WOMEN MATTER AFRICA REPORT

McKinsey’s been studying the impact of women in leadership roles for more than a decade and recently released the findings of its first African survey. The Women Matter Africa report is based on the financial performance of 210 publicly traded companies across 14 African stock exchanges. It includes an analysis of women’s Cabinet appointments from 2000 to 2015, as well as an organisational analysis of gender diversity in 55 African companies.

It shows that organisations with a greater number of women directors on their boards had higher operating margins, returns on equity and total returns to shareholders. In particular, it proves that the earnings before tax and interest margin of companies with at least 30% of female board directors were at least one-fifth higher than industry averages.

“Companies with a greater number of women in leadership positions tend to manage risk better – they’re less likely to overpay when they make acquisitions, for example.  And women leaders help companies relate to their customers better, as a company with greater gender diversity is better positioned to understand the needs of its female customers,” states the report.

According to the report, how do women enhance decision making?

  • They offer openness to new perspectives. Research shows that male board members rely more on normative reasoning – ie, they prefer making decisions based on rules, regulations and traditional ways of doing business. Women are more likely to ‘rock the boat’. They can be more open to new ideas and a broader set of solutions.
  • They collaborate and are inclusive. Women are more likely to co-operate, collaborate, build consensus and take into account the interests of multiple stakeholders.
  • They present strength in ethics and fairness. On average, women score more highly than men do on complex moral reasoning tests, suggesting they’re more likely to make consistently fair decisions when competing interests are at stake.

STATS AT A GLANCE

  • In Africa, 5% of CEOs are women. This figure is 4% in Asia, 3% in Europe, 2% in Latin America and 5% in the USA.
  • Women occupy 14% of director positions in Africa, 10% in Asia, 18% in Europe, 6% in Latin America and 17% in the USA.
  • 29% of senior managers in Africa are women.
  • 36% of promotions in Africa go to women.

Subconscious biases

The report identifies a number of obstacles to the advancement of women. The “performance evaluation bias” shows that men are generally evaluated more on their future potential, while women are measured by what they’ve achieved to date. Women are also given less credit for career successes and are criticised more for failures. “The resulting lack of confidence means women are less likely to put themselves up for promotion. There’s also a maternal bias: motherhood triggers assumptions that women are less committed to their careers. As a result, they tend to be held to higher standards and offered fewer leadership opportunities.”

The report offers three ways to drive gender diversity:

  • Set targets and key performance indicators (KPIs) for women’s representation in leadership and the broader workforce and review these targets regularly. Experience elsewhere shows that companies with formal gender diversity commitments increase female representation in the corporate pipeline fastest, while those with no formal commitments actually lose ground over time.
  • Establish a culture of accountability. Each target should be assigned an “owner”, ideally a senior executive who reports directly to the CEO and is seen as a credible proxy in terms of intention and authority. The targets could be incorporated into the KPIs of each senior executive and reinforced by performance incentives.
  • Lead communications on the gender diversity strategy. It’s the CEO’s role to communicate to employees the strategy to increase women’s representation and inspire them to help bring about change. Face-to-face communication – town halls or networking events, for example – create a real dialogue and assure employees that leadership commitment is strong.

ABOUT ADAMS ON AFRICA | ISSUE 1

This article is part of a new quarterly digital publication, Adams on Africa. The publication aims to provide you with the necessary information and updates on developments in business and the law in Africa. We welcome your feedback. Articles in this issue:

A NEW CONVERSATION ON AFRICA

AFRICA REGIONAL REPORT

CHAPTER 9: THE POWERS OF THE PUBLIC PROTECTOR

DISSECTING THE NEW IP CONSULTATIVE FRAMEWORK

HOW OIL PRICES IMPACT AFRICA

ADDLED BY THE INTERWEBS

AFRICA’S LEADING LADIES

BANKING ON THE MAPUTO CORRIDOR

TOURISM – A MARKET OF OPPORTUNITIES

PHILANTHROPY’S PURPLE RAIN

PURE WATER ON TAP

 

EXPLORING THE MAPUTO CORRIDOR

Often referred to as one of the most successful initiatives of its kind in Sub-Saharan Africa, the Maputo Corridor is a short, but extremely busy trade route with annual revenues exceeding R25 billion.

An estimated four million people, 700 000 vehicles and 80 000 trucks cross the Mozambique-South Africa border annually. The corridor boasts some of the continent’s most effective public-private partnerships with R7 billion being invested into the road infrastructure and the rehabilitation of the rail line from Ressano Garcia to Maputo (completed in 2008). This was accomplished with significant investments in excess of $80 million. A 20-year master plan will also see close to $2 billion invested in port growth and development to service the demands of the region with a throughput of 48 million tons by 2033.

Covering a distance of 590 kilometers by road and 581 kilometers by rail, The Maputo Corridor is a transport route linking the east coast of Maputo in Mozambique with the industrialised and productive regions of Gauteng and Mpumalanga provinces in South Africa. For South African exporters in the Gauteng region it is the shortest route to a port, exporting a variety of commodities including coal, timber, agricultural produce, granite, chrome, cement, steel, magnetite, sugar, maize, gasoline, pulp, fertiliser and citrus. The key elements of the corridor are the N4 toll road, the rail corridor, the Lebombo/Ressano Garcia border post and the port and terminal facilities at the Port of Maputo. The Port of Maputo provides the shortest access to the Indian and Far Eastern markets and complements the South African regional port hubs in a multipurpose port of 15 terminals.

The Maputo Corridor was already a major trade route in the past but deteriorated during the years of unrest in Mozambique. In order to re-establish trade and investment ties to rebuild their flailing economies, the governments of South Africa and Mozambique launched the Spatial Development Initiative programme in order to rehabilitate and maximise investment in the corridor.

WHEN IN MAPUTO

Tips for the business traveller when working in and exploring Mozambique’s vibrant capital

Time: Maputo is GMT+2 and has no Daylight Saving Time.

Currency: The currency in Mozambique is the Metical, and banks and forex bureaus exchange all major currencies. In southern parts of the country some hotels accept South African rands, US dollars or pounds sterling to pay for accommodation. Credit cards are accepted at hotels, but carry cash for markets. ATM’s are easy to find.

Weather: Mozambique has a warm, tropical climate with an average temperature of 28°C. October to April is humid and very hot, while June to October is cooler. Maputo’s dry period is May to August.

Electricity: Electrical sockets are the round two-pinned type with a voltage of 220V.

Communications: The mobile networks give good coverage and local SIM cards can be bought at the airport. Most premium hotels offer free internet access, and there are some internet cafes.

Public transport: Taxis are the most reliable form of transport and there are ranks outside most of the top hotels. Fix the price upfront because they’re not metered.

To and from the airport: Maputo International Airport, also known as Lourenço Marques or Mavalane, is 3km from the city. Taxis are available, and hotels can arrange shuttles for guests.

3 TOP BUSINESS HOTELS

The grande dame of Maputo, the Polana Serena Hotel, was built in 1922. A refurb refreshed the hotel while maintaining its old-world charm. Do try the seafood and sushi at the Aquarius Sushi Bar, or indulge in the famous high tea. Services and amenities include a health club and spa, swimming pool, residents’ lounge, business centre,  beauty salon, three gift shops, and a conference and events area, including a ballroom. http://www.serenahotels.com/serenapolana/default-en.html

The Southern Sun Maputo is a gem right on the beachfront. With good service, great food and authentic Mozambican hospitality, it attracts a number of business and leisure travellers. Services and amenities include complimentary high-speed wifi, a fitness centre, business centre, outdoor pool and restaurant, bar and conference facilities. https://www.tsogosun.com/southern-sun-maputo

The first of the Radissons to open in Mozambique, the beachfront Radisson Blu Hotel & Residence Maputo is a good destination for business meetings and only 7km from the airport. The on-site restaurant, Filini, serves classic Italian dishes and there are three on-site bars. There’s also free high-speed wifi, a fitness centre, outdoor swimming pool, three meeting rooms, conference room and a pre-function area. https://www.radissonblu.com/en/hotel-maputo

 

OUT AND ABOUT

  • Restaurant Costa de Sol is the spot for LM prawns and a sea view. Marginal Coast Road, Tel: 258 21 450 115
  • Portuguese wines, seafood and grilled chicken are recommended at Zambi, which has a great sea view. Tel: 258 84 3392 624
  • The trendy Tree House hosts barbecues and grills, and serves delicious caipirinhas. Avenida Francisco Orlando Magumbwe. Tel: 258 82 109 9368
  • For simple pasta, try Campo di Fiore and pop into Gianni’s ice-cream parlour next door. Jardim Dos Cronistas, Rua Rui de Pina, Sommerschield. Tel: 258 21497937
  • Enjoy a vibey bar and tapas at 1908: Avenida Salvador Allende, Tel: 258 21 321 908
  • For a chilled meal and Sunday jazz sessions, pop into Dolce Vita on Avenida Julius Nyerere.
  • Cocktail hour is best enjoyed at News Café in the Polana Casino. Avenida Marginal no. 5289.
  • A night on the town should kick off in Avenida Julius Nyerere, the main street through Maputo, which has a good selection of bars, restaurants and party spots within walking distance from each other.

ABOUT ADAMS ON AFRICA | ISSUE 1

This article is part of a new quarterly digital publication, Adams on Africa. The publication aims to provide you with the necessary information and updates on developments in business and the law in Africa. We welcome your feedback. Articles in this issue:

A NEW CONVERSATION ON AFRICA

AFRICA REGIONAL REPORT

CHAPTER 9: THE POWERS OF THE PUBLIC PROTECTOR

DISSECTING THE NEW IP CONSULTATIVE FRAMEWORK

HOW OIL PRICES IMPACT AFRICA

ADDLED BY THE INTERWEBS

AFRICA’S LEADING LADIES

BANKING ON THE MAPUTO CORRIDOR

TOURISM – A MARKET OF OPPORTUNITIES

PHILANTHROPY’S PURPLE RAIN

PURE WATER ON TAP

TOURISM – A MARKET OF OPPORTUNITIES

Tourism on the African continent is an industry full of opportunities where, with the right ingredients, it can only grow.

According to the United Nations World Tourism Organisation (UNWTO), between January and April 2016 there was 7% year-on-year increase in international tourism in Africa. What is also interesting about this data is that a large portion of the increased traffic is to Sub-Saharan Africa and even more specifically, to the SADC countries.

The world is a different place to what it was just 20 years ago. This is largely due to the growth of technology and its greater availability to a larger market. However, acts of terrorism in many first world countries have also played a part in the increasing numbers of international visitors to “untouched” areas on the continent and tourism hubs in Sub-Saharan Africa.

Some SADC tourism authorities believe that a UNIVISA, a visa that allows people to travel more easily from one country to another, especially to allow for access to multiple tourist attractions, would encourage the growth of tourism to an even greater extent. Francis Ngwenya, President of the Zimbabwe Council for Tourism (ZCT) believes the common visa approach is a positive step towards growing tourism on the continent. Zimbabwe and Zambia have tried the UNIVISA with some success and Ngwenya believes it would be beneficial to the African economy through support of free-flow tourism.

Jerry Mabhena, CEO of the South African Thebe Tourism Group, identifies another growth factor in the tourism industry: the continent’s growing black middle class as an economic bloc. Mabhena believes that investing in the correct marketing strategy for the emergent economic power bloc is a winning strategy for the tourism industry.

Finding a way to merge all the advantages presently at play is key to taking advantage of and ensuring the continued growth of African tourism.


ABOUT ADAMS ON AFRICA | ISSUE 1

This article is part of a new quarterly digital publication, Adams on Africa. The publication aims to provide you with the necessary information and updates on developments in business and the law in Africa. We welcome your feedback. Articles in this issue:

A NEW CONVERSATION ON AFRICA

AFRICA REGIONAL REPORT

CHAPTER 9: THE POWERS OF THE PUBLIC PROTECTOR

DISSECTING THE NEW IP CONSULTATIVE FRAMEWORK

HOW OIL PRICES IMPACT AFRICA

ADDLED BY THE INTERWEBS

AFRICA’S LEADING LADIES

BANKING ON THE MAPUTO CORRIDOR

TOURISM – A MARKET OF OPPORTUNITIES

PHILANTHROPY’S PURPLE RAIN

PURE WATER ON TAP

PHILANTHROPY’S PURPLE RAIN

A few years ago, the front page headline of the Wall Street Journal stated boldly “Charity Brawl: Non-profits Aren’t So Generous When a Name’s at Stake” referring to the stinging criticism received by a celebrated charity for enforcing their rights over part of their name.

The palaver prompted a retort from Dan Pallotta, a renowned philanthropist who’s evangelical about the need to change the mindset of how we see charity, and for charities to change their perception of themselves. His response was followed by an insightful article published in Boston College Law Review by Lauren Behr entitled Trademarks for the Cure: Why Non-profits Need Their Own Set of Trademark Rules.

In short, the Wall Street Journal and its commentary illustrated the difficulties of protecting a brand name built up through sheer hard work in the philanthropic space, both from a legal and PR point of view. Without the brand, the philanthropic’s ability to communicate, mobilise and, ultimately, do good, can be severely compromised. Yet protecting it could threaten the integrity of the philanthropic altogether.

As Pallotta said in his response, referring to a reaction when his business decided to take legal action against another charity: “To say that public reaction was vitriolic would be an understatement. To give you a flavour, one anonymous critic wrote to me that I was evil, adding: ‘No wonder your partner killed himself.’ My partner had committed suicide a year-and-a-half earlier.”

It’s not just an issue in the US. Last year, the UK IP court adjudicated on who had rights in the name Open College Network and OCN between two educational charities. Prof Jeremy Phillips, respected IP academic, emotively describes the spat as: “The most perfect example of a disgraceful waste, of utter stupidity in branding and squandering of charitable funds for no constructive purpose. While I am a keen supporter of charities in general, and educational charities in particular, I would be most reluctant to see so much as a penny’s worth of my hard-earned cash go to any charity that adopted a logo as confusingly similar to that of another charity, whatever its alleged reason or justification.”

The lethargic but acrimonious fight between the WWF (wrestlers and the wildlife fund) over the last decade has been well documented and, in Romania recently, an international charity offering guidance and assistance in the areas of religion and relationships had to step in and protect its Alpha trade mark against Alpha Clinics. In Israel, a recent decision not to recognise the goodwill in a charity because it was not “in business” illustrates some of the thinking Pallota is guarding against and, closer to my own home, the position is no different.

Not long ago, it wasn’t possible to register a trademark in South Africa for a charity because trademarks had to be capable of being used in trade, and a charity was not considered a trade. This has changed, but there still exists a responsibility for the charity to police and protect the trademark. The National Lottery Board’s failures to manage the use of its trademark by others led to a Supreme Court of Appeal decision in 2009, invalidating its “lotto” trademark for becoming generic. The repercussion of this decision may well be that someone is gaming with a different lotto on the assumption that some of their funds are going to a charity.

This is why Behr, in her article, advocates for greater protection for trademarks in the non-profit sector because “the work of these organisations affects the greater public, as well as both potential donors and recipients”. I would agree with that.

So how exactly does one protect a brand in the philanthropic space?

Well, traditional forms of IP protection should be considered not only in protecting the brand, but also the creativity and innovation within the non-profit. Care should be taken in deciding where to house the IP because of the possible tax and structural challenges and advantages in using a non-profit or trust. Vigilance and deftness should be key in communicating, licensing and enforcing IP both from a legal and PR point of view. One needs to remember that the philanthropic may be in the business of giving, but that does not mean it’s for others to take.

It’s time for the non-profit brands, especially in the philanthropic space, to step out from the purple rain.


ABOUT ADAMS ON AFRICA | ISSUE 1

This article is part of a new quarterly digital publication, Adams on Africa. The publication aims to provide you with the necessary information and updates on developments in business and the law in Africa. We welcome your feedback. Articles in this issue:

A NEW CONVERSATION ON AFRICA

AFRICA REGIONAL REPORT

CHAPTER 9: THE POWERS OF THE PUBLIC PROTECTOR

DISSECTING THE NEW IP CONSULTATIVE FRAMEWORK

HOW OIL PRICES IMPACT AFRICA

ADDLED BY THE INTERWEBS

AFRICA’S LEADING LADIES

BANKING ON THE MAPUTO CORRIDOR

TOURISM – A MARKET OF OPPORTUNITIES

PHILANTHROPY’S PURPLE RAIN

PURE WATER ON TAP

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Darren olivier

Partner
Attorney

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PURE WATER ON TAP

In the wake of winning the Sunday Times Top Brands award in the petrol station category for the sixth consecutive year, Engen is continuing to roll-out signature convenience offerings across its network.

A leading producer and marketer of fuels, lubricants and oil-based products, Engen also provides associated convenience services, including fast food and restaurant partnerships, Wi-Fi, Butcher’s Best Biltong Bars and Pure Water on Tap water bars.

After a successful pilot at four forecourts, the company plans to roll out Pure Water on Tap nationally. Established in response to customer demand for affordable, quality water, customers can either refill their own bottles at the water bars or purchase pre-filled supplies at reduced rates. The water bars account for approximately 35% of total water category sales at the pilot sites, and that number is growing. The end product provides health benefits as pure water is forced across a membrane, leaving impurities behind.

