French telecommunications giant Orange has forced a small Cape Town-based ICT outsourcing company to change its name, as it flexes its legal muscle to protect its globally-recognised name.
Orange, France Telecom's mobile arm, is the fifth largest cellular company in the world. France Telecom has operations in 35 countries, 20 of which are in Africa, including Botswana, Uganda, Kenya, Cameroon and the Central African Republic.
France Telecom, which has more than 170 000 staff around the world, has a subscriber base of 217.3 million customers, of which 143 million are on the Orange network. The company reportedly opened a local office in 2009, although it is not known whether this is still in existence.
According to its latest annual report, its presence in SA seems to be limited to a 70% stake in broadcast firm Globecast South Africa. Despite Orange's limited operations in SA, it has now forced a small company with 25 staff members to change its name.
Ashley Floris, executive director of what will soon no longer be Orange Business Services, says the company is in the process of changing its name and should complete the move by the end of February. Its new name will be O365 Systems, he adds.
Orange Business Services received a letter from Orange's local attorneys, Adams & Adams, about five months ago informing it that its use of the name infringed the French company's trademark, says Floris.
The South African company, which has been trading for the past decade, had trademarked its logo, which will remain the same, notes Floris. He says the entity intended to defend the action, but was advised Orange, which has “deep pockets”, has a strong case.
Orange Business Services, which is black owned, offers services such as infrastructure data cabling and voice over IP, high performance computing, enterprise server support, enterprise management and ICT outsourcing.
Painful exercise
Floris says the company is currently rebranding, which is a lengthy and costly exercise and cannot be done overnight. It has registered a new domain as well as a new company name. “It's going to cost us money.”
However, apart from the pain of changing names, the company is also concerned about the potential loss of business because it is an established brand, and is known in the public and private sector as Orange Business Services, explains Floris. He says making the new name known will be the hardest aspect of the change.
“The hard part is getting that to market, and that is going to be the most expensive part.” Floris points out that it is difficult to put a value on a company's name.
“We actually don't know how this is going to affect us.” The company has not yet quantified the costs.
Floris explains the Paris Convention, to which SA is a signatory, allows companies with a registered name in one member country to defend intellectual property in another country that is a signatory.
The Paris Convention for the Protection of Industrial Property was initially signed in France in 1883 and was one of the first intellectual property treaties. It currently has 173 contracting member countries.
Muscle-flexing?
This is not the first time Orange Telecoms has enforced its might over a small South African company. About two years ago, it threatened public relations firm Orange Ink with legal action if the company did not change its name and colour scheme.
Director Meggan Liebenberg says the company eventually came to a compromise with the telecoms giant. Orange Ink kept its name, but its colours changed from orange, to green and silver.
Liebenberg says a few other organisations received the same letter from the telecoms group. She says the company decided it was worth fighting to protect a brand that had been eight years in the making, but the small firm did not have two years and millions of rands to take the French company on.
The compromise was a “happy outcome,” says Liebenberg. Orange Ink also informed the French company's lawyers, also Adams & Adams, that it was a public relations firm and had no intention of entering the mobile space, she adds.
Orange Ink started changing its colours at the end of 2009, which cost the firm, but was cheaper than a court battle, says Liebenberg. “It's a scary place to be.”
Liebenberg says Orange's actions may not be intended to bully small companies, but most will cave in as they do not have an option.
ITWeb contacted both Adams & Adams and Orange in a bid to get the mobile company's comments. Adams & Adams indicated Orange would respond directly to ITWeb.
Orange says it has grown into a “globally recognisable brand for fixed, mobile, broadband, IT, new services and media” since launching in 1994.
The company says: “Orange takes the protection of its brand very seriously, and takes steps to defend and protect its trademarks and other intellectual property rights worldwide, including in South Africa.”
However, it is not Orange's policy to discuss the details of any pending litigation or other legal action, it says.
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