MOZAMBIQUE | PATENT COOPERATION TREATY SEMINAR

On 20 & 21 April 2016 the Mozambique Intellectual Property Institute (IPI) held a Patent Cooperation Treaty (PCT) seminar, in cooperation with WIPO and ARIPO in Maputo. The event was sponsored by Adams & Adams Mozambique and was attended by 80 delegates comprising Intellectual Property agents, inventors and representatives from several Government agencies. The Mozambican Registrar, Mr. José Meque, officially opened the event. A similar seminar was held in Beira, the second largest city in Mozambique, on 18 and 19 April 2016.

For further updates, information and queries on copyright law, trade mark, patent and design filings in Mozambique and across Africa, please contact africaip@adamsadams.com

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Nicky Garnett

Partner – Head of Africa Patents
Attorney

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PATTERNING SUCCESS THROUGH STRONG IP STRATEGIES

Beyoncé may have drawn further attention to his name when she endorsed his luxury designs in a blog post on Saturday, but Laduma Ngxokolo says the brand boost is only one step in the right direction. These were his comments to John Robbie on 702 after being asked about the ‘shout out’ by the pop icon of Destiny’s Child fame.

MaXhosa, a fashion label that uses traditional bead work motifs and patterns of 702 & Cape Talk

Laduma Ngxokolo is already an internationally acclaimed and award-winning textile designer of ethnic-inspired knitwear. A young proudly African Port Elizabeth-based designer, Laduma’s talent was nurtured early by his late mother, Lindelwa Ngxokolo.

His journey to internationally recognised and highly sought-after designer is nothing short of spellbinding. “My passion for knitwear began when I used to help my mother machine-knit garments for sale,” says Laduma.  His first hands-on experience of textile design was during his high school days at Lawson Brown High School in Port Elizabeth.

In 2010, his design work titled ‘The Colourful World of the Xhosa Culture’, a translation of South African mohair and merino wool men’s knitwear inspired by traditional Xhosa beadwork, won the international Society of Dyers and Colourists (SDC) Design Award in London.

Laduma’s designs are unique and different in the world design arena. As a young designer and entrepreneur he is very aware of his intellectual property rights and the need to protect his design.  He filed applications to register some of his designs for his knitwear and the wall clock design.  He also filed trade mark applications to protect his brands LADUMA NGXOKOLO and MAXHOSA BY LADUMA.

“I see my designs as my assets and I am well aware that there are copycats all over the world who would happily knock off original designs. Young designers and creatives need to focus on protecting their brands and designs.  As an entrepreneur, you have to focus on both the creative and the business side.”

Laduma has worked with Adams & Adams on protecting his intellectual property.  Mariette du Plessis, senior partner, who has been involved in Laduma’s IP portfolio, says “It is refreshing to come across a young South African designer who realises the value of his creativity and the need to protect it.  Laduma’s designs are unique, yet very South African and have made an enormous impact wherever exhibited.  For that reason, Laduma is wisely taking the necessary steps to protect his brands in South Africa and we shall also assist him with his IP portfolio abroad.“

“Laduma will be a role model for young designers, as he has not only focused on the creative side, but is equally focused on his business, which will stand him in good stead in the long run,” says du Plessis.

AN IP PATTERN FOR YOUNG DESIGNERS

We asked Mariette du Plessis for advice for young creatives who want to learn lessons from Laduma’s success.

“My message to creatives is to learn from Laduma’s example. Do searches on the internet before you adopt your brand.  Then conduct searches at the Trade Marks Office to ensure that you do not infringe on anyone’s rights.  Register your brand as a domain name, on Facebook and as your Twitter handle to ensure that somebody else does not pinch it and, most importantly, apply to register your brand and design (or both). Design protection gives a very strong monopoly and there are 32 categories in which your design can be registered. This is especially important for jewellery, textile and wallpaper designers, as it is only relevant for designs that will be multiplied and not for once off art works. Those will qualify for copyright protection. Prevention is always better than cure and to protect your creative rights is the best way to ensure that only you benefit from your creations.“

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Mariëtte du Plessis

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Trade Mark Attorney

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UPDATE ON NEW IP CODE IN MOZAMBIQUE

The new Mozambique Industrial Property Code was approved by the Council of Ministers of Mozambique by Decree no 47 of 2015, on 31 December 2015 (“the New IP Code”).  It will come into force on 31 March 2016 and will replace the existing Industrial Property Code, Decree no 4 of 2006 (“the Old IP Code”).  Trade marks, patents and other IP rights filed in Mozambique up until 30 March 2016 will still be subject to the Old IP Code.

