The trademark as a badge of origin
It is widely used to distinguish similar products from each other
THE Trademarks Act does not refer to the cost of goods or services for purposes of the two cornerstones of our trademark law, namely whether a trademark is capable of distinguishing (registrability issues) or whether the use of a trademark is likely to cause confusion or deception (infringement issues).
However, when trademarks are compared for confusing similarity the notional consumer is taken into account and there is case law that confirms that the purchaser of an inherently expensive product such as a motor vehicle is likely to be circumspect, while not much care is taken when purchasing chewing gum, especially by young children.
In a recent judgment a judge said “… even though whisky is a popular drink, it is not a cheap drink. Consequently, a consumer is likely to exercise circumspection and a greater degree of care in making a purchase. It is not an overstatement that whisky drinkers take pride in the product and assimilate it in such that they are able to distinguish whether it is a single malt or blended, as well as a source of origin… I am inclined to find that it is unlikely that the notional purchaser of the applicant’s whisky, even with an imperfect recollection or perception, when confronted with Black Knight would focus attention only on the word Knight and ignore the word Black. To my mind, the whole mark Black Knight serves to distinguish the respondent’s whisky from that of the applicant.”
As long as a trademark can serve as a badge of origin (ie it is not descriptive) in relation to specific goods or services it should be a good trademark, regardless whether it is Rolls Royce for motor vehicles or Chappies for chewing gum. It is the trademark proprietor’s prerogative to determine the level of quality of the goods, which, together with appropriate marketing, assists him to set a price that consumers find reasonable, while allowing for an acceptable profit margin.
There is nothing in law to stop a trademark proprietor from using the same trademark for a wide range of goods of diverse quality, as long as there is no confusion as to the source of the goods. However, if a trademark proprietor chooses to do so he would be wise to ensure that he does not erode the commercial magnetism of his trademark. This can be done in a number of ways. I used Rolls Royce as an example because this trademark has become the classic example of a mark designating quality. In the motor vehicle industry manufacturers offer a range of vehicles covering a wide range of prices. For example Toyota-branded motor vehicles range from R118,100 to R988,000 — although if one excludes the 4x4s the top model is R329,900. The different prices reflect different models, performance and extras, but they are all Toyotas.
The Toyota Corporation has been careful to distinguish its luxury motor vehicles by selecting a different trademark, namely Lexus. Lexus prices range from R370,000 to R1,236,700. The same applies to Nissan with their Infiniti brand and Volkswagen has Porsche, Audi and Volkswagen.
An excellent example of a diverse range of quality and price within a single brand is the Johnnie Walker stable. While the Johnnie Walker trademark is used consistently, the range is distinguished by different colours, namely the Red, Black, Gold, Platinum and Blue Labels, with the prices ranging from R159 for the entry-level Red Label to R1,999 for wealthy connoisseurs. While under normal circumstances a mere colour does not serve as a badge of origin, within the Johnnie Walker range these colours separate the entry- level whisky drinker from the discerning connoisseur who is prepared to pay R2,000 for 750ml of spirits.
While the general principle is sound, the particular application of the principle to the facts of the case, which established that the Knights and Black Knight whiskies retailed for R80, is open to question because whisky can be a cheap drink and the notional consumer in that particular case was not that discerning drinker, as opposed to the rarefied atmosphere of imbibers of Johnnie Walker Blue.
ENSURING MAGNETISM OF TRADEMARK