Hazel

An analysis of the use or abuse of trademark protection and how it conflicts with freedom of expression. By Hazel Mawokomatanda - Submitted in partial fulfilment of the requirements for the degree of Bachelors of Laws (LLB) FACULTY OF LAW – UNIVERSITY OF PRETORIA SUPERVISOR PROFESSOR MUNYAI PHUMUDZO OCTOBER 2019 Table of Contents An analysis of the use or abuse of trademark protection and how it conflicts with freedom of expression.1 By1 Hazel Mawokomatanda1 Part 1: Introduction3 1.Research Title3 2.Research issue3 3.Research Questions4 4.My motivation for study.4 6.Research methodology5 Part 2: Trademark Protection7 2.1 General aspects of trademark infringement principles7 2.2 The concept of trademark dilution in the South African trademark law8 2.2.1 What is Dilution by blurring?8 2.2.2 What is Dilution by tarnishing?9 2.3 Is a trademark recognised as property?11 Part 3: Freedom of Expression in South Africa12 3.1 Section 34 (1) (c) and Freedom of Expression in South Africa14 Part 4: What do trademarks contribute to the society that they deserve protection?18 4.1 Function of trademark18 4.2 Source or Origin Function19 4.3 Advertising function20 4.4 Quality function21 4.5 Distinguishing Function22 5.1.1 The Foundation of freedom of Expression in the US.23 5.2 Trademark Protection and The Right to Free Speech in the United States24 Part 6: Parody and trademark dilution26 6.1 Parody as a form of freedom of expression26 6.2 Problems with trademark parody27 6.2.1 Getting the balance right28 Part 7: Conclusion30 Bibliography31 Part 1: Introduction 1. Research Title An analysis of the use or abuse of trademark protection and how it conflicts with freedom of expression. 2. Research issue This dissertation will focus on issues related to the use or abuse of trademark protection and how it conflicts with freedom of expression. Trademarks whether intellectual, immaterial or intangible are property and they deserve protection under the South African Constitution’s property clause.1 The proprietor of the mark has the right to use the mark and is entitled under the specific provisions of the Bill of Rights to constitutional protection.2 This dissertation analyses three aspects. Firstly, it aims to critically asses the conflict arising between freedom of expression and section 34 (1) (c) of the Trademark Act.3 This involves balancing the competing rights between the guarantee of freedom of expression enshrined in the Bill of Rights and the protection of intellectual property rights attached to registered trademarks for purposes of determining whether the use constitutes trademark infringement. Secondly, it aims to explore why the protection of the mark from infringement by a third party is important to both consumers and the trademark owner. Lastly, this dissertation emphasises that the advertising value of the mark is of paramount importance than focusing only on goodwill. The context of my dissertation shall be to analyse the value of freedom of expression in two jurisdictions, the United States of America and South Africa. I will then conclude with an analysis of parody, in the South African context. 3. Research Questions The questions which lie at the heart of this research are: a) What is trademark dilution? b) What is the importance of freedom of expression? c) What is Trademark Dilution and Freedom of expression in South Africa? d) What is parody as a defence to trademark infringement? e) Comparative Survey. 4. My motivation for study. The issue surrounding trademark dilution includes the misappropriation of the advertising value of a trademark and this leads to an erosion of the commercial magnetism and selling power of a trademark.4 Section 34(1) (c) of the Trademark Act5, states that: “the rights acquired by registration of a trademark shall be infringed by the unauthorised use in the course of trade in relation to any goods or services of a mark which is identical or similar to a trademark registered, if such mark is well-known in the Republic and the use of the said mark would likely take unfair advantage of, or be detrimental to the distinctive character or repute of the registered trademark, notwithstanding the absence of confusion or deception”6. Premier Brand case could be used as an example to illustrates the need for protection to trademark owners as they spent large amounts of money to build a reputation of their mark and unauthorised use will erode the originality of the mark.7 There are two consequences of dilution: (a) dilution by blurring which can take place when the inherent uniqueness of the trademark is eroded and (b) tarnishment, which occurs where a detrimental association is created between a proprietor’s mark and that of an unauthorized user.8 5. Literature Review My focus is on freedom of expression. The “right to freedom of expression is to ensure openness, transparency and accountability”9. The aim is to focus on why trademark owners deserve protection and what the protectable interest is? 6. Research methodology My research will focus on trying to find where the balance lies between freedom of expression and trademark protection through reading articles, case law, journal articles and legal textbooks. I will compare the United States and South Africa with regards to laws relating to freedom of expression and trademark protection weighing the similarities and differences. This dissertation seeks to contribute to the body of literature by unpacking the challenges faced by trademark owners in attempting to balance their right to parody and freedom of expression. 