THEME 4: TRADE MARKS

Unit 4.4  TM: Rights, Infringement & Remedies

Unit 4.6  TM in The Digital Environment
 UNIT 4.4

TM: RIGHTS, INFRINGMENT & REMEDIES

T H E T R A N S F E R & L I C E N S I N G O F T R A D E M A R KS

TRANSFER OF RIGHTS IN A TRADE MARK

 The process where ownership of TM is passed from one entity to another

S 39 - Provides 2 ways for transferring rights in a TM

(1) Assignment
(2) Transmission

Aspect Assignment Transmission

Definition Formal act of transferring ownership of a TM. Automatic passing of TM ownership by operation of law.

Applicability Applies to registered TM & TMs pending registration. Occurs without formal act related to or comprising a TM.

Inheritance  TM can be transmitted through

For registered TM  transfer is labelled an assignment.
Process
For pending application  it involves the substitution of
the applicant for registration.
Nature Formal & intentional transfer of ownership.
inheritance when the owner passes away.
Bankruptcy  ownership of TM may be transmitted.
Statutory Changes  Changes in legal status, such as
mergers or corporate restructuring, can lead to the
transmission of TM
Automatic & operates by legal principles.
 ASSIGNMENT

 An assignment of a TM involves the transfer of ownership of the TM from one party to another.
 This process is similar to the sale of movable assets, commonly referred to as a "Deed of Assignment"
 Unlike the sale of physical goods, TMs are considered incorporeal or intangible assets.

Written Agreement Requirement:

Mandatory Written Agreement An assignment of a TM must be carried out through a written agreement

Validity Condition No assignment is considered valid unless a written agreement has been executed

Effective Date The effective date of assignment cannot precede the actual date of the DOA’s signature

 Written agreement requirement ensures clarity in ownership transfer & allows for accurate record-keeping in TM register.
 Whether transferring ownership with or without goodwill, parties must adhere to the legal requirements to ensure the
validity & effectiveness of the assignment.

Achieving Partial Assignment of a Trademark: Alternative Means

• When registrar does not permit partial assignment of TM, alternative strategies can be pursued to achieve a similar
objective.
•The Act recognizes the permissibility of partial assignments & if the registrar disallows it, one can resort to other lawful
means.

Lodging a Statement of Case & Affidavit:

Legal Requirement
Essential Components
Establishing Differences
To pursue partial assignment, a statement of case & an affidavit must be lodged.
The affidavit should include crucial averments & evidence supporting the argument
that the use of the same mark by different proprietors for similar goods/services won't
lead to public confusion or deception
Common strategies involve demonstrating that different proprietors deal with distinct
goods/services despite falling within the same international classification or showing a
connection between the proprietors that mitigates the likelihood of confusion.
 Examples of Permissible Partial Assignments:

• Varied Businesses  Registrar has allowed partial assignments where owners engage in diverse businesses, such as

 manufacturing both motor vehicles & aeroplanes

 manufacturing both cigarettes & luxury smokers' articles
 manufacturing both sweets & fresh bakery products

Justifiable Separation  In each case, the separation of TM for these diverse businesses was deemed justifiable.

TRANSMISSION

 The transmission of trademarks = legal process where ownership of TM can be transferred from one entity to
another, often through various means.

 A transmission can take the following forms, inter alia:

FORM OF TRANSMISSION SCENARIO TRANSFER MECHANISM

When company experiences liquidation or
ACQUISITION OF
merger, acquiring entity gains ownership
COMPANY ASSETS:
of company's assets, including TMs.
In the event of the death of a natural
INHERITANCE: person who is the proprietor of a TM, the
TM becomes an asset in deceased's estate.
Transformation of state-owned
TRANSMISSION THROUGH institutions, especially in Eastern European
FOREIGN LEGISLATION: countries, into civil law companies
(different legal entities).
Trademarks, being assets of the defunct
company, pass to the acquiring entity along
with other assets.
As part of inheritance process, when
deceased's assets are transmitted to heirs,
ownership of TM is transmitted to heirs.
Assets, including trademarks, owned by
state institution pass to the successor
company.
 RECORDING THE ASSIGNMENT OR TRANSMISSION

❖ When a transmission of the ownership occurs, whether through assignment or other means, it is NB for the new
proprietor to initiate the record of this change in the register of trademarks  Failing to take these necessary steps
can result in various uncertainties & potential prejudices for the new trademark owner.
❖ Once transferred  the NEW PROPRIETOR must record the change in ownership in the register of trade marks

 The post-transfer responsibility of new owner = to promptly update the register of TMs with change
in ownership.

❖ The term "Don’t = Uncertainty"

 This concept implies that the lack of timely record-keeping introduces uncertainty.
 This uncertainty could be prejudicial to the new proprietor, as it may create ambiguity or legal
complications regarding the rightful owner of the TM.
 The risk of trademark invalidation if the change in ownership is not officially documented.

❖ Previous Proprietor = right to use the TM until it’s recorded & cannot be sued for infringement ito the Act

❖ S27: If new proprietor is not recorded + 5 Years have lapsed = TM can be attacked on grounds of non-use

❖ S10(13): If the TM causes deception or confusion it can be removed – where non-record may cause confusion or
deception regarding the origin of the mark

❖ S40: Makes registering the transfer of title by application to the Registrar mandatory

❖ An infringement action can only be instituted by the new proprietor after record

❖ The importance of prompt record is highlighted through the following considerations:

NB  Record in register provides legal certainty regarding the current ownership of the TM.
Legal Certainty: Avoiding Uncertainties  Without proper record, uncertainties may arise ito the rightful owner,
leading to legal complications & disputes.

Risk of Invalidation  Failure to record change in ownership may expose TM to risks, including the
possibility of invalidation.
Preventing Prejudice:
Protecting Rights  Timely record safeguards rights of the new proprietor, ensuring legal standing &
protection of the trademark.
 Record ensures the operational integrity of TM system is maintained.
Operational Integrity
Public Accessibility  Facilitates public access to accurate & up-to-date info about TM ownership
Statutory Requirement  The Act & relevant regulations mandate record of changes in TM ownership.

Legal Compliance Compliance  New proprietors are legally obliged to comply with these requirements to maintain the
validity of their TM rights

LICENSING OF REGISTERED TRADE MARKS

What is a licence? Refers to relationship between the proprietor of TM & entity authorised by the proprietor to
use TM in relation to goods manufactures & sold in respect of the services rendered

Licensing Relationship:

 When TM owner grants a license to another entity, they allow the entity to use TM on their products / services.

 NB  Owner of TM retains ownership of the TM  They do not renounce their rights to the trademark.

 Instead, they grant permission for another entity to use it often for a specific purpose or under certain conditions

 A TRADEMARK LICENSE IS
 A legal agreement that allows an entity to use TM owned by another party while TM owner retains ownership.

 Licensing can be a mutually beneficial arrangement, allowing authorized entity to benefit from goodwill associated
with the TM & the TM owner to generate revenue through licensing fees.

