Wednesday 2 December 2009

Darren Olivier

What should Lolly do?

Thanks to an alert from brand enforcement expert Marius Haman, Afro Leo has become aware that strip club Teazers is on the end of an unfair advantage and detriment claim by Afrikaans entertainment channel kykNET (just watch) in relation to their use of Kyk Net! on the billboard featured alongside. You can read about the claims here.

Unlike Lolly, this blog encourages interaction and has set up a poll alongside for your comment. Cast your vote - is this a case of unfair advantage, is it a case of detriment, is there a defence or is there merit in the case at all? You have until 11 December to make your call, the same date as Lolly.

The relevant provisions of the Trade Mark Act can be found here - see sections S34(1)(c) and S34(2)(b). We shall assume the mark kykNET is validly registered for the services in respect of which which it is used.

Darren Olivier

Darren Olivier

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Natacha Rey
2 December 2009 at 22:57 delete

Hi there,

The link for poll didnt come through so I will submit my humble law-student opinion here;)

In a nutshell, S34(1)(c) relates to marks that are similar for goods in different markets where there is a threat of dilution of a well-known mark in the Republic. It applies only where the mark is well-known in the Republic, and the Section prohibits the use of a mark that is detrimental to the distinctive charater of a registered mark.

The Courts have aided in the interpretation of this section through the now infamous "Laugh it off" case, whereby the SCA held that there are two forms of dilution; namely tarnishment and blurring. With regard to the former, the result must be a negative or unfavoured perspective of the goods of the registered mark; while the latter results in lowered distinctiveness of the goods.

I think it is safe to assume that blurring would not occur and that there in no lowered distinctiveness, unless kykNET is broadcasting programmes I am not aware of. However, there may be tarnishment in light of the morally disfavoured view that society may have on an establishment such as Teazers; one with which kykNET would not want to be mistakenly be associated. Had the matter ended there, I think there might be a valid argument for tarnishment and application of S34(1)(c).

However, the matter went further and the Constitutional Court went on to express the need for satire and freedom of expression within society. The Section should be interpreted in the least restrictive means to avoid infringing the right to freedom of speech. It held that for S34(1)(c) to apply, there must be substantial economic harm to selling power of the product and must amount to unfairness. Where there is no impact on the selling power, there is no infringement.

In light of this, I reckon the courts will favour Lolly in this one, unless kykNET can prove a drop in viewers as a result of the billboard.

With regard to the S34(2)(b) defence (i.e. that the mark is a bona fide description of the goods), the court in Tri-Ang Pedigree v Prima Toys concluded that for the mark to amount to a bona fide description, it is not a matter of looking at the words alone; the product as a whole should be considered to determine whether a mark is riding on the goodwill of another.

In light of the above and considering the assumed different markets involved in this case, it is likely that this defence would be successful in my opinion.

Having considered the above, it makes me wonder what the Constitutional Court would have decided had this case come before it before the "Laugh it off" matter. Considering the parties involved in the latter were young guys running a satirical t-shirt company, it seems "fair" that the court sided with the little guy. Now that the case involves something a lot more controversial due to the sexual nature of the enterprise involved, I wonder if the Justices would have made the same finding.

I guess we wait and see...

-Natacha Rey