7. Overview of chapter This dissertation will consist of seven parts. Part one: Introduction. Part two: What trademark dilution entails? Part three: Trademark Dilution and Freedom of Expression. Part four: The function of the trademark protection of the owner. Part five: Discussion of the comparative study. Part six: Discussion of the nature of parody as defence in the South African context. Part seven: Conclusion and the bibliography. Part 2: Trademark Protection 2.1 General aspects of trademark infringement principles The Trade Mark Act10 governs all aspects of Trademarks in South Africa. This Act is reflective of “international instruments concerning trademarks, namely the European Directive on Trade Marks and the Uruguay Round of the negotiations on the General Agreement on Tariffs and Trade, in particular, the Paris Convention on Industrial Property and the Agreement on Trade-Related Aspects of Intellectual Property Rights”.11 Trademark infringement types are found in section 34 (1) of the Act. Infringement action under 34 (1) must be registered as a trademark. Section 34 (1) (c) states the registration of a trademark shall be infringed when the following requirements are met:12 “a mark which is identical or similar to, a well- known registered trademark, and is used without permission in the course of trade, in relation to goods or services. If such use would be likely to take unfair advantage of or be detrimental to the distinctive character or the repute of the registered trademark, notwithstanding the absence of confusion or deception”.13 Section 34(1)(c), falls within the scope of trade infringement, but the provision protects well-known trademarks from use by the third party on goods and services dissimilar to those on which the proprietor used the mark, excluding the need to prove whether there is confusion or deception. Section 34(1)(c) is referred to as trademark infringement by ‘dilution'. Dilution can be found in two ways; tarnishment and blurring which will be the next focus of my analysis. 2.2 The concept of trademark dilution in the South African trademark law Dilution takes place when “the unique character of a trademark is lessened by use on a product which is not similar to the original product”.14 Dilution occurs by either blurring and tarnishing. These forms of dilution minimize the function of guaranteeing the consistency of the trademark to its owner by undermining or, lessening it’s selling power.15 2.2.1 What is Dilution by blurring? A trademark consists of a unique and distinctive character which when used on goods of a third party, the distinct features of the mark are eroded. When the trademark is used on goods other than the proprietor’s goods, this leads to the weakening of the ability to distinguish source in the eye of the consumer.16 Pistorius is of the opinion that that dilution by blurring is when consumers gradually disassociate themselves from buying the goods of the trademark owner.17 Kaseke and Pistorius both agree that dilution by blurring affects the ability to attract consumers to buy. Also, they believe that consumers will think the products of the proprietor are of less value as the authorised use by a third party will make the mark lose its originality.18 Dilution by blurring affects the unique qualities of the mark and consumers are mostly affected because they can’t associate the mark as exclusive to the original owner. Rutherford and Kaseke agree that it is dilution by blurring when the unique mark of a proprietor is used on a variety of other goods which are not manufactured or originally from the owner of the mark.19 Dilution by blurring destroys the commercial magnetism and selling power of the mark and this is achieved by consumers disassociating from the trademark owners’ products.20 The court mentioned in the Verimark case21 “that when the consumer merely associates the allegedly infringing mark with that of a trademark that is well known it is not enough to establish trademark by dilution”.22 To allege dilution by blurring there must be additional factors that show the lessening capacity of a well-known trademark to distinguish products of the trademark owner.23 The fact that courts require an additional factor before one is considered to have infringed a trademark has led to the erosion of trademark protection. This begs the question, what is trademark dilution? Dilution in terms of blurring aims to protect against use and abuse of the mark’s advertising and selling strength of the trademark achieved by large amounts of money used to build the brand through advertisement. This will not be achieved if the courts believe that mere association is not enough to prove trademark dilution. 2.2.2 What is Dilution by tarnishing? Tarnishing is when negative associations arise between the trademark owner and the infringer’s mark. The positive association that exists in the mind of the consumer are weakened and the mark is tainted.24 Rutherford suggests, that when a trademark is used concerning inferior goods, or where it is used offensively, the mark loses its value from negative association and this may lead to damage to the reputation of the mark.25 The case of Laugh It Off Promotions CC v SAB International Finance BV t/a Sabmark International illustrates this issue. (hereinafter Laugh It Off). The case of Laugh it off26 can illustrate dilution by tarnishing of a well- known trademark. Laugh it off sold t-shirts that irked SAB by replacing certain original words on Black Label beer with phrases, "Black Labour, White Guilt and No regard Given Worldwide."27 SAB alleged dilution by tarnishing; the reason was that they said the T-shirts painted a picture to the public that there was exploitation of ‘’black labour’’ and ‘’unethical’’ benefits from the ‘’legacy of apartheid’’.28 SAB argued there was an impairment of the ability to attract consumers to buy their goods because their reputation was being tarnished.29 They also argued the trademark was used in a way that was hateful and negative. The court thought that "racially provocative nature of the message conveyed by this use amounted to dilution by tarnishing in that it bordered