Orange squeezes rivals

ORANGE, the British cellphone network operator, has sent letters to South African companies that have the word "orange" in their names, sparking speculation it's planning to enter this market. The letters have gone out from Orange's trademark attorneys, Adams & Adams, to these companies telling them to cease trading under their existing names.

But alternative legal opinion says Orange is being "overly hopeful" in its claims.

Several hundred South African companies or trademarks in a wide range of business activities use the word "orange" in their names. Companies as far removed from mobile telephony as restaurants and IT services are understood to have received warnings.

One company was told its conduct is "unlawful": it's infringing Orange's trademark rights and is guilty of "passing-off" and contravening SA's Companies Act. Several hundred South African companies or trademarks in a wide range of business activities use the word "orange" in their names. Comment was sought from Adams & Adams, but they declined, claiming the matter was sub judice.

Trademark attorney Hans Muhlberg doesn't believe Orange could force people to change or stop using their company names after the two-year period allowed for objections had passed. "And when a name is used in a diluted form, a company has very limited rights.

"I don't think they qualify as well-known in SA. Only McDonald's and Gap have successfully won cases in SA based on their claim to be well-known brands. There's no likelihood of confusion or passing off. "The companies being challenged have rights of their own. I think Orange is being overly hopeful in its demands."

Interestingly, iBurst recently went to the Advertising Standards Authority to try and stop Neotel from using the same corporate shade of orange as iBurst's, and failed. It was represented by Adams & Adams.

Orange obviously plays a deep game. It registered its name in SA as early as 1996, eventually scheduling about 200 different activities, including "carry bags of paper, card and plastic" diaries and bookmarks.

"We resent being bullied in this way but don't have the money to fight a case against a big international firm," says the founder of a small company that received one of the letters. "We wanted to fight it and have already spent a lot on obtaining legal advice but we've been warned it could take two years of our time and cost millions.

"We've been trading for six years under a legally registered name. Company law gives disputing parties two years to object and we never received an objection in that time. Orange isn't well known in SA and we aren't operating in the same field as they are. Yet they claim we're building our name on the strength of its brand. In the end we don't have much choice. I don't have time to manage a class action. But it will cost quite a lot to reregister a name, change our stationery, update our website and market the new brand. It would have been a different story if they had approached us in a nice way."

It's been known for up to six weeks in SA's cellphone industry that Orange has opened an office in Sandton. With a reputation for innovative and aggressive marketing, Orange is the third mobile phone network in Britain, with a 22% market share, after O2 (27%) and Vodafone (25%). It's owned by Deutsche Telekom and France Telecom.