South Africa: Primark v Truworths – who will win?

For the past seven years, fashion retailer Truworths has had its eye on the PRIMARK trademark. In 2018 it successfully cancelled Primark Holdings’ UK mark for non-use and in 2019 the company applied for its own version of the mark. Truworths CEO Michael Mark has now announced that it will launch 15 stores in the next few months in an attempt to adapt to changing shopping habits following the covid-19 outbreak.

Background

Primark is an international retailer that offers the latest fashion, beauty and homeware products at great value to customers. The company opened its first store in Dublin, Ireland in 1969 under the name Penneys and now operates more than 380 stores in 13 countries across Europe and the United States, owning more than 400 valid trademarks around the globe. The Primark website states that: “Adored by fashion fans and value seekers alike Primark is widely established as the destination store for keeping up with the latest looks without breaking the bank.” Primark's parent company, Associated British Foods (ABF), is 20 times the size of Truworths and has plenty of reason to prevent this entity from setting a precedent.

With more than 900 valid trademarks – mostly in South Africa and other African countries – Truworths owns a number of top brands such as Earthchild, Identity, YDE and Uzzi. Now, it is looking to introduce its new brand, Primark, to the clothing market as well. Truworths claims that the new label will offer "good quality at great value and highly competitive prices yet reasonable margins" and will be tactically aligned with local suppliers.

Primark Holdings trademark cancelled for non-use

In South Africa, a third party can cancel a trademark if it has not been used for five years. In 2018 Truworths filed a cancellation action against Primark’s registration for PRIMARK on the basis that the mark was not subject to use.

In 1976 Primark applied to register PRIMARK in Class 25. At the time, it did not have a presence in South Africa. During the cancellation proceedings, Primark argued that its registration was entitled to protection as a well-known mark and that the non-use requirements did not apply. The Supreme Court of Appeal found that Primark’s evidence was insufficient to establish the required degree of knowledge of the mark and that, although PRIMARK could be regarded as well known elsewhere, particularly in the United Kingdom, the company had to show that the mark was well known in South Africa among the relevant sector of the public.

The court stated that the relevant sectors “will be constituted by those who are potentially likely to be attracted by the mark’s reputation to do business with the proprietor of the mark, whether as consumers, agents, importers, channels of supply, retailers or otherwise… any other knowledge of the mark is irrelevant for the purpose of determining whether the mark is a well-known mark deserving of protection under s 35(1)”.

Pending applications and a political effort

However, the Supreme Court of Appeal also commented on Truworths' dishonest motivations and approach. Truworths then claimed that “it did not actually want to open stores named Primark, but only wanted to use the name on a line of clothing”. It now says that it will launch standalone and free-standing stores under the Primark name.

In addition, the Supreme Court of Appeal warned that cancelling Primark’s trademark did not necessarily mean that Truworths could register its own mark.

Both applications filed by Truworths (2013) and Primark Holdings (2019) remain pending in South Africa. Primark states that it will take whatever steps necessary to protect its trademark and hard-earned reputation. “Truworths is attempting to misappropriate our brand and, in so doing, deceive the South African consumer,” the company told Business Insider South Africa in March 2021.

As a result of Brexit, now is a good time for owner brands such as ABF, which has a local and important presence in Africa (particularly in South Africa), to consider help from the UK government.

The court’s final notes are remarkable, stating that:

Territorial isolation is a vanishing phenomenon… national boundaries and borders may restrict the movement of people, money, goods and services but the osmotic power of ideas and indeed images has intensified immensely in recent decades… in the twinkling of an eye, a brand or label not well known in South Africa can become embedded in the consciousness of ordinary people living here… if the principle of territoriality in relation to trade marks is to be revisited in the light of the changing social milieu, this will require an internationally concerted political effort and considerable political will… these are matters beyond the province of this court.

Comment

Primark v Truworths is a warning for IP owners to make use of their trademarks to ensure that they are not cancelled based on non-use. Proof of use should be documented and preserved in case an application for cancellation occurs. Further, owners of well-known marks should identify the relevant sector and then ensure that the appropriate evidence is provided to establish knowledge of their mark in this area.

Primark has not said what kind of action it foresees and Truworths’ actions so far may not guarantee its ultimate success.

This is a co-published article, which was originally published in the World Trademark Review (WTR)