IS001/DEC 2017 - Trade Marks v Trade Names

Trade Marks v Trade Names - why it is important to understand the difference

Although trade marks and trade names are similar in some respects there are important differences that require consideration.

A trade mark is a distinctive mark that is used to identify and distinguish the products and services of one company from the same kind of products and services offered by another. The registration of trade marks and the nature and scope of the statutory protection that is acquired upon registration is regulated by the Trade Marks Act. A trade name on the other hand is the name by which a business enterprise is known. At present company names are regulated by the Companies Act, while business names will be regulated by the Consumer Protection Act once the relevant sections come into effect.
Benefits of registering your trade name as a trade mark
  • no need to establish a reputation in infringement proceedings
Unregistered trade marks that have been used extensively and for a substantial period of time will acquire some protection in terms of the common law. This also applies to company names. The goodwill in an unregistered mark or name is protected against unlawful competition and passing off.

In order for Company A to successfully rely on passing off it must prove that its name or mark has acquired a reputation and is associated by the public with the services it offers. In addition it must show that the use by Company B of a name or mark that is the same or similar to its name or mark is likely to cause confusion. It must show that the public will assume that the companies are associated with each other in some way.
Hey, that's my trade mark!

The Companies Act makes provision for trade mark owners to object to the registration of a company in circumstances where the company name contains or consists of matter which infringes a trade mark or falsely implies that it is part of or associated with another person or entity.

In a recent decision the Companies Tribunal ordered Kulula Cash Loans (Pty) Ltd to change its name to one that did not include the registered trade mark KULULA.

"it is only once a trade name has been registered as a trade mark that exclusive statutory rights in the name are acquired"