The trade­mark as a badge of ori­gin

It is widely used to dis­tin­guish sim­i­lar prod­ucts from each other

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - CHARLES WEB­STER

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.

Pic­ture: THINKSTOCK

EN­SUR­ING MAG­NETISM OF TRADE­MARK

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