in a case of tarnishment, establishing detriment
by blurring is a matter of inference which must be made on the basis of the
evidence pleaded (see Hollywood SAS v Souza Cruz SA supra in pars 111-2).
Following Laugh It Off, our courts are unlikely to infer dilution by blurring
merely from the unauthorised use of a well-known trade mark in relation to
a number of unrelated products. They will probably require evidence of some
additional factor that indicates a lessening of the capacity of the well-known
TRADE-MARK PROTECTION AND FREEDOM OF EXPRESSION 361

trade mark to distinguish the products of its proprietor (see, eg, Moseley v V
Secret Catalogue Inc supra at 1124 and1125).
But it remains unclear what evidence will suffice. In most cases it may be
difficult to establish any detriment to the distinctive character of the well-known
trade mark in the absence of confusion or tarnishment (see Premier Brands v
Typhoon supra at 802-3; see further Bently & Sherman op cit at 874-5).
While the Constitutional Court requires a probability of substantial
economic harm in instances of dilution by tarnishment, it is not clear whether
this requirement would also apply to a claim of dilution by blurring. On the one
hand, one can argue that in Laugh It Off the Court was specifically concerned
with a claim of dilution by tarnishment. This involved an investigation as to
a likelihood of detriment to the repute of the CARLING BLACK LABEL
mark rather than as to a likelihood of detriment to its distinctive character.
Accordingly, the requirement of substantial economic harm imposed by the
Court should be limited to such a claim and should not be extended to a claim
of dilution by blurring. On the other hand, one can argue that the Court, while
it stressed that the detriment referred to related to the dilution of the selling
power of the trade mark, did not draw any clear distinction between a claim
of dilution by blurring and a claim of dilution by tarnishment. Inasmuch as
dilution by blurring and tarnishment both concern a likelihood of detriment to
the distinctive character or repute of the mark, one can argue, with some force,
that the requirement of substantial economic harm would apply equally to a
case of dilution by blurring.
The requirement of substantial economic harm in a case of dilution by
blurring is even more problematic. Unlike dilution by tarnishment, dilution by
blurring is of a far more elusive nature. It is a gradual process that is difficult
to assess and establish, especially during its initial stages. But if it is allowed
to continue until economic harm is apparent, it may well be too late to save
the distinctiveness of the mark from destruction (see Salmon op cit at 648-9;
Schechter op cit at 813ff).

5 Unfair Advantage
Infringement in terms of s 34(1)(c) can also occur where the trade-mark
proprietor can establish that the use complained of is likely to take unfair
advantage of the distinctive character or repute of his registered well-known
trade mark. The notion of taking unfair advantage of the distinctive character or
repute of a trade mark is akin to the notion of misappropriation. The proscription
of such conduct is aimed at preventing the exploitation or free-riding on the
reputation of a well-known trade mark (see Bently & Sherman op cit at 872;
Mostert op cit at 1-115 and 1-116). Unlike the notion of detriment to the
distinctive character or repute which requires a lessening of the distinguishing
capacity of the trade mark, taking unfair advantage involves the accrual to the
infringer of some benefit or marketing advantage flowing from his use of the
well-known trade mark (Mostert op cit at 1-115 and 1-116).
To succeed with a claim of taking unfair advantage, the proprietor has to
362 (2006) 18 SA Merc LJ

prove that the infringer has created an association in the minds of consumers
between the well-known trade mark and his infringing mark (see General
Motors Corporation v Yplon SA [2000] 15 RPC 572 in par 23 at 577; Daimler
Chrysler AG v Javid Alavi (t/a MERC) [2001] RPC 42 in par 86; see also Anna
Carboni ‘Two Stripes and You’re Out’ [2004] European Intellectual Property
Review 229 at 232-3). This implies that the registered trade mark must be well
known to infringer’s customers (see Vodafone Group plc v Orange Personal
Communications Services Ltd [1997] FSR 34 at 39; General Motors v Yplon
supra in par 23 at 577; Mostert op cit at 1-116). Also, the proprietor has to
establish a transfer of repute from the well-known trade mark to the products of
the infringer that would facilitate the sale of the infringer’s products (see Pfizer
Ltd v Eurpofood Link (UK) Ltd [2001] FSR 17 in par 37 at 32; Hollywood
SAS v Souza Cruz SA supra in pars 121-2; Bently & Sherman op cit at 872-3;
Mostert op cit at 1-116).
In the light of the Laugh It Off decision, the advantage accruing to the
infringer would also have to be substantial (see also Oasis Stores Ltd’s Trade
Mark Application [1998] RPC 631 at 649; CA Scheimer (M) SDN BHD’s
Trade Mark Application [2000] RPC 484 at 505; Daimler Chrysler v Javid
Alavi supra at 842). The proprietor probably has to identify some specific
aspect of the repute of his well-known trade mark from which the infringer is
likely to benefit (see Oasis Stores supra at 649). Bently and Sherman (op cit
at 974) note that although the assessment of unfair advantage is an objective
one, the motive of the infringer could well indicate that he intended to trade
on the reputation of the well-known mark and that he regarded the benefit as
substantial. Finally, the proprietor also has to show that the use of his trade
mark amounts to unfairness in the context of the case.
Taking unfair advantage of the distinctive character or repute of the registered
trade mark was not considered by the Constitutional Court. However, as a claim
of taking unfair advantage focuses on the benefit accruing to the infringer rather
than any detriment to the trade-mark proprietor, I argue that the requirement of
substantial economic harm will find no application.

