The annual Cape Wine Makers Guild Auction is reputed for premium quality wines, attracting private collectors and trade buyers.
The recent Nedbank Cape Wine Makers Guild Auction recorded the highest sales of top South African wines in its 30-year history of over R11 million.
Another first was the application of security foil strips to each bottle of wine on auction bearing its own security code embedded in a hologram which is only system readable – a pledge of origin.
The popularity of South African wines has grown immensely.
This heightens the threat of fraud and counterfeiting – a reality we are all familiar with as it has far-reaching implications financially and to personal health and safety.
Although the problem of counterfeit wines is believed far more extensive outside South Africa, the reality remains that a successful brand will be counterfeited. Applied security foils to the auction wines reassure buyers.
The need to reassure is intertwined with a brand, the primary attraction and badge of origin.
The experience people associate with branding should never be underestimated.
The damage caused by counterfeit products to the reputation of a brand and producer can be detrimental.
The value attributable to branding requires protection which could extend to trademarks, designs, patents, copyright and domain names – collectively referred to as IP or intellectual property.
IP protection is an involved process and is briefly alluded to below.
Trademark protection, registration and maintenance are vital contributors to the success of any business.
As a consequence of the territorial nature of IP rights, a trademark registered in South Africa is not automatically available for use or registration in foreign countries.
It is essential to first ascertain by searching the relevant registers whether the proposed trademark is available in the relevant market, and that the use thereof will not infringe an existing local trademark.
Trademark registration is recommended in every relevant country and while essential principles of trademark law provide guidance, trademarks are governed by country-specific acts and regulations.
While it is possible to lodge individual national applications in most territories, there are two types of registrations available to South Africans that confer trademark protection in a number of territories by filing a single application.
They are Europe’s Community Trade Mark (CTM*) and west Africa’s OAPI/AIPO** (African Intellectual Property Organisation) registration.
Both are attractive options for exporters wanting to protect their trademarks in the EU and in west Africa – proving to be time and cost-effective.
The international registration of trademarks, the Madrid System, offers another option to secure protection of trademarks in a number of countries.
This is done by filing a single international registration application with a centralised office in Madrid.
South Africa approved the ratification of the Madrid Protocol but has not yet acceded to it, and requires member countries to examine trademarks within a certain timeframe; one of the reasons for South Africa not joining.
South Africa’s Companies and Intellectual Property Commission has since September 2013 accepted electronically lodged trademark applications which may reduce current timeframes.
India and Mexico recently joined, and with a number of Asian countries set to join in 2015, it will be a matter of time before South Africa becomes a member of the Madrid Protocol.
The advantages of trademark registration include:
- The proprietor or licensee is afforded a statutory and exclusive right to use a trademark in respect of the goods and/or services for which it is registered;
- Once filed, the application presents an obstacle to latter-filed same/similar applications in that territory;
- Unauthorised use of the trademark can constitute trademark infringement for which the proprietor can claim damages;
- Trademarks can be licensed to third parties to which the parties may agree to payment of royalties;
- Customs authorities in certain territories can prevent the unauthorised importation of goods bearing the registered trademark; and
- Trademarks can be renewed, usually every 10 years, in perpetuity.
It can be seen from the above that the advantages of trademark registration should clearly inform any filing approach.
Both in the wine industry and beyond, brand value continues to increase over time, steadily proving that above all else, it is brand loyalty that triggers purchase.
Donvay Wegierski is a director at Werksmans Attorneys.
Notes: *CTM: A CTM covers all 28 member countries of the EU, namely Austria, Belgium, Bulgaria, Croatia, Cyprus, The Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
**OAPI: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Congo, Comoros, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Ivory Coast, Mali, Mauritania, Niger, Senegal and Togo.