Most of the sections in the New IP Code have been re-worded with the bulk of the changes relating to procedural and administrative issues. In particular, various changes entail either a shortening or extension or clarification of the time periods within which to oppose the granting of the different forms of intellectual property rights or comply with formalities. For example, the time period within which to oppose a trade mark application has been reduced from sixty to thirty days while, in respect of all IP rights, the deadline to submit outstanding documents (such as a power of attorney) has been extended from fifteen days to thirty days.

The New IP Code also envisages a few substantive changes, however.  Insofar as trade marks are concerned, one significant development is that the New IP Code gives recognition to ARIPO registrations by way of “Regional Registrations”.  This is to prepare Mozambique for when it accedes to the Banjul Protocol.  The Mozambique authorities are still in the process of negotiating Mozambique’s accession to the Banjul Protocol.

With regard to the sections of the New IP Code dealing with patents, utility models and designs, these now make provision for the Director General to issue provisional refusals. Certain additional exclusions from protection have been incorporated into the New IP Code.

Geographical Indications and Designations of Origin (already recognised in the Old IP Code) now have a more comprehensive legal framework and the New IP Code makes provision for Industrial Property Rights to be pledged and given as security.   New (increased) official fees are expected to come into force likely between April and June this year, once approved by the competent Ministries.  A more detailed overview of the New IP Code is included below.

Industrial Property Rights provisions:

Definitions for “Franchise Agreements”, “Technology Transfer Agreements”, “Designations of Origin”, “Intellectual Property” and “Establishment Names (relating to the registration of Business Names)” have been incorporated into the New IP Code. The definitions for “Geographical Indications” and “Insignias of an Establishment” have changed.

A new section has been incorporated into the New IP Code relating to the “Effects of Registration of Industrial Property Rights”.  Regarding formal requirements, the deadline to submit outstanding documentation/information (such as powers of attorney) has changed to 30 days from the date of notification (as opposed to 15 days provided for in the Old IP Code).

If an applicant is deemed to have abandoned an application for an Industrial Property Right, the New IP Code provides that the IPI shall always notify the applicant of the abandonment.  Regarding the provision dealing with providing proof of an Industrial Property Right, the New IP Code provides that the relevant registration certificate should be provided within 15 days from the date of filing the request for proof.  The Old IP Code prescribed no time limit in this regard.

The New IP Code provides that with reference to the issuance of “registration certificates” (“certidoes” – see note below)* of Industrial Property Rights, the certificates shall be delivered within 5 days from the date that the request is filed.  No such time limit was imposed on the IPI (Industrial Property Institute) in terms of the Old IP Code in this regard.

The deadline to appeal against the Director General’s decision has changed to 30 days in terms of the New IP Code (as opposed to 60 days in the Old IP Code).  The New IP Code also makes provision for an appeal to the Minister of Industry and Commerce against decisions of the Director General of IPI.

The New IP Code provides that annulments of Industrial Property Rights may be raised within 90 days from the date of publication of the final grant or refusal of the right.  The Old IP Code, however, provided that the annulment may be sought within one year.

In the case of a third party wishing to lodge an opposition against the decision to restore an applicant’s Industrial Property Right, he must do so within 30 days of the publication of the notice of restoration, according to the New IP Code.  The Old IP Code provided that this should be done within 2 months of the said publication.

The New IP Code now provides that Industrial Property Rights can be pledged and given as security and are subject to seizure and attachment.

Provisions relating to Patents:

Regarding the protection of patents, the definition of “State of the Art” has been amended in the New IP Code.

An additional exclusion from patentability has been incorporated into the New IP Code, namely, “projects, whatever their nature or area of application”.