 Terms & conditions are outlined in formal agreement, ensuring that the TM integrity & reputation are preserved

Example of trademark licensing  when a famous brand licenses its logo or name to be used on merchandise, such as
clothing, accessories, or toys. For instance, a well-known sports brand might license its logo to a clothing manufacturer,
allowing them to produce & sell sportswear with that brand's logo.
Type of License:

Type of
Description
License
Allows a single user + proprietor to use of the TM.
Licensor retains the licensed rights for himself, subject to some restriction, and extends these to the
licensee.
Licensor is not able to authorise any other person to perform the same protected acts in the same
Sole License
territory and the same field of use.
Limited to 1 user = exclusive access for the licensee.
The licensee is the only person, in addition to the licensor, that is authorised to perform the protected
acts in the territory and field of use
Grants exclusive use to a person, excluding all others, including the proprietor.
Highest level of exclusivity, limiting use even by owner.
Exclusive
Licensor effectively agrees to a restraint that prevents him from performing the protected acts in the
License
territory and the field of use, so that the licensee is the only person who is authorised to perform the
protected acts in relation to the intellectual property in the territory and field of use
Allows the use of TM by multiple users, including the proprietor.
Requires monitoring to prevent dilution or misuse.
Commonly used in franchises or situations with multiple users.
Non-
Monitoring is NB to maintain distinctiveness of mark.
Exclusive
Licensor retains the licensed rights for himself without restriction but extends these to the licensee.
License
Licensor is himself able to perform the protected acts in relation to the intellectual property in the
territory and the field of use and is able to authorise other persons besides the licensee to perform the
same acts in the same territory and in the same field of use

Permitted Use – VS – Registered Users

ASPECT PERMITTED USE
Section 38(1): authorised use with the ‘licence of
the proprietor’ by an entity - permitted use.
Usage of a registered TM by a person other than
DEFINITION the proprietor with proprietor's license.
• Deemed permitted use.
LEGAL • Considered as if used by the proprietor.
IMPLICATIONS • Not considered as use by another person.
• Limited to purposes covered by the Act
REGISTERED USERS
Section 38(3): a registered user may be recorded in
the register, and the use may be in respect of some or
all of the goods for which the trade mark is
registered.
Registered user (registered use agreements) possible
but not mandatory A person, not the proprietor, using
a registered TM with the proprietor's license, can be
registered for specific goods or services.
• Entitled to request proprietor to initiate infringement
proceedings.
• Specific legal standing & rights associated with use.
 G RO U N D S F O R I N F R I N G E M E N T 1

INTRODUCTION

• Once a TM is registered, registered owner can prevent others from using the TM without owner’s permission
• Sections 34 & 35 provide for different ways in which trade mark infringement may occur.

unauthorised use, in the course of trade, of a mark which is identical to a registered trade
mark or a mark nearly resembling a registered trade mark in relation to IDENTICAL goods or
Section 34(1)(a):
services in respect of which a trade mark is registered & in a manner likely to cause
deception or confusion
unauthorised use of a mark which is Identical or Similar to a registered trade mark, in
Section 34(1)(b): relation to SIMILAR goods or services in respect of which a trade mark is registered and
where such unauthorised use is like to cause deception or cause confusion
unauthorised use of a mark which is Identical or Similar to a registered trade mark which is
well-known in South Africa in respect of ANY goods or services, where the use of such trade
Section 34(1)(c): mark is likely to take unfair advantage of, or be detrimental to, the repute or distinctive
character of such registered well-known trade mark, notwithstanding the absence of
confusion or deception
unauthorised use of a trade mark which constitutes a reproduction, imitation or translation
of a foreign trade mark which is not registered in South Africa, but which is well-known in
Section 35(3): the Republic as belonging to persons who are nationals of, or are domiciled in, or have
commercial addresses in, Paris Convention countries, whether or not such persons carry on
business in SA

Section 33: No person is entitled to institute any proceedings under S 34 in relation to any TM not registered under the act

1
https://www.youtube.com/watch?v=2aHcfcadJW4
TM INFRINGEMNE = REGISTERED MARK → IN THE COURSE OF TRADE → IN RELATION TO GOODS OR SERVICES

THE WHAT THE HOW THE WHY

Refers to the fact that this is a non-exhaustive

definition. ‘In course of trade’ = Means in the
’Use in relation to goods or services’
context of commercial activity with a
Including’ Goods and services are classified into classes
view of economic advantage and not
• Device as a private matter. and the use must be regarding such
classification.
• Name
- This classification system can be found in
• Signature
Schedule 3 of the Regulations. Use in the course
• Word
of trade
• Letter
- Simply put, it must fall within one of those 34
• Numeral, shape • Configuration • Pattern classes of goods or 11 classes of services.

• Ornamentation

• Colour

• Container for goods.

 SECTION 34(1)(a) – PRIMARY INFRINGEMENT
 Section 34(1)(a): unauthorised use, in the course of trade, of a mark which is identical to a registered TM or a mark nearly resembling a registered trade mark in
relation to IDENTICAL goods or services in respect of which a TM is registered & in a manner likely to cause deception or confusion

The key elements which must be proved for an infringement

IN RELATION TO IDENTICAL
A MARK IDENTICAL OR NEARLY USE LIKELY TO DECEIVE OR
UNAUTHORISED USE IN THE COURSE OF TRADE GOODS / SERVICES ITO
RESEMBLING REGISTERED TM CAUSE CONFUSION
WHICH TM IS REGISTERED

Requirements Explanation

Unauthorised use The use of a trademark without the owner's permission.

In the course of trade The use occurs within a commercial context, involving buying & selling or any commercial activities.

In respect of same goods/ services The use pertains to the identical goods or services for which the trademark is registered.

An identical mark that so nearly Use of the exact same trademark without any alterations. The use of a mark that closely resembles the registered trademark to an extent
resembles the registered TM that it is likely to cause deception or confusion.
 ELEMENT EXPLANATION INFORMATION
Doctrine of exhaustion of rights: implied authorisation that
goods manufactured with the authority of the TM owner can be
resold under the TM
Even if goods resold w/o express authority of TM owner, the
goods are still genuine + resale ≠ amount to infringement on
registered TM owner's rights
Many manufacturers restrict the resale of their products by
appointing exclusive distributors to distribute their product in
specific countries around the globe
Parallel importation doesn't amount to infringement.
Owner of a registered TM Goods modified to the extent that they are no longer genuine
Unauthorised use
must prove that the use may constitute infringement.
by the 3rd party was not Use of the trademark without authorization in the course of
trade.
authorized by the owner.
If the manufacturer produces additional goods identical to
authorized ones without consent, it may constitute
infringement. But, if goods have been altered where they can
no longer be said to be genuine = unauthorised use and TM
infringement
What if additional goods have been manufactured and sold into Respondent was a manufacturer for the TM owner but then sold
the trade by the same manufacturer who has authority from the additional goods under the TM 'KAPPA' w/o the TM owner's consent
registered TM owner to only produce specific goods?
CASE LAW
Television Radio Centre (Pty) Ltd v Sony
When determining whether goods are no longer 'genuine' goods, the
nature, purpose + extent of the alterations must be considered
The issue is 'essentially a practical one and each case must be decided
on its own facts in light of the ordinary business practice and
reasonable expectations of purchasers'
Generally, second-hand goods qualify as genuine goods as long as
there's no misrepresentation by the seller and they are sold as second-
hand goods & Same applies to re-conditioned goods
PAG Ltd v Hawk-Woods Ltd
Electric batteries were reconditioned with replacement cells
TM infringement had occurred since the re-celled battery was no
longer the genuine product
Berman Bros v Sodastream Ltd & Another
Court held, based on the facts, there was only infringement of the
SODASTREAM TM in relation to the contents of the cylinders in those
instances where the cylinders bore the wording 'Guaranteed filled by
authorised Sodastream distributor' would be seen by consumers
If the TM only appeared on the valve of the cylinder, no confusion
would arise and thus no TM infringement
MCT Labels SA and Another v Gemelli CC
TM owner alleged that such goods were not 'genuine goods'
The court agreed and found the conduct to constitute a TM
infringement
Meaning of "use"

• Use includes using the mark as a trade mark or any other use.
• Use as a trade mark involves distinguishing goods and services of an infringer.
• Use other than as a trade mark includes instances where the trademark is incorporated into a trade name, company name, or used in comparative advertising without permission.

CASE LAW SUMMARY

Television Radio Centre (Pty) Ltd v Sony Kabushika Modification of genuine goods affects technical nature; consideration of nature, purpose, and extent of
Kaisha t/a Sony Corporation alterations.

PAG Ltd v Hawk-Woods Ltd Reconditioning of products may result in non-genuine goods; trade mark infringement.

Berman Bros (Pty) Ltd v Sodastream Ltd and Refilling of containers with non-manufacturer gas assessed for infringement based on use in relation to
Another container or contents.