According to Engen’s Retail Business Manager Seelan Naidoo, “A refill using your own bottle will cost around R1 per litre. So a customer who brings in a 5L bottle will only pay R5 to top up. Purchasing a pre-filled bottle also sells at a lower price. A 500ml prefilled bottle costs around R4.50.”

Customers have the option of buying pre-filled bottles of pure water in 500ml, 750ml, 1L and 5L containers or topping up their 5L, 10L, 20L, and 25L bottles.

In addition to the consumer benefits, the water bars are environmentally friendly and promote water conservation. For every litre purified, there is an additional two litres of water that can be recycled and used by dealers as grey water, and stored in tanks; a move that will reduce the company’s carbon footprint.

Engen’s Sales and Marketing General Manager, Joe Mahlo says, “As South Africans grapple with water quality, restrictions, drought and water constraints, we believe that our Pure Water On Tap offering is one way in which our customers can access good quality fresh water at affordable prices.  In a small way, this concept assists customers in mitigating a dry future and activates a conservation mind set while also cutting back on costs.”


ABOUT ADAMS ON AFRICA | ISSUE 1

This article is part of a new quarterly digital publication, Adams on Africa. The publication aims to provide you with the necessary information and updates on developments in business and the law in Africa. We welcome your feedback. Articles in this issue:

A NEW CONVERSATION ON AFRICA

AFRICA REGIONAL REPORT

CHAPTER 9: THE POWERS OF THE PUBLIC PROTECTOR

DISSECTING THE NEW IP CONSULTATIVE FRAMEWORK

HOW OIL PRICES IMPACT AFRICA

ADDLED BY THE INTERWEBS

AFRICA’S LEADING LADIES

BANKING ON THE MAPUTO CORRIDOR

TOURISM – A MARKET OF OPPORTUNITIES

PHILANTHROPY’S PURPLE RAIN

PURE WATER ON TAP

KENYA RULING GIVES PARTIES TO TRADE MARK OPPOSITIONS A SECOND BITE AT THE CHERRY

A recent decision in Kenya means that parties in opposition proceedings can file evidence at any time before a ruling is made, even after all of their submissions have been made, effectively affording parties multiple chances to file evidence.

In Republic v Assistant Registrar of Trade Marks ex parte Strategic Industries Limited and another [2006] eKLR, the High Court in Kenya was petitioned by way of judicial review to determine whether the Registrar of Trade Marks, the Respondent in this case, had correctly exercised its discretion in allowing the filing of further evidence in an opposition to a trade mark application after the parties had made all their submissions and pleadings had closed.

By way of background, the Applicant in the High Court Case, Strategic Industries Limited (“Strategic”), had formally opposed the registration of the trade mark FREEDOM which was applied for in the name of Rebecca Fashion (Kenya) Limited (“Rebecca”), which was also an interested party to the proceedings before the High Court. After the Registrar of Trade Marks had issued confirmation of a date for handing down the decision in the opposition, Rebecca made application in terms of Rule 52 of the Trade Mark Rules for leave to adduce further evidence in support of its case. Rule 52 states that in any proceedings before the Registrar, he may at any time give leave to either party to lead any evidence upon such terms as to costs or otherwise as he may think fit.

Naturally, the application was opposed by Strategic. However, the Registrar of Trade Marks found in favour of Rebecca and granted it leave to file additional evidence. The High Court case emanated from this decision of the Registrar of Trade Marks.

Strategic argued that the Respondent could only exercise its discretion in terms of Rule 52 to allow for the filing of further evidence before the hearing or adjudication of a matter. Rebecca conversely made the arguments that:

  1. the filing of further evidence at that stage did not determine the parties’ rights, as Strategic would still have the opportunity at the main proceedings to contest the evidence filed;
  1. at the conclusion of the proceedings, Strategic still had the right to appeal against the decision reached in the opposition based on points of law; and
  1. if the High Court interfered with the decision of the Registrar of Trade Marks at that point, it would be interfering with the powers of an independent party and it would effectively be operating as a trial and appeal court presiding over the same issues.

The High Court agreed with the arguments made by Rebecca and found that Rule 52 allowed the Registrar to grant leave to file additional evidence at any time. Indeed, this is the wording of Rule 52. In addition, it held that the issue whether the Registrar had exercised its discretion correctly was one for determination by appeal rather than judicial review as it goes to the merit of the decision. Judicial review, the court found, rather dealt with the lawfulness of a decision. The decision confirms the position that a court on judicial review will not interfere in ongoing proceedings before an administrative body, unless those proceedings are unlawful.

The decision also extends the interpretation of Rule 52 of the Trade Mark Rules to mean that, in matters before the Registrar of Trade Marks, parties can make application to file further evidence even after final submissions have been made, but provided that a ruling has not yet been issued.

By

Kelly Thompson | Partner

Kim Rampersadh | Senior Associate

KELLY THOMPSON

Partner & Chairperson of Trade Mark Litigation
Trade Mark Attorney

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KIM RAMPERSADH

Senior Associate
Attorney

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CAN AN EMPLOYER RECOVER DAMAGES FROM EMPLOYEES?

In an employer-employee relationship it often happens that an employee violates his employment agreement in a manner that results in the employer suffering damages. For example, an employee performs his duties in a grossly negligent manner and the employer suffers a financial loss or an employee decides to quit without giving the agreed upon notice. If such a situation occurs, the employer is always left wondering whether it can proceed against the employee, and if so, how to proceed and whether, it can recover damages from the employee in question.

In South Africa, it is generally believed that South African labour legislation is overprotective of employees and offers little to no protection to employers. This is evident from the myriad labour statutes that protect the rights of employees in South Africa and the high rate of success of cases brought against employers. The misconception as to the protection offered to employers is well demonstrated in the case of Rand Water v Johan Stoop (JA 78/11) where counsel for the defendant argued that the Basic Conditions of Employment Act (BCEA), 1997 was designed to only permit claims by employees against their employers and not vice versa.

However, the court in the above matter held as follow:

“there is simply no warrant for interpreting the BCEA in a partisan manner. The BCEA benefits both employers and employees….The BCEA was designed to promote the right to fair labour practice which is available to everyone employees and employers alike. If the employee can claim damages for breach, so too can the employer, to suggest otherwise is to argue that this section is unconstitutional.”

Section 77(3) of the BCEA stipulates that ‘the Labour Court has concurrent jurisdiction with the Civil Courts to hear and determine any matter concerning a contract of employment, irrespective of whether any basic condition of employment constitutes a term of that contract.’

This provision of the BCEA clearly applies both ways and permits the employer to sue and recover from an employee damages caused by the employee, if the wrongful conduct constitute a breach of the contract of employment. Obviously, the normal principles of common law applicable to claims for damages will apply to such a claim.

For example, an employer will have to prove that it actually suffered damages or loss as a result of the breach of contract. The courts have wide powers in terms of the BCEA and may make any order considered reasonable on any matter concerning a contract of employment, including an award of damages. For example, the courts have upheld claims for payment of damages resulting from the repudiation of an employment contract by an employee, and a failure by an employee to work his full notice.

However, a claim for damages may not always be the simplest and most effective route for an employer to take and there are less acrimonious courses of action to pursue. For example, an employer may make salary deductions from an employee’s remuneration, to recover loss or damages only if such damages occurred in the course of employment and was due to the fault of the employee. For such a deduction to be in compliance with the BCEA, the employer must comply with a number of requirements, such as, the employer must follow a fair procedure and give the employee a reasonable opportunity to show why the deductions should not be made, the total amount of the debt must not exceed the actual amount of the loss or damage, and the total deductions from the employee’s remuneration must not exceed one-quarter of the employee’s remuneration in monetary terms.

Unfortunately, these formalities cannot be seen as mere guidelines and have to be complied with strictly. This was confirmed by the court in Shenaaz Padayachee v Interpark Books (D243-12) where the court stated that the BCEA confers a right on the employer to make deductions from an employee’s remuneration in respect of damages or loss caused by the employee but stipulates that this cannot be done unless the prescribed formalities are complied with. These prescribed formalities include an internal hearing to determine the liability of the employee and a written agreement by the employee to reimburse the employer in respect of the damages.

If the employee does not admit liability, and consequently, does not agree to the salary deductions the employer can proceed with court action and claim contractual damages. In this instance, the employer will rely on section 77 (3) of the BCEA as set out above and establish a case of breach of the relevant employment contract. The normal principles of common law applicable to claims for damages will apply to such a claim.

In conclusion, employers should not labour under the misconception that its employees are immune to civil action. In fact, the above principles clearly demonstrate that an employer can recover damages from an employee under Section 77(3) of the BCEA if the breach by the employee of his contract of employment resulted in damages or financial loss to the employer. It has also been established that an employer can recover damages by making deductions from an employee’s salary, subject, the formalities prescribed by the BCEA.

by Thami Khoza | Candidate Attorney

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Andre Visser

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A GOOSE EGG FOR A WILD TURKEY

An Australian court ruling on authorised use within a trade mark license agreement may affect South African brand owners.

The Federal Court in Australia recently handed down judgment in a protracted dispute between the ‘Wild Geese’ and ‘Wild Turkey’ brands in that territory. The court found that trade mark owners can lose their registrations if they fail to exercise proper control over their licensees – and provided much needed clarity on how Section 8 of the Trade Marks Act 1995 of Australia should be interpreted.

The judgment was handed down in an appeal by Lodestar Anstalt of a decision regarding the non-use of the ‘Wild Geese Wines’ and ‘Wild Geese’ trade marks owned by Campari America LLC. Lodestar sought to sell whiskey under the mark ‘Wild Geese’ and applied for the removal of the trade mark held by Campari on the basis of non-use.

Under Australia’s Trade Marks Act, a trade mark can be removed from the Register if it hasn’t been used for a period of 3 years and 30 days prior to any removal application, and the trade mark owner must show that the mark has been used by the owner or an authorised user (licensee) during the relevant period. Campari had entered into a license agreement with Wild Geese Wines producer, Mr. O’Sullivan.

In clarifying the Act’s definitions of ‘control’ and ‘use’ under the Trade Marks Act, the court had to decide to what extent a licensor must control the use of the trade mark for the licensee to be deemed an ‘authorised user’. In this case, while the agreement between O’Sullivan and Campari contained certain quality control provisions, they did not exercise any of the provisions before the non-use action was instituted.

The court held that ‘control’ means actual control in relation to the use of the trade mark. Besanko J, in delivering judgment stated that, “There must be control as a matter of substance. ‘Actual control’ is a question of fact and degree and will depend on the facts of the case. For example, a licence agreement may contain terms that set out in detail a quality standard to be achieved, and those details may be so extensive that it isn’t necessary for the registered owner to give further direction to the licensee throughout the term.”

“The Australian court’s decision has potential implications for owners of trade marks in South Africa and other African countries, and their licensees, in risk-proofing trade marks against removal for non-use,” says Partner with Adams & Adams, Kelly Thompson. “The South African Trade Marks Act contains similar provisions and refers to use by a licensee as “permitted use”. There is also a provision that allows for the cancellation of a trade mark where it has been used in a manner likely to cause deception or confusion. Uncontrolled licensing could lead to that. The reasoning applied in the Australian ruling may be relied upon in South African courts.”

Howard Rogers, also a Partner with Adams & Adams who specialises in licence agreements, says “Certain other countries in Africa contain specific provisions regarding quality control in their legislation and, where appropriate measures are absent from a licence agreement, it may be considered invalid. The Australian case has highlighted the importance of careful drafting of trade mark licences and ensuring that licence agreements contain explicit quality controls that are enforced meticulously.”

Contact Howard Rogers should you wish to discuss existing or future licence arrangements, or Kelly Thompson with queries regarding the non-use of trade marks in South Africa and Africa.

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HOWARD ROGERS

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KELLY THOMPSON

Partner & Chairperson of Trade Mark Litigation
Trade Mark Attorney

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MEET GAVIN NOETH | COMMERCIAL SPECIALIST

When Gavin Noeth isn’t tackling large-scale banking and finance structuring or advising on complex public private partnership agreements, then he is tasked with the gargantuan task of helping his wife raise two very busy 4-year old twin boys. “I think the latter is the more difficult one, “he laughs. “But it’s also the more rewarding ‘project’.”

Gavin is one of two ‘heavy-weight’ consultants – the other being Tim de Wet – to join the progressive commercial law team at Adams & Adams Attorneys this quarter – their aim: to mentor and assist the young, dynamic and ambitious groups under Commercial, Property and Litigation Chair, Grégor Wolter. The expanding commercial practice has an enviable track record and client base, with many luminaries and experts in the fields of administrative, public procurement, property, constitutional, competition law and litigation.

Noeth joins Adams & Adams after more than 20 years of commercial experience with both Norton Rose Fulbright and Cliffe Dekker Hofmeyr. He has built a speciality practice around mainly the financing of infrastructure projects, public private partnerships and South African export credit work; and has a strong background in a broad spectrum of industries such as energy, mining, commodities and toll roads.

Gavin hails from Pretoria and attended Clapham High School in the city before deciding to study law. He articled in 1990 at Bowman Gilfillan, did short stint at Arthur Andersen and returned to practice with Norton Rose Fulbright in Johannesburg “I am excited now to consult for a firm with such a great spectrum of expertise in commercial, property law and litigation,” he adds. “I see great scope for using my insight into banking and finance law to help grow the group at Adams & Adams.”

Added to Gavin’s general banking and finance law expertise, he has also been involved in advising private and public sector project sponsors and lenders (including development finance institutions) on financing of a range of projects. He has significant PPP and export credit (ECIC) experience, and dealings with the IDC and Development Bank of SA.

In welcoming Noeth to the firm, Grégor Wolter, partner, said “We have dealt on numerous occasions with Gavin and Tim over the decades and have developed a deep and sincere respect for the manner in which they have built their practices. So to have them on board to mentor our young Partners and assist us in providing direction for this burgeoning commercial department is a fantastic opportunity for us.”

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GAVIN NOETH

Specialist Consultant
Commercial Attorney

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NAMIBIA’S PRESIDENT SIGNS BIPA ACT

The Business and Intellectual Property Authority Act no. 198 of 2016  (“the BIPA Act”) was passed by Parliament and signed by President Hage Geingob during a public signing ceremony  on 12 August 2016.

The BIPA Act provides for the establishment of the Namibian Business and Intellectual Property Authority (“BIPA”), a central body for the registration, regulation and administration of businesses and intellectual property rights. BIPA has already been up and running for some time now under the Companies Act. The establishment of BIPA is intended to improve service delivery and the administration of IP rights and and company registrations in Namibia. The President has expressed his hope this will attract the attention of foreign investors.

One of the most important changes BIPA has introduced is the online registration of companies and close corporations through its website. It also appears that electronic patent applications will be possible soon.

The BIPA Act is welcomed by local practitioners but there are some concerns regarding the effective implementation of the Act. The Act is not yet in operation and is expected to come into force in March 2017 together with the new Industrial Property Act 1 of 2012, which is still awaiting Regulations. Questions related to the BIPA or intellectual property rights in Namibia may be directed to namibia@adamsadams.com

Kareema Shaik | Senior Associate

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Partner
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KAREEMA SHAIK

Senior Associate
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KELLY THOMPSON

Partner & Chairperson of Trade Mark Litigation
Trade Mark Attorney

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ARE CIPC ANNUAL FEE CALCULATIONS UNLAWFUL?

On 5 September 2016 the Companies and Intellectual Property Commission (the CIPC) issued a media statement (the Media Statement) stating that over 15 listed companies have been under disclosing or not disclosing their proper annual turnover values and, consequently, have not been paying the correct annual return fees to the CIPC.  This, according to the CIPC is an offence in terms of the Act and is punishable by a fine or imprisonment or both.

Section 33(1)(a) of the Companies Act, 2008 (the Act) requires all companies to file an annual return in the prescribed form along with the prescribed fee.

The fee referred to in section 33 of the Act is prescribed in Table CR 2B (Annexure A to the Regulations). In terms of this Annexure the fee for filing an annual return varies according to the company “turnover” and the time of the filing.  This begs the question as to how the “turnover” of a company should be calculated for purposes of determining its filing fee. This question becomes particularly relevant when calculating the “turnover” of a “holding company” as a “holding company” normally does not trade and usually has little or no turnover.

It appears from the Media Statement that the CIPC is of the opinion that the annual return filing fee in respect of a “holding company” is calculated based on the gross consolidated turnover of that company and its subsidiaries.  The CIPC is ostensibly relying on the Companies Regulations, 2011 (the Regulations) for this interpretation.  This view is backed up by Practice Note 1 of 2016 (the Practice Note), published by the CIPC in May 2016.

Both the Practice Note and the Media Statement state that Regulation 164(4) sets out what constitutes turnover for a company and a holding company and the method required to calculate turnover for the purpose of determining the correct annual return fee to be paid to the CIPC.