on hate speech”.30 The court granted an interdict restraining Laugh it off from using the mark in a way that takes an “unfair advantage of or is detrimental to the distinctive character and repute of the mark”.31 The Laugh it off decision recognised dilution by tarnishing in the statement made public by Laugh it off; the message affected the reputation of the mark.32 The trademark would now be associated with the racially oppressive history of apartheid, leading to the erosion of the trademark reputation. A similar scenario can be seen in the Verimark case. In this case, it was held, the harm to the unique reputation of the mark must be substantial.33 Is the court insisting on owners of trademarks to wait until substantial damage has been done to their trademarks for them to get protection for their trademark rights? In the Trimmed case34 it was held that consumers will stop buying products of the proprietor when there is a negative association between the trademark of a proprietor and the defendant mark.35 If consumers stop buying the proprietors goods by the use of the mark through tarnishing, the user will be guilty of trademark infringement. One cannot wait until substantial detriment is done to the reputation of the brand or when the desire to buy has eroded. The courts must protect the use of the trademarks through tarnishing regardless of whether the user has caused denigration of selling power or substantially affected the repute of a proprietor’s mark. Blurring and tarnishment are the results of an exploitation of the trademark or insufficient trademark protection. The concept of dilution seeks to prevent this abuse to protect the proprietor from the effects of blurring or tarnishing of his trademark.36 2.3 Is a trademark recognised as property? Intellectual property is characterised as tangible and intangible property which deserves protection. Trademarks are viewed as intangible property.37 The fact that trademarks are immaterial property does not mean that they should be less protected.38 It is evident from section 25 of the constitution (the property clause) that property is not limited to material property.39 The Universal Declaration of Human Rights gave intellectual property specific protection, in contrast to the South African constitution. Nevertheless, the Constitutional Court made it clear that intellectual property did not have to be incorporated as a separate right under the Bill of Rights.40 This can be seen as a translation to mean there is no constitutional right to trademarks. There is no obligation on recognition of intellectual property and “no inherent right to claim it”.41 However, when a claim in trademark infringement arises, trademarks are entitled the same protection as other property. Trademarks are property in terms of both the Act and the Constitution; which will be the focus of my analysis, I will show they may need to be balanced against freedom of expression. Part 3: Freedom of Expression in South Africa In the Pre-constitutional period, there was no right to freedom of expression.42 The Suppression of Communism Act43 banned individuals from holding office in any organisation, public speaking or writing any publication.44 Televisions were prohibited for some years, broadcasting was illegal, some newspapers were closed down and some journalists were forbidden to work.45 It began in 1996 with the ratification of the constitution, including the right to freedom of expression. “Freedom of expression is valuable because expression is an important part of what it means to be human," says Dworkin.46 “Basically freedom of expression lies at the heart of humanity”.47 When one considers the history of South Africa, during the apartheid regime one understands, “why this right is guarded so preciously”.48 Freedom of expression, “carries its inherent worth and serves a collection of other intertwined constitutional ends in an open and democratic society”.49 The right to freedom of expression is protected in section 16 of the constitution and involves the right to, “freedom of the press and other media: freedom to receive or impart information or ideas; freedom of artistic creativity as well as academic freedom and freedom of scientific research”.50 This right shall be subject to limitation. There are limitations identified in section 3651 and the provision itself. The right to freedom of expression can be limited by laws of general application such as trademark and the law of defamation. The case of Laugh It Off illustrates the conflict between defamation and freedom of expression principles, in which case the corporation “can however only bring allegation of defamation claims where the statement was calculated to cause financial prejudice”.52 This use and abuse of the trademark right because it is very difficult to prove financial prejudice, results in the trademark infringer getting away with causing damage to the reputation of the trademark owner. Laugh It Off used Black Label mark owned by SAB. Laugh It Off sold t-shirts “that irked SAB and replaced certain phrases appearing on the beer of the Black Label with statements such as Black Labour, White Guilty and No regard Given Worldwide".53 This statement highlights apartheid connotation to any reasonable reader to be aroused of wounds of the injustices of the history of South Africa. This may lead to a decrease in the sales of the given product, which the Trademark Act protects; the right to freedom of expression must be balanced against the right of the trademark owner not to be disadvantaged in this regard. The use of the t-shirts was not in the interests of the public, it was detrimental to the public as it aroused hate from the history of inherent South Africa. It may have argued that the use of the well-known Black Label mark is a defamation claim, and that SAB was or is responsible for the unfair