MCT Labels SA and Another v Gemelli CC Unauthorized sale of additional goods under a trademark without owner's consent constitutes trade mark
infringement.
 In Verimark (Pty) Ltd v BMW AG. The BMW logo appeared in an ad
launched by Verimark for their brand of car polish. The logo
appeared on TV + on the packaging of the polish. This case
changed the laws on TM infringement significantly

Before this case, comparative advertising would have = TM

'In the course of trade' must mean trade in goods or services infringement, now = may or may not depending on how the TM is
the same as or similar to the goods/services of registration used and interpreted by the reasonable consumer. If the TM is
used in a way that the mark would be interpreted by a consumer
Use must be in the course of trade, competing with the trade
being linked to the TM owner then it would = TM infringement
of the infringed trademark.
Definition of 'in the course under s34(1)(a)
Use in the Course of Trade

of trade' The mark should be used as an indication of origin. Consumer

In adidas AG and Another v Pepkor Retail Ltd, adidas instituted
perception is crucial in determining use as a trademark
 Beecham Group plc v proceedings against Pepkor for infringement of its registered 3
Southern Transvaal Use must create an impression of a material link between stripe TM, Pepkor released boots and trainers with 4 stripes. The
Pharmaceutical Pricing goods/services and the trademark proprietor  infringing TM court held that it is a factual issue which must be determined
Bureau (Pty) Ltd and must be used in a TM sense objectively by how the marks would be perceived by the
Another consumer. Some of the shoes were infringing and others not
This is a question of fact determined by a test of how the mark
. would be perceived by the average consumer of the types of Société Des Produits Nestle S.A. V International Foodstuffs Co
goods in question (NB!) Nestle claimed its Finger Wafer marks were being infringed
through the picture which appeared on the Respondent's product
and the shape of the product

Court held that there was no material link btw the Respondent's
product and Nestle's as consumers would merely see the picture
as a descriptive indication of what was contained inside. Court
found there was no use 'as a TM' by the Respondent and
subsequently no infringement of s34(1)(a) with respect to the
Finger Wafers
In Relation to Goods and Services of
Use must relate to the same goods or services for which the trademark is registered

Infringing mark must be used in connection with the same goods or services covered by the registered trademark.
Registration

Goods not used may lead to a counterclaim to cancel those goods.

S34(1)(a) requires that the goods in connection with which the offending TM is being used are the same as the goods of registration of the Infringed mark

The goods related to the infringing TM must be the same as those registered for the infringed mark.

Infringement occurs if the use aligns with the goods or services for which the trademark is registered
 The plaintiff must show on a balance of probabilities Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd (NB!)
that there is a likely hood of deception or confusion as
Test for comparison in infringement cases
a result of the use of the infringing mark
Identical Mark or Confusingly Similar Mark

In an infringement action, the onus is on the plaintiff to show the probability/likelihood of

Comparison limited to the marks alone, not
deception/confusion
considering extraneous matter.
It is not necessary for the plaintiff to show that every person interested/concerned (i.e., the customer)
If the TM's are identical, confusion is inevitable
in the class of goods for which his TM has been registered would probably be deceived or confused
Likelihood of confusion is not limited to identical
It is sufficient if the probabilities establish that a substantial number of such persons would be
marks. Imperfect perception due to the reputation of a
deceived/confused as to the origin of the goods or the existence/non-existence of such a connection
trademark increases the likelihood of confusion
The comparison of marks is limited to the marks solely
If they are not, then the courts should consider
whether the 2 TM's are similar enough for confusion to No extraneous matter should be taken into account
arise
The likely hood of deception must be determined in relation to the TM's themselves and not to the
respective labels/get-up/other features of which the TM's form part

Application

• Three-leg enquiry:
1. Assess the identity of the goods or services.
2. Assess the identity or similarity of the marks. –
o Plascon-Evans Paints (TVL) Ltd v Van Riebeck Paints (Pty) Ltd: analysis of ‘likelihood of confusion’ under subsection 1(a) involves due consideration of the similarities and
differences between the two conflicting marks in terms of sense, sound, and appearance.
3. Overall assessment.

There is an interdependence between marks and goods similarities.

The similarity of marks and the similarity of goods are two separate enquiries.
Section 34(1)(b) requires the marks to be identical or similar
•
 SECTION 34(1)(b) – EXTENDED INFRINGEMENT

 Section 34(1)(b): unauthorised use of a mark which is Identical or Similar to a registered trade mark, in relation to SIMILAR goods or services in

respect of which a trade mark is registered and where such unauthorised use is like to cause deception or cause confusion

UNAUTHORISED USE
IN RELATION TO SIMILAR
A MARK IDENTICAL OR USE LIKELY TO DECEIVE OR
IN THE COURSE OF TRADE GOODS / SERVICES ITO
SIMILAR TO REGISTERED TM CAUSE CONFUSION
WHICH TM IS REGISTERED
Application

• Three-leg enquiry:

1. Assess the identity or similarity of the marks

o Foschini Retail Group (Pty) Ltd v Coetzee: reference to the class of goods or services to determine similarity would be a step that comes after determining whether or not
the marks themselves are similar.

2. Assess the identity or similarity of the goods or services:

o Apply British Sugar PLC v James Robertson & Sons (1996)

o The similarity of goods is to be assessed by taking into account all of the relevant factors that characterise the relationship between the goods, including their:
▪ Nature (i.e. physical matter)
▪ intended purpose (i.e. users)
▪ method of use
▪ whether they are competing or complimentary
▪ trade channels
▪ the complimentary of the goods or services

3. Assess the identity or similarity of the marks:

o Yuppiechef Epson Holdings (Pty) Ltd v Yuppie Gadgets Holdings (Pty) Ltd
o Look at the impact on the average consumer.
o Section 34(1)(b) requires the use of the goods or services to raise a risk of deception or confusion.

4. Make a value judgment

 Requirements for Section 34(1)(b) Explanation

Unauthorised use in relation to Unauthorised use of a mark identical or similar to a registered trademark in respect of goods or services that are similar but
similar goods or services. not identical.

Requirements for S 34(1)(b) Explanation Case Law

Degree of Similarity The required degree of similarity between goods/services is a crucial question. English case law UK Case: British Sugar plc v
considers goods like wine and spirits, jelly and ice cream, rum and a rum cocktail as "of the same James Robertsons & Sons Ltd;
description." Similarity may be influenced by falling within the same prescribed class. The less Emphasized an independent
similarity between goods or services, the greater the resemblance required between marks for consideration of similarity of
likelihood of deception or confusion. goods

Independent assessment of similarity of goods, considering factors like use, users, physical nature,
trade channels, & competition.

High bar before finding similarity.

British Sugar plc v James Robertsons & Sons

Factors taken into account:

(1) The respective uses + users of the respective goods/services

(2) The physical nature of the goods or acts of service
(3) The respective trade channels through which the goods/services reached the market or likely to be found in supermarkets and whether they are, or
likely, to be found on the same/different shelves
(4) The extent to which the respective goods/services are competitive

Court emphasised that the question of similarity of goods should be considered entirely independently of any other factors such as where the two TM's
were confusingly similar
 S34(1)(a) VS S34(1)(b)

The difference between section 34(1)(a) & (b)?