6 Other Forms of Trade-mark Infringement

The so-called traditional forms of infringement are dealt with in s 34(1)(a)
and (b) of the Trade Marks Act.
Section 34(1)(a) states that the rights acquired by the registration of a
trade mark are infringed by the unauthorised use, in the course of trade, of an
identical or confusingly similar mark in relation to goods or services in respect
of which the mark is registered. This type of infringement is defined widely
and grants extensive rights to a trade-mark proprietor. It merely requires use of
a registered trade mark or a confusingly similar mark on the registered goods
or services. Like the dilution provision, it does not require a likelihood of
deception or confusion. So infringement can occur irrespective of whether the
use complained of is likely to cause deception or confusion. Also, the provision
is wide enough to cover not only use of the allegedly infringing mark as a trade
TRADE-MARK PROTECTION AND FREEDOM OF EXPRESSION 363

mark (that is, for the purpose of identifying and distinguishing the infringer’s
products from the products of others – the typical passing-off type situation),
but also use of the allegedly infringing mark for other purposes. While the
former infringing use (use as a trade mark) will give rise to a likelihood of
deception or confusion in the marketplace, the latter forms of use will normally
be characterised by an absence of any confusion.
Should a conflict between the rights of the trade-mark proprietor and the
constitutionally entrenched right to freedom of expression arise, it will be
necessary, in the light of the Laugh It Off decision, to balance the rights of
the trade-mark proprietors against the constitutionally guaranteed right to
freedom of expression (see Ron Wheeldon ‘Brand-Comparative Advertising.
Is it Unlawful, Really?’ 1996 De Rebus 585 at 588).
In so far as the provision does cover use that is likely to cause deception
or confusion in the marketplace, it serves both the interests of the trade-
mark proprietor and the public interest. So any likelihood of confusion in the
marketplace is likely to carry considerable weight in the balancing process,
and the rights of the trade-mark proprietor should prevail. But in so far as the
provision extends to use that does not give rise to a likelihood of deception or
confusion, it serves the interests of the trade-mark proprietor rather than the
public interest. Should any conflict arise, then, it is likely that the guarantee
of freedom of expression will outweigh trade-mark protection. In any such
balancing process, the courts are likely to interpret s 34(1)(a) restrictively so
as to limit the trade-mark monopoly.
Wheeldon (op cit at 585) argues that the infringement provisions should be
construed in a manner that would limit infringing use to use as a trade mark.
However, the European Court of Justice adopted a different approach in Arsenal
FC plc v Reed ([2003] RPC (9) 144). There, the well-known Arsenal Football
Club had instituted trade-mark infringement proceedings in terms of s 10(1)
of the United Kingdom Trade Marks Act, 1994, against the defendant who had
sold unofficial merchandise bearing the Arsenal trade marks outside Highbury,
the Arsenal football ground. The High Court had found that the use of the
Arsenal trade marks on the merchandise in question were perceived by the
public as badges of support, loyalty, and affiliation rather than as an indication
of origin, so that there was no likelihood of confusion. But the action was
stayed pending a reference of the following questions to the European Court
of Justice: Is it a defence to an infringement action that the use complained
of did not indicate trade origin? And, if it is, would it suffice that the use in
question would be perceived as a badge of support or affiliation to the trade-
mark proprietor?
In considering the scope of protection afforded by art 5(1) of the European
Trade Mark Directive (First Council Directive 89/104 of December 21, 1988
to approximate the laws of the Member States relating to trade marks), the
Court ruled that it is immaterial whether the allegedly infringing mark is used
as a trade mark. While use as a trade mark will fall within the ambit of art 5(1),
other uses may also infringe. The Court stated (in par 48 at 171) that
364 (2006) 18 SA Merc LJ

‘... the essential function of a trade mark is to guarantee the identity of origin of the marked
goods or services to the consumer or end user by enabling him, without any possibility of
confusion, to distinguish the goods or services from others which have another origin. For the
trade mark to be able to fulfil its essential role in the system of undistorted competition which
the Treaty seeks to establish and maintain, it must offer a guarantee that all goods or services
bearing it have been manufactured or supplied under the control of a single undertaking which
is responsible for their quality.’

