The Increasing Importance of Trade Marks


Before the age of consumerism, Othello would say “he that filches from me my good name robs me of that which does not enrich him, and makes me poor indeed”. This changed when trademarks also became selling tools and enrichment from filching goodwill by appropriating such trademarks became part of the commercial arena.

A further philosophical change occurred during the last 50 years when trade marks became increasingly principal icons of postmodern times. Previously, brands were badges of origin and identifying signs of first products and later services. The emphasis is now on a trade marks’ function to distinguish, but in the culture of the global village, with its mass communication mediums and treatment of trade marks as commodities in their own right, the value of trademarks has increased dramatically as symbols of hype.

This change is reflected in the balance sheets of listed companies in the world’s largest stock exchanges. From being predominantly tangible in 1970, the larger part of their assets has shifted to represent intangible assets such as trade marks. With the advent of Capital Gains Tax in South Africa, it is also important to put a current value on trademarks on commencement of their use following acquisition or creation, as they are regarded as capital assets of substantial value.

It is now foolhardy to ignore the importance of trademarks, goodwill and licensing in the strategies of a commercial undertaking. A business’ trademarks are often its most valuable property and the easiest targets for unscrupulous competitors to appropriate. For this reason, it is prudent to be constantly vigilant to ensure that a business’s products and services enjoy sufficient protection against potential infringers in order that the goodwill which attaches to such trade marks is not eroded and eventually lost.

Most unregistered, common law trademarks that are not well known are vulnerable to underhand tactics of competitors. Names for products or services – in other words brands – must be investigated to see whether they should not enjoy statutory protection as registered trade marks. New proposed brands should be searched before they are adopted and used to ascertain whether they may not, in their turn, infringe on a mark already on the register. A later costly retraction of a brand, including printed stationery and promotional expenses, could often have been prevented by such trade mark searches.

Trademarks are registerable in one or more of 45 different classes, 34 of them being goods classes and 11 of them being service classes. By registering a trade mark, a proprietor will be able to stop others from using a similar or confusingly similar mark for the same or similar goods or services for which the trade mark is registered. This protection extends to the whole of South Africa and whether or not the infringing party is aware of such mark or its registration.

A registration certificate is the only proof which is needed in a trade mark infringement action. For an unregistered mark, one must not only laboriously prove goodwill in the relevant common law trademark, but also that the reputation of the common law trademark was so well-known in the area where the infringer traded, that his goods or services were seen as having been passed off as yours. Usually, a court would also require cases of actual confusion as proof of passing-off. Lastly, the whole get-up of the relevant products or services must be compared. However, to establish infringement of a registered trademark is much less burdensome, as it relates to legal arguments about the potential of confusion by sight or sound or concept. Furthermore, only the registered trademark as such is compared with the infringer’s use.


Even though a trade mark takes a long time to register, the eventual certificate of registration is retrospectively effective as from the day on which the trade mark application was originally filed. For this reason people usually use the postscript ™ to indicate a pending trade mark application, as the ® symbol can only be used for a registered mark. These indications serve as deterrents against potential infringers.