 S34(1)(a) covers the goods of registration only while (b) also covers goods which are 'similar'
to the goods of registration
 S34(1)(b) includes protection for 'similar' goods
 S34(1)(b): Relates to SIMILAR goods/services = traded in different classes → Same factors as
s34(1)(a) + tm owner must show that there is sufficient similarity between the goods/services
used under the infringing mark that it would cause confusion with the goods/services of the
registered mark

 The TM owner must also show that the goods/services being used under the infringing mark
are similar enough to the goods of registration to make it likely that the consumers will be
 GROUNDS FOR INFRINGEMENT  WELL – KNOWN TM

SECTION 35

Protection of an unregistered,
WELL – KNOWN TM well-known trade mark

SECTION 34(1)(c)

Protection of a registered, well-

known trade mark
 SECTION 34(1)(c) –INFRINGEMENT THROUGH DILUTION

 SECTION 34(1)(c) - unauthorised use of a mark which is Identical or Similar to a registered trade mark which is well-known in South Africa in respect of ANY goods
or services, where the use of such trade mark is likely to take unfair advantage of, or be detrimental to, the repute or distinctive character of such registered well-
known trade mark, notwithstanding the absence of confusion or deception

This section provides that the rights acquired by registration of a trade mark are infringed by

 Purpose of s34(1)(c) is to prevent 3rd parties from trading off the goodwill attached to a well-known brand to promote their own products

 S 34(1)(c) provides in case of a diluted product of registered TM, the onus is on plaintiff to show/prove infringement

WHAT IS DILUTION??
Dilution means the objectionable mark must:
(1) Take unfair advantage of
(2) Be detrimental to
(3) The distinctive character OR
(4) Repute of
(5) Well-known trade mark.
DILUTION OCCURS IN 3 WAYS  THE TYPES OF DILUTION:

There unique identity of the TM is eroded resulting in its weaker selling power
DILUTION BY Erosion
 Eg = non-competing goods

DILUTION BY BLURRING Loss of value of the TM due to mark becoming a descriptive name for goods/services

DILUTION BY TARNISHMENT Unfavourable associations created between well-known & infringing mark negatively impacts purchasing desirability

Section 34(1)(c) The Dilution Provision:

Section 10(17): the unregisterability provision
 The Act contains two relevant anti-dilution provisions
Section 34(1)(c): the infringement provision

REQUIREMENTS:
• The plaintiff must show the defendant used TM without authorization.
• The use requirement is not defined in the TM Act, however, this occurs when intellectual property is used without owner’s permission.
• Section 34(1) (c) focuses more on use that aims to be destructive to an existing TMs reputation
Unauthorised Use
• the advantage must be unfair and of a sufficiently significant degree.
• Dilution occurs when well-known TM is overexposed, leading to loss of its advertising value.
• The use of the infringing mark must be unauthorized.
 • The use of the trade mark must occur in the course of trade.
• This means with the purpose of selling something in other words the requirement is concerned with the use of the mark during
In the Course of
commercial activity for economic or financial benefit.
Trade
• The plaintiff must show that the use of the mark was done during ordinary business or commerce.
• This highlights that the context of the use is commercial or business-related, not merely personal or non-commercial use.

Nestlé Case

In the Nestle case the court stated section 34(1)(c) aims to safeguard a registered product & also protect its reputation or selling power.

The section is relevant when the mark is used in a non-trade mark sense. Therefore, it protects the brand in a trade and outside of trade sense.

• Focuses on the use of a mark that has a significant resemblance to the registered TM concerning the goods or services in question.
• Test for similarity of TM, it is a visual, aural, & conceptual comparison. When testing for similarity the following questions must be asked
Mark Identical or
(1) Do the trademarks look similar?
Similar to a
(2) Do they sound similar?
Registered Trade
(3) Do they conjure up the same image(s) in one’s mind?
Mark

If the answer is yes, then similarity is proven & the focus is on the dominant or striking features of the trademarks concerned

Bata Ltd v Face Fashions

The SCA held that the word ‘similar’ should not be given a wide interpretation.

The ordinary meaning of ‘similar’ refers to the resemblance of the infringing mark and the registered trade mark
 • The definition of well-known, was considered in the case of McDonalds Corporation v Joburgers Drive-in Restaurant = The term was
interpreted to mean that the mark should have a reputation in a wider section of the country to those who would be interested in buying
Well-Known in the goods of the proprietor.
South Africa • The trade mark must be well known in South Africa, similar to the reputation required for passing off.
• Well-known status is determined by extent of reputation among public or persons in trade.
• Limited geographical use may still qualify if well-known in that area.

McDonald’s Corporation v Joburgers Drive-Inn Restaurant:

The court held that section 35 gives provision for a well-known mark in the Republic.

A substantial number of the public in the market has to be familiar with the infringed trade mark

In determining the meaning of 'well-known' for Section 34(1)(c), the court aligned it with the reputation required for passing off.

Well-known means the reputation must extend to a substantial number of the public or persons in the relevant trade

Established a connection between the concepts of well-known for Section 34(1)(c) and reputation for passing off.

Triomed (Pty) Ltd v Beecham Group plc:

The court used the test applied in the McDonald’s case & held that the interpretation given for section 35 by the preceding case can also be applied for the
purposes of section 34(1)(c).

Adopted the test applied in the McDonald’s case, emphasizing the similarity in the interpretation of 'well-known' for both Section 35 and Section 34(1)(c)

Highlighted the interrelation between the concepts of well-known and reputation in evaluating trade mark dilution.
Likely to Take • This requirement aims to protect is the owner’s right to the reputation.

Unfair • The reputation of the mark refers to the opinion that a relevant section of the community or public holds about a certain product.
• The misappropriation or commercial exploitation of the marks ability to sell or attract customers is prohibited in terms of dilution.
Advantage or
• Use of the mark must be likely to take unfair advantage of or be detrimental to the distinctive
Be Detrimental
• The term detrimental should bear its ordinary meaning.
• Use of the plaintiff's trademark by the defendant should negatively affect or erode the selling power of the plaintiff's mark.
• This requirement aims to prevent third parties from capitalizing on the goodwill attached to a well-known brand unfairly.

Laugh It Off Promotions CC v South African Breweries International

The Court’s decision gives way of freedom of expression within its limitation which does not amount to tarnishment of the trade mark

Emphasized that Section 34(1)(c) does not limit use that takes fair advantage of the mark or does not threaten substantial harm to the repute of the mark

Protected use that qualifies as 'free expression' and does not amount to tarnishment of the trade mark

Acknowledged that use in a manner constituting 'free expression' should enjoy protection as fair use.

Verimark (Pty) Ltd v BMW AG

In the case of Verimark Pty Ltd v BMW AG 22the court had to determine the likelihood of dilution through blurring of the BMW logo. When having to prove

dilution, a trademark proprietor must prove that he or she suffered damage at the hands of the secondary user. The court held that an association in the mind of

the public does not necessarily translate into blurring or tarnishment of the mark. The court held that there must be evidence of actual detriment or unfair

advantage. It failed to see how the BMW logo would be detrimentally affected where it is used as coincidental to the defendant9s product.

The question of unfair advantage must be answered with reference to how the consumer perceived the use of the registered trade mark by Vermark.
Application of S 34(1)(c) To invoke protection ITO this section, infringement must relate to:

STEP-BY-STEP BREAKDOWN OF THE INFRINGEMENT ANALYSIS & THE FORMULATION OF LEGAL REMEDIES ITO THE NESLE CASE

 Analysis of Trademark Infringement by Mark:

(1) Identification of Infringement Type
The most applicable type of infringement in this scenario is identified as Section 34(1)(c), infringement by dilution.

(2) Unauthorized Use Requirement:

Mark did not seek permission to use Nestlé SA's trademark, fulfilling the unauthorized use requirement.

(3) Course of Trade:

Mark is selling cups for financial benefit, which satisfies the requirement for use in the course of trade.

(4) Goods Complementarity:

Section 34(1)(c) does not specify specific goods; it includes goods that complement each other.
In this case, Mark's cups and Nestlé SA's coffee complement each other, as people often drink coffee with cups.

(5) Well-Known Trademark:

Nestlé SA's trademark for "Ricoffy" is registered and well-known.
Well-known is interpreted as having a reputation.
Mark's trademark negatively affects the reputation of Nestlé SA's trademark.

(6) Unfair Advantage and Detrimental Effect:

Mark's use of his trademark results in an unfair advantage and is detrimental to the distinctive character and reputation of Nestlé SA's registered trademark.
 Formulation of Legal Remedies:
(1) Available Legal Remedies
The owner of the trademark that is alleged to be infringed can approach the courts under the Trademarks Act for remedies such as an interdict to restrain
infringement and, if damages are proven, relief for damages suffered.