labour practices based upon race. When a consumer associates the t-shirt with the memories of the apartheid fraught history of South Africa, this would be a defamatory association.54 To meet the requirement for publication it has to be determined that the claim is defamatory and is believed to be unlawful and intentional. The onus shifts to Laugh It Off to offer a viable defence such as “truth and public benefit; fair comment and privileged occasion”.55 Laugh it Off submitted that they tried to convey a message that Sabmark has exploited and is still exploiting black labour and should have a feeling guilty and business worldwide could not care less56. Laugh It Off went on to say it intended to satirize the mark and the t-shirts said nothing about SAB but the statement was about how whites exploited black workers. The court held it was clear that Laugh it off did not rely on a defence based on truth in public interest or fair comment and privileged occasion.57 The court said it was not friendly by sex and drug-related parodies even if they are funny because prejudice to the trademark outweighs freedom of expression.58 3.1 Section 34 (1) (c) and Freedom of Expression in South Africa Albert points out that “liability based on dilution is somewhat controversial, given that the law does not punish or provide remedies for benefits obtained”.59 It is therefore important to interpret dilution legislation properly to ensure that there is no monopoly on trademarks and that freedom of expression is not unduly restricted.60 This Laugh It Off case highlights the novel, somewhat vexed, problem “of the proper interface between the guarantee of free expression enshrined in section 16 of the Constitution and the protection of intellectual property rights attached to registered trademarks”61 found in section 34(1)(c) of the Trade Marks Act62 In the court of first instance, “the respondent approached the High Court for an interdict on the ground that the unauthorised use of its registered trademarks by the applicant in the course of trade offended the anti-dilution provisions of section 34(1)(c)”.63 The applicant opposed the relief sought, arguing that its use of the trademark has not infringed the section in so far as the likelihood of harm to the reputation of the marks had not been established and that, in any event, it exercised the right to freedom of expression enshrined in section 16 of the Constitution64. The pith of the applicant's free expression argument was that correctly understood, section 34 (1)(c) does not deprive the applicant of its constitutional right to comment, lampoon or make fun of any trademark and its related label.65 It claimed that the “well-known brands took advantage of the gullible public and its purpose was to challenge the very nature intellectual property rights”.66 The black labour representation was based on a registered trademark BLACK LABEL which is owned by the South African Breweries International Finance BV and traded as Sabmark. Sabmark and its predecessors in title had owned mark BLACK LABEL for 30 years. The mark was well known. Sabmark said that the message on the t-shirts did not make a political statement that had relations to SAB or Sabmark. Sabmark also said that the message on the t-shirts were racially inflammatory, and wrongly carried the innuendo that Sabmark had exploited and continued to exploit black labour. Laugh It Off had not portrayed a political message, but simply they aimed to make money.67 Outside the court, they were protests that was as a result of Laugh it Off exploiting the trademark of Sabmark. Protests are usually associated with violence as an unforeseen circumstance. The Protesters were in favour of freedom of expression, which as a result leads the consumers who used to buy the product – BLACK LABEL to hold certain misconceptions or biases about the brand and might cause damage to the reputation, advertising, goodwill and selling power of the brand. The court took the view that there was a possibility of material damage to the distinctive character or image of the markings on the T-shirt. The court found that improving the protection of free expression was not available to the applicant because the applicant abused the marks for profit. The court pointed out that Laugh It Off was deliberately taking advantage of Sabmark’s trademark to sell; its use of Sabmark’s mark was not harmless in ways that create a comic effect.68 The court concluded that although the line dividing freedom of expression and statutory trademark protection is thin, Laugh it Off could not rely on freedom of expression as a defence. Rather, “it is a publication that borders on hate speech because it invokes the factor of race, something that our constitution and our new democracy are attempting to avoid”.69 The court found that the applicant’s use of the marks expressed an intention of harm, based on race, ethnicity, or social origin and colour. On appeal Harms, JA said even though the fact that trademark owners may be voracious and brands can control ideas and concepts, trademark consist of property and they are entitled to protection70. The court pointed out that dilution provision protects the economic value of the trademark which includes selling power, advertising value and reputation.71 The court had to determine whether or not, ‘the use of Laugh It Off mark “would likely take unfair advantage of or be detrimental to the distinctive character or the reputation of the registered trademark”.72 The court held that to prove trademark infringement, one has to look at what the message the t-shirt transmits, and the way it is perceived by the purchaser and the person seeing the t-shirt.73. Courts will generally not tolerate in “unfair or unjustified racial slurs on the trademark owner”.74 The court noted that s34(1)(c) of the Act does not limit freedom of