The Court then held (in par 51 at 172) that

‘[i]t follows that the exclusive right under Article 5(1) of the Trade Mark Directive was conferred
in order to enable the trade mark proprietor to protect his specific interests as proprietor, that is
to ensure that the trade mark can fulfil its functions. The exercise of that right must therefore
be reserved to cases in which a third party’s use of the sign affects or is liable to affect the
functions of the trade mark, in particular its essential function of guaranteeing to consumers
the origin of the goods.’

The court pointed out that the proprietor may not prohibit the use of an
allegedly infringing mark if that use does not impair, or is likely to impair,
the interests of the proprietor of the trade mark, having regard to the functions
of the trade mark and that certain uses for purely descriptive purposes do not
constitute an infringement (see in par 54 at 172).
Bently and Sherman (op cit at 912) correctly note that while the European
Court of Justice explicitly mentioned the guarantee of origin as an essential
function of a trade mark, it failed to indicate what other functions, if any, it
regarded as legally protected. If one adopts the narrow view that art 5(1) is
restricted to the protection of the origin function, the proprietor will be able
to prohibit only use that is likely to cause deception or confusion. But if one
adopts the broader view that art 5(1) is not limited to protection of the origin
function but also extends to other functions of a trade mark in appropriate
cases, the proprietor will be able to prohibit use that not only impairs the trade
mark’s guarantee of origin but also its other functions such as its distinguishing
function, guarantee function, and advertising function. The proprietor will
then, for example, be protected against any use that is detrimental to the
distinctive character or repute of the registered trade mark, even in the absence
of a likelihood of confusion or deception.
The decision of the European Court of Justice in the Arsenal case was
applied by the English Court of Appeal in Arsenal FC plc v Reed ([2003] 3
All ER 865 (CA)). The Court of Appeal noted that the European Court had
not been concerned with whether the use complained of was use as a trade
mark, but rather with whether such use was likely to damage the trade-mark
right by jeopardising the essential function of a trade mark of guaranteeing
origin (see at 874B5). The Court agreed with the European Court that some
consumers may interpret the marks as indicating origin in the Arsenal Football
Club if they should come across the goods at a later stage. So any unchecked,
non-descriptive use of the mark by third parties was likely to jeopardise the
origin function of the trade marks. The more extensive such use, the less likely
the marks would be able to perform their function of guaranteeing the origin
of the proprietor’s goods (see at 878). Accordingly, the Court found that the
defendant had infringed the Arsenal trade marks.
TRADE-MARK PROTECTION AND FREEDOM OF EXPRESSION 365

In R v Johnstone ([2003] 3 All ER 884 (HL) at 890-1), the House of Lords

interpreted the judgment of the European Court of Justice in the Arsenal case
to mean that the infringing mark must be used as a trade mark – to indicate
origin. The House of Lords was of the view that the only use that affects the
essential function of guaranteeing origin is trade-mark use, and that non-trade-
mark use does not infringe (see at 891). Although this approach is in line with
prior European Court of Justice jurisprudence where ‘use as a trade mark’ has
been regarded as a valid requirement for infringement in terms of art 5(1) of
the Directive (see Annette Kur ‘Use “as a mark”? Implications of the ECJ’s
Arsenal Decision for Protection for Merchandising Properties in the EU’,
paper delivered at the Fordham University School of Law’s Eleventh Annual
Conference on International Intellectual Property Law and Policy, April 2003,
at 4), I believe that it is based on an incorrect reading of the judgment of the
European Court of Justice. While use as a trade mark will clearly affect the
origin function of a registered trade mark, other uses (as evidenced by the
Arsenal case) may also do so.
Section 34(1)(a) of the Trade Marks Act derives from art 5(1) of the
European Directive, and so the judgments of the European Court of Justice
and the English courts have persuasive authority in South Africa (see Beecham
Group plc v Triomed (Pty) Ltd 2003 (3) SA 639 (SCA) at 645B). The Supreme
Court of Appeal has also ruled that, in terms of the definition, the function of a
trade mark is to indicate the origin of the goods or services, but pointed out that
the protection granted in terms of the infringement provisions, in particular
s 34(1)(c), extends beyond the notion of a ‘badge of origin’ (Beecham Group
v Triomed supra at 646A; Laugh It Off Promotions v South African Breweries
(SCA) supra at 54B-C).
It is likely, then, that our courts, when they are required to balance the rights
of a trade-mark proprietor as against a claim of freedom of expression, will
follow the approach of the European Court of Justice in the Arsenal case and
adopt the narrow approach that seeks to protect the essential origin function of
a trade mark. This implies that s 34(1)(a) is likely to be interpreted restrictively
to cover only situations where the infringing use is likely to jeopardise the
essential function of the trade mark of indicating origin.
Section 34(1)(b) states that the rights acquired by the registration of a trade
mark are infringed by the unauthorised use of a mark that is identical or similar
to the registered trade mark, in the course of trade in relation to goods or services
that are so similar to the goods or services in respect of which the trade mark is
registered, that in such use there exists the likelihood of deception or confusion.
This form of infringement requires a likelihood of confusion or deception. In so
doing, it serves the interests of the trade-mark proprietor and the public interest.
Should any conflict between the rights of the proprietor and the constitutionally
entrenched fundamental right to freedom of expression arise, it is likely that the
probability of deception or confusion in the marketplace will carry considerable
weight in any balancing process and the rights of the trade-mark proprietor will
prevail, as they also serve the public interest.
366 (2006) 18 SA Merc LJ