Regulation 164(4) states that the annual turnover of a “holding company” is the consolidated gross revenue of that company and each of its subsidiaries from income in, into or from the Republic arising from transactions or events such as the sale of goods, as recorded on the company’s most recent annual financial statements.

It is however clear from the wording of Regulation 164 that the Regulation applies in a completely different context and does not apply to the calculation of turnover for purposes of determining a “holding company’s” annual return filing fee.

Regulation 164 refers particularly to Section 175 of the Act (“administrative fines”), which requires the calculation of the turnover of a company in a completely different context, which context cannot be ignored.  The context of Section 175 is one in which the “holding company” has contravened a provision of the Act and a subsequent compliance notice and needs to be punished by way of a fine which must be calculated based on that company’s turnover.  Section 175 of the Act, however, presents a significant problem in relation to “holding companies”, as a company may not be fined more than 10% of its turnover for the period of the contravention in terms of Section 175(1)(b), whilst “holding companies” normally have little or no turnover.  This means that “holding companies” could technically not be fined in terms of Section 175 was it not for Regulation 164(4).  It therefore makes sense, in that particular context, for the turnover of the subsidiaries of a “holding company” to be taken into account for purposes of calculating the fine payable by a “holding company” and therefore it makes sense that the Regulation 164 caters for this.

However, in the context of determining the annual return filing fee payable by a “holding company” it makes very little sense to take the turnover of its subsidiaries into account, as each of those subsidiaries have to submit their own annual returns and, accordingly, would each have to pay their own annual return filing fees based on their respective annual turnovers.  Accordingly, if the “holding company” of those subsidiaries also have to pay an annual return filing fee based on the turnover values of its subsidiaries, this would constitute a duplication of payments by that particular group of companies.  In fact, considering the sliding scale in terms of which the annual return filing fee is determined under table CR 2B, the annual return filing fee payable by a “holding company” goes beyond mere duplication of payments also made by its subsidiaries, but actually exceeds the payments made by the subsidiaries.  It is clear from the manner in which Regulation 164 was drafted (read with the other provisions of the Act and Regulations which deal with annual returns and filing fees), that Regulation 164 applies exclusively to the calculation of turnover for the purpose of calculating “administrative fines” in terms of Section 175 of the Act.  This is clear in that the Regulation contains numerous cross-references to Section 175, whilst it contains no reference to Section 33 of the Act, nor to Table CR 2B or Regulation 30 in which filing fees are dealt with.  Had the drafters contemplated that Regulation 164 should apply to the calculation of filing fees, including cross-references to Section 33 of the Act, Table CR 2B or Regulation 30 would have been the obvious and easy thing to do.  Accordingly, there can be no reasonable inference, based on the wording of the relevant provisions of the Act and Regulations, that the provisions of Regulation 164 applies to the calculation of annual turnover for purposes of determining a “holding company’s” annual return filing fee.

Accordingly, a “holding company” should not be treated differently in relation to the determination of its annual return filing fee than any other company and in our view you are not entitled to base a “holding company’s” annual return filing fee on the consolidated turnover of that company’s subsidiaries.  A “holding company’s” annual return filing fee should be based on its annual turnover only.  In light of this, companies receiving notices from the CIPC should not blindly pay the alleged deficit but should obtain legal advice as to whether they are in fact required to pay.

by Sibusile Khusi | Candidate Attorney

Helgard Janse van Rensburg | Associate

André Visser | Partner

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ANDRE VISSER

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HELGARD JANSE VAN RENSBURG

Senior Associate
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SAFEGUARDING SA’s HERITAGE AND ARTISTIC RIGHTS

Excitement is building for the annual BASA Awards on 19 September 2016, jointly sponsored by Hollard & Business Day – and the only awards ceremony that acknowledges business support of and partnerships in the arts in South Africa.

The BASA Awards recognise and encourage excellence and innovation in the field of business support for the arts.  Imaginative, innovative, and cost-effective partnerships between business and the arts are highlighted, demonstrating the potential for synergy, the window of mutual opportunity, and the far reaching benefits for business, for the arts, and for all South Africans.

The awards are judged by an independent panel of judges and the results are audited by Grant Thornton. A specially commissioned work of art is given to the winning sponsor in each Award category.

The event is attended by captains of industry, BASA members, and members of government. Adams & Adams, a proud member of BASA has, with its diverse partnerships, become integral to the concept of shared value in the arts sector. “To some, the partnership between a law practice and multi-disciplinary creative platforms such as BASA, Design Indaba and the Loeries may seem rather tenuous,” says partner with Adams & Adams, Mariëtte du Plessis. “But to us this is an integral part of years of promoting and protecting the intellectual property and commercial rights of the flourishing South African creative industry.”

Adams & Adams is currently providing advice to the Department of Arts and Culture in respect of setting up a trust for the benefit of all artists, whether born in South Africa, naturalised or with established links to the country, and who are 70 (seventy) years or older. A trust deed has already been drafted for The Living Legends Legacy Trust.

Of the Trust’s purpose, partner André Visser says, “The intention of the Living Legends Legacy trust is to identify, capture, preserve, protect and promote the body of work of the trust beneficiaries; provide youth leadership or development programmes in the arts culture and heritage industry; and to preserve indigenous knowledge systems and cultural practices in the arts, culture and heritage, among many other objectives.”

Each year, the BASA Awards venue is selected based on its socio-cultural importance and the theme of the Awards for that year, relevant to the current socio-political context in South Africa at the time.  Examples of previous BASA Awards venues include The Constitutional Court Foyer, The Market Theatre, Johannesburg City Hall, the Wits Art Museum, Turbine Hall Newtown, and Hollard’s Villa Arcadia.

This year the BASA Awards are seeing the inclusion of an African focus in one of the award categories, stemming from BASA’s growing engagement on the African continent to support members with operations outside of South Africa’s borders. This falls within the Beyond Borders Partnership Award, which will be awarded to a global-level partnership that builds brand reputation and audience for both the business and an arts organisation across international borders. Another exciting addition is the Cultural Tourism Award, supported by Nedbank, which recognises business support of arts and culture projects which contribute towards the growth of communities and jobs, and support the opportunities provided by local tourism.

“Adams & Adams aims to further build and develop relationships between the firm, the creative industry and Africa’s rich reservoir of heritage in the arts, by providing continual legal support and advice,” add Visser.

Release by: BASA, Adams & Adams

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ANDRE VISSER

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Mariëtte du Plessis

Partner
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Nishi Chetty

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THE CURRENCY OF CERTAINTY

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South African intellectual property law firm Adams & Adams is hosting this year’s conference of the BRICS Intellectual Property Forum in London, UK on 21 and 22 November 2016.  The conference is co-hosted by Forum members Daniel Advogados from Brazil, Gorodissky and Partners from Russia, Remfry & Sagar from India and CCPIT from China.  This year marks the eighth successive year of the conference and the first time that it will be presented in London.

Leading individuals from Europe-based industry and top legal practitioners of the above firms will be presenting a conference programme that has been carefully drawn up for delegates to learn, first hand, of actual experiences and strategies in BRICS IP prosecution and litigation, as well as of the latest developments in IP law and practice in the BRICS countries.  The conference promises to equip delegates with clarity and greater certainty in relation to some of the nuances that are often encountered, and sometimes tend to give rise to uncertainty and frustration, in navigating the BRICS IP landscape.

In the current economic climate, the well-developed but still developing economies of the BRICS countries, compounded by the prominent rise of their middle classes, present impressive opportunities for investment in their emerging markets.  It has been reported that in China alone the middle class is expected to increase more than 5 fold in size between the early 2000’s and 2030, while India’s middle class is also on the rise, with an expected start of explosive growth toward the early 2020’s.  The exploitability of the opportunities available in the BRICS was best reflected by the recent periods of rapid economic growth, especially in Africa and China, particularly while quantitative easing was intensively implemented by some of the developed economies.  However, as of late and far too often, continuing availability of commercial opportunities in the BRICS countries may be forgone in light of an impression of legal and political uncertainty, and concomitant risk.  This is regrettable in a time in which money is cheap.

Intellectual property protection is, indisputably, a critical foundation for technology-based companies to address their risks in launching into new markets, none more so than the emerging markets of the BRICS countries.  Offering the currency of certainty in this regard holds more value than ever before.

To join the forum members at the BIPF Conference in London (21-22 Nov), take advantage of the early-bird registration by CLICKING HERE.

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DARREN OLIVIER

Partner
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Gérard du Plessis

Partner & Firm Chairman
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PHILIP PLA

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PIETER VISAGIE

Partner
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AN OMBUD FOR THE ADVERTISING AND MARKETING INDUSTRY

Section 82 of the Consumer Protection Act 68 of 2008 (“CPA”) allows the Minister of Trade and Industry to accredit industry specific ombudsman schemes, and to prescribe accompanying industry codes. To date, two industry ombudsman schemes have been accredited, namely the Motor Industry Ombudsman of South Africa (which enforces the South African Automotive Industry Code of Conduct), and the Consumer Goods and Services Ombud (which enforces the Consumer Goods and Services Code of Conduct).

On behalf of the South African advertising and marketing industry, the Advertising Standards Authority of South Africa (ASA) has approached the National Consumer Commission (“NCC”) with a proposed industry code, the Advertising and Marketing Industry Code of Practice (“the Industry Code”). The ASA has also requested accreditation as an ombudsman scheme in the advertising and marketing industry. The Industry Code was published for public comment in the Government Gazette of 26 July 2016, and interested parties have been invited to submit comments.

The Industry Code is designed to protect consumers against improper trade practices, and deceptive, misleading, unfair or fraudulent conduct in the marketing and advertising industry. It aims to ensure that all advertising and marketing in South Africa is informative, factual, honest, conforms to fair marketing practices and does not contravene any laws.

If the Industry Code is accepted, it will be compulsory for all advertising and marketing industry “participants or subscribers” to:

  • register with the ASA;
  • comply with the Industry Code;
  • place suitable notices on their websites and at their trading premises, advising consumers that they subscribe to, and are bound by, the Industry Code and providing the ASA’s contact details to consumers; and
  • contribute towards the funding of the ASA. It is proposed that a levy collection agency will be established for this purpose.

Advertising and marketing industry “participants or subscribers” is widely defined, and includes marketing and advertising agencies, media owners and their agents, media buyers and all other marketers and advertisers of goods and services in South Africa (such as retailers, suppliers, wholesalers, distributors, manufacturers, producers and importers).

Although the Industry Code overlaps, to a certain extent, with the ASA’s current Code of Advertising Practice (“ASA Code”), some changes were necessitated by the need to bring that Code in line with the CPA. The definition of “advertisement” has been given the meaning as set out in Article 1 of the CPA, but it has been made clear that editorial matter, for which no consideration has been given or received (such as news articles), does not fall within the definition of an advertisement.

The Industry Code appears to place more emphasis on consumer rights. Clause 1.4 of the Industry Code states that the Code:

specifically deals with the resolution of complaints of prohibited conduct and the failure to comply with required conduct in respect of advertising and marketing of goods and services to consumers as provided for and envisaged within the scope of the [Consumer Protection] Act”.

That being said, and similar to the ASA Code, the Industry Code provides a basis for dispute resolution between industry participants (i.e. competitor complaints), in addition to complaints between industry participants and consumers (i.e. consumer complaints). As is the current practice, consumers and organisations serving in the public interest will not be required to pay any fees when filing complaints before the ASA, or in subsequent appeal proceedings. Competitors will (or may) be required to do so.

The Industry Code’s complaints procedure overlaps with the current complaints procedure before the ASA. Initial complaints will still, in general, be considered by the Directorate, and appeals may be filed with the Advertising Industry Tribunal, Advertising Standards Committee or the Final Appeal Committee, as the case may be. The sanctions that may be imposed by these tribunals have been limited to (i) withdrawal or amending the contravening advert, (ii) submitting the proposed amendment(s) to the advert for pre-publication advice and (iii) ordering the advertiser to publish a summarised version of the ASA ruling in certain media. The Industry Code also provides that non-compliance with ASA rulings will be escalated to the NCC, and dealt with in terms of the CPA.

Only a few of the 19 general principles that are found in Section II of the ASA Code have been incorporated into the Industry Code, including those relating to truthful presentation and substantiation of claims, and the prohibition of misleading claims (which overlaps with Section 41 of the CPA, dealing with false, misleading or deceptive representations).

Many of the clauses in the ASA Code that often form the basis of competitor complaints before the ASA (including disparagement, imitation and exploitation of advertising goodwill) have been excluded from the Industry Code. In the circumstances, if the Industry Code is accepted in its current form, the grounds on which the ASA will be able to consider competitor complaints will be more limited.

Only some of the appendices to the ASA Code have been incorporated in the Industry Code, including those relating to alcohol advertising, the advertising of cosmetics, direct marketing and environmental claims. Provisions dealing, specifically, with advertising for slimming products, foodstuffs and beverages, breastmilk substitutes, baby feeding bottles and teats and collective investment schemes have been excluded from the Industry Code. Furthermore, Section III of the ASA Code, which sets out advertising requirements relating to specific categories of goods, services or other activities (such as the advertising relating to charitable causes,  property, cell phones, and the rental of televisions and other domestic appliances) have also been excluded from the Industry Code. These exclusions from the Industry Code are, presumably, due to the fact that the advertising and marketing of those goods and services are regulated in terms of other legislation, and should be enforced by other suitable bodies or Government departments.

As many of the important clauses in the ASA Code have been excluded from the Industry Code, it appears that, in certain instances where the ASA has been an appropriate dispute resolution forum in the past, other suitable Tribunals may have to be approached in the future. That being said, it remains to be seen which amendments, if any, will be made to the Industry Code before it is finalised and accepted.

Interested parties have until 20 October 2016 to submit comments to the Industry Code. After this date, the NCC will consider the submitted comments, and consult with relevant industry participants. The NCC may then revise the proposed Industry Code, to the extent that it deems this necessary, before making recommendations to the Minister of Trade and Industry relating to the recognition of the Industry Code, and the accreditation of the ASA as an ombudsman scheme in terms of Section 82 of the CPA.

Jeanette Visagie | Associate

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THE GLOBAL PATENT PROSECUTION HIGHWAY

The Global Patent Prosecution Highway (GPPH) was launched on 6 January 2014 with the express intent of allowing patent applicants to request accelerated examination at any and all patent offices involved in the pilot programme. In ‘Born to be trialed’, IPProPatent investigates how the pilot programme has fared, and speaks to Adams & Adams Partner and Head of Africa Patents, Nicky Garnett, about the situation in Africa. Click here to read the FULL ARTICLE.

Extract :-

Highway to nil

Nicky Garnett, head of Africa patents at Adams & Adams, sheds some light on the concerns and issues that certain African countries might have with global patent projects such as the GPPH. “There is no such thing as an ‘African Patent’, she says, explaining that the continent doesn’t benefit from its own European Patent Convention model.

“We do have two regional systems in Africa, namely the African Regional Intellectual Property Organization (ARIPO) and the African Intellectual Property Organization, better known as its French name the Organisation Africaine de la Propriété Intellectuelle (OAPI).”

“Africa has 18 states which can be designated in an ARIPO patent application and OAPI has 17 member states. Both systems cater for English as a working language.”

“In addition, unlike a European Patent, no validation process is necessary, so once a patent has been granted it has automatic effect in all designated states in the case of an ARIPO patent and all OAPI member states in the case of an OAPI patent.”

These systems allow for African patents to be relatively easy to acquire in multiple patent offices in the continent. Despite a large patent programme in Africa, Garnett says that the majority of countries in Africa “do not conduct substantive examination of patent applications”, and those that do can have “serious capacity issues.” Africa’s problems with large-scale patenting seem to be mainly in Africa’s largest economies, which aren’t part of either organisation and require separate filings in each jurisdiction, causing problems with capacity.

“In South Africa, where moves to introduce substantive examination are underway and training of examiners has recently begun, it is expected that it will take several years before the South African Patent Office is able to effectively examine applications in all technical fields.” Citing Egypt as an example, Garnett says that its current PPH deal with Japan is the first step towards confidence in the GPPH in South Africa. But there are many countries left in Africa that are concerned about their registration type systems. Most are content with existing systems and, apart from those that have already introduced some form of examination, it seems there is little desire to change the status quo.

Extract courtesy of IPProPatent.com

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NICKY GARNETT

Partner & Head of Africa Patents
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ROBERT McBRIDE v MINISTER OF POLICE

In another victory for the constitutionally established institutions, the Constitutional Court struck down legislation offending IPID’s independence and set aside the Minister of Police’s suspension of Robert McBride today. A copy of the judgement is available HERE.

Constitutional Court Media Summary

Robert McBride v Minister of Police and Another. CCT 255/15

Today the Constitutional Court handed down judgment in a matter concerning the constitutional validity of statutory powers of the Minister of Police to unilaterally suspend and institute disciplinary proceedings against the Executive Director of the Independent Police Investigative Directorate (IPID).