Regarding the provision dealing with the inventor needing to inform his employer of his invention in writing, this now needs to be done “as soon as possible” in terms of the New IP Code. The Old IP Code provided that this should be done within 6 months from the date the invention was completed.  The New IP Code provides that the employer now has 6 months from the date of communication of the invention by the employee to express his interest in the said invention and if he fails to do so within that time period, the employee shall have the right to assume ownership of the invention or transfer it to 3rd parties.

Regarding the supporting documentation to be filed for a patent, the New IP Code provides that this shall now be filed in triplicate, although this was always done in practice.

The New IP Code provides that the rights of a patent holder shall not extend to, inter alia, “acts done privately and on a non-commercial scale or for non-commercial purpose, provided that it does not significantly prejudice the commercial interests of the patent holder” and “acts relating to the preparation in a pharmacy of provisional medication for an individual in accordance with prescription given by a registered medical practitioner”.

The New IP Code provides for the provisional refusal of a patent application by the Director General.  A notification of such provisional refusal, including the grounds thereof, should be issued to the applicant within 5 days and the applicant will have 30 days within which to respond.  No response by the applicant will automatically result in the refusal being made final.  No provision is made for obtaining an extension of time.

Regarding the provision dealing with the licensing of patent rights and where the proprietor of the patent may request the IPI to place the patent on offer to the public for licensing in the Industrial Property Journal, the New IP Code provides that this must be done within no less than 12 months.  In terms of the Old IP Code, no such time limit was applicable.

Provisions relating to Utility Models:

Regarding the requirements for an invention to qualify as a utility model, the New IP Code has expressly excluded “pharmaceutical” and “agro-pharmaceutical” products from qualifying as a utility model.

The Old IP Code provided that the conversion of a utility model into a patent could be done at any time prior to examination stage of the application, however, the New IP Code provides that this may be done prior to publication of the application.  The New IP Code also makes provision for the provisional refusal of utility models similar to patents, mentioned above.

The New IP Code provides that the time periods relating to opposing the grant of a utility model, reply to the opposition and reply to notices of provisional refusal shall be 30 days. The Old IP Code merely provided that the procedural processes in respect of applications for utility models should be more simplified and faster than the procedures for patent applications and no time limits were imposed.  The New IP Code provides that if there is no opposition after 30 days of the date of publication, the utility model application shall be granted without any formalities as to substantive examination and this is not provided for in the Old IP Code.

Provisions relating to Industrial Designs:

The procedure relating to the opposition of industrial designs has now been clarified in the New IP Code. Any person who feels the grant of an industrial design would be detrimental to him may oppose the application within 30 days from the date of its publication in the Industrial Property Bulletin containing the notice of grant. The time period may be extended only once for a maximum period of 30 days. The opposition will need to be submitted in triplicate and substantiated by matters of fact and law. The applicant will need to respond to the opposition within 30 days, which period may be extended only once for a maximum period of 30 days. The Director General shall decide on the outcome of the opposition and shall notify the interested parties of his decision.

The New IP Code also provides for the provisional refusal of a design application by the Director General. The decision shall be made within 30 days and the applicant shall be notified of the provisional refusal within 5 days from the date of decision. The applicant is then required to reply to the notice of provisional refusal within 30 days, failing which, the refusal will become final.

Provisions relating to Trade Marks:

The New IP Code provides that the opposition period in relation to trade mark applications is now 30 days (as opposed to 60 days as provided in the Old IP Code).  As such, an opposition must now be lodged within 30 days after the advertisement of an application in the Industrial Property Bulletin. An extension for a maximum period of 60 days may be applied for.  No further extension is allowed. The applicant will need to respond to the opposition within 30 days and may seek an extension, only once, for a maximum period of 30 days.  The Director General shall decide on the outcome of the opposition and shall notify the interested parties of his decision.

The New IP Code provides that if the Director General provisionally refuses an application, that the applicant should be notified of the provisional refusal within 5 days from the date of the decision.  The Old IP Code provided that the applicant shall be notified “immediately” of a provisional refusal.  The applicant shall reply to the notice of provisional refusal within 30 days, failing which, the refusal shall become final.   The New IP Code provides that an applicant shall be notified of the final decision to grant or refuse the application within 5 days.

Entirely new sections (Articles 142 to 153) have been incorporated into the New IP Code regarding “regional registrations”, giving recognition to ARIPO registrations which amounts to a substantial amendment to the existing Trade Mark Law in Mozambique.  However, it is important to note that Mozambique has not yet acceded to the Banjul Protocol.