(2) Specific Relief for Infringement:

Where a registered trademark has been infringed, the court may grant specific relief, including an interdict and an order for the removal of the infringing mark
from all material.
SECTION 35(3) –INFRINGEMENT THROUGH THE UNAUTHORISED USE OF WELL-KNOWN FORGEIN TM

unauthoris of a foreign
ed use trade TM

is not but which belonging - nationals

registered is well- to persons - domiciled in
IN SA known in who are
- have commercial addresses
SA

whether or
not persons Paris
carry on Convention
business in countries,
SA

43 | P a g e
 FAMOUS MARK - S35(3)

 S35 provides protection to famous foreign TM's which are well known in RSA but which have not been registered/used in RSA

To be successful

To be successful, the applicant must prove:

(1) That his mark is well known in RSA

(2) That he is a national/domiciled/established in a convention country

(3) That the offending mark is a reproduction, imitation or translation of his well-known mark

(4) That it is being used in relation to goods or services which are identical or similar to his goods/services

(5) That such use is likely to cause deception or confusion

 Although it does not specify that the use must be unauthorised and in the course of trade, these
factors must also be proven for a claim of infringement to be sustained

Distinguishing factors:
 Well known in the McDonalds Corporation v Joburgers Drive
Republic 'Well-known = If it is well-known to a substantial number of people in the target market of those goods/services
This is supported by section 35(1)(A) – that it must be well-known in its relevant public sector
‘Substantial number of people’ = based on sector
In casu: held that the potential customers of McDonalds required a lower level of awareness while potential Franchises required a higher level of awareness
Court admitted market survey evidence that helped to prove the tms reputation in SA.
Note: If the tm is never used in SA – can bring evidence of spill-over reputation via worldwide sales and advertising figures or actual exposure to the tm
Applicant must be a SA has obligations under the Paris Convention to protect well-known foreign trade marks of Paris Convention countries that are not registered in SA
national/ domiciled in
a Paris Convention Blue Lion Manufacturing v National Brands
country Section 35 applies only to unregistered foreign well-known tms
The common law or s10(12) should be relied on for unregistered South African well-known tms
Must be a Higher degree of similarity than s34(1)(a) & (b) is required
reproduction, Tm must have been copied and deliberately misappropriated
imitation or S36(2): section 35 will not apply where the mark has been used Bona Fide and continuously from before 31 August 1991 or from before the tm became well-
translation known (= Saving of Vested Rights Provision)
AM Moolla Group v The Gap
• Previous Trade Marks Act required Licensees to be registered for it to constitute use by the owner.
• In casu: Licensees of AM Moolla were not registered, therefore there was no use that was continuous and in good faith – s36(2) did not apply as a defence to
section 35.
• Found that regardless, s35 had not been infringed since local marks that are not well known at the time of their reproduction, imitation or translation and
are then subsequently taken over by another businesses reputation does not result in infringement
In terms of similar/identical goods/services –
Where the use will likely cause deception/confusion
 APPLICATION

There are 3 different sides of use regarding the above sections and
corresponding questions

The What:

The registered mark

Refers to the graphical representation of the mark (eg.

Mars is very cold
Apple logo) The Why:

‘what is being infringed? In respect of goods or services

The How:
Refers to what class of goods/services the tm is
Satur
In the course of trade
Saturn
registered under is ringed
(Apple is registred under the class of
n isthe mark is being traded
Refers to how
electronic products)
with by the proprietor (eg. Selling of
ringe
electronic products)
Look at ‘why is the mark a trade mark?’

dhave a commercial aspect

The use must
 In order for a successful claim under s34(1)(a), s34(1)(b) and s35, the tm owner must prove that between the registered tm and allegedly infringing tm there exists a
likelihood of confusion or deception

Before that, what is Confusion and deception

 It is central to tm law

 Confusion = Uncertainty regarding the origins of a particular product or a material link to the proprietor’s product

 Deception = Where consumers are deceived into believing something untrue such as that the product originates from the tm

owners’ products or there is a material link to his products

The assessment of Infringement: (STEPS)

 1) Determine the use of the tm in the course of trade (WHAT, WHY, HOW)

Remember that the “WHY” will set s34(1)(a) and s34(1)(b) apart since the former requires registration in the same class and the
latter requires registration in a different class

2) Then turn your focus to the 3 enquiries regarding deception and confusion:

Ste p 1: Determine if goods/services themselvesSte p 2: Determine if the trade marks are similar or identical
are similar
 An enquiry must be had ito WHAT the tm
is registered for and WHY confusion or
deception is likely
 Where the goods/services are not
identical - - - Apply the British Sugar Case
factors
Ste p 3: Assess the global impression
 Assess the identicality or similarity between the allegedly  Look at step 1 and step 2 together and assess how
infringing mark and the registered mark it would be perceived by a reasonable consumer
 If a customer were to walk into the store, would they
become deceived or confused upon coming across the
 Plascon-Evans Paints v Van Riebeck Paints product → It is a value judgement
 Whether there is a likelihood of confusion is dependent
on similarities and differences ito sense, sound and
 Yuppiechef Epson Holdings v Yuppie Gadgets
appearance
Holdings -Metterheimer v Zonquasdrif Vineyards:
 Eg. Sense (what does the sign invoke), Sound (what
 The stronger the case is made in terms of
sounds do the marks evoke – nike swoosh and the word
the identicality or similarity of step 1 or step 2,
nike), appearance (both marks relate to nike but are
the lesser the burden of proving step 2 or step
different)
1 becomes
 Therefore, if a strong identicality or
 This stage can be argued where 2/3 of the aspects can be shown similarity is proven ito the goods/services, the
 REMEMBER that in the Application of s34(1)(b), this is regarded burden of proving a strong identicality or
as STEP 1: similarity ito the tms becomes less
 Foschini Retail Group v Coetzee:
 Only once a determination is made regarding whether the
marks are similar, can reference be made to classes of
goods/services to determine similarity -
 3) A value judgement must be considering all the above-mentioned aspects

NOTE:

 S34(1)(b)’s application will require Step 1 and Step 2 to be switched!!

 This is since it must first be stated WHY s34(1)(b) applies UNLIKE s34(1)(a) where the marks will automatically be identical if they fall into
the same class – no test required

 Therefore, it must first be determined if the tms are similar/identical (1) THEN if the goods/services are identical or similar (2) s34(1)(a)
and s34(1)(b) can not apply simultaneously to the same mark since one requires the goods to be in the same class and the other in different
classes

 Exception: Lucky Star v Lucky Brands: 1 in a million case where it was shown that both applied

 BUT: s34(1)(a)/ s34(1)(b) and s34(1)(c) can apply simultaneously to the same mark, but one will cancel the other out.
 This will occur if the goods/services and well-known requirements are met
 REMEDIES

REMEDIES

INTERDICT DELIVERY UP DAMAGES REASONABLE ROYALTY ANTON PILLER ORDERS

This is where most tm infringement actions start in court to stop the use of the tm
It is done pending the determination of the substantive suit or perpetually
Where = Infringement has occurred or where there is a reasonable apprehension that it will occur.
Will not be granted where:
Interdict
 Tm owner did not act for an unreasonable period of time.
 Infringing conduct has stopped, or the infringer has undertaken to stop all use

May be requested where the actual infringement has not yet occurred but there is a reasonable apprehension that there will be infringement
If the offending conduct has terminated or the defendant has provided an undertaking that they have stopped all use, no interdict will be granted
Delivery up The court can grant an order in favour of the applicant who will be able to order the removal of the infringing mark on all materials and such
infringing material can be delivered to the registered owner to completely stop distribution of all infringing material.