The applicant, Mr Robert McBride (Mr McBride), the Executive Director of the IDIP, was suspended pending disciplinary action by the first respondent, the Minister of Police (the Minister) pursuant to the provisions of, among others, the IPID Act. Mr McBride became responsible for a publicly controversial IPID investigation into the alleged involvement of Lieutenant General Dramat, the then head of the Directorate of Priority Crimes Investigation (DPCI) and Major General Sibiya, the provincial head of the DPCI, in the alleged unlawful rendition of four Zimbabwean nationals during 2010 and 2011. An initial report recommended that Mr Dramat and Mr Sibiya should be criminally charged with kidnapping and defeating the ends of justice. However in a subsequent report, endorsed by Mr McBride, it was recommended that no charges be brought against them – citing lack of evidence as the reason. Mr McBride was accused of unlawfully tampering with the report. The inconsistencies between the two reports prompted the Minister to suspend Mr McBride and initiate disciplinary proceedings against him. Disciplinary proceedings have been stayed by the Labour Court pending the outcome of this case.

The High Court emphasised that the independence of IPID is expressly guaranteed under section 206(6) of the Constitution. It held that this independence was not adequately protected by the relevant legislative provisions. The provisions were declared invalid to the extent of their inconsistency with the Constitution. As an interim measure, provisions from the South African Police Service Act (SAPS Act) – providing for parliamentary oversight of the removal of the head of the DPCI – were read-in to the IPID Act. The decisions of the Minister to suspend Mr McBride and institute disciplinary action against him were set aside. The latter order was suspended for 30 days, allowing Parliament a short period to institute action against Mr McBride under the provisions read-in from the SAPS Act, if it so decided. All of these orders were referred to the Constitutional Court for confirmation.

In a unanimous judgment, written by Bosielo AJ, the Constitutional Court confirmed the High Court’s declaration of invalidity and found that the dispute provisions undermined IPID’s constitutionally guaranteed independence. The Court emphasised the need to protect IPID from undue influence or political pressure by ensuring that t appropriate mechanisms for accountability and oversight are in place. This would include, among other things, security of tenure through parliamentary oversight. Public confidence in IPID’s ability to fulfil its duties is important the Court held, and as a result in addition to having actual independence, the Constitution also requires IPID to be perceived as independent. On remedy, the Minister’s intention that this decisions ought to be preserved, despite them being taken in terms of constitutionally invalid provisions, was rejected and found to be unsupported in law. The Minister’s decisions to suspend Mr McBride and take disciplinary steps pursuant to his suspension were set aside. However, since both parties were amenable, the order setting aside the Minister’s decisions was suspended for 30 days so that the process can be restarted with the necessary parliamentary oversight.

The above explanatory note is provided to assist in reporting this cause and is not binding on the Constitutional Court, any member of the Court or Adams & Adams.

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JAC MARAIS

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DR DANIE STRACHAN

The Partners, professionals and staff of Adams & Adams congratulate fellow partner and colleague, Danie Strachan, who was today conferred a Doctorate in Law at a ceremony at the University of Pretoria.

Strachan, who graduated from the University with an LLB (cum laude) in 2003, and was admitted as an attorney in 2006, examined the regulation of promotional competitions in South Africa in his doctoral thesis. In it, he considered the consequences of gambling and the need for and nature of regulation, as well the related marketing and consumer protection contexts. He also explored law relating to promotional competitions in New Zealand and Great Britain is in order to compare it to the South African position. Apart from examinations of the current regulation of promotional competitions in South Africa, the CPA and the Lotteries Act, and the self-regulation of promotional Competitions, Strachan also recommended solutions for the problems identified in the analysis of the relevant legislation. (A review of the thesis will be published soon).

Dr Strachan, a member of the Law Society of the Northern Provinces and a fellow of the South African Institute of Intellectual Property Law, is frequently asked to present talks and workshops on promotional competitions, consumer protection, data protection and other regulatory topics. He regularly writes press articles regarding these topics and has been interviewed on radio numerous times. His clients range from entrepreneurs and technology start-ups to well-known multi-nationals.Due to his background in intellectual property law, Strachan is also in a unique position to advise clients regarding the commercialisation of their intellectual property rights, and franchising in particular. He has advised numerous foreign franchisors in relation to their expansion into South Africa. He also assists clients with the drafting of franchise agreements and related documentation.

Compliance is another of Dr Strachan’s focus areas and he often assists clients to understand the regulatory environment. In particular, he provides advice on consumer protection as well as data protection and privacy, a burgeoning practice area in South Africa.

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DANIE STRACHAN

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NEW DESIGN ACT FOR ZAMBIA

Zambia has passed into law the new Industrial Design Act no 22 of 2016 repealing the Registered Designs Act of 1958. The new Design Act came into force on 6 June 2016. Some of the new provisions contained in the new Act are as follows:

  • Worldwide novelty requirements;
  • Grace period and exceptions in respect  of disclosure of the design in order to comply with novelty requirements;
  • Restoration of rights lost due to non-payment of  maintenance fees;
  • Amendment of a design application and
  • Opposition of design registration by 3rd party including the state.

The new Act also introduced changes in respect of the term of a registered design. The 1958 Act provided for a  registration term of  five years extentable upon payment of renewal fees for two further five year terms. According to the new Act, the term of registration is five years from the filing date renewable upon payment of renewal  fees for a further period of five years. Furthermore, while the 1958 Act made provision for foreign filing licence in respect of new foreign design applications by  a person ordinarily resident or domiciled in Zambia, the 2016 Act is silent in this regard.

For further updates, information and queries on copyright law, trade mark, patent and design filings in Zambia and across Africa, please contact africaip@adamsadams.com

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NICKY GARNETT

Partner – Head of Africa Patents
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NTHABISHENG PHASWANA

Partner
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ALL THE LOERIES® 2016 WINNERS

The Loeries® Creative Week™ Durban 2016 drew to a close on Sunday 21 August 2016 at the Durban International Convention Centre with a raft of awards honouring the best creative work in the Africa & the Middle East being presented, along with four special awards.

A total of 316 awards were handed out over the two nights selected from 3112 entries from 22 countries across the Africa Middle East region. There were eight coveted Grand Prix winners with Nando’s the big winner of the awards scooping two.

The full list of Grand Prix winners include:

  • Nando’s “Global Visual Identity System”, by Sunshine Gun
  • Tusker Lager’s “Team Kenya”, by Net#workBBDO
  • Channel O’s “Youth Day” by Black River FC
  • Nando’s “Chicken Run” & “Heartfelt Celebration of South African Design”
  • KFC’s ‘’The Everyman Meal’’, by Ogilvy & Mather Johannesburg
  • Saudi Telecom Company – STC, “1st Branded Online Entertainment Hub” by J.Walter Thomspon KSA
  • Chicken Licken’s “Kung Fu” by Network BBDO
  • Ster-Kinekor’s “#OpenEyes” by Fox P2

Commenting on the standard of work Jury President Laura Jordan-Bambach Creative Partner, Mr President London said, “We have seen some beautiful pieces of work that have the spirit of a very modern Africa and the broader region; very different to what you see elsewhere and it doesn’t feel like it was made in London or New York“.

The full awards are broken down as follows:

ALL Student Professional
Grand Prix 8 0 8
Gold 32 5 27
Silver 82 13 69
Bronze 121 21 100
Craft Gold 17 1 16
Craft Certificate 56 4 52

Judged by 160 local and international experts in their fields, including international jury presidents Bridget Jung (Sydney), Susan Credle (New York city) Jimmy Smith (Los Angeles) and Laura Jordan-Bambach (London), the coveted Grand Prix, Gold, Silver and Bronze Loeries® statues remain the industry benchmark for creative excellence.

The Adams and Adams Young Creatives Award went to Katie Mylrea, art director at Ogilvy & Mather Cape Town and Amori Brits, head of design at Shift Joe Public who each received R60,000 and a South African Airways flight to New York City. The Loeries® Creative Future Scholarship went to four young Kwa-Zulu Natal Grade 12 students, Londeka Gumede, Roxanne Schoon, Mali Khuzwayo and Samkelisiwe Faku to study at Vega School of Brand Leadership and the Design School South Africa.

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ADAMS & ADAMS NETWORK EXPANDS FURTHER IN WEST AFRICA

Adams & Adams continues to synergise and expand its African Network. Sub Saharan Africa’s largest intellectual property law firm, Adams & Adams, has established an Associate office in The Gambia which also services Liberia and Sierra Leone. This brings to 18 the number of associated offices in different African countries that form part of the Adams & Adams Africa Network (AAAN).

“Our focus has always been to add exceptional value to our clients’ experience. We target strategic associations with firms whose work ethic and standards mirror those of our own. At the heart of this approach is to enhance the experience for the client and to add a high level of comfort to client in knowing that the matter will be handled the same whether in South Africa or at our Associate firms. High standards are expected of our offices and we ensure continued adherence by a rigorous Due Diligence process that each associate firm must undergo. Our strategy remains to empower our associate offices by exposing them to our lawyers’ vast legal knowledge accumulated over the 109 years that Adams & Adams has been in operation.” Simon Brown, Partner and Chair of the Africa IP Committee.

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A&A ASSOCIATE OFFICE IN THE GAMBIA

A&A’s strategy has not only been to grow in Africa for the sake of expansion but to ensure any association is beneficial to its clients by aligning workflows leading to greater efficiency and more advantageous pricing to its clients. This new office continues to solidify the shift in Adams & Adams focus on Africa which began a number of years ago but gained traction and momentum with the emergence of the African economy’s growth potential.  In the past four years, Adams & Adams has also established associate offices in Kenya (2013), Nigeria and Ghana (2014) and Egypt, which also covers the other North African countries of Algeria, Libya, Morocco, Sudan and Tunisia, (2015).

As testament to its African influence and experience, Adams & Adams recently held its annual showpiece event, the Africa Network Meeting which took place at the Adams & Adams Head Office in Pretoria, South Africa from 11 – 12 August 2016. Now in its fourth year, this first of its kind event, continues to be the largest meeting of top IP practitioners and administrators in Africa.

Adams & Adams is an African institution and continues to be passionate about Africa and the role that IP will ultimately play in the sustained economic growth of the continent.

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A&A AND FACEBOOK TEAM UP FOR LOERIES STUDENT EVENTS

Facebook has announced its sponsorship of the Loeries Student Awards, celebrating the achievements of the next generation of creative professionals who will define creativity in a mobile-first world, and supporting the Adams & Adams Student Portfolio Day.

“Our sponsorship for 2016 is an opportunity to celebrate the young professionals who are telling rich, creative brand stories using our platforms. We believe creativity unlocks the power of technology and young people in the creative community especially are at an exciting place to craft beautiful and relevant work. Young creatives can play an important role in solving bigger problems by building or creating for mobile as more people become connected,” says Rob Newlan, head of Facebook Creative Shop EMEA.

“The Loeries Awards are about celebrating great ideas and increasingly the Facebook platform is a canvas to bring great ideas to life and share it with millions of people. We want to support the young talent that is redefining the rules of creativity by exploiting mobile, the most important medium of the generation. In South Africa alone, Facebook has more than 14 million active users, 90% of them on mobile,” adds Nunu Ntshingila, head of Facebook, Africa.

On 19 August, Facebook will support the Adams and Adams Student Portfolio Day, giving students the tools to build online creative portfolios, and promoting these to the industry using Facebook Canvas Ads. The Student Portfolio Day has become an important part of the Loeries Creative Week.

“It has become incredibly hard to distinguish oneself in the creative world. The Student Portfolio Day has become a forum for displaying fresh ideas, landing a job and staying in demand in today’s creative business environment. Choosing the right way to develop one’s talent is crucial, and too often young people are left with no support to develop their potential,” says Mariëtte du Plessis, senior partner, at Adams & Adams.  “It is always fantastic to be part of an initiative that sets out to nurture talented young creatives, and to be partnering with Facebook in this way.”

IP EDUCATION

Besides helping to promote the apprentice talent, the firm’s involvement is also concerned with educating students on the importance of protecting their intellectual property as they prepare to enter the market.

Du Plessis adds that as a nurturer and protector of the intellectual property of local creative works for over 100 years, the firm is a perfect fit with the world of the creative.  “Apart from showcasing their work, it imperative that students are also empowered by providing them with the necessary tools to prevent the devaluation of, and under-appreciation of, the commercial value of their work.   Only once they have embraced this concept do they realise that the protection of their endeavours is vital to their financial success.”

“Whether it’s copyright, design, patent, or trade marks – we believe these should be concepts which form part of the lexicon of the new generation of creatives.  We encourage anyone in need of assistance with protecting their work, to give us a call, drop us an email or just tweet us,” she adds.

Adams & Adams is the exclusive legal advisor to the Loeries, as well as being the sponsor of the Young Creatives Award.

For more on the Facebook events and sponsorship, click here (Courtesy BizCommunity)

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AFRICA NETWORK MEETING | BY AFRICA, FOR AFRICA

Delegates meet to analyse the state-of-play of Intellectual Property management and legislation on the continent.

 

Simon Brown with Guest Speaker, John Kani
John Kani addresses the Meeting
Gérard du Plessis (Chairman) with John Kani, Nicky Garnett and Simon Brown
Delegates of the 2016 Africa Network Meeting
Adams & Adams Partners, Lauren Ross, Darren Olivier and Lindie Serrurier
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What are we as professionals doing to preserve the legacies and intellectual capital of Africa? This was the question that renowned actor, director, writer and playwright, John Kani, asked the intellectual property law professionals who had gathered for the recently held 4th Africa IP Network Meeting at the offices of Adams & Adams in Pretoria. Kani, who was opening the Meeting as Guest Speaker, captivated the audience with stories of his upbringing and of his time in Hollywood – including his latest role as an African monarch in the Marvel Captain America film franchise.

“I was cast as an African monarch in a fictional North-African kingdom, and I asked them very nicely whether I could speak Xhosa instead of that ‘Tarzan’ dialect that Hollywood loves so much,” he jokes. “We need to think carefully about how we protect and advance our continent’s rich history, legacy and inherent intellectual property.” It was a sobering thought for the delegates. Adams & Adams has been particularly active in the area of Legacy Intellectual Property rights, with recent work being undertaken for the Steve Biko Foundation by Partner, Darren Olivier, and his team. READ DARREN’S AFRICA NETWORK BLOG ENTRY HERE. 

In welcoming the attendees, both Chairman, Gérard du Plessis and Partner, Simon Brown, stressed the importance of IP law professionals and IP administrators in sharing their experiences and updates on IP developments and legislations as the firm and its associated offices continue to develop best practice IP strategies for clients.

Then it was down to business as the Meeting discussed and debated industry matters such as IP commercialisation, the handling of opposition IP proceedings in multiple jurisdictions, and registry practices and search capabilities.

High on the agenda was the issues currently being experienced with the Madrid Protocol – a system of international registrations, administered by the World Intellectual Property Organisation (WIPO) that allows for the centralised registration and management of trade marks. Of the 37 African territories that are currently members of the Madrid Agreement / Protocol, only seven have properly “domesticated” the protocol through appropriate amendments to their national trade mark legislation, together with the implementation on enabling regulations. Speaking at a recent Madrid system think-tank at Adams & Adams, Partner, Stephen Hollis noted that “one of the core issues with the national applicability of IP treaties such as the Madrid Protocol is that additional direction, procedures and mechanisms need to be put in place, on a national level, to ensure that the national IP Office is equipped to deal with and process International Registrations and also how to deal with objections, oppositions and so forth. Even national trade mark legislation is not considered to be enacted properly until the so-called ‘enabling regulations’ have been promulgated. Enabling regulations supplement and complete trade mark legislation by formally determining the processes and procedures through which the provisions of the legislation can be practically implemented and fulfilled by the national trade marks office concerned.” DOWNLOAD THE LATEST ADAMS & ADAMS MADRID MEMORANDUM HERE.

Strategies to deal with Madrid, as well the current implementation of the Industrial Property Automation System (IPAS) system in registries across the continent, were also discussed; followed by regional updates from Associates from offices in Egypt, Ghana, Tanzania and Zimbabwe.

RISE TO THE CHALLENGE | CEO SLEEPOUT™ 2016

 

PLEDGE YOUR SUPPORT

On the 28th of July – the coldest night of the year – the both the Adams & Adams Chairman and COO will take part in the CEO SleepOut™ initiative. Leaders from every industry will sleep on the Nelson Mandela Bridge in an effort to raise funds and awareness around the plight of the homeless, and those who do not have ready access to education in South Africa. Gérard du Plessis (Chairman) and Dave Forbes (COO) have risen to the challenge and are leading our firm’s charge in raising money for the beneficiaries of the CEO SleepOut™. Visit the 2016 Sun International CEO SleepOut™ website and pledge your support by making a donation to Gérard and Dave today : CLICK HERE


RADIO INTERVIEW

Adams & Adams COO, Dave Forbes talks to Jacaranda FM about the significance of the firm’s involvement in the second Sun International CEO SleepOut™


BROADCAST INTERVIEWS

Adams & Adams Partner,  Darren Olivier chatting to Maggs on Media on eNCAnews about the ‪2016 Sun International CEO SleepOut™

Sun International CEO SleepOut™ discussion with Darren Olivier and Thuli Madonsela on CNBC Africa

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PRESS STATEMENT

ADAMS & ADAMS’ ATTORNEYS RETURN FOR ANOTHER SLEEPOUT™ FOR CHANGE

Firm accepts challenge as a Stakeholder Partner in the 2016 Sun International CEO SleepOut™

Leading intellectual property and commercial law firm, Adams & Adams, has proudly announced its participation, as Stakeholder Partner, in The Sun International CEO SleepOut™ for the second year in a row.