The New IP Code provides that the opposition period in relation to International Registrations is now 30 days (as opposed to 60 days as provided in the Old IP Code).  Another change specifically in relation to International Registrations is that the New IP Code now provides that the due date for submission of Declarations of Intention to Use (“DIU”) shall run from the date of notification of the International Registration.  The Old IP Code provided that the due date would run from the date of the International Registration (as opposed to the notification thereof).  The New IP Code also provides that the date of registration of an International Registration shall be the date that the International Bureau of the World Intellectual Property Organisation registers the application on its database.

Provisions relating to Designations of Origin and Geographical Indications:

Most of the “new” provisions incorporated into the New IP Code in relation to Designations of Origin and Geographical Indications were already foreseen in a separate Decree (no. 21 of 2009), but which has been revoked and replaced by the New IP Code.

In terms of the New IP Code, the IPI shall now keep an up-to-date register of registered Geographical Indications and Designations of Origin.  It sets out who would have legal capacity to apply for registration of a Geographical Indication and Designation of Origin.

Additional requirements have been created in terms of the New IP Code, namely, “a single document” must now be lodged at the time of filing the application which should contain the following information: the name, description of the product, including specific rules relating to its packaging and labeling and a concise description of the geographical area; a description of the link between the product and the geographical environment or the geographical origin including, if appropriate, the specific elements in the product description or production method that justify such a link.  If the application relates to a geographical area in a third country, the application for registration shall also comply with the conditions required and shall contain proof that the designation in question is protected in its country of origin. In addition, the application shall be written in Portuguese or if drafted in another language, it shall be accompanied by an official translation into Portuguese.

The New IP Code provides for additional specifications (in addition to that which was required in terms of the Old IP Code) to be complied with, namely, the specifications shall now also contain the description of the product, including raw materials, if any, and the main physical, chemical, microbiological or organoleptic characteristics of the product; the factors that prove that the product originates in the defined geographical area; the description of the method used to obtain the product and, if necessary, the unvarying and authentic local methods used as well as any information concerning its packaging. The specification shall also contain factors that justify the relationship between a specific quality or the characteristics of the product and the respective geographical environment/origin; the name and address of the authorities that check compliance with the provisions of the specifications and their specific responsibilities and any specific labeling rule for the product in question.

The New IP Code has created provisions to ensure that there is compliance with the specifications and provision has been made to apply for amendment of the specifications, particularly taking into account scientific and technical developments or to revise the demarcation of the geographical area.  Minor amendments will also be allowed subject to IPI approval.

The New IP Code provides that once all the requirements have been fulfilled, the IPI shall cause the application for registration of a Geographical Indication or Designation of Origin, together with the single document, to be published in the Industrial Property Bulletin.  In terms of the Old IP Code, Geographical Indications or Designations of Origin were not required to be published.  The New IP Code makes provision for provisional protection of Geographical Indications and Designations of Origin after publication, before they proceed to registration.  Some new grounds for refusal of Geographical Indications and Designations of Origin have been created in the New IP Code.

It is now possible to oppose an application for a Geographical Indication or Designation of Origin in terms of the New IP Code (which was not provided for in terms of the Old IP Code) within 30 days after the date of publication of the application in the IP Bulletin.  The IPI shall send a copy of the opposition to the applicant, giving him notice to respond to the opposition within 60 days.  The mentioned times periods may be extended only once for a maximum period of 30 days.

The New IP Code provides that when a Geographical Indication or Designation of Origin proceeds to registration, a registration certificate shall now be issued as proof thereof.  In terms of the New IP Code, it is now possible for any natural person or legal person with a legitimate interest to apply for cancellation of registration of a Geographical Indication or Designation of Origin, by providing appropriate grounds.

Provisions relating to Trade names, Establishment Names and Establishment Insignias:

The opposition period in relation to Trade names, Establishment Names and Establishment Insignias has also been reduced from 60 days to 30 days in the New IP Code.

General provisions:

The Old IP Code provided that Industrial Property Rights belonging to non-profit organisations shall be exempt from registration fees.  The New IP Code, however, provides that Industrial Property Rights belonging to such entities are subject to the formalities and charges provided for in the Code but the Director General may, upon a justified request by an interested party, decide on the exemption from payment of fees by non-profit organisations.