Section 34(3)(c) expressly provides that damages can be awarded from acts which were performed after the date on which trade mark
applications were accepted.
It has to be shown that the infringer had knowledge of the existence of the registered trade mark before this date, then damages can be reclaimed
Damages
from the date on which the infringer had the knowledge.
This remedy includes damages arising from the infringing acts performed after advertisement of the acceptance of an application for registration
Damages are calculated on the basis of an actual financial loss sustained by the plaintiff (including loss of profit) as a result of the infringement
BUT: Damages of this nature are difficult to prove, so a plaintiff should opt for payment of reasonable royalties instead
A reasonable royalty will be given after proving the number of infringing articles
Reasonable All a claimant must prove if the number of infringing articles & reasonable royalty rate (Puma AG Rudolf Dassler Sport v Global Warming (Pty) Ltd)
royalty At the option of the proprietor, in lieu of damages, a reasonable royalty which would have been payable by a licensee for the use of the trade mark
concerned after advertisement of the acceptance of an application for registration
Order to attach and preserve evidence which prevents the infringer from removing or destroying it upon receiving notice of the proceedings Is not a
substantive infringement claim – this must be done in a separate application
To be granted an Anton Piller Order, the claimant must prima facie establish
Anton Piller (1)He has a cause of action against the respondent.
Orders (2)The respondent has specific & vital evidence to the cause of action in his possession that applicant does not have a claim or personal right over.

(3)There is a real and well-founded apprehension that the respondent will destroy or hide such evidence upon becoming aware of the proceedings

before it must go to trial or discovery

 UNIT 4.6

TM IN THE DIGITAL ENVIRONMENT

 I N T RO D U CT I O N : T M I N T H E D I G I TA L E N V I RO N M E N T

• Trade marks in the digital environment have become a complex & evolving area of intellectual property law.
• The digital landscape, with its growth in online trade & various online activities, has presented both
opportunities & challenges for businesses
• The internet is a breeding ground for TM infringement, where people can duplicate your brand & exploit it to:
 sell knockoff goods
 pose as your brand
 damage your reputation.

ONLINE TM INFRINGEMENT:

• Online TM infringement can have serious repercussions, including

 lost sales
 damaging a brand’s reputation
 legal action

• When consumers are uncertain about source of the good /service, it can result in brand dilution  lowering
your brand’s value.

IMPACT OF THE DIGITAL AGE:

(1) Global Reach The internet has given businesses the ability to reach a global audience, making
trademarks more valuable than ever
(2) 24/7 Accessibility Online commerce operates around the clock, requiring constant trademarks
vigilance
(3) E-commerce Growth The rise of e-commerce platforms has increased the importance of brand
recognition
(4) Social Media Brands are built & damaged on platforms like Facebook, Twitter, & Instagram

DIGITAL MARKET & TRADEMARKS

• Online trade has experienced significant growth & many businesses now mainly operate online or have a substantial
online presence to reach a global audience.
• Businesses strive to enhance their online visibility & brand recognition.
• However, these activities can sometimes infringe on the rights of third parties.
TRADE MARK PROTECTION:

• Given that the value of many well-known companies is largely tied to their intangible assets, protecting these
rights in the digital realm is NB.
• Businesses are concerned about preventing the misuse or misappropriation of their trademarks

TRADE MARK INFRINGEMENT CHALLENGES:

• In the digital environment, the concept of trade mark infringement is not as straightforward as it once was in
the physical world.
• Traditionally, trade mark infringement focused on the visible & overt use of marks.
• However, the digital landscape has introduced various challenges & complexities  making it necessary to
adapt & expand the understanding of trade mark infringement.

SPECIFIC CHALLENGES IN THE DIGITAL ENVIRONMENT:

• Two notable challenges related to trade mark use in the digital environment include their use by search
engines and on secondary markets, such as online marketplaces like eBay.
• These challenges have led to legal discussions and developments regarding the boundaries of trade mark use
and protection in the digital context.

TRADE MARK LAW

 Within the digital environment, the law & principles of trade marks usually apply mutatis mutandis.
 The issues around registrability, use, transfer & infringement of registered TMs are governed by the Trade Marks
Act & the applicable regulations both online & offline
the physical environment

the digital environment

 S 34(1)(a) & (b) of the Trade Marks Act, 1993 = a registered TM will be infringed if there has been unauthorised
use in the course of trade of the same or similar marks, in relation to the same or similar goods (or services),
that is likely to cause confusion.

 S 34(1)(c) = a well-known registered trade mark will be infringed if there has been unauthorised use in the
course of trade of the same or similar mark, if such use is likely to take unfair advantage of, or be detrimental to,
the distinctive character or the repute of the registered trade mark.
 In relation to Internet-related trade mark issues, the root of the matter is almost invariably whether there has
been use of the relevant trade mark or similar trade mark in the course of trade.

 However, there are certain activities that are irregular to the digital environment & such activities in turn affect
the way that trade mark laws & principles operate
 Activities such as those involving:

the use of
selling infringing
registered or even keywords and enforcing trade using domain
goods & services
unregistered TMs Adwords mark rights online names
online
as metatags

DOMAIN NAMES

• A domain name is a human-readable address used to access websites on the internet.

• It serves as a user-friendly way to identify & locate specific web resources.
• The domain name is typically composed of alphanumeric strings & is found to the right of the "@" symbol in an
email address or immediately following the "www" abbreviation when searching for a website.

Email Address:

In an email address the domain name is found to the right of the "@" symbol

 U123456789@tuks.co.za

the domain name = ‘tuks.co.za’

 tuks.co.za = uniquely identifies email provider or server associated with user.

Website URL:

• This domain name is NB for directing the browser to the specific website hosted at that address.
• The domain name immediately follows after the "www" abbreviation when searching for a website
The structure of a domain name

➢ There are 3 parts to a domain name, each separated by a full stop

➢ The structure of a domain name includes

The top-level domain is the highest level in the domain name hierarchy.

TOP-LEVEL DOMAIN It is the LAST PART OF THE DOMAIN NAME

It is located to the right of the last dot.
".com," ".org," ".net," ".gov," ".edu,"

The 2nd level domain = the part of the domain name that is LOCATED DIRECTLY
TO LEFT OF TLD.
SECOND-LEVEL DOMAIN
It is the MAIN IDENTIFIER of a website or entity on the internet.
This indicates the country of origin.

A subdomain is a prefix to the main domain

SUBDOMAINS It is located to the left of the SLD.
It allows for organization of website content into specific sections or categories.

EXAMPLE = WWW. GOOGLE. COM

"www" is a subdomain
"google" is the SLD, ".com" is the TLD
 DOMAIN NAME SYSTEM

HOW DOES DOMAIN NAMES WORK?

 IP Address Translation:
Domain names translate human-readable names into IP addresses, which are used by computers to locate
websites on the internet.

 Domain Name System (DNS):

The DNS is a system that maps domain names to their corresponding IP addresses
This enables internet navigation.

 Registrars & Registries:

Domain names are registered through domain registrars managed by domain registries

DOMAIN NAMES AS TRADE MARKS

Distinctive Brand Identity = Domain name can extend brand's identity into digital realm, enhancing brand recognition.

Trade mark Registration = Businesses can register domain names as TM to protect their online brand presence,
 DOMAIN NAME SYSTEM V TRADE MARKS

Differences:

Trademarks Domain Names

Nature & Purpose Trademarks are distinctive signs used to
identify & distinguish goods or services in
the marketplace. They serve as indicators
of the source or origin of products.
Legal Basis Trademarks are protected under
intellectual property laws & their
registration provides exclusive rights to
the mark's owner within the specified
class of goods or services
Renewal & Trademarks can be renewed indefinitely
Duration as long as they are in use & the renewal
fees are paid.
Ownership and Trademarks are owned by the entity that
Transfer registers and uses them. Transfer involves
specific legal procedures and
assignments
Domain names, are alphanumeric strings
used to locate resources on the Internet.
They facilitate the addressing of websites &
emails, serving as human-readable labels for
numeric IP addresses
Domain names are not inherently protected
as intellectual property. Protection often
involves contractual agreements, dispute
resolution policies, and, in some cases, legal
actions.
Domain names have a limited duration and
require periodic renewal. If not renewed, they
may become available for registration by
others
Domain names are registered through
registrars, and ownership is subject to
registration agreements. They can be
transferred between parties, either through
the market or by court order.