In making the announcement, Adams & Adams’ Chairperson, Gérard du Plessis explained the firm’s rationale for extending its involvement in the innovative campaign; “In a recent global CEO survey, more than three-quarters of the CEOs interviewed worldwide agreed that business success in this century would be defined by more that just financial profit. Big business can help solve some important problems in the world today, and I believe we have found the ideal platform and partner in The CEO SleepOut™ initiative – a drive that helps us balance our bottom-line objectives with the need for responsible business practices.”

As a Stakeholder Partner since the first CEO SleepOut™ in 2015, Adams & Adams has been profoundly involved in both the fundraising and outcomes aspects of the initiative. The firm’s involvement last year, which included participation by clients, suppliers, staff and partners alike, resulted in it raising a contribution of well over R500 000 – the third highest contribution of all participants.

“Adams & Adams’ participation as a Stakeholder Partner was invaluable in the setting up of The CEO SleepOut™ and it’s various divisions,” said SleepOut™ SA CEO, Ali Gregg. “Importantly, we have a group of people and corporates whose first responsibility is to the identified beneficiaries we support, and a group that understands the value of creating opportunities for donors to develop empathy with those they are assisting.”

“This is a significant movement for positive change on the South African landscape at the moment, and we are both humbled and thrilled to be a champion for the challenge again,” added Gérard du Plessis.

GOVERNMENT DECLARES THE CEO SLEEPOUT™ A PROTECTED EVENT

The Sun International CEO SleepOut™ Event is officially a ‘Protected Event’. Following an extensive application and thorough consideration, the Minister of Trade & Industry, Rob Davies, has declared the 2016 CEO SleepOut™ Event a protected event, under S15 of the Merchandise Mark Act 17 of 1941. This elevates the status of The CEO SleepOut™ Event to the equivalent of the 2010 FIFA World Cup South Africa™. It is the first time a non-sporting event has been declared a protected event.

The CEO SleepOut™ Trust satisfied government that the staging of the event is in the public interest, and that organisers have created sufficient opportunities for small businesses – in particular those from previously disadvantaged communities. In terms of the Act, the protected status gives the event special protection against ambush marketing which may occur by intrusion or association with the event. The use of certain marks are also prohibited. Specifically, no person may use a trade mark in relation to the event in a manner which is calculated to achieve publicity for that trade mark**, thereby deriving special promotional benefit from the event, without the prior authority of the organisers of The Sun International CEO SleepOut™ Event.

Through the application process, Stakeholder Partners and legal advisers to the Trust, Adams & Adams also confirmed a list of marks [VIEW] that are related to the event and that are covered by the SleepOut™ ‘s raised status. These marks include SleepOut, CEO SleepOut, CEO Cook Off, images related to the event, names of sponsors and beneficiaries as well as other distinctive features related to the event. Any contravention of this protected status is a statutory offence which could lead to imprisonment and/or a fine.

In announcing the confirmed status, Trust member and Adams & Adams Partner, Darren Olivier, said, “The raised status by government of this event not only affirms the philanthropic impact of the event in South Africa, but also the globally-recognised relevance of the CEO SleepOut.” The area of protection from ambush marketing by intrusion is a two kilometre radius of the location of the event at The Nelson Mandela Bridge. Otherwise, the area of protection is nationwide.

The CEO SleepOut™ and related events takes place on the evening of 28 July 2016. Over 200 CEOs, sympathy sleepers and students will brave the icy Nelson Mandela Bridge in an effort to raise more than R30-million for various designated charities and trusts. The South African Weather Service is forecasting that the overnight temperature will be as low as 4-degree Celsius, and a predicted 10-knot breeze will surely add insult to injury.

Leading intellectual property and commercial law firm, Adams & Adams, proudly announced its participation, as Stakeholder Partner, in The Sun International CEO SleepOut™ for the second year in a row. In making the announcement, Adams & Adams’ Chairman, Gérard du Plessis explained the firm’s rationale for extending its involvement in the innovative campaign; “In a recent global CEO survey, more than three-quarters of the CEOs interviewed worldwide agreed that business success in this century would be defined by more than just financial profit. Big business can help solve some important problems in the world today, and we believe we have found the ideal platform and partner in The CEO SleepOut initiative – a drive that helps us balance our bottom-line objectives with the need for responsible business practices.”

As a Stakeholder Partner since the first CEO SleepOut in 2015, Adams & Adams has been profoundly involved in both the fundraising and outcomes aspects of the initiative. The firm’s involvement last year, which included participation by clients, suppliers, staff and partners alike, resulted in it raising a contribution of well over R500 000 – the third highest contribution of all participants.

To pledge you support for The CEO SleepOut™, visit the WEBSITE to donate or to find out more about related events and initiatives.

ABOUT THE CEO SLEEPOUT™

The Sun International CEO SleepOut™ is part of a global movement, effecting positive social change for vulnerable and homeless communities. It asks current and future business leaders to spend a winter’s night on the streets, raising funds and empathy for the homeless, resulting in real change, around the world. Founded in Australia ten years ago, The CEO SleepOut™ is now a global initiative, with SleepOut™s taking place in Australia, New Zealand, Canada, the United States and the United Kingdom. It is leading the new wave of philanthropy and social entrepreneurship, where profits are being used for purpose, and leaders are inspiring others to find compassion and sustainable solutions for those who need it most.

The inaugural CEO SleepOut™ in South Africa took place in 2015, where 247 CEO and C-Suite members raised over R26million for Girls & Boys Town. In 2016, The CEO SleepOut™ is focusing on supporting education as a means to eradicate homelessness. On 28 July, C-Suite members, along with a colleague, student and matric learner with notable leadership qualities, will Rise To The Challenge and spend the night on The Nelson Mandela Bridge. The funds raised will be awarded to the 2016 Beneficiary Partners; ASHA Trust, Columba Leadership and the Steve Biko Foundation, all of whom work tirelessly to educate our youth. There is also a national call to action for the rest of the country to get involved; #SouthAfricaMustRise. Companies, universities and schools can SleepOut™ in solidarity at their own Sympathy, Student and School SleepOut™s.

For more information:
Visit: www.theceosleepoutza.co.za

**USE OF TRADE MARKS

The use of a trade mark includes:

a) any visual representation of the trade mark upon or in relation to goods or in relation to the rendering of services;

b) any audible reproduction of the trade mark in relation to goods or the rendering of services; or

c) the use of the trade mark in promotional activities, which in any way, directly or indirectly, is intended to be brought into association with or to allude to an event.

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AWARD RECOGNISES TRAILBLAZING JEWELLERY DESIGN COMPANY

Leaders of South African design were honoured on Saturday evening at the fourth annual Southern Guild Design Foundation Awards ceremony, held at Southern Guild Gallery in Woodstock, Cape Town. The awards acknowledge the industry’s top achievers as trailblazers in local design, manufacture, monetisation and innovation.

Pichulik, a bespoke range of accessories designed by Katherine-Mary Pichulik, was conferred the Adams & Adams Maker to Market Award. The award recognises artists or designers who tangibly understand the value of marketing, consumer interaction, packaging and delivery.

“A Design Foundation Award is one of the most prestigious accolades a South African design company can receive,” said Guild board member Trevyn McGowan. “It’s not solely about recognising immense success and awarding new talent – the awards are part of the foundation’s greater goal of supporting the industry and aiding in its global growth.”

Patent Attorney and Partner at Adams & Adams, Philip Pla, presented the Maker to Market Award to Pichulik. “South Africa’s rich heritage of solving problems and creating solutions is celebrated in the Southern Guild Design Foundation Awards, and as a leading IP firm with interests in protecting and commercialising our country’s design genius, Adams & Adams is proud to be part of this celebration of talent,” he said.

Pichulik’s elaborate jewelry items are regularly featured in global fashion titles, with Vogue Magazine naming her as one of Africa’s ‘top ten fashion brands to watch’ in 2015. “Besides being a trained artist, Katherine-Mary is also a qualified pâtissière,” added Adams & Adams Partner, Mariëtte du Plessis. “If thousands of reality cookery shows have taught us anything, it’s that a world-class pastry chef is able to take fairly humdrum ingredients and, with vision and attention to detail, synthesise them into a delicious dessert that everyone ‘just has to taste’!” Her patisserie skills have very obviously given Pichulik an advantage in understanding her market and product delivery.

Besides the award, Pichulik’s ‘sugar rush’ in jewellery design will also receive professional legal assistance from Adams & Adams, Africa’s leading intellectual property law firm. “Katherine-Mary’s products are already available in 14 territories across the globe, so it is imperative that we evaluate, protect and plan for the growth of the Pichulik IP portfolio,” says du Plessis.

Adams & Adams, South Africa’s largest Intellectual Property law firm, is a proud partner of the Southern Guild Design Foundation. For assistance and advice with trade marks, designs, copyright and patents, email mail@adamsadams.com

BUT FIRST COFFEE | NISHI CHETTY

Trade mark attorney and partner at Adams & Adams in Durban, Nishi Chetty, recently featured in the prestige community KZN magazines, theRidge and theCrest. The publishers have kindly allowed us to post the feature to our website.

Nishi is a fellow of the South African Institute of Intellectual Property. She qualified as a trade mark practitioner in South Africa in 2002 and was the first person of colour in South Africa to qualify as a trade mark practitioner. To read the interview with Nishi, click the image below:

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THE KING IV CODES | INSIGHTS

INTRODUCTION

The Institute of Directors in Southern Africa (IoDSA) published the draft King IV Report on Corporate Governance on 15 March 2016 and Sector Supplements on 11 May 2016 for public comment. These new draft codes are the next phase in the series of corporate governance codes produced by the IoDSA to guide and benchmark the required standards for corporate governance in South Africa. The latest draft codes are the fourth iteration of the codes since the King Committee was formed in 1992, led by former judge, Mervyn King, and are arguably one of the most drastic reinventions of the codes since their first publication in 1994. Download King IV™ Report

The King III Codes, the King IV’s predecessor, which came into effect on 1 March 2010, was published two years after the Companies Act, 2008 (the “Act”) was promulgated, but before the Act came into effect or its regulations adopted. The King III codes thus lacked insight regarding subsequent developments. In addition, whilst the King III Codes are progressive, they still followed a rule-based model of compliance and the controversial “comply or explain” approach. There have also been numerous global developments since the 2010 codes, such as the publication of the Codes for Responsible Investing in South Africa and the shift towards integrated thinking and reporting and the publication of the IIRC guidelines for integrated reporting and the work of the IRCSA.

The King IV codes aim to address these and other gaps and expand on the successes achieved in the King III, as well as bring the codes in line with global developments. As a proud partner and sponsor of this Report, Adams & Adams hosted a commentary session in Sandton recently. SEMINAR VIDEOS ARE AVAILABLE ON YOUTUBE

THE NEW DEVELOPMENTS 

One of the main goals of the King IV committee was to increase the accessibility of the codes and the simplicity of its principles. This can be seen in the consolidation of the previous 75 principles into 16 succinct outcomes (17 if counting institutional investors). In an effort to move away from compliance governance or the ‘box-tick approach’, the new codes also differentiate between principles and recommended practices and how these can be used to achieve sustainable outcomes. The maxim ‘comply or explain’, has been replaced with the new ‘comply and explain’. In this way, the new codes seek a more qualitative approach regarding compliance and disclosures, with adherence to the basic outcomes being assumed.

In respect of sustainable development, the King III made use of the ‘triple context’ or the ‘triple bottom line’ framework for reporting, the areas of reporting being the economy, society and natural environment. The new codes aim to steer away from the rigidity that this brought about. Rather, the new codes makes reference to the ‘six capitals model’ as the basis for sustainable development, adopting the recommendations of the IRCSA and the work of the IIRC. These six capitals areas are financial, manufactured, intellectual, human, social and relational and natural (environmental). Although not all will be applicable to every organization, to be relevant for reporting they simply need to be used, transformed or provided.

One of the major shifts the King IV aims to bring about is greater stakeholder inclusion in corporate decision making. This is in an effort to reinterpret who the directors in a body corporate serve. In the context of a Company, has largely been accepted to be the company itself (i.e. the shareholders as a whole) however, in doing so, directors were previously required to consider other stakeholders as well, such as employees, customers and the community. This has come to be known as the enlightened shareholder model. The King IV committee distinguish the new code’s position from this model, requiring that directors in the shareholder-inclusive model consider other stakeholders, not merely as instruments to serve the interests of shareholders but as having intrinsic value for board decision-making.

Director remuneration has been a long been a worldwide corporate governance problem, particularly in the post-2008 economic environment. Remuneration of directors is a key area which the King IV committee focused on. The previous codes required any remuneration policy be approved by a non-binding advisory vote of shareholders. The new codes require that both the policy and its implementation be approved by shareholders and where less than 75% approval is achieved for either the policy or the implementation plan, compulsory shareholder engagement is triggered. In addition, with a view to address the endemically large wage gaps between directors and employees, the new codes introduce the requirement that the remuneration committee, social and ethics committee and governing body consider and disclose measures put in place to attain fair remuneration, in the context of overall employee remuneration.

The social and ethics committee was a concept first introduced under the Act and the implementation into corporate governance structures has been slow. Currently, under the Act, this committee is voluntary for most private companies. The King IV codes argue that the committee’s functions goes beyond the statutory duties specified in the Act and extend into all aspects of ethics management in an organization, and beyond mere compliance. Rather than a ring-fenced ethics committee, the King IV codes also argues for greater integration and powers of the social and ethics committee in other areas of policy-making (such as the remuneration committee).

With the publication of the rule by the Independent Regulatory Board of Auditors on 4 December 2015, the King IV committee sought to align the King principles with the increased requirements for auditor independence. King IV therefore recommends that the audit committee oversee and disclose the appointment date of a company’s auditing firm, however does not go as far as recommending audit rotation. The codes also recommend that the audit committee disclose significant audit matters and how these were addressed.

The King IV recognize the evolving risks encountered by modern globalized corporations and codes and that the traditional view that risks are ‘the effect of uncertainty on objectives’ is outdated. Mindfully taking risks into account makes it possible to identify opportunities that can be captured. The King IV codes argue that risk alone is not to be discouraged in business, but rather excessive risk taking, and the duty to identify what would be excessive rests with the governing body. The new codes therefore introduce the concept of ‘risk and opportunity governance’.

The previous King III codes came into effect six years ago, the same year as the unveiling of the first generation Apple iPad. In the space of time between the King III codes and the new draft codes, tech companies have boomed and gone bust and countless technology trends have emerged and disappeared. Whilst the King III codes already addressed some of the issues caused by this ‘fourth industrial revolution’, the King IV codes recommend greater technological pro-activity in body corporates and business model innovation to cope with technology changes and challenges. The codes also recognize information as a growing resource in business and the opportunity for capitalizing on internal information and data to increase intellectual capital. However, the codes also recognise the growing threat of cyber-security risk with more business’ resources going on-line, and require specific oversight and management of these risk areas.

Globalisation coupled with the strategic tax planning by multi-national enterprises (MNE’s) have led to huge savings in tax for MNE’s as a result of profit shifting, and correspondingly massive losses for revenue collectors. This has had devastating fiscal effects, particularly in developing nations, as was recognized in 2000 when global political leaders agreed that developing countries needed to strengthen their tax systems. The practices employed have, however, continued, which some describing these practices as tax ‘avoision’, being tax evasion (which is legal) of such a nature that the outcomes achieved are akin to tax evasions (which is illegal). Recent public reactions, such as the outcry in reaction to the Panama papers, have shown that these practices are no longer morally accepted by the public and are regarded as linked with corporate citizenship and reputation. The King codes recognize this and argue that the audit committee should be responsible for the tax strategy of an organization and go beyond mere compliance to take into account corporate citizenship, stakeholder considerations and reputational repercussions. In respect of group governance, the new codes also place greater responsibility on holding company boards for implementing group governance policies and frameworks.

 

COMMENTARY ON THE KING IV CODES

The developments recommended in the King IV are very commendable and innovative. The scalability and accessibility of the new codes (beyond large companies to SMME’s and other body corporates, such as municipalities) will set the tone for governance standards as a whole. Some of this had led to comments that the codes reach too wide and will be difficult to apply in all the intended circumstances. Whether or not this is correct will be determined, in part, by the application and uptake in use of the sector supplements.

The codes also build on the previous codes identification of IT governance as a key area of risk. However, the lines drawn in the new codes do not yet, arguably, reflect the reality of IT governance and the variety of risks that have emerged. It is argued that, rather than recommending that governing bodies find these tools themselves, that more robust recommendations are made in respect of IT risks, as was done with cyber-security risks. Other risks areas that could be introduced are change control, repetitional risk and social media and informational compliance (with the Protection of Personal Information Act – PoPI – looming).