expression. The court conducted a two-stage inquiry to balance trademark rights with freedom of expression. The investigation began with whether section 34(1)(c) has been infringed upon. If yes, the question of freedom of expression had to be considered. The SCA upheld the decision but amended the final interdict granted by the High Court to the applicant.75 The main issue on appeal in the Constitutional Court was the meaning of the words “likely to take unfair advantage of, or detrimental to, the distinctive character or repute of the registered trademark”.76 Also, it confirmed that section s 34 (1) (c) must be constitutional and balanced against the right to freedom of expression77.The court held that 34 (1)(c) restricts in some cases the right to freedom of expression for well-known registered trademarks. However, section 34(1)(c) was not challenged on its constitutional validity. The clause was therefore justified. The court provided a sequence to be followed when analysing dilution. It commenced with an inquiry, whether freedom of expression was protected under s 16 (1) of the constitution, then whether it was detrimental in the context of 34(1)(c) as weighed against freedom of expression principles. As a result, the right to freedom of expression was elevated above the protection of trademark dilution.78 The court, however, “based, its decision on a construction of section 34(1)(c) requiring the plaintiff to establish a likelihood of significant economic harm or detriment to the plaintiff’s mark”.79 In the dilution case, the court held "actual detriment instead of likelihood” of detriment is required to prove a case of trademark infringement. By placing the burden to show results of substantial economic loss, the court ruled unfairly to the respondent. As a result of the Constitutional Courts decision, the position in South African is that freedom of expression can outweigh the rights of trademark owners, absent of proof of actual economic harm. With the absence of economic harm, trademark owners cannot use their trademarks to protect themselves against a third party. It was wrongly decided by the Constitutional Court that freedom of expression could outweigh the rights of the trademark owner; they deserve to be protected under the same standard. Part 4: What do trademarks contribute to the society that they deserve protection? Trademarks enable companies to expand and grow, it helps reduce time spent by customers choosing various products from suppliers80, promoting the manufacturing of more products. Therefore, trademarks are connected socially and economically in terms of their value.81 The ultimate question is then what value do trademarks afford the owner and what are their contribution to the economy to warrant the owner’s protection.82 To envision how trademarks are protected, one ought to look at the function performed by that particular trademark to see what is being protected, and to determine how certain trademarks can be misappropriated.83 "Trademarks perform several socio-economic functions. These functions include (a) the function of origin, (b) the function of product differentiation, (c) the function of quality guarantee, and (d) the advertising function".84 4.1 Function of trademark Economides states that “the main reasons for the existence and protection of trademarks are that: they facilitate and enhance consumer decisions, and create incentives for companies to produce goods and desirable qualities, even if these qualities cannot be observable before purchase”85 Schechter notes that “the true function of a trademark is to classify a product as pleasing and thus encourage the consumer’s further purchases.”86 Economides stipulates that trademarks help consumers minimize their shopping time by choosing a brand of high quality based on the mark appearing on the product.87 It is arguable that “without these trademarks, consumers would often choose products of poor quality while businesses would be unable to inform the consumers of high-quality goods signals”.88 The role of a trademark in the economy can, therefore, be to help consumers make informed choices when shopping, as well as to encourage firms to produce high-quality goods that consumers want.89 4.2 Source or Origin Function Laing is of the opinion that “trademarks were viewed exclusively as “badges of origin, with the intended purpose to indicate a connection in the course of trade between the marked goods or services and the owner of the trademark”, 90 Sypros M and Anselm Kemperman Sanders are of the opinion that a trademark was originally regarded as “a badge of origin”, which they called a concrete origin.91 Laing, Sypros M and Anselm Kemperman argue that trademarks are badges of origin which establishes which goods belong to a specific owner.92 According to Friedrich-Karl Beier, “the origin of the goods with a particular company” should be identified by a trademark.93 Rutherford thinks: “The economic developments in the 20th century and the rapid growth of industry, the effective distribution of products and the large-scale promotion had the effect of exposing the limitations of recognising the function of origin as the sole function of the trademark”.94 Rutherford maintains that the trademark is capable of performing different functions. Dan Shanaham acknowledged the progress of the commercial industry and said that the origin function is a primary source while the other functions serve a secondary function.95 Gardiner is of the opinion that the origin function still has a dominant position in trademark law.96 The trademark according to Schechter and Shanaham, “does not indicate that the product originates from a specific source but merely that the goods in connection with the trademark used originate from the same source or have reached the consumer through the same channels as certain other goods which have already satisfied the consumer”.97 A broader idea of advertising and brand building was initially accepted for the protection of a trademark as the identity of origin98. According to Frankfurter a trademark is a shortcut merchandising tool that stimulates a customer to pick what they want or what they think they want.99 The trademark serves not only as a source-origin tool but as a marketing attribute for the owner. 