Thesis (PhD)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: The Constitutional Court in the Republic of South African indicated in 2006 (Laugh It Off Promotions CC v SAB International (Finance) BV t/a Sabmark International (Freedom of Expression Institute as amicus curiae), 2006 (1) SA 144 (CC)) that a senior trademark cannot be provided with anti-dilution protection if the senior trademark cannot demonstrate a probability of substantial economic harm. In the United States of America, legislation (Trademark Dilution Revision Act of 2006) corrected an earlier Supreme Court decision (Moseley v Victoria's Secret Catalogue, Inc., 537 U.S. 418 (2003)), and as a result evidence of a probability of dilution is now required to provide a senior trademark with anti-dilution protection. Senior trademarks experienced mixed success in courts in the Republic of South Africa as well as the United States of America when requesting anti-dilution protection. The reason is that when empirical evidence is offered of trademark dilution the nature of the evidence is usually limited and the method of obtaining it is often flawed. The response of brand managers to trademark infringement also seems to be limited to decisions contemplating litigation. Therefore, to assist both the legal and marketing fraternity when trademark infringement is thought to occur, this study investigates the nature and extent of trademark dilution. A literature review revealed the elements and forms (tarnishing and blurring) of trademark dilution and the motivation for using the concept ‘brand’ and the construct ‘brand equity’ to conceptualise trademark value. The limitations of previous research in measuring trademark dilution and commentary on court decisions provided the basis of the conceptualisation of trademark dilution as an undesirable effect on customer-based brand equity, operationalised as brand attitude. Brand attitude is a higher level brand value creator and five sub-components (affect, cognition, attitude valence and stability, attitude accessibility, purchase intention) were identified that measures brand attitude accurately. Brand attitude is also preceded by brand familiarity and leads to brand loyalty. Furthermore, brand attitudes can also be explained according to four types of decision-making processes: the type of decisions (high and low involvement) and type of motivations (informational and transformational). The purpose of this study was to investigate the nature and extent of trademark dilution, (tarnishing and blurring) on components of customer-based brand equity. The study used an experimental research strategy and an electronic survey instrument (Qualtrics) with self-administered questionnaires. Six hypotheses were formulated to assess whether trademark tarnishing and blurring had an effect on any component of customer-based brand equity when trademarks/brands were considered collectively and individually. The study was designed as a 3 x 2 x 2 factorial experiment. It consisted of three factors (type of dilution; type of decision; type of motivation) with different levels (undiluted/tarnish/blur; high involvement/low involvement; informational/transformational). Twelve different questionnaires were administered to a convenience sample of 3 441 potential respondents. The data generated by the 12 questionnaires was analysed using ANOVA and Mann-Whitney U tests. The results suggested that trademark tarnishing did have statistically significant effects on components of customer-brand equity as far all trademarks/brands were concerned and that the effect of trademark tarnishing and blurring were different when all trademarks/brands were considered together. Tarnishing and blurring had statistically significant effects on components of customer-based brand equity when individual trademarks/brands were considered, but the effect seemed to be specific to the type of decision (high/low involvement) taken and not the type of motivation (informational/transformational) involved. Tarnishing and blurring, when compared, had different and similar, but varying in intensity, effects on components of customer-based brand equity for individual trademarks/brands. Tarnishing and blurring, when considered separately, had different and similar, but varying in intensity, effects on components of customer-based brand equity. The study made a theoretical contribution which should be of value to members of the legal and marketing fraternity. The study showed in the first instance that trademark tarnishing and blurring are independent constructs that had different or similar, but varying in intensity, effects on components of customer-based brand equity. The effect of trademark dilution, tarnishing and blurring, is not limited to brand recall and recognition and brand attitude accessibility. Trademark tarnishing also had different or