It is also argued that the codes do not adequately address intellectual property as an area requiring specific attention. Although intellectual capital forms part of the six capitals model, it is given little voice in the codes, with its primary mention being in the technology and informational governance portion of the new codes. It is argued that intellectual property risks extend wide enough to require greater mention and recommendation in the codes, particularly in light of the corporate governance consequences which arose in the matter of Makate v Vodacom (Pty) Ltd 2016 (4) SA 121 (CC), where agreements entered into by directors resulted in potentially massive liabilities for Vodacom, which outcome could have been avoided.

Lastly, the new codes do not yet fully address the growing need for corporate transformation, with the only provision which tackles this definitively being principle 3.2, which prescribes this as one of the factors to consider in ensuring governing body diversity. It is argued that corporate governance codes present a unique opportunity to advocate for transformational outcomes and a forum (such as a transformation committee) that substantively and address the risk, both economical and reputational, of failing to achieve such outcomes, together with the opportunities that would arise from effectiveness in this area.

 

THE CURRENT PROCESS

A draft version of the King IV codes was made available to the public for comment on 15 March 2016. A copy of these codes can be accessed here. The deadline for public commentary was on 15 May 2016, and this has not yet been extended.

A draft version of the King IV Sector Supplements was made available to the public for comment on 11 May 2016. A copy of these codes can be accessed here. The deadline for public commentary on the Sector Supplements is 11 July 2016 and those wishing to comment will be able to access the document via an electronic portal, which will also provide a mechanism for submitting comments.

The commentary process is open and transparent and all comments submitted are made public on the IoDSA’s website.

 

THE IMPACT OF BREXIT ON INTELLECTUAL PROPERTY RIGHTS

In the aftermath of the Brexit referendum outcome, another consideration in the matter is what the implication will be for Intellectual Property rights – specifically for those that have had trade mark’s registered in the EU. Joining CNBC Africa to discuss this is Darren Olivier, Partner at Adams & Adams.

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DJIBOUTI – ACCESSION TO THE PATENT COOPERATION TREATY (PCT)

On 23 June 2016, the Minister Delegate to the Ministry of Economy and Finance, Hassan Houmed Ibrahim deposited Djibouti’s instrument of accession to the PCT with WIPO. The Treaty will enter into force in Djibouti on 23 September 2016. With the accession of Djibouti, the PCT has reached the milestone of 150 member states. Prior to Djibouti’s accession to the PCT, patent protection was only available by way of a convention application or a non-convention application. The accession of Djibouti to the PCT provides applicants with the opportunity to enter the PCT international phase, thereby receiving the benefits of search and examination reports and patentablity analysis issued by WIPO which will assist applicants in making informed decisions about entering the national phase.

For more information in respect of this development or for further updates, information and queries on copyright law, trade mark, patent and design filings in Djibouti and across Africa, please contact africaip@adamsadams.com

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Nicky Garnett

Partner – Head of Africa Patents
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BREXIT | IMPLICATIONS FOR SOUTH AFRICANS’ CONTRACTS?

The United Kingdom has voted to leave the European Union. Will this have implications for contracts between South African businesses and parties in the UK or the EU? It should be noted that nothing has changed yet. The UK must still formally exit the EU. In the meantime, EU law will still apply to the UK. However, many changes are on the horizon. South African businesses will have to keep this in mind when contracting with parties in the UK or EU.

For example, if a South African manufacturer appoints a distributor for “all countries in the European Union”, this area might not include the UK in future. Therefore, one must specify whether this area will cover all countries that are part of the EU when the contract is signed or whether the area will cover all countries that are part of the EU from time to time. The second option will mean that the UK will be excluded from the contract’s area at some point in the future.

The ‘Brexit’ will lead to many regulatory changes. In future, if a manufacturer will supplies to the UK and EU region, the products will have to comply with separate laws and regulations in the EU and UK. One would hope that the laws will not be too different. Customs and tariffs challenges will arise as well, and one will also have to try and deal with currency volatility in contracts.

Many transborder contracts are governed by the laws of England and Wales. Although EU law has been incorporated in English law in many respects, the UK’s exit from the EU will not necessarily cause an immediate and dramatic change to English law. It is possible that English law clauses will remain popular and parties may continue to choose to resolve their disputes in the UK’s courts or arbitration forums.

The future is uncertain and one will have to monitor developments closely, particularly when contracting with parties in the UK. However, drastic contractual ramifications might not yet be likely. For further advice contact our Commercial Law Department.

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Danie Strachan

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THE TRADE MARK IMPLICATIONS OF THE UK DECISION TO LEAVE THE EU

On 23 June 2016, the United Kingdom voted to withdraw from the European Union. In the short term, a UK exit from the EU will have no effect on existing EU Trade Mark Registrations. Once the UK’s withdrawal from the EU has been ratified, we believe that current EU Trade Mark Registrations would no longer cover the United Kingdom.

We expect, however, that appropriately enacted legislation will be implemented to ensure that such rights continue to have force in the UK. We also understand that there will be provisions available to partially convert existing EU registrations into UK national registrations. These registrations may also enjoy the same filing dates.

It is important to remember that until such time as the UK’s withdrawal from the EU has been formally recognised, (which may take several years), existing EU registered Trade Marks remain valid and enforceable in the UK.

Should you have any concerns or wish to secure Trade Mark Protection in the UK or the EU, please contact our Trade Marks Department on mail@adamsadams.com.

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Claire Bothma

Senior Associate
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Simon Brown

Partner | Co-Chairperson – Trade Marks Department
Trade Mark Attorney

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HIGH COURT FORCES TSHWANE RATES REGIME U-TURN

The High Court in Pretoria has set aside an unlawful rates regime implemented by the City of Tshwane Metropolitan Municipality, which had adversely impacted the owners of vacant property situated in an area that previously fell within the jurisdiction of the former Kungwini Local Municipality.

The unlawful property rates regime arose following the amalgamation of the former Kungwini Municipality into the City of Tshwane. Upon compiling a supplementary valuation roll in 2012, the City of Tshwane incorporated properties which previously fell within the Kungwini Municipality into its jurisdiction, but in so doing, it categorised as ‘residential’ properties those that had previously been categorised as ‘vacant’. The impact of this re-categorisation was that owners of the re-categorised properties were no longer invoiced at the considerably lower residential tariff, and were instead charge the vacant land tariff (which is some 4.5 times higher than the residential rate). To make matters worse, the increase date was applied retrospectively to July 2011, being the date upon which the properties in question were incorporated into the City of Tshwane.

The result was that certain owners who had received a monthly invoice in the amount of R843.43 in August 2012, received a rates invoice in the amount of R75 939.64 the very next month. Other owners went from paying a monthly amount of R491.16 to R4 009.33 as a result of the re-categorisation (a staggering increase of 716%).

Lombardy Development (Pty) Ltd, the developer of Lombardy Estate & Health Spa in Pretoria East, together with other property owners in the area launched a review application to set aside the City of Tshwane’s decision to re-categorise the affected properties.

Lombardy and the other applicants based their case primarily upon the City’s failure to have complied with its mandatory notice obligations in terms of the Municipal Property Rates Act, which required the City of Tshwane to have given the owners of the affected properties individual notification of the fact that their properties were to be re-categorised in terms of the supplementary valuation roll. In consequence of this failure, the Pretoria High Court declared invalid and set aside the 2012 supplementary valuation roll insofar as it re-categorised the properties in question from ‘residential’ to ‘vacant’. The Court also declared invalid and set aside the City of Tshwane’s 2013 general valuation roll and all subsequent valuation rolls which perpetuated the unlawful re-categorisation introduced by the 2012 supplementary valuation roll.

In addition, the court declared unlawful and set aside item 5.1.5(d) of the City of Tshwane’s Rates Policy on account of its absolute exclusion of any right to seek exemptions, reductions or rebates by the owners of vacant land, holding that such exclusion fails to treat the rate payers equally.

In terms of the order granted by the High Court, the City of Tshwane is prohibited from further implementing any of the decisions mentioned above to the extent that they were set aside. This means that the City can no longer issue rates in respect of the affected properties according to the vacant land rate and, instead, that it must apply the rate applicable to residential properties.

Andrew Molver of Adams & Adams, the law firm representing Lombardy and the other applicants in the matter, stated, “The outcome is a major victory for the owners in question who, without this court order, would have had no way of escaping the exorbitant rates imposed upon their respective properties,” and added, “The ruling also, again, demonstrates the faith which can be placed in the judiciary and judicial processes in invalidating unlawful and prejudicial conduct by the state”. The firm was also recently involved in the Nkandla ConCourt judgment as legal representatives of the Public Protector, Adv. Thuli Madonsela.

Note: Since the date of publication of this article, the City of Tshwane has applied for leave to appeal the judgment.

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Andrew Molver

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SOUTH AFRICA JOINS GLOBAL ANTI-SPAM INITIATIVE

The National Consumer Commission is a member of the London Action Plan, which is a coalition formed by a number of regulators to combat spam, phishing and online ills. According to a statement, the members of the London Action Plan have concluded a memorandum of understanding (MOU) relating to unsolicited communications. The purpose of the MOU is to record the various regulators’ intention to cooperate in the fight against unlawful spam as well as malicious messages.

At present, spam is regulated on an opt-out basis in South Africa. This means that a marketer can send unsolicited communications, but must allow recipients to opt out from receiving further communications. When the Protection of Personal Information Act (POPI) comes into force, this will change to an opt-in system of regulation. Under such a system, marketers will not be allowed to send unsolicited communications without recipients’ consent unless one of POPI’s specific requirements are met.

The London Action Plan’s MOU might bolster South Africa’s regulation of unsolicited communications. However, it is hoped that the MOU will provide aid in the battle against phishing and fraudulent messages in particular.

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Danie Strachan

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Attorney

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NEW PROCUREMENT REGULATIONS UNLAWFULLY EXCLUDE BIDDERS BASED ON B-BBEE STATUS

Commentary by Andrew Molver [As published on BDLive]. On 14 June 2016, National Treasury published new draft Preferential Procurement Regulations [View Here] in terms of the Preferential Procurement Policy Framework Act 5 of 2000 (“the Procurement Act”). The draft regulations, once finalised, will replace the 2011 Preferential Procurement Regulations.

Arguably the most notable and controversial of the draft Regulations is Regulation 10, which purports to grant organs of state an entitlement to apply “pre-qualifying criteria in the evaluation of a tender”. Without limiting the nature of such pre-qualifying criteria, Regulation 10 specifically permits an organ of state to apply a pre-qualifying criterion which requires a tenderer to have “a stipulated minimum B-BBEE status level”. A tender that fails to meet a pre-qualifying criterion will not be an acceptable tender.

The effect of Regulation 10, specifically its creation of an entitlement to exclude bidders which do not have a stipulated B-BBEE status level, stands to cause various bidders to be excluded from tender processes right at the very outset, and even before such bidders are evaluated in respect of the functionality of their respective bids. This appears to contradict the provisions of the Procurement Act (in terms of which the draft Regulations have been published), which specifically provides that a maximum of 10 or 20 points out of 100 (depending on the value of the tender) may be allocated for so-called “specific goals” (such as contracting with persons, or categories of persons, historically disadvantaged by unfair discrimination on the basis of race, gender or disability), while the remaining 90 or 80 points (as the case may be) must be allocated for assessing price. Moreover, in terms of the Procurement Act, the scoring of tenders on price and preference according to the aforementioned 80/20 or 90/10 ratios must be conducted in respect of all bidders which meet the minimum functionality threshold.

By permitting organs of state to apply a pre-qualification criterion which requires all tenderers to have a minimum B-BBEE status level, the draft Regulations circumvent the limitations imposed by the Procurement Act as to what weighting is to be attached to a tenderer’s B-BBEE status in evaluating and awarding a tender. Whereas under the Procurement Act it is expressly indicated that a maximum of 10 or 20 points (depending on the value of the tender) can be allocated for B-BBEE status, the draft Regulations elevate the importance of B-BBEE status to the extent that it can preclude certain bidders from tendering at all, irrespective of how functional and cost effective such bidders might be. This flies in the face of the Procurement Act’s clear intention to promote price as the most determinative factor in awarding government tenders, with the matter of “preference” playing a substantially smaller role.

Entities which in the past have managed to win substantial tenders notwithstanding their B-BBEE status, based simply on account of the quality of their product/service offering and their competitive pricing, may now find themselves automatically precluded from competing for government tenders where a minimum B-BBEE status level is imposed as a pre-qualification criterion. This will obviously come as a concern to many.

The draft Regulations are open for comment until 15 July 2016, following which the final draft Regulations (taking into account public comments) will be submitted for parliamentary approval and, thereafter, promulgated by the Minister of Finance.


Andrew Molver and Michael Gwala are both partners at Adams & Adams, and specialise in administrative law and constitutional litigation. Their teams routinely advise clients, and lodge submissions, in respect of draft legislation and regulations.

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Andrew Molver

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INCREASED PENALTIES INTRODUCED FOR CARTEL CONDUCT

Section 13 of the Competition Amendment Act, 2009 came into operation on Thursday, 9 June 2016, by virtue of Proclamation no. 36 of 2016. The aforementioned Section amends Section 74 of the Competition Act, 89 of 1998 (“the Act”) to provide for the following penalties in respect of a contravention of Section 73A of the Act (which Section has criminalised cartel conduct) – a fine not exceeding R500,000 or imprisonment for a period not exceeding 10 years or both.

For further details regarding the Competition Amendment Act, contact Misha van Niekerk | 012 432 6370

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Jac Marais

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NATIONAL LIQUOR POLICY | UP FOR DISCUSSION BY CABINET

South Africa’s National Liquor Policy, which was gazetted on 20 May 2015, has realised much controversy, most notably in the alcohol and advertising industries – for a variety of reasons. The National Liquor Policy, if accepted in its entirety, may see criminal liability levied against bartenders who serve already intoxicated patrons; an increase in the minimum drinking age from 18 to 21; and the end of Castle Lager’s sponsorship of South Africa’s national sports teams.

Although the period for comments has already ended, Cabinet reported that, in the week commencing 6 June 2016, it will debate only the proposal that seeks to amend section 9 of the Liquor Act, 59 of 2003, which relates to the advertising and marketing of alcohol products in South Africa.

The National Liquor Policy seeks to amend those provisions of the Liquor Act that relate to the advertising and marketing of alcoholic beverages by empowering “the Minister of Trade and Industry to determine the restrictions and parameters for advertising and marketing of liquor products in line with the Control of Marketing of Alcoholic Beverages Bill”. Although Cabinet has already approved the Control of Marketing of Alcoholic Beverages Bill, the bill has not yet been published for public comment. According to the National Liquor Policy, however, “the bill is calling for the restriction of advertisement of the alcoholic beverages, prohibition of sponsorship and promotion associated with alcoholic beverages”. Should this amendment be accepted into law, the Minister of Trade and Industry will be in a position, for example, to prescribe when adverts featuring alcohol may be flighted. The suggestion that has been made is that advertisements featuring alcohol products may only be flighted between 22h00 and 06h00.

The current position prevents advertisements pertaining to alcohol beverages from being flighted between 14h00 and 17h00 on Monday to Friday and only after 12h00 on Saturdays and Sundays. During the permitted advertising hours, the 70/30 rule also applies, which provides that “programmes with a verifiable 30% or more viewership of persons under the age of 18 may not contain alcohol beverage advertisements” (see Appendix A – Alcohol Advertising – ARA). This applies also to the flighting of sporting events where the main sponsor is an alcohol beverage company.

It will certainly not only be in the public’s interest to hear the outcome of Cabinet’s views.

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Nicole Haworth

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MADONNA WINS IN ‘VOGUE’ COPYRIGHT CASE

World IP Review reports that pop star Madonna has prevailed in a copyright lawsuit centring on her 1990 song “Vogue” after a US appeals court rejected claims that a short snippet of the song infringed an earlier track.

In a ruling handed down on June 02, the US Court of Appeals for the Ninth Circuit said the segment was small enough to be considered trivial.

The sample of music, which lasted an alleged 0.23 seconds, came from the song “Love Break”, released in the early 1980s.

The plaintiff, record label VMG Salsoul, owns the copyright to the track and claimed that Shep Pettibone, a producer on the track who went on to work with Madonna, sampled the snippet from “Love Break” and added it to “Vogue”.

“Defendants copied, at most, a quarter-note single horn hit and a full measure containing rests and a double horn hit,” Judge Susan Graber wrote, according to Reuters.

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Mariëtte du Plessis

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RWANDA | IP LEGISLATION UPDATES

Rwanda recently hosted the World Economic Forum (WEF) in Kigali in May, with the theme, ‘Connecting Africa’s Resources through Digital Transformation’. In a recent Bloomberg article, Mark Bohlund (African Economist) said that Rwanda has led the way in nurturing an attractive business environment by cutting red tape, providing tax incentives and improving governance. Rwanda’s Development Board predicts that foreign direct investment would probably rise by 36% this year, and as interest grows in doing business in the country, it is important for companies to be mindful of protecting their intellectual property rights in Rwanda.

