It is common practise that companies often trade under names other than their name which is registered with the Companies and Intellectual Property Commission (“CIPC”), for example “Winsoft (Pty) Ltd t/a Software Industries”.
Logically, such trade names may not be the same as any other company name or trademark. Selecting such a trade name is done at your own risk, although an individual/company is not required to officially register a trade name as yet, you should convene a reasonable level of investigation into whether your selected trade name is not already being used.
The Consumer Protection Act 68 of 2008 (“CPA”) intends to throw the proverbial spanner in the works. Section 79 to 81 of the CPA prescribes detailed criteria on business names and the registration thereof. Section 79 of the CPA bars any person from “carrying on business”, except under the person’s full name as recorded in their identity document, registered in terms of public regulation or in the case of a juristic person, a name registered with CIPC.
Further, section 81 of the CPA provides that a trade name, in order to be registered:
- may not be the same as, or confusingly similar to, the name of a registered company or close corporation, or a trademark that has been registered or for which an application for registration has been filed, or a foreign trademark that is well-known in South Africa; and
- may not falsely suggest that the business is connected with any other person or entity, or with any state or organ of state, or is owned or managed by persons holding particular qualifications or by members of a regulated profession.
The provisions may seem somewhat burdensome on the proprietor of the trade name at first glance; however it ensures the protection of well-known companies’ good will as well as assisting in the protection of registered trademarks.
The consumer-centric approach of the CPA is well illustrated in the aforementioned sections as it supports the consumer in protecting it from suppliers masking their real identity by selecting random trade names. The provisions serve to prevent the chess game of unscrupulous suppliers constantly changing their trade name to ‘dodge’ any sort of regress or liability which may be imposed on them.
As per Schedule 2, Item 5 of the CPA, Sections 79 – 81 do not take effect until a date determined by the Minister by notice in the Gazette, which date must be one year following the general effective date. As of yet, the Minister or Commission has not issued such notice.
Although these provisions have not come into effect as yet, in the interests of avoiding the rush of changing branding and registering new names at CIPC , the provisions as mentioned should be duly considered when choosing a business name as the criteria will most likely need to be adhered to in the near future.