The New IP Code provides that the Industrial Property Bulletin shall be published on a monthly basis. The Old IP Code provided that the Bulletin would be published every 2 months by the IPI.

Conclusion:

The changes incorporated into the New IP Code are of importance to all practitioners and clients seeking to protect and enforce Intellectual Property Rights in Mozambique.  Some minor errors were contained in the New IP Code and the rectified document shall be published in the Government Gazette soon.  Watch this space.  If you have any queries, please do not hesitate to contact us.

CATHERINE WOJTOWITZ | ASSOCIATE

* Note: The Portuguese words “certidao” and “certificado” are each translated in English to mean “certificate”, however, “certidao” has its own legal meaning, referring to an authenticated copy or transcript recording the contents of an original document and should not be confused with the generic and more common term “certificado”.

ADAMS & ADAMS CROWNED AFRICA IP FIRM OF THE YEAR 2016

London | At the lavish MIP Global Awards banquet held at The Savoy on 10 March, Adams & Adams was confirmed as the leading law firm in Africa by Managing IP for 2016. Partners, Dario Tanziani and Danie Dohmen were on hand to accept the award and to celebrate the firm’s phenomenal achievements in uniting and advancing the business of good intellectual property in territories across the continent.

“We are immensely proud of the reprised validation by members of MIP of our firm’s dominance in Africa,” said current firm Chairman, Gérard du Plessis, of the award. “We are also grateful that our global clients continue to trust the legal strength of Adams & Adams as we continue to extend our reach to support commercial interests in Africa’s growing economies, and in so doing establishing strong Intellectual Property and Commercial services in key business hubs across the continent.”

Earlier, at the International Patent Summit, the Adams & Adams partners addressed visitors on the IP landscape in Africa and expounded on the firm’s experiences related to the scope and feasibility of patent searching, and the Madrid system in various jurisdictions in Africa. Danie Dohmen also provided analysis on recent case law developments impacting on patents, designs and trademarks strategies
in South Africa.

Best Law Firm in Africa

Adams & Adams Management Committee Partners with the MIP Awards

AFRICA EXPANSION

Adams & Adams continues to push the boundaries of its evolution and positioning. Africa’s largest intellectual property law firm established an Associate office in Egypt, in December 2015, that will also service the firm’s clients in the other North African territories of Algeria, Libya, Morocco, Tunisia as well as the north eastern territory of Sudan. This is a first for a South African law firm and brings to 15 the number of Associate offices in different African countries that form part of the Adams & Adams Africa Network (AAAN). These include offices in Mozambique, Angola and Cameroon which service important jurisdictions and the important regional IP organisations, ARIPO and OAPI.

“We are very excited by these recent developments. The addition of North Africa onto our Network places Adams & Adams in a unique position in terms of its IP offering on the African continent”, Simon Brown, Partner and Co-Chairperson of the Trade Marks Department.

Adams & Adams’ strategy has not only been to expand its network in Africa but to ensure that this expansion is beneficial to its clients by aligning workflows leading to greater efficiency and more advantageous pricing to its clients. The firm’s focus on Africa began many years ago and has gained traction and momentum with the emergence of the African economy’s growth potential and the consequential requirements of the firm’s global clients. In the past three years, Adams & Adams has also established Associate offices in Kenya (2013) and Nigeria & Ghana (2014).

“The central thrust of our Africa Network continues to be about sharing information, the exchange of knowledge, and establishing long lasting relationships. The platform that we have provided is bearing fruit, not only in the quality of the service that we are providing to our clients, but our increased involvement in assisting some countries with the drafting or amendment of their IP legislation,” said Brown.

