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BusinessDay

November 2016

INSIGHTS
Recent case sheds light on internet
keywords, comparative advertising
Comparative advertising, when
properly regulated, promotes
competition: however, it is still
a relatively new concept in SA
and is influenced by factors
such as the Trade Marks Act;
the provisions relating to
unlawful competition; and the
Code of Advertising Practice of
the Advertising Authority of SA
(ASA code).
Eben van Wyk, partner at
Spoor & Fisher Cape Town,
says the ASA code specifically
permits comparative
advertising, subject to a number
of requirements including,

among others, that all legal

requirements must be adhered
to (specifically the provisions of
the Trade Marks Act); that only
facts capable of substantiation
can be used; that one or more
material, relevant, objectively
determinable and verifiable
claim is made; that the claims
must not be misleading or
confusing; that no infringement
of advertising goodwill or
disparagement takes place; that
the facts or criteria used are fair
and that the products or
services compared have the
same or similar characteristics

and are intended for the same

or a similar purpose.
The South African courts
have recently adopted a lenient
approach towards comparative
brand advertising, namely
when goods or services
compared are referred to by the
respective trademarks under
which they are sold.
The Supreme Court of
Appeal (SCA) in BMW v
Verimark held that Verimarks
unauthorised use of a clearly
identifiable BMW logo in its
advertisement was incidental
and that it did not constitute

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trademark use (and accordingly

not trademark infringement).
This had a significant effect
on comparative advertising,
changing SA trademark law to
such an extent that the use of a

The acquisition by the listed

KAP group of Safripol for R4.1bn
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acting as corporate advisor on
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The firm is also acting on
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transaction for the acquisition
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Supabets. In 2015 the firm acted
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Growthpoint of a commercial
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Tiber Group, Roodt says.
Achieving this level of
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Staying at the forefront in
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becoming directly and
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clients business, providing

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Webber Wentzel
Webber Wentzel
ENSafrica
Allen & Overy
Spoor & Fischer
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Werksmans Attorneys
Bowman Gilfillan
Norton Rose Fulbright South Africa
Fasken Martineau DuMoulin
Cliffe Dekker Hofmeyr

third-party trademark in a
comparative advertisement is
now unlikely to constitute
trademark infringement.
A more recent, topical form
of comparative advertising

Recognition for SAs

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Top lawyers
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value adding services in the

fields of the firms own areas of
expertise, and managing the
service delivery by providers of
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areas of expertise, Roodt says.
Brent Williams, CEO of Cliffe
Dekker Hofmeyr (CDH), says
the firm once again features
prominently in the eighth
edition of Best Lawyers in SA;
he adds that this recognition
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As a firm, we pride
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Among other indicators such as
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prominence across a number of
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CDH boasts some of SAs most
respected legal minds,
Williams says.
Three of the firms lawyers
received Lawyer of the Year
awards Emil Brincker (tax),
Pieter Conradie (arbitration and
mediation) in Joburg, and
Francis Newham (mergers and
acquisitions) in Cape Town. Its
real estate practice was named
the Law Firm of the Year.
Attie Pretorius, chairman,
CDH Real Estate National
Practice head and director, says
the slowdown in China is
having dramatic ripple effects
throughout Africa, but this does
not mean there are not avenues
for expansion. Despite the
headwinds, demand for
property development pipelines
continues at a healthy pace.

centres around internet

keywords and, in particular,
Googles Adwords. This is a
system which allows
advertisers to secure a
keyword by purchasing or
bidding on it to ensure that,
when the keyword is entered
into Googles search engine,
their advertisement is displayed
in the sponsored links section

of the search results. The

issues get complicated when an
advertiser bids on a keyword
comprising their competitors
trademark, Van Wyk says.
The recent judgment in
Cochrane Steel Products (Pty)
Ltd v M-Systems Group (Pty)
Ltd handed down by the SCA in
May 2016 has provided clarity,
effectively adopting a position
similar to that in the European
Union and New Zealand.
The relevant question when
dealing with comparative
keyword bidding and
advertising is, according to the
SCA, whether the advert
enables normally informed and
reasonably observant internet
users to determine whether the
goods or services referred to in
the sponsored advertisement
originate from the trademark
proprietor (whose trademark is
used as a keyword) or,
alternatively, from a third party.
The SCA held that a

reasonable consumer would

know that every result obtained
from a Google search would
not relate to the trademark
owners product or services
and would assume that they
have to separate the wheat
from the chaff in deciding what
hyperlinks appearing in the
search results to click.
The sponsored adverts are
also clearly distinguished from
the natural search results.
Keyword advertising is
accordingly regarded as an
acceptable commercial practice
and there is no likelihood of
deception or confusion where
an advertiser uses another
traders (even a competitors)
trademark as a keyword.
The important factor is
whether the advertitself gives
rise to the likelihood of
confusion and not whether the
bidding by a competitor on a
trademark of another is
unlawful, Van Wyk says.

"We understand our clients strategic and

commercial objectives in each transaction
and are directly involved from inception to
final closure of each deal."

TAILORED CREATIVE INTELLIGENT

Tel (+27 11) 685 0000 Email info@roodtinc.com www.roodtinc.com

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The 8th edition of Best Lawyers in South Africa

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