Pro­tect­ing ‘look and feel’ of a busi­ness

Ap­ple’s suc­cess seems to be bear­ing un­wanted fruit in the east

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - GAE­LYN SCOTT AND WIM AL­BERTS

ALL things Ap­ple, such as the iPad, iPhone, and iPod, are seen by many in the western world as “hip” and glam­orous. Ap­ple’s suc­cess, how­ever, seems to be bear­ing un­wanted fruit in the east, par­tic­u­larly in China.

Re­cent re­ports tell the story of a “fake” Ap­ple store in a Chi­nese town, whose in­te­rior was said to re­sem­ble that of an orig­i­nal Ap­ple iS­tore. So much so, that even the em­ploy­ees ap­par­ently thought they were work­ing for the US com­pany. If this form of flat­tery were to hap­pen in SA, how would it be dealt with in terms of our in­tel­lec­tual prop­erty laws?

Firstly, it would be sim­ple to deal with the un­wanted con­duct where the items sold bear­ing the Ap­ple trade mark do not orig­i­nate from Ap­ple. The ap­pli­ca­tion to the goods of, for in­stance, the word Ap­ple, could amount to trade mark in­fringe­ment. Sim­i­larly, the re­pro­duc­tion of the Ap­ple logo could also amount to copy­right in­fringe­ment. These forms of in­fringe­ment would fall within the scope of anti-coun­ter­feit leg­is­la­tion and this im­plies, in par­tic­u­lar, that the au­thor­i­ties would per­haps be en­ti­tled to con­fis­cate the in­fring­ing goods.

Slightly more in­volved, is the sit­u­a­tion where the store would, for in­stance, be called Kun­ming Ap­ple. In other words, a trad­ing name or style in­clud­ing the word “Ap­ple”. The use of the trade mark would then not re­late to goods, but rather to ser­vices, a sit­u­a­tion which nat­u­rally falls out­side the scope of coun­ter­feit leg­is­la­tion and the dis­con­tin­u­ance of the use of the Ap­ple trade mark would then re­quire Ap­ple ob­tain­ing a court or­der.

This leads to the more dif­fi­cult ques­tion, thirdly, of whether the “look and feel” of the authen­tic Ap­ple store can be pro­tected?

In the South African de­ci­sion in Spur Steak Ranches Ltd v Sad­dles Steak Ranch, Spur re­lied on un­law­ful com­pe­ti­tion and al­leged that they had used a par­tic­u­lar lay­out and dé­cor in their restau­rants for more than three decades. Nine­teen key fea­tures were iden­ti­fied in­clud­ing Span­ish-style plas­ter on the walls, totem poles and dé­cor panels with Western mo­tifs in­clud­ing ea­gles. The court asked the ques­tion that nat­u­rally arises be­ing, what are the dis­tinc­tive de­sign and lay­out fea­tures the Spur claims as its own? The court re­ferred to the fact that the var­i­ous fea­tures men­tioned are not found in all Spur restau­rants and sub­se­quently reached the con­clu­sion that the claimed unique­ness was not proven. It also stated that, as a mat­ter of prac­ti­cal­ity, it would have been dif­fi­cult to make an or­der pro­hibit­ing the use of fea­tures “sub­stan­tially sim­i­lar to Spur Steak Ranches”.

A dif­fer­ent ap­proach was fol­lowed in the US de­ci­sion in Two Pe­sos Inc v Taco Ca­bana. Here, a restau­rant with the fol­low­ing in­te­rior fea­tured:

“(A) fes­tive eat­ing at­mos­phere hav­ing in­te­rior din­ing and pa­tio ar­eas dec­o­rated with arte­facts, bright colours, paint­ings and mu­rals. The pa­tio in- cludes in­te­rior and ex­te­rior ar­eas, with the in­te­rior pa­tio ca­pa­ble of be­ing sealed off from the out­side pa­tio by over­head garage doors. The stepped ex­te­rior of the build­ing is a fes­tive and vivid colour scheme us­ing top bor­der paint and neon stripes. Bright awn­ings and um­brel­las con­tinue the theme.”