4.3 Advertising function Frank Schechter first advocated, “the advertising functions of the trademark when he argued that "the fact that, through his trademark, the manufacturer or importer can reach over the shoulder of the retailer and across the latter’s counter straight to the consumer cannot be over-emphasised, because there is the key to any effective trademark protection scheme”.100 When a “trademark holder can get his trademark to identify a particular product and cause a connection or desirability with that product, the trademark has marketing value”.101 The advertising value of a trademark cannot be undermined, since it allows the consumer to establish a relationship with the owner of the trademark by always buying the same product, from the same owner of the trademark. Arguably, the advertising function is the most in need of protection concerning the protection of the distinctive reputation of the trademark of the owner. Diamond describes this function by saying that “trademark holders spend a lot of money defining the distinctive quality of their marks and as well as building a reputation for their marks”.102 The “significance of the advertising function lies in the significant potential which a mark provides for the producers to communicate with consumers via the advertising media”.103 The mark establishes a connection between the mark and the product. The trademark becomes a sales magnet since it is the device that stimulates the desire for the product to sell.104 The advertising function symbolizes the mark’s ability to produce and sustain demand by imprinting on the mind of the public a guarantee of satisfaction.105 The trademark is not merely a tool for creating recurring consumers, it also serves as a quality guarantee function.106 4.4 Quality function A trademark is simply a matter of ensuring that a consumer still gets the same value from a particular manufacturer.107 In other words to inform the customer that the quality of the goods purchased under the trademark are consistent with the value of the products of previous purchases.108 If all goods had the same type of name or term the consumer would not be able to differentiate the products.109 Therefore, if a consumer purchases and likes a product and goes back to the shop for more when all similar products are sold under the same name, the consumer will not be able to say which products she likes.110 Trademarks assist consumers with different options in selecting a product that has satisfied the consumer with their previous purchase.111 From the producer's hand, through the secure recognition of a product or service, trademarks foster innovation, protect investors and increase market share. From the user, by defining the commodity and guaranteeing its origin and presumed value, they promote selection. Economides defines the “Goods of experience as those goods that the consumer purchases and gathers information and features about the particular products through experience, this experience is used by the consumer to purchase the product”112. Economides defines “search goods” as goods that the same person often consumers.113 The customer is obliged to rely on information obtained from previous use to purchase the product again. While there is no way for the customer to know whether the brand is of high quality, they will choose to purchase it or not based on the quality associated with the trademark.114 The trademark is “well-known for the quality products it produces”, which serve as a tool for the trademark owner to maintain a competitive edge on the market.115 Trademark experience helps consumers who are satisfied with the quality to trust a particular trademark without first testing the product. When consumers want to buy a product for the first time, they have to rely on quality guarantee to buy the product again. The trademark serves both as a quality guarantee function and distinguishing function. 4.5 Distinguishing Function Gardiner is of the opinion that, before a mark can define a connection between a certain product and origin, it must recognise the product and can differentiate between these products and its rivals to qualify as a mark.116 Klopper and Van der Spuy argue that this function is essentially a trademark’s main function.117 Gardiner argues that if a mark is unable to perform this purpose, it is not a mark.118Gardiner maintains that this ability to distinguish goods and services is fundamental to trademark law.119 This function is extremely important as it is a requirement that a trademark is protected under the law of South Africa. Rutherford maintains that a retailer uses his mark in respect of his goods and services for identification and differentiation of similar products and at the same time, allows the consumer to recognise and to differentiate the trader's goods from a variety of competing products 120 5.1 Freedom of expression in the United States of America The right to freedom of expression is adopted in the US by the First Amendment of its Constitution. It provides the following principles: Congress shall not make a law which protects or forbids the free exercise of religion or that shortens freedom of speech or the media or that violates a people’s right to peaceful assembly and calls on the government to address complaints.121 The US constitution also protects the government against state censorship from the most offensive or divisive expression and requires