In the banking world, more zeros are often a good thing: R100 becomes R 1000. Zero fees. This is not always the case though and apparently not for banking trade marks.

South African banking has recently been disrupted by a few low cost, digital banks. One of these is Bank Zero which was registered as a mutual bank effective 17 August 2018. This has been spoken about in the financial press for some time (for example, it was reported on in the Business Report on 16 January 2018) and according to reports is going live
in the first half of 2020. This bank is a start up created by First National Bank’s former CEO, Michael Jordaan and aims to further disrupt the market with its low cost digital offering.

On its Twitter Feed of 13 November 2019, @BankZeroSA says of itself “Not just another bank. These are core features that every serious bank who wants to sit at the global table should have. We’ve ticked these boxes, requirements critical to systemic stability. But then there’s differentiation – and that’s where the fun & future starts.”

It seems that this “fun & future” may get interesting.

One of the “requirements critical to systemic stability” is a strong brand. This is a basic element of “differentiation”. So, it is interesting to see in news reports on 14 November 2019 that First National Bank has launched its digital account, Easy Zero. It has rebranded its digital-only bank account “eWallet eXtra” and has now introduced a debit card to this account.

According to an article on on 14 November 2019, “the account will now more effectively compete with new banking entrants like TymeBank and Bank Zero, which are digital accounts that include a card for transactions.” On the face of it, Bank Zero and Easy Zero would seem to be directly competing services.

According to the South African trade mark office records, BANK ZERO was applied for as a trade mark in 2018 (in various forms and for various services). It has not been registered yet and the trade mark office records show that the trade mark office has called for a disclaimer of the word “Zero” from the application. If this becomes a condition of the registered trade mark, this means that BANK ZERO would not be able to claim exclusivity of the word ZERO.

First National Bank filed for EASY ZERO in 2019, in a few different forms and for a variety of services. These applications are still pending and as such it remains to be seen what approach the trade mark office will take to these applications.

According to the trade mark office, there are five other trade mark registrations or applications in the financial service class which include the word “ZERO”. Three of these are subject to a disclaimer of the word “ZERO”.

As such, it seems that there may be some uncertainty regarding the exclusivity or otherwise of the term “ZERO” for financial services. There are several different legal routes which can be taken, and it remains to be seen which of these will be chosen. But this is not an ideal situation from a legal, or, presumably, a marketing, perspective. Especially in the digital environment where clear branding is so important.

Leaving aside the obvious questions about why First National Bank would choose a mark so close to that chosen by its ex-CEO, this story does highlight the need from a trade mark law perspective to make sure that any chosen brand is distinctive and is original. It cannot be in any party’s interests to have potential confusion and dilution in the market of brands such as BANK ZERO or EASY ZERO.

When developing a brand, it is critical, from a trade mark perspective, to add a distinctive element to any generic mark and create an individual, unique trade mark. All companies starting up new brands must always be aware of this and must ensure that their marks are distinctive. It is critical that they do a comprehensive trade mark availability search and that they are fully aware of the legal trade mark landscape when adopting brands.

Creativity and originality are protected by the Trade Mark Act when a mark is registered as a trade mark. Choose a distinctive brand and the Trade Mark Act will protect it as it develops into an iconic brand.

Bruce Lister
15 November 2019