similar, but varying in strength, effects on individual trademarks/brands, as did trademark blurring. The type of decision (high or low) and type of motivation (informational or transformational) therefore play a role in the unique effect trademark tarnishing or blurring will have on components of customer-based brand equity. Secondly, the effect of trademark tarnishing and blurring may not be unfavourable by implication. In fact, blurring had a positive effect on components of customer-based brand equity, at least after a single exposure. This finding implies that trademark tarnishing has a more severe and faster effect on customer-based brand equity compared to trademark blurring. A brand manager will, as a result of the study, know how to respond, if at all, when a junior mark emerges that is similar to their senior trademark and seemingly dilutes the senior trademark. An attorney whose client requests anti-dilution protection will know, as a result of the study, whether litigation is indeed the answer to the problem. The study provides insight, not only regarding the nature of trademark dilution, as explained by the impact of trademark tarnishing and blurring on specific components of customer-based brand equity, but also regarding the extent of trademark dilution. Trademark dilution has an effect on trademarks/brands, but the effect, be it in respect of a specific component or the intensity of the effect on the component, may not be what is expected. Based on the results of this study several recommendations can be offered to brand managers and trademark attorneys. Brand managers (senior trademarks) should not respond to junior marks using their brands (senior trademarks) without first assessing the nature and extent of the effect of the junior mark on the senior trademark’s customer-based brand equity. Similarly, attorneys should also first examine the nature and extent of trademark dilution and advise their clients accordingly. Once the nature and extent of trademark dilution have been determined, a brand manager can customise his response according to the component of customer-based brand equity affected as well as the intensity of the effect. Attorneys can support at least part of their arguments to obtain anti-dilution protection for their clients, on very exact indications of the effect of use by a junior mark on customer-based brand equity. / AFRIKAANSE OPSOMMING: Die Konstitusionele Hof van die Republiek van Suid-Afrika het in 2006 (“Laugh it Off Promotions CC vs SAB International (Finance) BV t/a Sabmark International (Freedom of Expression Institute as amicus curiae),” 2006 (1) SA 144 (CC)) bevind dat ‘n senior handelsmerk nie anti-skendingsbeskerming kan geniet tensy die senior handelsmerk ‘n waarskynlikheid van wesenlike finansiële skade kan demonstreer nie. In die Verenigde State van Amerika het wetgewing ‘n Hooggeregshof-uitspraak (“Moseley v Victoria’s Secret Catalogue, Inc.,” 537 U.S. 418 (2003)) gekorrigeer sodat sederdien slegs bewys van ‘n waarskynlikheid van skending nou benodig word vir ‘n senior handelsmerk om anti-skendingsbeskerming te kan geniet. Senior handelsmerke het gemengde welslae in beide die Republiek van Suid-Afrika sowel as die Verenigde State van Amerika behaal wanneer hulle anti-skendingsbeskerming versoek het omrede die empiriese bewyse wat normaalweg aangebied is, beperkend van aard was en die data-insamelingsmetode gebrekkig. Die reaksie van handelsmerkbestuurders op handelsmerk-oortreding was tot dusver beperk tot besluite ten gunste van litigasie al dan nie. Derhalwe ondersoek hierdie studie die aard en omvang van handelsmerk-skending om sodoende beide die regskundige en bemarkingsgemeenskappe te ondersteun wanneer handelsmerk-oortreding vermoed word. ‘n Literatuur oorsig het die elemente en vorme (besmetting en verdowwing) van handelsmerk-skending geidentifiseer asook die motivering om die konsep van ‘handelsmerk’ en die konstruk van ‘handelsmerkwaarde’ te gebruik. Die beperkings van vorige navorsing om handelsmerk-skending te meet en kommentaar op hofbeslissings het die basis van die voorstelling van handelsmerk-skending as ‘n ongewenste effek op kliënt-gebaseerde handelsmerkwaarde neergelê en dit geoperasionaliseer as handelsmerk-ingesteldheid. Handelsmerk-ingesteldheid is ‘n hoë-vlak handelsmerkwaardeskepper en vyf subkomponente (gevoelsinhoud/emosie; denke/kennis; polariteit en stabiliteit van ingesteldheid; ingesteldheidstoeganklikheid/reaksie latentheid; aankoopvoorneme) is geïdentifiseer wat handelsmerk-ingesteldheid akkuraat meet. Handelsmerk-ingesteldheid word voorafgegaan deur handelsmerk-bekendheid en gevolg deur handelsmerk-lojaliteit. Verder kan handelsmerk-ingesteldheid ook verklaar word aan die hand van vier soorte besluitnemingsprosesse: die tipe besluit (hoë betrokkenheid of lae betrokkenheid) en die tipe motivering (informatief of