In the highly competitive market place, businesses are required to invest an essential amount of time and money in developing products and services that are new and innovative in order to compete with opposition businesses and to ensure their survival. This investment directly contributes to the building of a brand that in turn attracts goodwill in the market place. Customers associate the quality of the products and services to a name and build trust and loyalty towards it. Consequent to this reputation and clientele which a business attracts through good service and products, often other businesses, unimpressively so, capitalize on that hard work by imitating that business or services and/or creating products that are very similar or the same as the original products – perhaps mostly unlawfully so. Mostly, these products or services are not of the same quality as the original and this could lead to the proprietor business suffering damages and could lead to the dilution of the brand.
A trademark may be one of the greatest assets that a business can ever possess. A registered trademark is an asset which has value. It may be licensed, franchised, sold and even provided as security for a loan. For example, a brand like Apple constitutes a name on a product which is indicative of the quality that can be expected from the manufacturer and, in addition, determines the price that the owner may ask.
In registering a trademark a business is protecting the identity of its business. Under the Trademarks Act a business is afforded protection against others using the same or similar trademark to identify their business and or products. This means that should a business or individual institute action against an infringing party it need only prove that it is in possession of a lawful trademark registration. The burden of proof then rests on the infringing party to prove that they are not acting unlawfully and infringing on the rights of the business owning such registration. The registration of a trademark offers the owner of the mark concrete proof of its legally protected rights and eliminates the need to rely on the common law.
In common law, a business or other proprietor is afforded protection against infringement through the law of unlawful competition and in particular under an action of passing-off. However, quite to the contrary with trademarks, in common law the burden of proof is on the owner of the business whose rights are being infringed upon to prove that another party is passing off another’s business as its own. This means that the business’s rights being infringed upon has to comply with all the requirements for an action of passing-off which include, amongst others, that it has a reputation in the industry. This is often quite difficult and costly to prove especially when the business which rights are being infringed upon, is not well-known or does not possess the commercial footprint of its competitors. Proving a reputation in the market place may lead to costly market research and high legal bills.
A trademark is defined as a mark used to distinguish the goods or services of one undertaking from those of other undertakings. This can be in the form of words, drawings, signs, symbols, colours or combinations thereof. A trademark can be a slogan, name, logo, a specific shape or a combination thereof. The following facts should be considered when registering a trademark:
Considerations when registering a trademark:
Louw du Toit – Barnard Incorporated Attorneys, Centurion
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