speech control in only restricted and specific circumstances.122 5.1.1 The Foundation of freedom of Expression in the US. The protection of freedom of expression in the US constitution embodies the idea that the capacity of individuals to express themselves freely without fear of punishment by the government results in the freedom and autonomy to ensure better governance.123 The US Constitution requires its people to debate public issues freely, resulting in an accountable government, inclusive of thought and a stabilised country.124 Therefore, the US encourages people to freely express their opinions irrespective of resistance from the state and the public.125 The First Amendment encourages openness and social stability in the United States through its constitution. The open public dialogue allows ideas to enter the market place, and they compete with ideas that other people freely share.126 There is a system which allows competition of ideas, which challenges the need to breed an environment where weaker and offensive ideas make way for better ones.127 5.2 Trademark Protection and The Right to Free Speech in the United States In the US dilution is protected by state laws on dilution.128 The position with regards to inter-state changed with the implementation of the Federal Trademark Dilution Act 129. Section 43 of the Trademark Act130 was amended by the Federal Trademark Dilution Act and was revised by the Trademark Dilution Revision Act- Principles found in the FTDA are listed below: The trademark must be proved that it is well-known to deserve protection.132 For a mark to be regarded as well known, the public need to recognise it, as they should be able to tell the goods that belong to a specific trademark mark label, the source- origin function.133 The law of trademark dilution developed, and this can be found in the case of Mosley.134 The court had to determine whether the FDTA needed clear evidence of “actual” economic loss. Under the Act, it was proved from the wording of the provision that, it is a requirement for dilution to prove actual loss. A trademark is not diluted by a simple relation between the well-known trademark and the junior mark. If there is a “mere association” between the two marks, this does not amount to dilution because it does not reduce the ability to associate the goods as belonging to a famous mark.135 The TDRA requires the burden of proof to show the “like hood of dilution”. One is not required to show “actual proof” but if there is a “likelihood of dilution”, it is sufficient under the Act. The Amended Act protects the well-known trademark from a negative association that will damage the reputation of the mark.136 The Mosley case offered a way to fixing the flaws in the FTDA. The need to show “actual dilution” was one of the drawbacks, creating a heavy burden to prove and this rendered the act useless.137 The FDTA Act provides limits on grounds to which claims can be brought under dilution. The shortcomings of dilution arguments are not in conflict with freedom of expression.138 TDRA exempts from the claims of dilution parody and criticism of a mark, fair use, non-commercial use and reporting commentary.139 The application of the ideals of the First Amendment is openly implemented by the US courts and it has been argued that they should exercise caution.140 Burrell and Gangiee claim that there are a few cases concerned with free speech in trademark because free speech is usually commercial.141 Part 6: Parody and trademark dilution Trademark holders use intellectual property rights to prevent critics of their marks by other institutions, but the courts have allowed use of trademarks for parody.142 The use of a trademark for parody purposes includes the adoption and imitation of the trademark to make it look ridiculous.143 Sach J is of the opinion that Laugh It Off did not merely win the case on the fact that they “could not prove actual economic harm” but it was in terms of the right freedom of expression principles.144 The position in a South Africa context in terms of the CC judgement, the right to freedom of expression can trump the rights of a trademark owner, absent the requirement of economic disadvantage. 6.1 Parody as a form of freedom of expression Parody is defined as: “the transformative use of a well-known work to satirise, ridicule, critiquing or commenting on the original work, as opposed to merely alluding to the original work to draw attention to the later work”145 Parody is a concept which cannot be easily defined judicially. Parody, however, is defined as an imitation or genre with exaggeration simply for purposes of making fun.146 Parody makes fun of the original work. It brings out any weakness, lack of self-awareness through mimicking the original work. Parody is categorised as “target parody, general parody, specific parody and a weapon parody”.147 A parody is paradoxical. The advantage attained by the use of a parody in a trademark is the famous mark referred can be recognised by the public. The more a parody draws from an original trademark, the more successful the parody is, the more customers know of the trademark and that the work is not commercially affiliated with the original.148 Laugh It Off case on appeal also touched on issues relating to parody.149 The court did not allow the defence based on freedom of expression principles, because the parody simply created a comic effect of the trademark. The SCA found that the use of the trademark by the applicant invoked racial slurs, however, given the South African's history of racial oppression that should have been avoided150. Sachs J provides, guidelines that may be of assistance in the future to address the controversial issues involving the balance between trademark protection and parody. 