7 Comparative Advertising
A registered trade mark may be used in comparative brand advertising. The
term comparative advertising refers to advertising where the product of one
trader is compared with the products of others. Comparative brand advertising,
in turn, refers to comparative advertising where the products are referred to by
their trade marks (see Bently & Sherman cit at 916; Webster & Page op cit in
par 12.18.2). In Abbott Laboratories v UAP Crop Care (Pty) Ltd (1999 (3) SA
624 (C)), the Court held that the use of a registered trade mark to identify the
proprietor’s product in comparative brand advertising falls within the ambit of
s 34(1)(a) and constitutes an infringement of the trade mark concerned (see
further Webster & Page op cit in par 12.18.2).
Comparative advertising may also constitute an infringement in terms
of s 34(1)(b) and (c) (see OH Dean ‘Intellectual Property and Comparative
Advertising’ (1996) 7 Stellenbosch LR 25 at 28; Webster & Page op cit in
par 12.18.2; Tanya Woker ‘Comparative Advertising – A Change in Attitude’
(1995) 7 SA Merc LJ 239 at 243).
Following the Laugh It Off decision, it may be necessary to revisit Abbott
Laboratories. One can argue that true and informative comparative brand
advertising is in the public interest. It increases the consumer’s knowledge
and awareness of the nature and quality of the whole range of products that
are compared, and it promotes competition (see Bently & Sherman op cit at
916; Cornish & Llewelyn op cit in par 16-045). Accordingly, it gives rise to
a potential conflict between the rights of the trade-mark proprietor and the
advertiser’s right to freedom of expression. A court that is confronted with such
a conflict will have to balance the rights of the trade-mark proprietors against
the advertiser’s constitutionally guaranteed right to freedom of expression. In
the balancing process a court may well interpret the infringement provisions
restrictively so as not to limit that fundamental right. Assuming that the court
adopts the narrow view of the European Court of Justice in the Arsenal case,
the use of the registered trade mark will constitute an infringement in terms
of s 34(1)(a) only if such use is likely to affect the origin function of the trade
mark. Where the trade mark is used purely for purposes of identifying the
proprietor’s product in the advertisement, such use will not impair the trade
mark’s guarantee of origin. Such use will not give rise to deception or confusion
and will not amount to infringement (see further Ron Wheeldon ‘Is our Trade
Mark Law out of Step with the EC?’ 2000 De Rebus 20 at 22-3). This result will
bring the statutory position in line with the position at common law rather than
extend the ambit of trade-mark protection. Any false or defamatory statements
can attract liability for defamation or discrediting a trader’s product (see Post
Newspapers (Pty) Ltd v World Printing & Publishing Co Ltd 1970 (1) SA 454
(W) at 459F-G; HJO van Heerden & J Neethling Unlawful Competition (1995)
at 283ff).
TRADE-MARK PROTECTION AND FREEDOM OF EXPRESSION 367

8 Conclusion
The decision of the Constitutional Court in Laugh It Off Promotions v
South African Breweries has far-reaching implications for the rights of trade-
mark proprietors. Any conflict between the rights of the trade-mark proprietor
and the constitutionally guaranteed right to freedom of expression requires a
balancing of the respective interests to determine what is unfair and materially
harmful to the trade mark. In this process, the courts will often adopt a
restrictive interpretation of the infringement provisions to restrict the trade-
mark monopoly. This may not always provide a satisfactory solution. Also, the
balancing process will usually be done on a case-by-case basis, which makes
it difficult to discern any general principles and predict the future scope and
application of the trade-mark proprietor’s rights. When attempting to limit the
rights of the trade-mark proprietor through restrictive interpretation, our courts
should heed the following words of Lord Justice Jacob in his recent address
to the United Kingdom Institute of Trade Mark Attorneys (quoted by Alice
Mastrovito ‘Wake Up. Where Are We Now? Where Are We Going?’ (2005)
177 Trademark World 18 at 21):
‘The great joy of trademarks is that there are no absolute answers. As soon as you fasten on one
answer, a whole lot of other answers become uncertain.’

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