Trademark dilution --- the last laugh

Section 34(1)(c) of South African Trade Marks Act is intended to protect proprietors of well-known trade marks against erosion and diminution of their rights through offending use by infringers. It indicates that the rights in a mark are infringed by:

“the unauthorized 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 of the said mark 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”

Full impact of the Section was not tested until 2003. In April 2003, The Cape of Good Hope Provincial Division of the High Court granted an order restraining Laugh It Off Promotions (LIO) from selling a t-shirt bearing the a racially inflammatory mark that was modified form of the well-known trade mark BLACK LABEL beer mark. Because of the novelty of the issues, LIO was granted the leave to appeal to the Supreme Court of Appeal. Before the hearing in the Supreme Court of Appeal, the Freedom of Expression Institute was granted leave to intervene as amicus curiae because of the issues relating to freedom of speech.

The Supreme Court dismissed the appeal, handing down a judgment dealing with local law and comparable laws internationally. The Court considered the basic philosophy of trade mark protection and indicated that, in spite of the fact that trade mark owners may be ferocious and brands can control ideas and concepts, trade marks constitute property that they are entitled to protect. The fact that they are intangible does not mean that they are of a lower order. The Court pointed out that the essential function of a trade mark is to guarantee the identity of the origin of the marked product to the consumer. However, Section 34(1)(c) is not concerned with origin or confusion but is simply to protect the economic value of a trade mark, particularly its reputation and advertising value or selling power.

Taking into account the fact that trade marks are property, no one would suggest that painting graffiti on private property is not an abuse of free speech. The Court asked why it should be different for trade marks. On the same principle, unfair or unjustified racial slurs on a trade mark owner should generally not be permitted, especially in South Africa. The Court pointed out that Section 34(1)(c) does not forbid and does not impinge on freedom of expression. LIO may use its caricature in the course of trade provided that it does not use it in relation to goods or services or may use its caricature in relation to goods or services provided that it does not do so in the course of trade. It may shout its message without appropriating the registered mark’s repute.

The Court considered the right to use freedom of speech and to use the trade mark in parody. The Court indicated that, as in the case of copyright infringement, parody cannot per se provide a defence to trade mark infringement. It is merely a factor that can be considered. The Court was satisfied that the message conveyed by ILO’s mark was likely to create an unwholesome, unsavoury and degrading association with the well-known mark. The claim to the right of freedom of expression was being abused and the use constituted an infringement of the trade mark rights.

Comment :

A South African trade mark must be seen as property that the owner may seek to protect like other property. One cannot freely take a registered trade mark and distort it for commercial gain. There may be cases where trade marks can be used for the purpose of parody, although this should be in situations where the use is not, strictly, for commercial gain but must be based on truth, public interest and fair comment for comic effect or to ridicule, criticise or comment on the trade mark or its proprietor.