6.2 Problems with trademark parody When the parody draws less from the original trademark; the parody will not be recognisable to the public. The public will fail to comprehend the comic effect that the parody seeks to portray, but when the parody takes too much from the original work, it can amount to trademark infringement, it does not matter how funny it is.151 Below are ways that illustrate parody is controversial in trademark dilution. The trademark of another party is used for comic effect. The owner of the trademark can bring a claim against the use of its mark in the form of a parody. The owner can allege the trademark is weakened and loses value from the use as a comic effect. Kotler and Dopson explain when a parody “does not take enough” form the original form of the trademark the public will not comprehend the link between the humour and the trademark.152 In the sense that the original work is against itself: the work of a parodist points the attention of the consumer to the original work and acknowledges its strength. The parodist relies on the ability of the consumer to be involved in the creation of the parody. The aim is for the consumer to keep both “closeness” and “distance” from the original mark’.153 There is an image that creates and attaches to the parody, also reinforcing the association with the trademark.154 If a registered trademark is used as an object of parody, it can conflict with trademark protection. The Sachs J said rather than the court viewing trademark infringement in strict ways, the court should be pleased for the context approach and the important discussion of how the balancing of interests should be performed. The interests the court consider when the conflict between freedom of expression and parody include the importance of satirical social comments, artistic reasons, the right to make fun of a trademark, the right of the owner of a trademark to keep a positive image, and prevention of the abuse of the large amounts invested in the mark by the owner.155 6.2.1 Getting the balance right Sachs J said the question whether the parody is commercial or non-commercial, plays a part in balancing interests between trademark protection and freedom of expression.156 Political expression receives the highest level of protection than commercial expression in the US. Commercial expression receives intermediate level of protection.157 To distinguish between commercial and non-commercial is problematic almost every trademark parody involves some form of commercial element.158 Sach J said a trademark parody has to be afforded constitutional protection even though it has a commercial element. The commercial element must be regarded as one of the factors to look at when balancing the interest between trademark parody and freedom of speech and “not determinative”.159 Sachs J suggests the way the message is conveyed to the audience is the most important to determine if the parody should be protected. Is it possible they could have used other ways to convey their message other than using the t-shirt with SAB’s mark? Sach J argued against the fact that they could have used other means. On “the basis that it will always be possible to identify a more direct, though less, convincing way of conveying the message, however, the vital role of branding in our consumer-driven society, it may be that the medium used is intertwined with the very nature of the parody that the medium is the message”. Lastly, Sachs J, posed a question, if the unsavoury nature of a trademark parody can be deserving of less protection? He suggests that the court “should not base its decision whether or not to protect trademark parody as a form of speech but on whether the parody is, in its view, is of good taste or not”160 Part 7: Conclusion Trademarks serve several functions which include an indication of origin, distinguishing products, the quality function and the advertising function to attract consumers to buy products from the trademark owner. The selling power of a trademark is viewed as the most significant economic function.161 The lines separating trademark protection and the right to freedom of expression are analysed above. Both of these rights discussed in this dissertation deserve to be protected. The rights to freedom of expression and trademark dilution are analysed above. Both rights deserve to be equally protected by law. The courts have to be cautious of allowing “the abuse of the right to freedom of expression”, or “to sacrifice trademark protection at the altar of fundamental human rights”162 The CC is the highest, in the South African context. “It remains a fervent hope that either the Constitutional Court can find it within itself to somehow tone down the unintended consequences of the Laugh It Off case or the legislature must find a way to make section 34(1) (c) useful again”. The Laugh it off case showed little protection to trademark owners. The decision was based on whether there was substantial economic loss. It is impossible to show devastating economical loss without having lost sales to an irretrievable point. Protection in terms of section 34(1)(c) was made worthless. In this case, the court showed that trademark owners should laugh it off as protection in terms of the law is impossible to attain. The court based their decision neither on freedom of expression nor trademark dilution principles but economical reasoning. This case expressed how the court let down the public's right to freedom of expression and trademark protection for owners. This dissertation proved that courts considering parody as a defence in trademark cases could eventually limit the development of trademark dilution. The conflict between freedom of expression and trademark rights remains a constant battle for the courts and there is a need for continuously making sure the balance remains fair. Bibliography Statute 1. 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