transformerend). Die doel van die studie was om die aard en omvang van handelsmerk-skending, (besmetting en verdowwing) op die komponente van kliënt-gebaseerde handelsmerkwaarde te ondersoek. Die studie het ‘n eksperimentele navorsingstrategie gevolg en van ‘n elektroniese opname-instrument (Qualtrics) met self-geadministreerde vraelyste gebruik gemaak. Ses hipoteses is geformuleer om vas te stel of besmetting of verdowwing ‘n effek op enige komponent van kliënt-gebaseerde handelsmerkwaarde het wanneer alle handelsmerke gesamentlik beskou word sowel as afsonderlik. Die studie was ontwerp as ‘n 3 x 2 x 2 faktoriale eksperiment. Dit het bestaan uit drie faktore (tipe skending; tipe besluit; tipe motivering) met verskillende vlakke (onbenadeel/besmet/verdof; hoë betrokkenheid/lae betrokkenheid; informatief/transformerend). Twaalf verskillende vraelyste is aan ‘n geriefsteekproef van 3 441 moontlike respondente gestuur. Die data word deur die 12 vraelyste gegenereer is met behulp van ANOVA en Mann Whitney U toetse ontleed. Die resultate het aangetoon dat besmetting ‘n statisties betekenisvolle effek op die komponente van kliënt-gebaseerde handelsmerkwaarde het wanneer die handelsmerke gesamentlik beskou word, asook dat die effek van besmetting en verdowwing verskillend is wanneer al die handelsmerke gesamentlik beskou word. Bemetting en verdowwing het statisties betekenisvolle effekte op die komponente van handelsmerkwaarde wanneer handelsmerke afsonderlik beskou word, maar die effek blyk verwant aan die tipe besluit (hoë betrokkenheid/lae betrokkenheid) te wees en nie aan die tipe motivering (informatief/transformerend) nie. Besmetting en verdowwing, wanneer dit vergelyk word, het verskillende of soortgelyke, maar veranderend invloede ten opsigte van intensiteit, effekte op die komponente van kliënt-gebaseerde handelsmerkwaarde. Die studie lewer ‘n teoretiese bydrae gelewer aan lede van die regskundige-en bemarkingsgemeenskappe. Die studie het ten eerste getoon dat handelsmerk-besmetting en –verdowwing onafhanklike konstrukte is wat verskillende of soortgelyke, maar veranderend in intensiteit, effekte op kliënt-gebaseerde handelsmerkwaarde het. Die effek van handelsmerk-skending, besmetting en verdowwing, is nie net beperk tot handelsmerk-herroeping en -herkenning en handelsmerk-ingesteldheidstoeganklikheid nie. Handelsmerk-besmetting het ook verskillende of soortgelyke, maar verskillend in intensiteit, effekte op die handelsmerke afsonderlik, wat ook geld in handelsmerk-verdowwing. Die tipe besluit (hoë betrokkenheid of lae betrokkenheid) en tipe motivering (informatief of transformerend) speel derhalwe ‘n rol in die unieke effek wat besmetting of verdowwing op die komponente van kliënt-gebaseerde handelsmerkwaarde het. Tweedens is die effek van besmetting en verdowwing nie noodwendig ongunstig nie. Trouens, verdowwing het ‘n versterkende effek op sommige komponente van kliënt-gebaseerde handelsmerkwaarde gehad, ten minste ná ‘n enkele blootstelling. Dit impliseer dat besmetting ‘n veel erger en vinniger effek op kliënt-gebaseerde handelsmerkwaarde as verdowwing het. ‘n Handelsmerkbestuurder sal na aanleiding van die studie weet hoe om te reageer, indien enigsins, wanneer ‘n junior merk verskyn wat soortgelyk aan die senior handelsmerk is. ‘n Prokureur wie se kliënt anti-skendingsbeskerming versoek sal weet, na aanleiding van die studie, of litigasie inderdaad die antwoord op die probleem is. Die studie verskaf insig, nie net ten opsigte van die aard van handelsmerkskending soos beskryf deur die impak van handelsmerkbesmetting en –verdowwing op sekere komponente van kliënt-gebaseerde handelsmerkwaarde nie, maar ook ten opsigte van die omvang van handelsmerkskending. Handelsmerkskending het ‘n effek op handelsmerke, maar die effek, of dit op ‘n sekere komponent of op die intensiteit van die effek op die kompenent mag wees, is moontlik anders as wat verwag is. Gabaseer op die resultate kan verskeie aanbevelings aan handelsmerkbestuurders en handelsmerkprokureurs gemaak word. Handelsmerkbestuurders (senior handelsmerke) behoort nie te reageer op junior merke wat hul merk (senior handelsmerk) gebruik sonder om die aard en omvang van die effek van die junior merk op die senior handelsmerk se kliënt-gebaseerde handelsmerkwaarde te bepaal nie. Eweneens behoort handelsmerkprokureurs eers die aard en omvang van die handelsmerkskending te bepaal en hul kliënte dienooreenkomstig adviseer. Sodra die aard en omvang van handelsmerkskending bepaal is, kan ‘n handelsmerkbestuurder sy reaksie volgens die geaffekteerde komponent van die handelsmerk, sowel as die intensiteit daarvan, aanpas. Prokureurs kan ten minste sommige van hul argumente om anti-skendingsbeskerming vir hul kliënte te verkry, ondersteun deur baie duidelike aanduidings van die effek van die gebruik van ‘n junior merk op kliënt-gebaseerde handelsmerkwaarde.