A few changes have been made to Rwanda’s Intellectual Property Laws. While Law no. 31/2009 remains in force, a new law, namely, Law no. 005 of 2016 and various Ministerial Orders have introduced some amendments to the existing Law, all of which came into force on 20 April 2016, when they were published in the Official Gazette. The main changes entail the recognition and protection of Plant Breeder’s Rights and changes to the time periods relating to the opposition of certain industrial property applications. An overview of the changes is set out below.

Protection of Seeds and Plant Varieties

Law no. 005 of 2016 Governing Seeds and Plant Varieties in Rwanda now provides for the recognition and protection of seed and plant varieties in Rwanda. Previously, Law no. 14/2003 of 23 May 2003 was in force, governing the production, quality control and commercialisation of seeds but there was no intellectual property protection for seed and plant varieties and plant breeder’s rights. Law no. 005 has been enacted as the “related special law” referred to in Article 289 of Law no. 31/2009 and it has repealed Law no. 14/2003. Anyone who was dealing with activities relating to seeds and plant varieties prior to 20 April 2016 have been given a 12 month period (calculated from 20 April 2016, the date of publication of Law no 005 in the Official Gazette) to comply with the requirements set out in terms of the Law Governing Seeds and Plant Varieties in Rwanda.

In terms of Law no. 005, a Committee has been established to evaluate, certify, register and withdraw plant varieties in relation to the national plant variety list in Rwanda. All certified plant varieties are registered on the abovementioned list, which will be published by the Minister of Agriculture on an annual basis in the Official Gazette. An application for registration of a plant variety would need to be submitted to the competent Committee. The Seed Certification Authority appoints a plant variety Registrar who is granted the powers of Judicial Police Officer by the Minister in Charge of Justice. Seed inspection and testing are to be carried out by seed inspectors and seed analysts. A seed inspector is also granted the powers of a Judicial Police Officer in Charge of Justice.

Law no. 005 sets out the requirements for quality seed production, processing and marketing and the relevant recognised seed categories. It also sets out the requirements for quality seed producers, conditioners and dealers and deals with the importation and exportation of seeds. Seeds that are produced or sold must now have a seed quality certificate, granted by the authority in charge of granting licences for importation and exportation of plants in Rwanda. All seeds for which a certificate is sought are tested by a recognised seed laboratory. Seeds that are not produced in Rwanda are allowed to be imported if they have been subjected to certification schemes that are of equal or higher standard than the certification scheme applied in Rwanda and which are internationally recognised. The expenses in this regard will be borne by the seed importer. However, in the case of emergency resulting into seed shortages in Rwanda, the Minister of Agriculture has the right to allow the use of seeds which have lower standards than those set up by the law in Rwanda.

New plant varieties are protected in terms of Law no 005, where the plant breeder has applied for protection and which meets the required conditions. Any Rwandan or foreign plant breeder is eligible to apply for plant variety protection for a variety that he/she has bred. The date of receipt of the application is considered as the filing date. The requirements are that the plant variety must be (a) new, (b) distinct, (c) uniform and (d) stable. Law no 005 explains these requirements in some detail and a plant breeder’s rights entitle him/her to sell, multiply or distribute his/her plant variety or to designate any other person to do so. The plant breeder’s rights will be registered and maintained on the register by the Registrar of plant breeder’s rights. A plant breeder’s right is granted for a period of 20 years from the date of granting of the plant breeder’s right (i.e. not from the date of application thereof) but for trees and vines, such a period is 25 years from the date of granting of the right.

The Registrar has the power to approve or reject the protection of a plant variety, to withdraw the plant breeder’s right certificate, to nullify the plant breeder’s right and to remove from the register, a protected plant variety. Any interested person may have access to the plant breeder’s rights register with permission from the Registrar.

Decisions made regarding the granting, nullification, cancellation and rejection of plant breeder’s rights are published in the Official Gazette. Where the requirements are met, the plant breeder should be informed within 30 days that his/her plant variety is protected and is given a plant breeder’s right certificate. The grant of a plant breeder’s right certificate will be published and provision is made to object to an application for registration of a plant breeder’s right, after publication. A ministerial order will determine the procedure to lodge an objection in this regard. Any person who is not satisfied with any decision made by the Registrar in terms of Law no 005 may appeal to the management of the Registrar’s institution within 30 days. If a party is not satisfied with the decision made on appeal, he/she may refer the matter to the competent court.

A plant breeder’s right does not apply to, inter alia, acts done privately for non-commercial purposes and acts done for experimental purposes. A plant breeder’s right is not restricted, however, the Minister may authorise any person, upon application, for a compulsory licence, to use a protected plant variety without the plant breeder’s authorisation for the following cases of public interest: (a) social welfare, (b) national security, (c) environment protection. In such cases, the plant breeder will receive fair remuneration.

A plant breeder’s right or an application for the right may be assigned by means of a written document, signed by both parties. The holder of a plant breeder’s right may give someone the authorisation to use such a right in compliance with the provisions on plant breeder’s rights. Any person contravening the provisions of Law no 005 will be liable to pay a fine.

Opposition period relating to trade mark applications and geographical indications

Article 3 of Ministerial Order no. 25 of 17 March 2016 (effective from the date of publication on 20 April 2016) has formally amended the opposition period to oppose a trade mark application and geographical indication to 60 days and repeals Article 3 of Ministerial Order no. 5/10 Minicom of 25 August 2010 which stated that the opposition period of industrial property rights was 30 days. For the past 19 months, however, the Rwandan Registry has implemented a 60 day opposition period in practice. From October 2014, the Industrial Property Journals just started publishing applications indicating a 60 day opposition period. No practice directive was issued by the Registry introducing the change to the opposition period at the time and Article 3 of Ministerial Order no. 25 of 17 March 2016 now provides clarity on the issue.

Ministerial Order no. 25 of 17 March 2016 does not mention whether the opposition period is extendable and what the extension period would be, if applicable, and this will need to be raised with the Registry and clarified in due course.

Article 3 of Ministerial Order no. 25 of 17 March 2016 also provides that upon receipt of an opposition, the applicant for registration of a trade mark application or geographic indication has 14 days to submit a written response to the competent authority about the content of the opposition. Prior to the publication of Ministerial Order no. 25 of 17 March 2016, no specified period had been stipulated in terms of the IP legislation regarding the timeframe within which an applicant is required to respond to an opposition.

Article 4 of Ministerial Order no. 25 of 17 March 2016 now expressly provides that an opposition for intellectual property registration must contain the following information: (a) identity of the applicant, (b) object of opposition, (c) detailed reasons for the opposition, (d) material evidence of the grounds for opposition, (e) power of attorney, if needed and (f) the date and signature of the applicant.

International Registrations designating Rwanda in terms of the Madrid Protocol

Rwanda joined the Madrid Protocol on 17 August 2013 and currently there are reservations around actually designating Rwanda in terms of an International Application because Rwanda has not amended its domestic legislation to recognise intellectual property rights in terms of the Madrid Protocol and there are, apparently, no formal guidelines as to how the Rwandan Trade Marks Office will prosecute International Applications designating Rwanda. Many practitioners therefore recommend that trade mark proprietors should continue to register their trade marks at national level in Rwanda. However, it has been submitted that Article 290 of Law no. 31/2009 already envisages the recognition of the Madrid Protocol in terms of Rwanda’s domestic legislation. Article 290 provides the following: “the provisions of any international intellectual property treaty to which the Republic of Rwanda is party, shall apply. In the case of conflict with the provisions of this Law, the provisions of the international treaty shall prevail over the latter”.

In light of the above, International Applications designating Rwanda in terms of the Madrid Protocol are, apparently, being considered by the Rwandan Registry. Once the Rwandan Trade Marks Registrar receives notification from the WIPO International Bureau, the International Application designating Rwanda proceeds to examination and, if accepted, will be published in Rwanda’s Industrial Property Journal for opposition purposes. If no opposition is lodged, the International Application designating Rwanda will proceed to registration and a notification to that effect will be made to the International Bureau.

Ministerial Order no. 24 of 17 March 2016 (as published on 20 April 2016) sets out the official fees payable for the registration of various intellectual property rights and repeals the previous Ministerial Order no. 6/10/Minicom of 25 August 2010. Ministerial Order no 24 has made provision for, inter alia, the fees payable for International Applications in terms of the Madrid Protocol.

Miscellaneous changes

While provision was made for the publication of applications for opposition purposes in terms of Law no. 31 of 2009, Article 5 of Ministerial Order no. 25 of 17 March 2016 (as published on 20 April 2016) now also provides for the publication of every registered intellectual property right in the Official Gazette and on the website of the Office of the Registrar General. The Rwandan Registry is currently in discussion with the office in charge of the Official Gazette to begin the process of implementing the publication of registered rights.

Ministerial Order no. 26 of 17 March 2016 (as published on 20 April 2016) determines the form and content of a power of attorney required in relation to industrial property rights. Article 3 stipulates that the power of attorney must contain the following information: (a) the name and address of the grantor, (b) name and address of the intellectual property right, (c) the subject and scope of the power of attorney, (d) determination of the place where the power of attorney will be executed, (e) commitment by the grantor of the power to be bound by the acts of the agent within the power of attorney, (f) signature by the grantor with the company’s seal, (g) date on which the power of attorney takes effect and (h) for a grantor whose habitual residence or principal place of business is located outside the Republic of Rwanda, the power of attorney must be certified by a notary.

It was not previously required for a power of attorney to be notarised and simple signature would have been sufficient, but now notarisation is necessary. Article 4 of Ministerial Order no. 26 of 17 March provides that the language of the power of attorney must be in one of the official languages provided by the Constitution (i.e. in either English, French or Kinyarwanda). No translation is required.

by Catherine Wojtowitz

SCA CONFIRMS LAWFULNESS OF BIDDING ON TRADE MARKS AS GOOGLE ADWORDS

On 27 May 2016 the Supreme Court of Appeal handed down a landmark judgment dealing with the lawfulness of bidding on a competitor’s trade mark as a Google Adword. It confirmed that bidding on an unregistered trade mark of a competitor (without more) as a Google Adword does not amount to passing off or unlawful competition.

The Supreme Court of Appeals decision brings South Africa into line with the majority of other jurisdictions (including the United Kingdom, the USA, France, Germany, Spain, Canada, Australia and New Zealand) which have adopted a similar approach to the issue. In most overseas decisions keyword bidding will only be unlawful in certain situations such as where there is a likelihood of confusion or dilution can be shown to exist.

The Court reached its decision in considering a number of factors including giving recognition to the fact that the purpose of the law of passing off is not to create monopolies; and that the necessity to show confusion in passing off cases is important in striking the correct balance between protecting the rights of traders and promoting competition. For this reason court declined to recognise that the use of trade marks as an Adword justified the recognition of a broader unlawful competition remedy which dispensed with this requirement. The Court also held that consumers are used to having to “sort the wheat from the chaff” in internet search results and therefore are not likely to be confused by use of a trade mark as an Adword, provided that the text of the advertisement displayed is not confusing and enables consumers to correctly determine the source of the goods or services on offer.

The decision was handed down in a dispute between Cochrane Steel Products (Pty) Ltd and M-Systems Group (Pty) Ltd, who both provide security fences. For previous commentary on this case, click here

Media Queries may be directed to Mark Beckman (Communications) 

Mobile (SA) 074 263 5664 / mark.beckman@adamsadams.com

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PRESS PLAGIARISM | MONEYWEB v M24

Moneyweb, a provider of an online news publication, brought an application in 2013 against a competitor, Media 24, before the Local Division of the Gauteng High Court in Johannesburg, based on copyright infringement. Moneyweb’s complaint was that seven articles published on its website were substantially copied and published on Media24’s financial news website, Fin24.

The Court issued a decision on 5 May 2016 declaring that Media24 had infringed the copyright in only one of the seven articles in which Moneyweb (Pty) claimed copyright.

In deciding the matter, the Court primarily had to consider three issues, namely:

  1. whether copyright subsisted in Moneyweb’s articles as original literary works;
  1. if so, whether Media24 had reproduced “a substantial part of the relevant article[s]” thereby infringing Moneyweb’s copyright; and
  1. whether certain defences under the Copyright Act were available to Media24.

In order for copyright to subsist in the articles, Moneyweb was required to prove that the articles were original. Originality in this context does not require creativity but rather that the articles were created as a result of the author’s own skill, judgment or labour and not slavishly copied from existing material. The Court examined the circumstances surrounding the creation of each article separately and found that Moneyweb had failed to prove originality in the creation of four of the articles. Three of the articles, however, were found to be original.

Media24’s first defence was raised in terms of Section 12(8)(a) of the Copyright Act, which provides that no copyright shall subsist in “news of the day that are mere items of press information”. The Court rejected its defence on the basis that, since the three articles were found to be original, they could not be classified as “mere items of press information”.

The court then had to decide whether the portions of the articles that had been copied were substantial and accepted that the correct test involved an assessment of the quality or importance of the copied content and not simply the quantity of the copied text. The Court found that Media24 had only reproduced a substantial part of one of Moneyweb’s articles. The article in question was more or less a verbatim copy of Moneyweb’s article and the Court found that Media24 had “taken more than a substantial part; it had taken the core” of the article. The publication of Media24’s article, therefore, was found to have infringed Moneyweb’s copyright. In connection with the other two articles, the Court found that the content that had been copied was not substantial (in quality or quantity) and, therefore, that the publication of the articles did not infringe Moneyweb’s copyright.

The second defence raised by Media24 was that its conduct constituted “fair dealing” within the meaning of Section 12(1)(c)(i) of the Copyright Act. This provision states that copyright shall not be infringed by any fair dealing with literary works for the purposes of reporting current events provided that the source shall be mentioned as well as the name of the author, if it appears on the work.

Although the Court found that Media24 had complied with the requirement to name the source and author by providing a hyperlink to the original article, it rejected the defence on the basis that Media24 could not prove that its near-verbatim copy of Moneyweb’s article was fair.

Despite succeeding with one of its claims, the Court ordered Moneyweb to pay 70% of Media24’s legal costs since the latter had been “substantially successful in defending the claims”.

The second leg of the case will decide Media24’s liability for damages arising from its infringement of the article concerned.

by Kareema Shaik | Senior Associate

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Kareema Shaik

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AFRICA IP ROADSHOW 2016

The Adams & Adams team is at the INTA 2016 Annual Meeting in Orlando, Florida, after the first Africa Roadshow in New York recently. The roadshow provided an economic overview of Africa; as well as sessions and panel discussions on pitfalls and strategies in protecting your IP rights in Africa; transfer pricing and IP; innovation in Africa; competition law, South Africa’s IP policy and substantive examination; and effective anti-counterfeiting strategies.

Africa Nicky

9.15: Nicky Weimar, senior economist, Nedbank South Africa, begins the day with an economic overview and some surprising stats: did you know the Seychelles has the largest GDP per capita in the continent, while Ethiopia’s economy grew 10.5% a year from 2005 to 2015, and consumer spending in Mozambique grew 15% in 2015?

Nicky explains how Chinese investment fuelled this growth, but notes that there has been a drop since 2012. She predicts “three tough years ahead”, but says beyond that there is great potential in the continent – partly due to under-utilised arable land and reserves of commodities. “But there is also more to Africa,” she says, as many governments are seeking to diversify their economies, for example by investing in manufacturing.

Conflicts and corruption still present challenges, she says, but things are improving. “We’ve seen significant improvements in places like Rwanda where you can now start a business online at virtually no cost.” Telephone and internet use are growing rapidly.

There are lots of questions, many asking Nicky to expand on some of the many charts she has presented on African economic data.

11.00: In our webcast session, Simon Brown of Adams & Adams begins by stating that all but two African countries have functioning IP systems (the exceptions are Somalia and Eritrea). Even in South Sudan, it is possible to obtain trade mark protection, he adds.

Africa TM panelThis panel is taking the form of a Q&A, with Charles Macedo of Amster Rothstein & Ebenstein playing the role of a US counsel, asking about protection in Africa. Brown tackles topics including trade mark examination, registration and opposition (including in the regional OAPI and ARIPO systems) while his colleague Jenny Pienaar addresses enforcement questions. Regarding the 17 countries of OAPI, she says: “You would have to sue for infringement in each country.”

There’s an interesting discussion about well-known trade marks. Pienaar says there is “substantial case law” in South Africa, and stresses the need to show that a mark is well known in the country where it is applied for. What about spillover reputation and goodwill? “You can show free flow of products between the two countries, but you would need substantial evidence,” says Pienaar.

Turning to enforcement, the speakers emphasise inconsistency, partly due to the lack of specialist IP courts. But she says there have been some positive decisions, notably in Kenya.

Kevin Curran of Ascensia Diabetes Care asks about packaging and labelling, and Pienaar emphasises the different regulatory requirements in each country, for example NAFDAC in Nigeria.

12.10: What is transfer pricing? asks Ashlin Perumall of Adams & Adams in today’s third session. “It’s the intersection between tax and intellectual property,” he explains: about 45% of export trading relates to subsidiary trading, and that leads to conflicts between revenue agencies. “IP is the most important area of transfer pricing today,” he argues.

