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Trademarks
February/March 2011

Trademarks:

Making your mark

When are you breaching intellectual property law and when are you just following a trend? When is it a counterfeit and when is it a legitimate copy? BEVAN FRANK delves into the world of trademarks, patents and designs

Several years ago a New Zealand company, XLR8, started marketing the agility training aids (ladders, hurdles, bands, etc.) that teams and athletes now use to get fit and ready for most kinds of sporting codes. Since then, it has grown tremendously in popularity, and now many teams and schools use them for fitness and speed training. Subsequently, several other companies started producing these items, often using the same names that XLR8 first adopted (e.g. Evasion Belt, Speed Chute, Strength Bags etc.).

XLR8 are claiming that these other companies are infringing their trademarks and trade names.

“We have had to take strong action against certain companies in SA who have copied our products via Indian and Chinese manufacturers and imported them into SA,” says Syd Rappoport who runs the South African distributor of XLR8, Speed Power Sports. “They have used our trade names for their products, which has cost us much money to develop on the market. These trade names belong to our principals in New Zealand, Speed Power & Stability Systems Ltd, who have instructed us to take action against the defaulting SA companies.”

Rappoport maintains that the various companies are trying to usurp Speed Power Sports’ market with “cheap imitations using our trade names, which is tantamount to passing off, in the same manner as illegal imports in the sports shoe industry”.

Disputes over trademarks, trade names, original product development and counterfeits are common problems in the sport, outdoor and leisure industries. Someone develops a new idea that suddenly takes on a life force of its own and many other companies start selling their own version of a product that was someone else’s concept.

The question arises as to when is one actually infringing a trademark — as opposed to just following a new product trend? Examples here include the development of synthetic soccer balls versus leather soccer balls, composite rackets versus wooden rackets, etc. One brand started the trend, others followed.

When is it copying or counterfeiting, as opposed to the development of a new sport product category?

“The act of copying a competitor’s get-up or product is not inherently unlawful and is a legitimate business strategy,” explains Alan Smith, a trademark and patent attorney and partner at Adams & Adams. “Within lawful bounds, copying a competitor is acceptable and stimulates growth and competition in the free market economy. If a competitor becomes aware of another competitor’s success in attracting the public to a particular product, copying can enhance competition. Competitors may not, however, copy if the copying falls foul of an intellectual property right.”

“Product infringement could occur by copying a product or design covered by a patent,” says Doryn Myers, a patent attorney and partner at Kantor Myers & Paslovsky Attorneys. “Similarly, infringement may occur if the product displayed a trademark or copyright, including on the packaging, without authorisation.”

Myers points out that simply copying an unprotected concept would not result in any intellectual property infringement.

Patents

Patents involve the protection of inventions, such as new products, or methods of manufacture. “This usually enables the concept to be protected and is not limited to a single embodiment of the invention,” explains Myers.

Absolute (international) novelty and inventiveness is required to obtain a valid patent. As examples of patents Myers refers to the invention of the collapse mechanism of a ladder, or a method for extracting coal.

A patentable invention is one that is new, and the creation of which involves an inventive step. “An invention will be considered to be new if it does not fall into the state of the art immediately before the patent is applied for,” says Smith. “State of the art refers to all matter that has been made available to the public.”

A factual inquiry would be undertaken to determine whether or not the invented article or method includes an inventive step. “An invention is deemed to involve an inventive step if it is not obvious to a person skilled in the art, having regard to any matter that formed part of the state of the art,” Smith explains. “Simply replacing an old material with a new one is usually not enough. Also, it is not possible to obtain patent protection for rules or methods for playing games, mere discoveries, scientific theories, aesthetic creations and similar items.”

Registered trademarks

A trademark is a mark that is used (or proposed to be used) by a person for goods or services to distinguish them from the same kinds of goods or services connected to any other person. “The function of a trademark is, therefore, to serve as a badge of origin and to distinguish the goods or services of different manufacturers,” says Smith. “It is registered for specific classes of goods or services.”

In terms of Section 9 of the Trademarks Act 193 of 1994, a mark can only be registered as a trademark if it is inherently capable of distinguishing goods or services — or if it has become capable of distinguishing by virtue of prior use.

“This means that a word that is likely to be required for descriptive use should not be registered,” Smith explains.

Based on the Trademark Act, a mark that is a description of a product, or product category, may not be registered, as the description would be required for use by other manufacturers in the course of their normal trade (for example words like soccer, shoes, bag, belt, etc.).

Registered trademarks are used to protect a brand. It can offer protection of any sign that can be represented graphically, including a device, name, signature, word, letter, numeral, shape, configuration, pattern, ornamentation, colour or container for goods — or any combination of the afore-mentioned. “This may even extend to smell or sounds,” says Myers.

With regard to infringement of trademarks registered in SA, Smith points out that if a trademark is registered and a third party were to adopt the trademark, or a confusingly similar trademark, there would be infringement if there is a likelihood that the public will be confused or deceived. “Those actions could be stopped,” says Smith.

Common Law Trademarks

Common Law Trademarks should be distinguished from registered trademarks. These are unregistered marks that have acquired a reputation in the mark and are capable of distinguishing the product / services from other similar products / services.

