Eastern Cape tuck shop forced to drop Sun City name after trademark dispute

A small tuck shop in the Eastern Cape has been ordered to change its name after Sun International successfully challenged its use of the words “Sun City”.

The Companies Tribunal ruled that Sun City Tuckshop, based in Fort Beaufort, had used a name confusingly similar to the registered trademark of the company’s Sun City resort in the North West.

The order, issued on 28 September 2026, gives the business 60 calendar days from receiving the order to choose a new name and amend its company registration.

If it fails to comply, the Companies and Intellectual Property Commission can replace its name with its registration number.

Speaking on The Money Show, ENS intellectual property executive Craig Shapiro explained the case shows why even small businesses need to understand trademark law.

While the dispute may appear to pit a large hospitality group against a small local business, unauthorised use of a well-known brand could create genuine commercial risks.

“This tiny little tuck shop can do serious harm to Sun International and the rights that they’ve acquired,” he said.

The dispute centred on whether the tuck shop’s registered company name breached the Companies Act.

The Act restricts company names that are identical or confusingly similar to registered trademarks belonging to other parties, unless the trademark owner has consented in writing.

Sun International argued that “Sun City” was the dominant and memorable part of the tuck shop’s name and that its use could make customers believe the businesses were connected.

The tribunal agreed and held that the names sounded the same when spoken aloud and that adding the words “Tuckshop” or “Spaza Shop” did not sufficiently distinguish the business from the established Sun City brand.

The tuck shop did not oppose Sun International’s application after attempts to resolve the dispute amicably failed.

Shapiro explained that trademark protection can take precedence over company-name registrations, domain names and social media accounts where conflicting rights arise.

He also said the fact that the businesses operate in different industries was not decisive in this case. The Companies Tribunal considered whether the registered company name complied with the Companies Act.

They were not deciding a conventional trademark infringement dispute between two businesses selling competing products.

Trademarks are territorial, which means protection generally applies throughout South Africa rather than only in the immediate area where a business operates.

As such, the distance between Fort Beaufort and Sun City does not automatically protect the tuck shop from a challenge.

The risk of damaging a well-known brand

Shapiro said trademark owners must consider not only whether consumers could confuse two businesses, but also whether uncontrolled use could dilute or damage the original brand.

In this case, Sun International argued that the unauthorised use could harm the resort’s reputation because it had no control over the quality of the tuck shop’s goods or services.

If customers incorrectly associated the two businesses, a negative experience at the shop could affect their perception of the resort.

Shapiro said this type of risk can arise even when customers do not necessarily believe that a famous brand has opened another business.

Trademark law provides protection against certain forms of dilution, tarnishment and unfair advantage of a brand’s reputation, depending on the circumstances.

Shapiro said Sun International faced a difficult choice. They could either take action and risk being criticised for targeting a small business, or allow the name to remain in use, potentially weakening their control over the brand.

“If they don’t stop this uncontrolled use, at a certain point, you reach the tipping point where they no longer own their own brand,” he said.

He also referred to the concept of “genericide”, where a trademark becomes so widely used as a generic description that it loses its distinctiveness. Xerox and Kleenex are examples often discussed in this context.

Shapiro said the concern is that allowing multiple businesses to use the same distinctive name could gradually undermine the trademark owner’s ability to control how the brand is used.

Message for small businesses

Shapiro said the dispute shows the importance of checking whether a proposed business name is available for use before investing in branding.

Entrepreneurs may register a company, buy a domain, open social media accounts and pay for signage without first checking whether another business owns conflicting trademark rights.

However, registering a company name does not necessarily give the owner the right to use it if it conflicts with an existing trademark.

Businesses may end up in a situation where they are taken to court over their name and forced to pay legal fees, which can be expensive. However, this isn’t the only risk they face.

A business may have to change its name, replace signs, update marketing materials, remove branded products or address domain-name disputes.

For an online business, losing access to a domain name or social media account could also disrupt its ability to reach customers and generate sales.

“From the entrepreneur’s perspective, there’s potentially major financial harm,” Shapiro explained.

He added that the problem often stems from a lack of awareness about intellectual property rights among South African entrepreneurs.

Before settling on a name, business owners should search existing trademarks and company names and obtain professional advice where there is a potential conflict.

They should also consider whether the name could create an impression of association with an established brand.