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Summary The Law of Competition and Trademarks - Exam Notes
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The Law of Competition and Trademarks - Exam Notes (LML4802)
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Q & A Law of competition and trademarksAdidas AG, a German corporation, is the parent company of the Adidas
group of companies. They hold the rights to well-known three strip trade
marks and the slogal ‘the mark with the three stripes’. These trade marks
are used on sport shoes and clothing. The three stripe mark has become
an exceptionally valuable and distinctive mark because of its high degree
of visibility. It can readily be identified by consumer as a badge of origin
of Adidas products. It comes to the attention of Adidas AG that a South
African company, Pepkor Retail Limited, is selling sport clothing and
footwear on which they use two and four stripe marks.
1. What is the function of a trade mark? (1)
A trade mark identifies and distinguishes those good or services for which it is used
from goods or services of the same kind supplied by some other person.
2. With reference to relevant South African case law, advise Adidas AG whether
they can prevent Pepkor Retail Limited from using the two and four stripe
marks on their shoes and clothing under the Trade Marks Act. (4)
Section 35 of the Trade Marks Act prohibits the unauthorised use of a trade mark which
has become well known in the Republic. It is not necessary that the mark should have
been registered or used in the Republic. A mark will be regarded as well known if it has
acquired a reputation in the Republic among a substantial number of persons
(McDonald’s Corporation v Joburgers Drive-Inn Restaurant). The proprietor may
restrain the use of any mark which constitutes a reproduction, imitation or translation of
his well-known trade mark in relation to goods or services which are similar to the goods
or services for which the trade mark is well known, provided such use is likely to cause
deception or confusion.
3. Would your answer to the above question differ if Pepkor Retail Limited was
the proprietor of motor vehicles and they used the two and four stripe marks
on such vehicles? Explain by reference to the Trade Marks Act. (4)
If the trade mark is registered in the country, then the answer would not differ. The rights
acquired by the registration of a trade mark are infringed by the unauthorised use in the
course of trade in relation to any goods or services of a mark which is identical or similar
to a trade mark registered, if such trade mark is well known in the Republic and the use
thereof would be likely to take unfair advantage of, or be detrimental to, the distinctive
character or the repute of the registered trade mark, notwithstanding the absence of
confusion or deception (section 34(1)(c)).
, Q & A Law of competition and trademarks
4. What is the duration of a trade mark? (1)
10 years, but this period may on certain conditions be renewed from time to time.
X is the proprietor of the FLIGHTLINE TRAVEL agency situated in
Johannesburg. X commenced operating her business in January 1995. X
has not registered any trade mark in respect of her business operations.
X uses the name FLIGHTLINE together with a drawing of a “smiling travel
bag” on all her stationery and in advertisements. The FLIGHTLINE travel
agency specialises in budget tours and has acquired a reputation for
offering high quality inexpensive holidays both in South Africa and
abroad. To expand her business, X plans to open a further travel agency
in Cape Town under the same name in 2014, but an enquiry reveals that
B has opened a travel agency in Cape Town under the name FLIGHTLINE
TRAVEL six months earlier. B has adopted a similar logo and trade dress
for her Cape Town travel agency as that used by X.
Advise X whether she can prevent B from using the name FLIGHTLINE TRAVEL
and a similar get-up in relation to the Cape Town travel agency under the private
law of competition. (5)
X can institute an action against B for passing off. Passing off takes place where a
trader represents to the public that his enterprise, goods, or services are those of his
competitor. He does so by using or imitating his competitor’s distinctive marks. X must
prove the following two things:
1. That the trade mark, get-up, service mark or trade name which X claims has been
imitated is known in the market and has acquired with the public a reputation
associated with her goods, service, or business
2. That B’s conduct is calculated to deceive the public
As X’s business has been on the market for almost two decades, and has acquired a
reputation, she should be able to establish the required reputation for her mark
FLIGHTLINE TRAVEL. The exact same name used by B is sure to deceive or confuse
the public. Accordingly, X should succeed with an action for passing off against B.
Alan is the owner of the trade mark ROAMER which is registered in
respect of radios. Alan discovers that Brian has commenced using the
mark ROMA on radios and that Brian has filed an application to register
the trade mark ROMA in respect of radios in terms of the Trade Marks
Act 194 of 1993.
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