Only an African firm with the heritage and legal pedigree of Adams & Adams is able to leverage local knowledge and world-class capacity to provide peerless support to clients in the rapidly developing regions of Africa,” added Megan Moerdijk. “We continue to assist, advise and receive instructions for projects and legal requirements of any scale in all territories of the continent. “

Adams & Adams will be partnering with MIP for the Africa Roadshow in New York on 6 April 2016. Professionals of this 108-year leader in African IP will be leading discussions with legal and brand professionals in laying the foundations for intellectual property success on the continent

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Danie Dohmen

Partner
Patent Attorney

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Dario Tanziani

Partner
Patent Attorney

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Gérard du Plessis

Partner & Firm Chairman
Trade Mark Attorney

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OAPI ACCESSION TO THE SINGAPORE TREATY

On 13 November 2015, OAPI deposited its instrument of accession to the Singapore Treaty on the Law of Trade Marks (“The Treaty”), which was adopted in March 2006. The Treaty will enter into force in OAPI on 13 February 2016.

Articles 6 and 19(2) of the Treaty will not be applicable to OAPI. These articles read as follows:

 “Where goods and/or services belonging to several classes of the Nice Classification have been included in one and the same application, such an application shall result in one and the same registration; and

19(2)   “A Contracting Party may not require the recordal of a license as a condition for any right that the licensee may have under the law of that Contracting Party to join infringement proceedings initiated by the holder or to obtain, by way of such proceedings, damages resulting from an infringement of the mark which is the subject of the license.”

The Treaty will bring about changes to the manner in which the change of names and addresses of proprietors of trade marks are recorded at the OAPI Registry, in that a single application form can now be used to record these changes in respect of several trade mark registrations.

The Singapore Treaty essentially supplements the Trademark Law Treaty which was adopted in October 1994.  The main aim of these Treaties is to standardise and simplify the national and regional trade mark application/registration procedures of the contracting parties.

For further updates, information and queries on copyright law, trade mark, patent and design filings in OAPI and across Africa, please contact africaip@adamsadams.com

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Jenny Pienaar

Partner
Trade Mark Attorney

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BOTSWANA | IP REGISTRY – HEARING DELAYS

The Registrar of Industrial Property in Botswana recently issued a communiqué stating that, due to a restructuring of the IP office and staff cutbacks, hearings for trade mark oppositions and cancellations have been suspended until further notice. According to the communiqué, the Companies and Intellectual Property Authority (CIPA) envisages a Trademarks Tribunal to handle such hearings in the future but is, in the meantime, working on an interim arrangement.

Interested parties can still lodge opposition and cancellation applications, but can expect delays in having their cases heard.

For further updates, information and queries on copyright law, trade mark, patent and design filings in Botswana and across Africa, please contact africaip@adamsadams.com

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Nicky Garnett

Partner – Head of Africa Patents
Attorney

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Simon Brown

Partner | Co-Chairperson – Trade Marks Department
Trade Mark Attorney

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CAN YOU BID ON A COMPETITOR’S MARK AS A KEYWORD?

In this case Cochrane Steel Products sought an interdict against the M-Systems for bidding on its brand name CLEAR VU as a Google Adwords search keyword. The applicant did not have a trade mark registration for its mark and accordingly relied on unlawful competition. Specifically, it alleged passing off and a new species of unlawful competition, leaning on.

Judgment was delivered by Nicholls J on 29 October 2014.

This case is open for leave to appeal, but as yet not such application has not been filed.

Google Adwords and the conduct of the respondent

Google Adwords is a service offered by the search provider Google. In essence any person can bid on a keyword to increase the likelihood of a link to its website being displayed in the sponsored links section of the search results. This bid constitutes a price per click (which will be charged to the bidder every time the link is clicked.) Whether or not the link is displayed is determined by the ranking of bid. This ranking is determined by the price bid as well as a number of factors including the quality of the website linked and how frequently consumers visit the site.

The applicant alleged two grounds of complaint. The first, which formed the subject matter of the judgment related to the bidding on the key word CLEAR VU which generated an advert containing a link to the respondent’s website. This advert did not make any use of the mark CLEAR VU in its text.

The second ground of complaint related to a similarly generated advertisement which did include CLEAR VU in the text of the advertisement. However, this ground was not considered. The evidence of this conduct was not admitted into evidence for a variety of reasons.

Decision of the court

The Court considered whether the common law should be developed to recognise leaning on and whether the applicant has established the requisite confusion or deception to necessary for passing off. As a result of its answers to these issues the Court declined to decide whether the applicant had established a reputation in CLEAR VU.