The ev­i­dence con­sisted, among oth­ers, of the fol­low­ing view of a well­known restau­ra­teur:

“(They) are ‘shaped the same’. They look the same. When you’re in­side they feel the same. They have the same project.”

Which other bases for pro­tec­tion of the in­te­rior of busi­ness’ premises can be con­sid­ered in South African law? One op­tion is a trade mark reg­is­tra­tion. A dif­fi­cult prob­lem one faces here is that a trade mark, in this case the in­te­rior of a build­ing, must be ca­pa­ble of be­ing rep­re­sented graph­i­cally. This re­quire­ment is in­tended to pro­vide le­gal cer­tainty re­gard­ing the scope of rights brought about by a par­tic­u­lar trade mark’s reg­is­tra­tion. The pub­lic must know, from the reg­is­ter, ex­actly what the rights granted by the reg­is­tra­tion en­tail. An at­tempt at do­ing this was in ef­fect re­jected in the Spur case.

In terms of tra­di­tional prin­ci­ples of pass­ing-off, an ap­pli­cant must prove a rep­u­ta­tion and the like­li­hood of con­fu­sion. In prov­ing the ex­is­tence of a rep­u­ta­tion in re­la­tion to a trade mark used on goods, for in­stance, turnover achieved through sales of the prod­uct, and ad­ver­tis­ing ex­po­sure and ex­pen­di­ture, are ma­jor fac­tors. In the case of the in­te­rior of a busi­ness, it would have to be proven that a rep­u­ta­tion has been built up through, for ex­am­ple, the num­ber of vis­i­tors to the premises. Even if a rep­u­ta­tion can be es­tab­lished, How­ever, it would not nec­es­sar­ily im­ply that the owner of the busi­ness premises would have a rem­edy. This is on ac­count of the na­ture of the com­par­i­son made in pass­ing-off cases. It is there­fore nec­es­sary, not only to com­pare the trade marks them­selves, but also con­sider any dis­tinc­tive ma­te­rial used along with them.

The im­pli­ca­tion of the above is that a par­tic­u­lar busi­ness’ in­te­rior may be dis­tinc­tive, and have a rep­u­ta­tion, and yet the name of the busi­ness on the out­side could also be dis­tinc­tive, bear­ing in mind that one is con­sid­er­ing the use of the “look and feel” of a busi­ness. There­fore, when a cus­tomer en­ters the par­tic­u­lar busi­ness’ premises, he will be aware of the iden­tity of the es­tab­lish­ment he is vis­it­ing and it would then be dif­fi­cult to prove the like­li­hood of con­fu­sion. Af­ter all, an or­der in pass­ing-off pro­ceed­ings will only re­late to trad­ing un­der­taken with­out tak­ing ad­e­quate steps to dis­tin­guish a busi­ness or goods, and there is no ab­so­lute pro­hi­bi­tion on the use of a trade mark.

It would, there­fore, seem that the adop­tion of a dis­tinc­tive name on the out­side of premises could suf­fice to ad­dress any con­cerns about con­fu­sion flow­ing from sim­i­lar­i­ties re­gard­ing the in­side of the busi­ness premises. The Amer­i­can de­ci­sion in the Two Pe­sos case would then prob­a­bly not eas­ily be ac­cepted in South Africa. To re­turn to the Ap­ple store ex­am­ple, it would seem that it could be dif­fi­cult to pro­tect those aspects typ­i­cal to such a store. How­ever, the Ap­ple brand im­age is very strong, and, fur­ther­more, our courts have shown in the re­cent past that they are pre­pared to adapt le­gal prin­ci­ples to cater for new sit­u­a­tions.

Wim Al­berts is also a Pro­fes­sor of IP Law at the Univer­sity of Jo­han­nes­burg.

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