National borders are increasingly less relevant to how brands are used, but trade marks are still the key to how brands are protected legally. Many products and services in the global marketplace reach various territories through informal channels even though brand holders do not formally export products to such territories. However, trade marks are territorial in nature so must be secured in each country where protection is required.
There is no “global trade mark” that confers protection in every jurisdiction. International and regional filing mechanisms can be helpful, but do not remove the need to be particular about which classes and territories brands should be registered. For South African businesses, with tight budgetary requirements, the degree of protection required must be assessed (in view of the costs involved) against the commercial value and risk profile for each trade mark.
Territorial Protection and Commercial Reach
While a South African trade mark registration provides protection in South Africa, protection in foreign markets will generally require separate national filings or sometimes may be covered by a regional filing system. While a misnomer, the “international” filing system, under the Madrid Protocol, can be helpful where the owner is a “qualified person” and where the target countries are covered. It is also important to note that applications for international registrations are still subject to examination and publication at a national level in each designated territory.
Website traffic, app downloads, sales, etc, may indicate visibility, but visibility does not create registered trade mark protection. There may be some common law protection unless the brand becomes defined in many territories as “well known” but in 99% of cases, a brand may be used in markets and have commercial value in markets where it has no trade mark protection, creating enforcement issues once it is too late. Unfortunately, this narrative is all too common. It is also important to note that certain countries do not recognise common law trade mark rights and follow the “first to file” rule – meaning that a trade mark application will take precedence over use by another party even where such use is extensive and for a substantial duration.
The enquiry requires careful prioritisation of the marks, the various goods and/or services of interest, and the various territories of interest. Filing too widely diverts capital from markets that are not yet commercially relevant. Filing too narrowly leaves important jurisdictions exposed, especially where a mark is likely to be copied, challenged or blocked by a third-party.
Cost Considerations
Costs will increase dramatically where protection is required across several jurisdictions or where the registrations need to cover multiple classes of goods and services. For a SaaS business, for example, the specification may need to account for software, online services, downloadable products, business services or sector-specific technology applications. And when it comes to a consumer brand, the relevant classes may expand as the business moves from a core product into related merchandise, services, or where new products are launched.
Prioritising Jurisdictions
A disciplined filing strategy begins with a ranking of jurisdictions, and crucially, the most important jurisdictions are not always the largest markets. As such, a country may be important because it is a current sales market, a planned expansion market, a manufacturing location, a distribution hub, or where competitors or counterfeiters are active – and it is not a closed list.
Client Considerations
South African businesses are advised to consider trade mark strategy early in the brand development process. A name or logo that is available in South Africa may not be available in an intended export market. Similarly, a brand that has been used locally for several years may face obstacles abroad if a third party has already secured rights in a key jurisdiction. Therefore, the risk of “being beaten to the punch” should eliminate as far as possible where there is a commercial interest in a country which outweighs the costs of registration in that given territory.
Brand owners also should consider how trade mark protection supports the capitalisation of IP. A registered trade mark portfolio will also assist with investor confidence, licensing, franchising, due diligence and the prospect for future expansion due to the enforceable rights in the trade marks on which a brand is built. Initial filings may focus on South Africa and immediate expansion markets. Further filings may follow when the brand enters new territories, launches new products, raises capital, or identifies other specific enforcement risks.
Building Protection Around Commercial Growth
The strongest global trade mark strategy is not necessarily for a company pursue the broadest possible filing proposal. For most South African businesses, the registration of trade marks will be a staged process that balances the costs, commercial opportunities and legal risks involved. This allows for rights supporting the longevity and growth of a brand without overcapitalisation.
When we prepare a filing proposal, we are not preparing a shopping list – it is more like a road map of a brand’s global protection. As such, we tailor our proposals for brand owners to select the classes and territories and see costs fluctuate in real time, allowing for costs transparency and for the process to be done as quickly and decisively as possible, maximising budgetary requirements to maximise protection.