Similarities:

Trademarks Domain Names

Distinctiveness & Value
Protection Against Misuse
Transferability
The distinctiveness of a trademark
enhances its value. Unique and
recognizable marks are more valuable
in the marketplace
Trademarks are protected to prevent
confusion or misuse by others in the
marketplace.
Trademarks can be assigned or licensed
for use by others
The uniqueness and recognizability of a
domain name contribute to its value,
especially in the context of online presence
and branding.
Similar protection aims to prevent
cybersquatting, unauthorized use, or misuse
of domain names through dispute resolution
policies
Domain names are transferable between
parties, either through sales or agreements.
 TYPES OF ONLINE TRADEMARKS INFRINGEMENT

 When someone uses a brand’s name or logo online without authorisation, this is known as online trademarks
infringement & This can cause
 customers to get confused
 harm a company’s reputation
 possibly result in lost sales

Cybersquatting  Some registrants intentionally register domain names that match famous or existing trademarks
with the intent to profit from their use.

Domain Name Infringement  When someone uses a brand’s name or TM in domain name not registered to brand
 The infringement domain could be used to market fake goods or reroute visitors to the infringement website.

Social Media Infringement  The unauthorised use of a company’s name / logo on social media sites.

DOMAIN NAME DISPUTES

 Domain name disputes have arisen more & more frequently over the past few years with the explosion of the
Internet and everything that goes with it.

 Types of disputes:
domain name speculators register existing trademarks as domain names to block subsequent
1. Cybersquatting
registrations or to hold trade mark proprietors to ransom
registrant registers a domain name incorporating a well-known mark without the proprietor’s

2. Cyber griping permission for the purposes of expressing criticism or appreciation e.g. “britneysucks.com” or
“welovebrangelina.com
US company selling shoe polish called “Shine” & SA company selling dental products called

3. Trademark disputes “Shine”

TM is owned & used in different countries by different proprietors for different goods & services.
The same mark is owned & used in different countries by different proprietors for same goods &
4. Split mark disputes
service
Split mark disputes

➢ Domain names which may constitute trade mark infringement, given the limited number of
generic top-level domains (gTLDs) & country code top-level domains (ccTLDs), it is only to be
expected that there may be lawful competing claims for the same domain name.

➢ In cases like this, where the same trade mark is registered by different persons, or where
persons have common-law rights to the same mark – sometimes referred to as ‘split mark’
disputes – the UK courts have determined that the entitlement to the registration of a domain
name incorporating such mark will be determined on the basis of priority of registration.

Cybersquatting

 Bad faith registration of domain names which conflict with third parties’ rights, such as the
trade mark rights.

 The registrant’s (commonly referred to as a cybersquatter) motivation for acquiring such a

registration is to profit from the sale of the relevant domain name to the relevant rights holder
through extortion, or to derive revenue from the substantial number of visitors (or traffic) a
website pointed to such a domain name is likely to have.

 Cybersquatters have been innovative in continuing to attempt to exploit situations from which
they could profit, & we have seen the emergence of practices such as typo squatting.

 Some cybersquatters – so-called robber barons – have increased the scale of their operations
through computer-assisted selection & registration of domain names, allowing them to
accumulate large portfolios of cybersquatted names.

 The basic form of cybersquatting may be an issue affecting new businesses or businesses
undergoing a change, possibly following a merger, if they have been slow to secure the
necessary domain name registrations.

 Under South African law, cybersquatting may amount to trade mark infringement, or to
passing off, or form the basis for a delictual or unlawful competition claim.
 DOMAIN NAME DISPUTE RESOLUTION:
• WIPO’s domain name policy called the Uniform Domain-Name DisputeResolution Policy (UDRP) provides a
mechanism to resolve domain name disputes outside traditional courts.
• Legal Actions = TM owners may resort to legal actions under TM law to protect their rights against infringing
domain name registrants.

• You have to establish 3 key elements:

(1) TM Ownership:
In legal actions under TM law, TM owner must first establish their ownership and rights to the TM.
This typically includes providing evidence of trade marks registration, if applicable, and showing that
they have exclusive rights to the mark in question.

(2) Domain Name Infringement:

To protect their rights against infringing domain name registrants, the TM owner must demonstrate that
the disputed domain name is identical or confusingly similar to their TM.
They need to show that the domain's use is likely to cause confusion among consumers.

(3) Bad Faith or Unlawful Use:

In legal actions, the TMs owner must prove that the use of the domain name is in bad faith or
constitutes unlawful or infringing activity.
This can involve showing that the registrant intentionally sought to profit from the TM owner's
reputation or that they used the domain in a way that dilutes the trade marks

Trade mark infringement

 Whether cybersquatting constitutes trade mark infringement, pursuant to section 34(1) of the TMA 1993,
depends primarily on whether
 such use of the domain name incorporating the trade mark
 amounts to use in the course of trade
 & whether such domain name is found to be identical, or similar
 To the registered trade mark.

 Whether use of a domain name amounts to use in the course of trade is a factual matter.
 Courts have construed ‘use in the course of trade’ widely: even though the defendants may not have used the
domain names
 the mere registration thereof in order to sell such domain names has been held to constitute use of trade marks
in the course of trade.
 Additionally, given the fact that websites are routinely accessed because they provide information about, or
provide actual, goods and services, it should not be difficult (because the courts have interpreted this widely) to
establish that any website utilising such a domain name is using the trade mark in relation to goods or services.
Passing off

• The plaintiff will have to establish the ‘classical trinity’ of reputation (or goodwill), misrepresentation and
damage.

• Once a plaintiff has established the first 2 requirements, the SA courts have presumed that the plaintiff has
suffered, or will suffer, damage as a consequence of the relevant conduct.

• A plaintiff can establish that the use of a domain name held by a cybersquatter constitutes passing off if it can
be shown that its customers would think that it is likely to have used its name, or the name of one of its
products, as a domain name.

• Since the advent of the Web, consumers are likely to assume that a fi rm will promote its business or products
online, which would increase the likelihood especially in the case of an established enterprise – that such firm
has a reputation that extends to a domain name which features its name, or the name of one of its products,
as the dominant portion of the domain name

• 2nd requirement will have been established if the plaintiff has shown that the ordinary or average customer
(or Internet user) is likely to be deceived or confused by the defendant’s conduct.

• More specifically, the plaintiff will have to adduce evidence to demonstrate that the average customer is likely
to consider that the defendant’s offering is indistinguishable from its offering or is connected with it.

• Factual enquiry, and the court must have regard to the profile of the average customer, for example, the age
and educational level of the relevant customers.

• New Media Publishing case, the applicant was unsuccessful in respect of its claim based on passing off as it
had failed to establish, on a balance of probabilities, that its name, mark or get-up had become distinctive and
that therefore it had a reputation to protect in this connection.
Form of Abuse Definition
Involves registering domain names with
1. Typosquatting variations or misspellings of existing
domain names, often incorporating
registered trademarks.
Incorporation of trademarks in domain
2. Gripe Sites and Fan
names for gripe sites (critical) or fan
Sites
sites (appreciative).
Involves registering a domain name that
incorporates a trademark with which
3. Techno-jacking
the registrant (typically an ISP or
developer) is in dispute.
4. Reverse Domain Name Bad faith attempts to deprive a
Hijacking (RDNH) registrant of its domain name.
Objective Example
Profit from users making typing errors and visiting Variations of "cocacola.com" like
their websites, potentially offering advertising "cokacola.com," "xocacola.com," or
space to competitors. "cocacolas.com."
Considerations include the nature of the domain
name, inclusion of additional material, & whether Domain names incorporating
the use is justified based on available defences or trademarks for gripe sites or fan sites.
freedom of expression.
Acts as a self-help remedy to coerce the trademark
owner into settling the dispute on potentially
unfavorable terms. Registering "trademarkdispute.com" by
a party in dispute with the trademark
Regulatory basis: Considered abusive registration owner.
under regulation 4(1)(a)(iv) – registrations aimed
at preventing the complainant from exercising its
rights.
Abuse of the alternative dispute resolution
mechanism, designed to be cost-effective and
quick. Attempting to unfairly take control of a
Distinguishing factor: Must be distinguished from domain name through bad faith claims
an unsuccessful yet honest complaint. RDNH in dispute resolution.
finding is appropriate if the complaint had no real
prospect of success and was characterized by bad
faith, recklessness, or dishonesty.
 Approach to Answer in Exam:

1.Definition of Domain Name: • Start by providing a definition of a domain name.