The thesis investigates the concept of trademark dilution under international and regional trademark law, and under the laws of selected jurisdictions; namely, the United States of America, Germany, the United Kingdom and the Republic of South Africa. The investigation includes measures undertaken to prohibit the internet-based dilution of famous marks through the registration of confusingly similar domain names. It is noted that dilution is imprecisely formulated under international trademark treaty law. In fact, the term "dilution" does not appear in international trademark treaties. To fill the gap of international trademark treaties, various policy initiatives, or `soft law' have been developed, which to some extent clarify both the concept of dilution, the type of mark protected from dilution, and the scope of such protection. The problem is that the policy initiatives are non-binding on States, so that different States have adopted different common law and statutory approaches to the protection of marks against dilution. This is demonstrated, for example, by the fact that the European Union and its Member States provide protection from dilution to "marks with a reputation", while the United States of America provides such protection only to "famous" marks, and the Republic of South Africa protects "marks which are well-known in the Republic" from dilution. The thesis analyses the protection granted in these jurisdictions, to determine the similarities and differences of approach, and to make appropriate law reform proposals to achieve uniformity of protection. In the final analysis, it is concluded that the burden of enforcing dilution provisions rest on the judiciary. This being so, the judiciary is urged to engage in a balancing exercise in deciding dilution cases. The courts should recognize that dilution provisions are powerful tools at the disposal of owners of trademarks with advertising value. At the same time, the courts should be steadfast in ensuring that protection from dilution does not stultify freedom of trade, or create absolute monopolies or a form of copyright in a trademark. / Jurisprudence / LL.D.

The thesis investigates the concept of trademark dilution under international and regional trademark law, and under the laws of selected jurisdictions; namely, the United States of America, Germany, the United Kingdom and the Republic of South Africa. The investigation includes measures undertaken to prohibit the internet-based dilution of famous marks through the registration of confusingly similar domain names. It is noted that dilution is imprecisely formulated under international trademark treaty law. In fact, the term "dilution" does not appear in international trademark treaties. To fill the gap of international trademark treaties, various policy initiatives, or `soft law' have been developed, which to some extent clarify both the concept of dilution, the type of mark protected from dilution, and the scope of such protection. The problem is that the policy initiatives are non-binding on States, so that different States have adopted different common law and statutory approaches to the protection of marks against dilution. This is demonstrated, for example, by the fact that the European Union and its Member States provide protection from dilution to "marks with a reputation", while the United States of America provides such protection only to "famous" marks, and the Republic of South Africa protects "marks which are well-known in the Republic" from dilution. The thesis analyses the protection granted in these jurisdictions, to determine the similarities and differences of approach, and to make appropriate law reform proposals to achieve uniformity of protection. In the final analysis, it is concluded that the burden of enforcing dilution provisions rest on the judiciary. This being so, the judiciary is urged to engage in a balancing exercise in deciding dilution cases. The courts should recognize that dilution provisions are powerful tools at the disposal of owners of trademarks with advertising value. At the same time, the courts should be steadfast in ensuring that protection from dilution does not stultify freedom of trade, or create absolute monopolies or a form of copyright in a trademark. / Jurisprudence / LL.D.