News analysis

The Primark store on Oxford street, London, in Nov
Primark's flagship store in London. (File/Getty)
  • Truworths has been trying to secure the use of the brand "Primark" for seven years. It now says it will launch stores with that name within months.
  • The UK fashion retailer Primark – which is not involved in those stores – won't say exactly what it plans in reaction, just that it will do what is necessary to protect itself.
  • Primark's parent company is 20 times the size of Truworths, and it has plenty of reason to stop Truworths from setting a precedent.
  • Being headquartered in post-Brexit Britain may help – and could make for a diplomatic turn to events.
  • For more stories go to www.BusinessInsider.co.za.

For the last seven years, fashion retailer Truworths has had its eye on the name "Primark". Finally, in the "next few months", it will finally be opening around 15 stores under that name, it told investors in February, with plans to have a combined 1.5 square kilometres of retail space under that name in its "launch trial phase".

That may embroil South Africa in a trade fight with the United Kingdom, see a change in the way SA protects trademarks and will, at the very least, earn Truworths the enmity of a multinational conglomerate many times its size, with every motivation to set a memorable example.

Primark is a half-century-old fashion retailer, originally from Ireland, that now counts 380 stores across Europe and the USA. It promises "the latest looks without breaking the bank".

The Primark brand Truworths intends to establish – with no connection to the UK retailer other than using the same name – will be "youthful, fashionable" and offer "[g]ood quality at great value", it has promised.

The UK Primark is not impressed.

"Truworths is attempting to misappropriate our brand and, in so doing, deceive the South African consumer," the company told Business Insider South Africa, in a direct repeat of its first, and so far only public statement after Truworths announced its plans.

"Primark will take whatever steps are necessary to protect our brand and its hard-earned reputation."

It would not say what kind of action it envisages, or what the timing would be.

But it appears to have much legal and regulatory reason to complain.

See also | H&M sales in South Africa were among the strongest in the world in 2020

When Truworths first applied to trademark "Primark" for use in the clothing sector, it wad denied. The UK retailer had registered that name in South Africa in 1976, and renewed its registration in 1997 and 2006, filings with the Companies and Intellectual Property Commission show.

Truworths was not deterred. In September 2018 it won an order from the Supreme Court of Appeal (SCA) that the Primark name must be struck from register of trade marks for lack of use – and in mid-2019 it applied again to call the name its own in South Africa.

But getting to that point cost Truworths some scars, without a guarantee of ultimate success.

The SCA agreed that, as the law stands, Primark had no right to trademark protection in South Africa because it had not been using the name locally, nor was its brand well known. (Under South Africa's use-it-or-lose-it system, anyone can apply for a trademark to be de-registered if it has not been used for five years.)

But the court also commented – unfavourable – on Truworths' dodgy motivations and its less-than-honest approach.

At one point in legal proceedings, Truworths claimed it knew nothing about the nature of Primark's business, and only "[a]fter this was shown to be dishonest" did it "grudgingly" admit otherwise. 

Then there was its "more probable purpose" in wanting to have clothes named Primark: "a desire to block competition from a potentially dangerous rival", said the court.

That was on the basis of Truworths' claim 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 it will launch "stand-alone" and "free standing" stores under the name. 

Knocking down Primark's copyright protection does not necessarily mean Truworths gets to register the name, the SCA warned bluntly.

And, in what may yet turn out to be a prescient observation, there's a bigger, global context to consider, said Judge Nigel Willis in a concurring judgment.

"Primark is not well known in South Africa as a brand or a label but Truworths’ application, by necessary implication, concedes that Primark has a market reputation that, at least potentially, is worth having. A court may fairly take judicial notice of the fact that the 'theft' of intellectual property, including trade marks, features regularly at summits of political leaders coming from different parts of the world."

Primark is a pretty big player in fashion, but its parent company Associated British Foods (ABF) is huge – 20 times as big as Truworths – and everywhere. It owns Illovo Sugar in South Africa, and sugar businesses in nine other countries. It makes vaccine ingredients, and bakers yeast, and pig feed, in plants that stretch from Canada to New Zealand. 

ABF also owns a number of brands it would, presumably, like to protect against usurpers in countries it has not yet entered, such as Twinings tea and Ryvita crispbread.

For such protection, a London listed and headquartered company would expect the help of the British government. And 2021 is a good time to ask, with Boris Johnson's administration eager to show – ideally in swashbuckling fashion – how it can benefit British industry with the external flexibility bestowed by Brexit.

As the country sets its own trade policy for the first time since the 1970s, the protection of intellectual property, including trademarks, is likely to feature prominently. In that the USA has set a precedent, threatening billions of rands of South African exports with loss of preferential treatment for fear of reduced copyright protection in SA

Whether Truworths will earn SA that kind of trouble for its love of the name "Primark" remains to be seen. But its efforts have already seen the SCA's Willis dismiss as outdated the territorial approach to trademark protection, in which trademark owners must fight for protection in each country afresh.

"If the principle of territoriality in relation to trade marks is to be revisited, in the light of changing social milieux, this will require an internationally concerted political effort and considerable political will," said Willis.

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