“You know you’re winning when you’re being copied.” (Robin Sharma, author of The Monk Who Sold His Ferrari)
Whether your business is brand new or well established, you need to protect your trading, product and service names from being unlawfully copied. Often your names (and associated logos and other branding) are essential elements in your business’ goodwill and profitability. It can be disastrous if competitors adopt similar branding in order to confuse customers and divert business away from you.
Your strongest protection will always be in the form of a registered trade mark, but don’t despair if you don’t have one – our laws still provide protection through the “passing off” concept.
A recent Supreme Court of Appeal (SCA) judgment provides a perfect example.
“Logic” and “Logik”: Similar names, confused marketplace
The opposing sides in this saga are Fire Logic (Pty) Ltd t/a “Fire Logic”, and Logik Group Africa (Pty) Ltd t/a “Fire Logik” (the company itself was previously Fire Logik (Pty) Ltd). Both operate in the same industry (fire protection and safety systems): Fire Logic since 1994 and Fire Logik since 2015.
In 2021 Fire Logic applied to the High Court to interdict Fire Logik from continuing to trade under that name. Logik Group denied any wrongdoing, but the High Court granted the interdict and the SCA confirmed it on appeal.
To understand that outcome, let’s have a look at the law underlying it.
What is “passing off” and how do you prove it?
To succeed in a claim for passing off, you will have to prove three elements:
- Reputation or goodwill in your product or brand. That was easily proved here by Fire Logic with its long track record.
- Misrepresentation by the other party’s actions causing, or reasonably likely to cause, confusion and deception among consumers. Unsurprisingly, given these names being pronounced identically and with only one letter’s difference between them, the Court found there to have been significant market confusion between the two businesses – such as misdirected purchase orders and misleading Google searches.
- Damage, or a likelihood of damage, to your reputation or goodwill flowing from misrepresentation. Again, this was easily proved in this case by Fire Logic given its trading history.
The core question is a factual one, to be answered in light of all the circumstances of each case: Is there a reasonable likelihood that members of the public may be confused into believing that the business of the one is, or is connected with, that of the other?
How best to protect your brand and goodwill?
A registered trade mark will always be your best and strongest protection, and although registration doesn’t come cheap, the cost could well be justified when you consider the alternative – having to apply to the courts for redress.
If you have no registered trade mark, and must rely on passing off provisions for protection, maximise your chances of success with these tips:
- Ensure that your trading names are reflected in all your registered company names, domain names, websites, social media channels, marketing channels, letterheads, email signatures, legal documentation and so on.
- Keep proof of when and how you first started using each of your trading name/s – length and depth of use by each party will be a factor in these cases.
- If you want countrywide protection, you must build up a track record in all provinces. In this case the interdict was confined to only the two provinces (Eastern and Western Cape) in which Fire Logic had built its reputation.
- Be ready to prove the goodwill in your brand. How well known are you? What track record have you built up under the name/s in question? What market share do you have?
- Be ready to show a “reasonable likelihood” that members of the public will be confused into believing that your competitor’s business is, or is connected with, yours. Keep detailed notes of all actual instances of confusion between the two businesses.
- Take legal advice and action at the first sign of any competitor using a name that may cause your businesses to be confused with each other. Delay in enforcement could harm your case!
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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