“It is often difficult and tedious to prove common law rights,” Myers states. “Even a well-known mark like Coca Cola or Vodacom would need to prove alleged rights. By contrast, the reputation of a registered trademark does not have to be proved in order to protect one’s mark — simple evidence of the trademark registration certificate will suffice.”

In the absence of a registered trademark, a trader may rely on common law rights to prevent third parties from riding on its reputation and goodwill if a mark has been used extensively in SA and has established a reputation and goodwill.

“This is possible where a competitor intentionally or negligently misrepresents that his goods or services are those of, or associated with, the trader who has the common law rights, to the extent that the public is confused, or is likely to be confused, into believing that those goods or services are those of the established trader,” Smith explains. “Passing off, therefore protects the plaintiff’s goodwill or reputation associated with its business and products.”

Territorial

The question arises as to whether trademarks and patents have to be registered in SA, or whether international trademarks are valid.

Would a product registration or patent registered in one country be valid in another country, or do you have to have worldwide registration?

Patents, designs and trademarks are generally territorial in nature. “With the exception of copyright, registration must be obtained in each territory where protection is sought,” Myers explains.

Smith points out that if valid patent protection is claimed for any invention, the inventor would be able to claim exclusivity in its invention and stop others from using it. Thus if the original designer of the XLR8 products created a novel piece of exercising equipment and creating the new equipment entailed an inventive step, then its invention may qualify for patent protection.”

“Even though there is no international patent the inventor would be able to rely on its application for patent rights in, for example, New Zealand, to form the basis of an extension of those rights to other countries — provided that it complies with specific time constraints,” says Smith. “The patent rights would, however, have to be obtained separately in each country or territory.”

Registered designs

A design registration affords protection specifically for the shape and appearance of an industrial article, as depicted in representations filed with the application. “The scope of protection is judged by the appearance,” states Smith. “The protection does not extend to the underlying principle of construction of the article, or its functional purpose. This means that a competing article that has a different shape and appearance would not constitute an infringement, even though it fulfils the identical function.”

The proprietor of a design would be able to obtain either aesthetic design protection (any pattern, shape, configuration or ornamentation with features that appeal to, and are judged solely by the eye, irrespective of its aesthetic quality) or functional design protection (any pattern, shape, or configuration applied to an article that has features that are necessitated by the function to which the article or the design is applied). The design is registered for specific classes of goods.

Design protection can be used by the proprietor to prevent others from making, importing, using or disposing articles within the same class, embodying the registered design, or a design not substantially different from the registered design.

“Thus, where the shape, configuration or appearance of an article determines its selection for a particular application, design protection may be ideally suited to secure exclusive rights,” says Smith.

On a general level Myers maintains that Intellectual Property rights are potentially a formidable business tool. “They can be used to protect against unlawful copying of one’s rights and to obtain manufacture / license agreements resulting in royalties, as well as an advertising tool whereby the product / service acquires an added value in the eyes of the consumer,” says Myers. “Intellectual Property rights can also be used to create valuable assets, which would affect the value of the business owning the rights.”

This article has just tried to highlight some of the main Intellectual Property Law concepts and issues that are relevant to Sports Trader readers. When faced with trademark, design or any other infringements, readers are urged to get professional legal advice pertaining to their situations, where applicable.

How to get protection

Patents need to be registered in the territory where protection is sought (e.g. South Africa). A foreign patent registration does not afford protection in SA.

Designs need to be registered in the territory where protection is sought (e.g. South Africa). A foreign design registration does not afford protection in SA.

Copyright: Protection is automatic and applies to most countries of the world, including SA.

Trademarks are territorial in nature, meaning the owner of a mark in another country would not usually have protection in SA, unless a trademark application was filed in SA or the mark is well-known in SA. Trademarks need to be registered in the territory where protection is sought (e.g. SA). A foreign trademark registration does not afford protection in SA.

Registering a trademark in SA:

1 Conduct registerability search (optional): 3-4 working days

2 File TM application

3 Examination and objection / acceptance: 10-18 months after filing

4Publication / registration: 2-3 months after acceptance

5 Certificate of Registration: 4-6 months after publication

Registering a patent & design in SA:

  • Patent application documents are lodged with the Patents / Design Office, thereafter the applicant is sent an application filing receipt. The receipt provides an application number, which is provided approximately 2 weeks after the documents are lodged.

  • 6-8 months thereafter, the application is examined to determine whether all formalities have been complied with. There is no formal examination to test whether the patent /design is new and original/ not commonplace.

  • Assuming formalities have been complied with, a notice of acceptance is issued for submission to the Government Printer.

  • The notice of acceptance is published in the Patent Journal. The patent / design is deemed to have been registered on the date of publication in the Patent Journal.

  • A registration certificate is issued thereafter once an objection period of 2 months has lapsed (approximately 4–6 months after objection period).

  • Special thanks to:

  • Alan Smith, a trademark and patent attorney and partner at Adams & Adams, Tel: 012 432 6303, Email: AJS@adamsadams.co.za

  • Doryn Myers, a patent Attorney and partner at Kantor Myers & Paslovsky Attorneys, Tel: 011 447 7199/7288, Email: mip@tiscali.co.za


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