Leaning on and dilution

The primary authority submitted to establish leaning on as a cause of action was academic argument in its favour by Van Heerden and Neethling. This species of unlawful competition is defined to occur when “one entrepreneur, in order to advertise his own performance, and in this way promote his goodwill, uses the advertising mark of another entrepreneur”. There is a substantial overlap between this remedy and passing off but leaning on extends beyond this in not requiring confusion. Therefore it would include dilution and misappropriation of advertising value as well as other conduct.

In considering whether the common law should be extend to include leaning on, the Court noted that South African law is generally opposed to monopolies not specifically provided by statute and that generally use of a name, where there is not likelihood of confusion, is not prohibited. The Court drew specific attention to the fact that the broad genus of unlawful competition is not intended to provide a remedy to a litigant who falls short of the requirements for passing off.

The Court concluded that leaning on, as proposed by the applicant, was not unknown to our courts and that it has, in fact, been considered (albeit under different descriptions) and rejected, often with criticism of the practice of relying on this doctrine.

The Court also noted that passing off (and the common law in general) protects goodwill not a trade mark per se, and on this basis concluded that passing off and other common law remedies to do not provide protection against dilution. Such protection, according to the decision, is to be found under the Trade Marks Act, 1993.

Passing off

The Court made extensive reference to foreign cases relating to Google Adwords. It made particular reference to InterCity Group (NZ) Limited v Nakedbus NZ Limited, Google France SARL v Vuitton Malletier SA, Interflora Inc v Marks and Spencer, and Cosmetic Warriors Limited and Lush Limited v Amazon.co.uk.

The Court noted that these cases do not provide authority for the submission that using the trade mark of another as a search keyword is prohibited or, as a general rule, likely to cause confusion but rather that such conduct is legitimate unless it can be shown that confusion is likely and that this will cause detriment to the ability of a trade mark to act as a source indicator. It noted that where a court accepts a likelihood of confusion, this must be done in light of the specific facts of that case.

The Court confirmed that the test for confusion applied in the foreign cases, which is that confusion will only be likely if, in light of the text of the advertisement, a reasonably well informed internet user cannot determine if the goods advertised originate from the brand owner or its competitor. It also took cognisance of the trend in foreign cases which holds that where an advertisement triggered by a sponsored link promotes alternative goods which are not simply imitations, this is likely to be fair competition. The Court noted that internet users are accustomed to sponsored advertisements and the need to filter their search results.

Nicholls J concluded that the consumers who were exposed to the respondent’s advertisements were highly unlikely to be confused or deceived into believing that the goods advertised were those of the applicant, particularly in light of the multiplicity of suppliers whose websites were returned in the search results. The Court specifically mentioned that this was particularly the case where the text of the advertisement itself did not make use of the mark concerned.

Accordingly the Court rejected the applicant’s claim on the basis of passing off, and dismissed the application. The Court did note that this case specifically related to a claim in the absence of a registered trade mark, which differs from the majority of the foreign cases. However, it pointed out that even a claim on the basis of a registered trade mark would only succeed if confusion could be shown. In the context of the judgment, this should not be read to limit the ability to bring such claim on the basis of dilution or unfair advantage in terms section 34(1)(c) as this remedy is recognised elsewhere in the decision, but rather a comment on the likely requirements for a claim for direct infringement on the basis of sections 34(1)(a) and (b).

Conclusion

This decision has brought much needed clarity to the legal position surrounding the practice of bidding on competitor keywords. It has confirmed that such conducted should conform with the general approach to passing off and trade mark infringement, which is that the core test is whether a likelihood of confusion exists. It establishes that the presence or absence of this must be evaluated on the basis of the advertisement itself, and the goods advertised, (in the context of appropriate surrounding circumstances) and that this is not altered by the fact that the advertisement is generated by the use of a keyword bidding service.

It indicates that advertisers who wish to bid on competitor’s trade marks as keywords may do so, provided that they are careful to ensure that these advertisements are clear and not confusing or otherwise do not take unfair advantage of the advertising value of a registered trade mark. As a result of this, traders will also need to adapt their marketing and brand protection strategies to ensure that they adequate deal with the risks such practices pose to their brands and market share.

by Darren Olivier & Ian Learmonth

(Attorneys acting for M-Systems)

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Darren Olivier

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