Social media fan accounts – honouring the brand or violating a trade mark?

Social media has enabled us to stay connected with each other in ways that we were never able to in the past. It has developed from traditionally being a connector of persons, friends and distant lovers to be a connector of businesses and traders with their consumers.

Social media has also evolved into a connector of cultures and movements – think of the various challenges that have taken social media by storm, the #10yearchallenge encouraged you to share throwback pictures where even celebrities participated posting decade old pictures of themselves. Recently, the #woolieswaterchallenge was trending, where we saw the accents of South Africans of all colours and backgrounds transform as they drank Woolworth’s water.

A number of people use social media not only to socialise but also to reap economic benefits by using it as a platform to trade. Social media has made it extremely easy for start-ups to market themselves and trade effectively. In fact, social media is probably the most effective tool for reaching and engaging consumers in a densely connected world.

However, with all its positive effects, it has brought along some of its own challenges for businesses on the trade mark front.

A few years ago, in the case of Olivier Wasem & Sammy Wasem v. Facebook, Inc. & Ferrari S.p.A., Case No. CIV-530869 (the Ferrari case), the luxury car maker Ferrari and Facebook were sued over popular Ferrari Facebook fan pages created by a father and son team (Olivier and Sammy Wasem). The fan pages had attracted millions of Ferrari enthusiasts.

The Wasems alleged that Ferrari had attempted to create a Facebook page on its own but failed to attract fans. Ferrari became aware of the Wasems fan pages and approached them to work together on the fan pages as partners. After years of working together on the fan pages created by the Wasems (under a partnership agreement), Ferrari and Facebook – seemingly working in concert - removed the Wasems as “administrators” of the pages taking away their ability to control or manage the page they created.

The Wasems sued Ferrari and Facebook for damages for, inter alia, the breach of the partnership agreement (against Ferrari) and breach of contract (against Facebook). In retaliation, Ferrari lodged proceedings for trade mark infringement. It seems that in the end the Ferrari case was not heard in court, although it would have been interesting to see how the California Superior Courts would have decided this matter.

In South Africa, we have not yet been faced with a social media dispute such as the Ferrari case, but the #woolieswaterchallenge allowed us to catch a small glimpse of how unauthorised use of a trade mark by fans can be dealt with by a trade mark owner.

After the #woolieswaterchallenge became viral, in a Tweet, Woolworths said the following to the boys who started the challenge: “Your video is exquisite and we’d love to amalgamate with you ??...”

In our view, Woolworths’ approach in choosing to collaborate with the young boys was prudent from a business perspective. The decision kept the public happy and encourages creativity amongst the youth. Woolworths also scored with the consumers by choosing collaboration over litigation and it now (presumably) gets to exercise some control over the posts by the #woolieswater boys.

Could it though have been possible for Woolworths to institute legal proceedings against the #woolieswater boys?

From a South African legal perspective, Sections 34 (1)(a) and (b) of the Trade Marks Act No. 194 of 1993 (“the Act”) provide that a registered trade mark can be infringed through the use, in the course of trade, of a confusingly similar trade mark in connection with goods/services similar to those covered by the registered trade mark.

However, use of trade marks on fan pages, at least traditionally, is not “use in the course of trade” – as a fan page is not used to trade in any goods or services but rather to create a platform for fans with similar interests to share their experiences, exchange information and keep each other updated with news or stories surrounding the subject of similar interest. So, in this sense, a trade mark owner would find it difficult to succeed on traditional trade mark infringement proceedings against a fan making unauthorised use of its trade mark on a fan page.

In addition, a fan page usually includes the words “fan page” and this arguably clearly indicates to the public that the page is not an official page of the business or trade mark owner. Similarly, the #woolieswater boys did not use the WOOLWORTHS/WOOLIES trade mark in the course of trade and so trade mark infringement proceedings on the basis of Sections 34 (1)(a) and (b) would, in all likelihood, have been unsuccessful.

Could use of trade marks by fans be regarded as diluting the trade mark in terms of Sections 34 (1) (c) of the Act? In terms of this section, a registered trade mark can be infringed if it is used by a third party in a way that is detrimental to the trade mark’s repute – i.e. in a way that “dilutes” the brand’s advertising value/selling power and causes economic damage to the brand owner. As the boys’ video and the #woolieswaterchallenge was well received by the public, it would have been difficult to argue that use of the WOOLWORTHS/ WOOLIES trade mark by the boys tarnished (one form of dilution) the WOOLWORTHS brand and, in any event, it would have been difficult to establish economic damage to Woolworths. (If anything, the video had the opposite effect).

Using a trade mark that belongs to another party is always potentially risky - you may not be as lucky as the #woolieswater boys, depending on how you use the trade mark and how your use is received by the public. In the #woolieswaterchallenge case, the public reaction was very positive, so much so that various other spin offs of the original #woolieswater video have subsequently been created by social media users of different backgrounds, cultures and race.

The way in which South Africans received and reacted to the #woolieswaterchallenge brought to mind Sachs J’s judgement in the case of Laugh It Off Promotions CC v South African Breweries International (Finance) BV t/a Sabmark International and Another (CCT42/04) [2005] ZACC 7; 2006 (1) SA 144 (CC); 2005 (8) BCLR 743 (CC) (27 May 2005) where the Honourable Judge said “…Humour is one of the great solvents of democracy. It permits the ambiguities and contradictions of public life to be articulated in non-violent forms. It promotes diversity. It enables a multitude of discontents to be expressed in a myriad of spontaneous ways. It is an elixir of constitutional health.”

This article was first published on BizCommunity.

Date published: 9 July 2019
Author: Zama Buthelezi & Megan Reimers

Tags: trade marks social media