2.Hierarchy of Domain Names:
3.Top-Level Domains (TLDs):
4.Second-Level Domains (SLDs):
• Emphasize its role as a web or internet address & its potential for TM
registration.
• Introduce the hierarchical structure of domain names, consisting of top-level
domains (TLDs) and second-level domains (SLDs).
• Highlight the significance of TLDs as the highest level in the Domain Name
System.
• Explain TLDs as the last segment of a domain name after the "dot."
• Differentiate between generic TLDs (e.g., ".com," ".edu," ".org") and country-
specific TLDs (e.g., ".za," ".au").
• Discuss the control and features associated with TLDs.
• Define SLDs as domains directly below TLDs.
• Clarify that SLDs are the portion of the domain name to the left of the ".com" or
similar extension.
• Emphasize the role of SLDs in distinguishing a site by reflecting brand names,
project names, or organization names.

Sample Answer:

A domain name serves as a web or internet address, often eligible for trademark registration. The structure of
domain names follows a hierarchy, primarily comprising top-level domains (TLDs) and second-level domains (SLDs).

(1) Top-Level Domains (TLDs): TLDs represent the highest level in the hierarchical Domain Name System,
appearing as the segment following the "dot" in a domain name. There are two main categories of TLDs.
Generic TLDs include extensions like ".com" for commercial sites, ".edu" for educational sites, and ".org" for
charitable sites. On the other hand, country-specific TLDs are tied to specific countries, such as ".za" for
South African sites or ".au" for Australian sites. TLDs play a crucial role in controlling and organizing the
addressing system of the internet.
(2) Second-Level Domains (SLDs): SLDs are located directly below TLDs and form the part of the domain name
to the left of the ".com" or a similar extension. These domains contribute to the distinct identification of a
site by incorporating brand names, project names, or organization names. The use of SLDs enhances user
recognition and facilitates the organization of web addresses.

In summary, the concept of a domain name encompasses a hierarchical structure, with TLDs and SLDs playing
distinctive roles in the organization and identification of web addresses. Understanding this structure is
fundamental to appreciating the significance of domain names in the digital landscape.
 M E TATAG S

WHAT ARE METATAGES

 Metatags are a key component of web pages & can have a significant impact on trade mark law.

 Metatags are HTML elements used in header of a web page to provide metadata that describes content of page.

 An HTML tag that contains descriptive information about a webpage and does not appear when the webpage
is displayed in a browser.

 A word that is in a metatag of a webpage will cause that webpage to turn up as a result of a search engine's
search on that word, even if that word is not found in the webpage as viewed in a browser.’

 Function  Metatags help search engines & browsers understand content, purpose, & relevance of a web page.

 Common types of metatags include

 meta titles
 meta descriptions
 meta keywords

METATAGES INFRINGEMENT

Keyword Stuffing Deceptive Practices

the practice of overloading a web page's metatags

with excessive keywords, particularly a competitor's Using a competitor's trade marks in metatags can be
brand name or trade marks, with the intent to considered a deceptive practice if it is done with the
manipulate search engine rankings and attract more intent to mislead and create confusion
web traffic.
 Keyword Stuffing:
This practice is considered deceptive and potentially infringing in the realm of trade marks law for several reasons:

(1) Misleading Search Engines By excessively using a competitor's brand name as keywords in their
metatags, a website attempts to trick search engines into ranking them
higher for searches related to that brand. This manipulation can lead to
inaccurate search results, diminishing the quality of the user experience.
(2) Unfair Competition Keyword stuffing misleads users by making them believe that the website
is directly associated with the brand or trade marks they are searching for,
which can be detrimental to the legitimate brand owner's online
reputation and sales. It creates an unfair competitive advantage for the
infringing website
(3) Consumer Confusion Keyword stuffing can lead to consumer confusion, as users who click on a
link with the expectation of finding information about a specific brand
may end up on a different site entirely. This can damage the trust users
have in search engine results

Deceptive Practices:

This is problematic for several reasons:

(1) False Association When a website uses a competitor's trade marks in their metatags, they are
attempting to create an association between their content and the competitor's
brand, even if there is no legitimate connection. This can mislead users into
believing that they are accessing the official or authorized source for that brand
(2) Consumer Trust Deceptive practices erode consumer trust. When users encounter misleading
metatags, they may become sceptical of search engine results and the authenticity
of online information, which can ultimately harm the online ecosystem.
(3) Potential Legal Deceptive metatag practices may result in legal actions under trademarks law.
Consequences Competitors may seek damages or injunctive relief to stop the deceptive use of
their trade marks in metatags

K E Y W O R D A DV E RT I S I N G

WHAT IS KEYWORD ADVERTISING

• Keyword advertising, also known as search engine marketing (SEM)

• It involves placing ads in search engine results based on specific keywords or phrases.
• Example: When users search for "smartphones," sponsored ads related to smartphones may appear at the top or
side of the search results
 HOW DOES KEYWORD ADVERTISING WORK?

• Auction-Based System = Advertisers bid on keywords relevant to their products or services in an auction-based
system.

• Ad Placement = Ads are displayed when users search for the chosen keywords, and advertisers pay when users
click on their ads (Pay-Per-Click, or PPC).

KEYWORD ADVERTISING AS A TM

Branded Keywords:

 Advertisers often bid on keywords that include specific brand names, such as "YourBrand smartphones" or
"YourBrand shoes.“
 By bidding on branded keywords, advertisers aim to leverage the brand recognition and reputation of the
trade marked brand to attract users who are searching for that brand or related products and services.

Brand Association:

 The use of branded keywords allows advertisers to associate their ads with a particular brand's products or
services.
 For example, when a user searches for "YourBrand smartphones," they may see ads from competitors offering
similar products.
 The goal is to capture the attention of users who are already interested in or searching for a specific brand,
hoping to divert some of that traffic to their own products or services
Distinguishing Features:
METATAGS KEYWORD ADVERTISING
ASPECT
APPROACH Case-by-case basis Case-by-case basis

(1) Clearly designated as an advertisement (1) Recognizable as an advertisement

KEY QUESTIONS
(2) Any reference to another's TM in text/URL (2) Use of the trademark as a keyword
(3) Adverse effects on functions of the TM (3) Adverse effects on the functions of the TM
INFRINGEMENT Infringing if the search result fails to enable an
"Use" of metatags considered as TM use &
OCCURRENCE average internet user to ascertain the origin of
potentially infringing
CRITERIA goods/services.

General formula:

Using competitor's TM as metatag = potentially

infringing
LEGAL REFERENCE The Bananabay case
Using a competitor's TM as a keyword in an internet
search engine = Not infringing IF the search result
was recognizable as advertisement

 Metatags  Focus on how metatags are used, considering them as potentially infringing if they impact the
origin indication and advertising functions of a trademark.

 Keyword Advertising  Assess the infringement based on whether the search result enables an average
internet user to ascertain the origin of goods/services. If recognizable as an advertisement, it may not be
considered infringing.

Similarities:

✓ Approach = Both are considered on a case-by-case basis.

✓ Common elements include

 clarity as an advertisement
 reference to another's trademark
 adverse effects on trademark functions.