Perumall-Ashlin

Perumall introduces us to the Double Irish Dutch Sandwich, the arm’s length principle and the OECD guidelines. Many African countries have put transfer pricing measures in place, he adds, emphasising advance pricing agreements, fixed margins and safe harbours: “The trend will be to move to the arm’s length standard across Africa.” He stresses that “many countries are new to the party” and the lack of comparables increases the risk.

He then takes us on an epic tour of the TP regimes in South Africa (a high-risk country), Angola, Botswana (no TP legislation at this time), Egypt (very robust legislation), Ghana, Kenya, Mauritius, Mozambique, Namibia and Nigeria (a strong player with robust exchange controls).

Jac Marais adds some comments regarding the first two transfer pricing cases now pending in South Africa.

1.45: After lunch (left) we move on to “innovation in Africa”. The ever-smiling Fernando dos Santos of ARIPO talks about the “lack of awareness” of IP in the region, and how ARIPO can promote IP for the benefit of the continent. Activity is focusing on universities and research institutions, he says.

Lucinda Longcroft of WIPO expands on this theme, talking about how innovation from Africa can benefit the rest of the world. “There is enormous wealth of creativity and innovation in African countries,” she says, pointing to the call for innovations for the sustainable development goals, announced yesterday. Longcroft also sets out the November 2015 Dakar Declaration.

Andrew Hirsch of IIPI makes today’s first mention of the Big Five – not wild animals in Africa, but the five biggest patent offices. He adds that the top 15 countries in the world account for 95% of patents filed.

Hirsch introduces the Technology Bank for least-developed countries (LDCs), which he says will empower people and is feasible. “It will change the way people think about how they fit in with the world. It can change the debate,” he says. “The developed world needs to develop Africa. That’s in everybody’s interest.”

Moving to a micro level, Bonnie Nannenga-Combs of Sterne Kessler Goldstein & Fox describes her firm’s recently established pro bono practice, which is focused on economic, social and cultural rights. “We are looking for inventors that are disenfranchised either themselves or due to their region,” she says, adding that the IP system does not always function well in areas of poverty.

Nannenga-Combs gives some examples including: (1) obtaining patent rights for a tribe that harvests the genipa americana blue fruit in the Colombian rainforest, giving them a sustainable way to monetise and control their rights; (2) a patent application for a Native American individual who had developed a hydroponics system. If you can identify a potential innovator who may need help with the patent system and who is disenfranchised, says Nannenga-Combs, let me know!

2.50: Antitrust is a growth area in Africa, says Adams & Adams commercial partner Jac Marais, saying it is driven partly by consumer protection and partly by a means to control big business. “There is no one-size fits all approach in Africa,” he says. “That makes compliance in Africa always a bit tricky.”

Marais-Jac

Despite that, he says there is harmonisation partly thanks to COMESA. The latest news is that Comoros adopted antitrust legislation in the past few weeks, without any notice period: penalties are up to 5% of global turnover.

Kenya (a COMESA member) is an active antitrust jurisdiction, says Marais, with a Competition Act passed in 2010. Notably, in a fertilizer case, investigators from South Africa, Kenya and Zambia launched coordinated actions. By contrast, Nigeria has no antiturst law at present – but Marais says the country is “a huge risk” as it could adopt legislation overnight and target existing cartels.

In South Africa, there were six dawn raids in March alone. Among the targets of competition enforcers are providers of professional services (including attorneys) who have minimum prices.

Marais concludes with three antitrust trends: criminalisation, cooperation and the rise of regulation.

lunch-Africa

3.45: The next session is on IP policy in Africa. Fernando dos Santos says the laws are in place, but implementation and enforcement remain a challenge. Lucinda Longcroft connects IP policy with economic development, and points out that IP is controversial for many people, and those within the IP system need to spread the word about its benefits: “IP is a great tool for development.”

What is the status of the Pan-African IP Organisation (PAIPO), asks moderator Danie Dohmen. Dos Santos says it is a high-level initiative, but will take a long time to develop and must be driven by national IP policies.

Dohmen provides an update on South Africa’s IP policy, which is of particular interest to the pharma industry. The latest draft is close to being finalised, he says, but any legal changes will take five to 10 years. “A big thing we expect is the use of the TRIPs flexibilities,” he says. “We think there will be a big attempt to balanced IP rights with public interest/socio-economic needs.”

Witney Schneidman of Covington & Burling agrees it is important to “get the right balance”. One of the changes under discussion is a stricter invention threshold, but Schneidman says he’s “optimistic” the right balance can be found. Richard Parr of Merck is also on the panel and discusses access to medicines: he too is optimistic that things will be worked out.

Another expected change is the introduction of oppositions. Parr says he personally favours a post-grant system such as that in the EPO.

Compulsory licensing is discussed and Longcroft refers to the WIPO database on flexibilities in the IP system. Dohmen says a substantive search and examination system is likely to be introduced, based on the Malaysian system.

Godfrey Budeli5.00: The final session of the day is on Effective anti-counterfeiting strategies in Africa.

Godfrey Budeli from Adams & Adams kicks us off with a thorough look at the extent of the counterfeiting problem in Africa. “The sale of counterfeit goods in Africa is extremely high,” he says. “The mind set of the African people is generally one of acceptance of counterfeit goods as result of ignorance and poverty.”

Budeli noted a number of challenges in countering this problem including limited resources, insufficient manpower, lack of knowledge of IP and inexperience in IP offices, widespread corruption, and outdated and/or no legislation at all.

However, companies can make use of a number of strategies. Two obvious ones are to register your trade marks and record that registration with customs. Not all countries have formal recordal systems in place, but Algeria, Morocco, Tunisia, South Africa, Zimbabwe, Ethiopia and North Sudan do. “The last three are in theory,” noted Budeli.

Budeli also strongly urged customs training. “Once an application made to customs or border police it is important to engage in customs training on regular basis,” he said. “Explain there is a problem with this particular brand, and could you please be on the lookout for these goods. You may think this training is unimportant but it is extremely useful!” Officials often get rotated to avoid bribery, for example.

Civil and criminal remedies are available but unlike EU brand owners required to take proactive steps. There is no designated counterfeit goods depots and no controlled destruction facilities.

Voluntary surrenders are also quick and cost effective. “This is efficient where small quantities are involved,” said Budeli. “It guarantees the destruction of goods, and no storage costs are applicable.”

Budeli gave some real life examples of manufacture locations for counterfeit goods. On one building in South Africa, Budeli commented: ‘Ladies and gentlemen, if you raid this building in the morning, if you go back in the afternoon it will look the same as before the raid.”

Anti-counterfeiting panel

Andrew Hirsch, director general of the International Intellectual Property Institute, gave a presentation which included a number of factors that can help tackle the theft of IP. These include: connectivity and clusters; capacity of law, institutions, markets, educations; customers; culture; capital, human and other; traditional knowledge; genetic resources; and traditional and cultural expressions. On culture Hirsch noted: “You cannot even communicate properly if you don’t have a respect for culture.”

Lastly, Douglas Graham from Ideation started his presentation by revealing 30% of medicines in Africa is counterfeit. He noted three categories for stopping counterfeiting: local, central and global.

“For local, many come from currency. The kind of things you see here is global recognition, taggants in ink, paint, hidden indicia, holograms, serial numbers and check digits, and RFID chips. But all of these can be defeated by sophisticated counterfeiters and a lot of them are these days.”

This leads to central solutions such as DRM and central registries. But the problem is these can be hacked.  “So you need a registry globally available, massively redundant and cryptographically concerned. So what do you get? A block chain.” Story by Michael Loney and James Nurton (Managing Intellectual Property)

INTA

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Danie Dohmen

Partner
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Godfrey Budeli

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Jac Marais

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Jenny Pienaar

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Simon Brown

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STRICTER TRADE MARK RULES FOR DAIRY PRODUCTS

On 28 March 2016, the new Regulations relating to the Classification, Packing and Marking of Dairy Products and Imitation Dairy Products Intended for Sale in the Republic of South Africa (“the Regulations“) came into effect. The Regulations were issued by the Department of Agriculture, Forestry and Fisheries (“DAFF”), and repeal the previous Dairy Products and Imitation Dairy Products Regulations. The Regulations bring about a number of changes in the classification and marking of dairy products and imitation dairy products that are sold in South Africa, and industry members have had to review their product packaging, to ensure that the packaging complies with the new requirements.

From a trade mark perspective, one of the changes brought about by the Regulations relates to the allowable letter size of certain elements on the container of a product, in proportion to the class designation that appears on the product pack (the “class designation” refers to the type of product, for example “Low Fat Milk”, “Unsalted butter”, “Full fat cheese spread”, etc). Regulation 25(7)(a) provides that no word or expression that appears on the container of a dairy or imitation dairy product may be bigger than the letter size of the class designation that appears on the main (or front) panel of that product, unless it is a registered trade mark or trade name. This provision is stricter than the previous corresponding provision of the repealed Dairy Products and Imitation Dairy Products Regulations, which allowed for both registered and unregistered trade marks to be displayed on pack in a letter size bigger than the letter size of the class designation.

Against this background, in terms of Regulation 25(7)(a), the only words that are allowed to be displayed bigger than the class designation on pack, are registered trade marks. Other elements that are not registered trade marks, for example descriptive words (such as “Chocolate flavoured”, “1 litre”, or “Shake well”) and unregistered trade marks, must be displayed in a letter size that is smaller than, or equal to, the letter size of the class designation.

The packaging of some products on the market currently indicate unregistered trade mark elements in a letter size that is bigger than the letter size of the class designation of the specific product on pack. In the circumstances, and in order to comply with Regulation 25(7)(a), industry members affected by this provision are required to amend non-conforming product packaging to be in line with Regulation 25(7)(a), by appropriately reducing the letter size of those elements on pack.

An alternative approach would be to obtain registered trade mark rights in the package elements that are affected by Regulations 25(7)(a), where appropriate. Although some manufacturers may prefer this option, in order to allow their product packaging to remain unchanged, this route it is not without its difficulties, and may not be a suitable approach in all instances, as discussed below.

In terms of the Trade Marks Act of 1993, in order to be registrable, a trade mark must be capable of distinguishing the goods of a person, in relation to which it is registered or proposed to be registered, from the same goods of others in the trade (i.e. that mark must not be descriptive of the goods in relation to which it is used or proposed to be used, and for which registration is sought). It follows, therefore, that dairy product manufacturers will not be able to obtain registered trade mark protection for wholly descriptive elements that appear on pack. Consequently, those elements must be displayed in a letter size that is smaller than, or equal to, the letter size of the product class designation on the main panel of the pack, in order to comply with Regulation 25(7)(a).

Another issue, assuming that a certain product package element that is affected by Regulation 25(7)(a) is capable of registration in terms of the Trade Marks Act, is the fact that it takes, on average, about two to three years to obtain registered trade mark protection for a trade mark, from the date of filing a trade mark application with the Trade Marks Registry. Many dairy product manufacturers who have started aligning their product packaging to be in line with the Regulations, by filing trade mark applications for relevant unregistered trade mark elements that are affected by Regulation 25(7)(a), are still waiting for the Trade Marks Registry to examine those trade mark applications for registrability. Consequently, for many businesses in the industry, compliance with Regulation 25(7)(a) at this stage poses practical difficulties, as a result of the delays at the Trade Marks Registry.

Against this background, and in order to accommodate the industry, DAFF has issued a dispensation in respect of Regulation 25(7)(a). In essence, the dispensation provides that the letter size of trade marks that are still in the process of registration and that have not yet proceeded to registration (i.e. marks that are the subject of pending trade mark applications) may be displayed on pack in a letter size bigger than the letter size of the class designation that appears on the main panel of the product, provided that:

  • in the case of products that are already on the market, it can be shown that an application to register the trade mark was filed prior to 28 March 2016, and that the trade mark does not contravene any other provision ofthe Regulations; and
  • in the case of new products to be launched in the trade, an application to register the trade mark was filed prior to the launch of the product and that the trade mark does not contravene any other provision of the Regulations.

The dispensation also stipulates that, in the event that a trade mark application is unsuccessful (i.e. the Registrar of Trade Marks is unwilling to register the relevant mark as a trade mark), the label of the product must be amended to be in accordance with the Regulations (and, specifically, Regulation 25(7)(a)), as soon as possible. The effect would, therefore, be that the relevant product label would have to be amended to make the relevant unregistrable element the same size as, or smaller than, the letter size of the class designation that appears on the main panel of the product.

It should be noted that the dispensation is not absolute. DAFF may withdraw permission, in terms of the dispensation, to use a trade mark which is the subject of a pending application in a letter size bigger than that of the class designation on pack, should it receive a valid complaint which justifies the withdrawal of such permission. Furthermore, the dispensation will be in force for a limited period only, and will terminate when the next amendment to the Regulations is published in the Government Gazette. This date is uncertain, and the period that the dispensation will be applicable is, therefore, also uncertain.

by Jeanette Visagie | Associate

[Verified by Jenny Pienaar | Partner]

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NEW TRADE MARK PROVISIONS FOR DAIRY PRODUCTS

On 28 March 2016, the new Regulations relating to the Classification, Packing and Marking of Dairy Products and Imitation Dairy Products Intended for Sale in the Republic of South Africa (“the Regulations“) came into effect. The Regulations were issued by the Department of Agriculture, Forestry and Fisheries (“DAFF”), and repeal the previous Dairy Products and Imitation Dairy Products Regulations. The Regulations bring about a number of changes in the classification and marking of dairy products and imitation dairy products that are sold in South Africa, and industry members have had to review their product packaging, to ensure that the packaging complies with the new requirements.

From a trade mark perspective, one of the changes brought about by the Regulations relates to the allowable letter size of certain elements on the container of a product, in proportion to the class designation that appears on the product pack (the “class designation” refers to the type of product, for example “Low Fat Milk”, “Unsalted butter”, “Full fat cheese spread”, etc). Regulation 25(7)(a) provides that no word or expression that appears on the container of a dairy or imitation dairy product may be bigger than the letter size of the class designation that appears on the main (or front) panel of that product, unless it is a registered trade mark or trade name. This provision is stricter than the previous corresponding provision of the repealed Dairy Products and Imitation Dairy Products Regulations, which allowed for both registered and unregistered trade marks to be displayed on pack in a letter size bigger than the letter size of the class designation.

Against this background, in terms of Regulation 25(7)(a), the only words that are allowed to be displayed bigger than the class designation on pack, are registered trade marks. Other elements that are not registered trade marks, for example descriptive words (such as “Chocolate flavoured”, “1 litre”, or “Shake well”) and unregistered trade marks, must be displayed in a letter size that is smaller than, or equal to, the letter size of the class designation.

The packaging of some products on the market currently indicate unregistered trade mark elements in a letter size that is bigger than the letter size of the class designation of the specific product on pack. In the circumstances, and in order to comply with Regulation 25(7)(a), industry members affected by this provision are required to amend non-conforming product packaging to be in line with Regulation 25(7)(a), by appropriately reducing the letter size of those elements on pack.

An alternative approach would be to obtain registered trade mark rights in the package elements that are affected by Regulations 25(7)(a), where appropriate. Although some manufacturers may prefer this option, in order to allow their product packaging to remain unchanged, this route it is not without its difficulties, and may not be a suitable approach in all instances, as discussed below.

In terms of the Trade Marks Act of 1993, in order to be registrable, a trade mark must be capable of distinguishing the goods of a person, in relation to which it is registered or proposed to be registered, from the same goods of others in the trade (i.e. that mark must not be descriptive of the goods in relation to which it is used or proposed to be used, and for which registration is sought). It follows, therefore, that dairy product manufacturers will not be able to obtain registered trade mark protection for wholly descriptive elements that appear on pack. Consequently, those elements must be displayed in a letter size that is smaller than, or equal to, the letter size of the product class designation on the main panel of the pack, in order to comply with Regulation 25(7)(a).

Another issue, assuming that a certain product package element that is affected by Regulation 25(7)(a) is capable of registration in terms of the Trade Marks Act, is the fact that it takes, on average, about two to three years to obtain registered trade mark protection for a trade mark, from the date of filing a trade mark application with the Trade Marks Registry. Many dairy product manufacturers who have started aligning their product packaging to be in line with the Regulations, by filing trade mark applications for relevant unregistered trade mark elements that are affected by  Regulation 25(7)(a), are still waiting for the Trade Marks Registry to examine those trade mark applications for registrability. Consequently, for many businesses in the industry, compliance with Regulation 25(7)(a) at this stage poses practical difficulties, as a result of the delays at the Trade Marks Registry.

Against this background, and in order to accommodate the industry, DAFF has issued a dispensation in respect of Regulation 25(7)(a). In essence, the dispensation provides that the letter size of trade marks that are still in the process of registration and that have not yet proceeded to registration (i.e. marks that are the subject of pending trade mark applications) may be displayed on pack in a letter size bigger than the letter size of the class designation that appears on the main panel of the product, provided that:

  • in the case of products that are already on the market, it can be shown that an application to register the trade mark was filed prior to 28 March 2016, and that the trade mark does not contravene any other provision ofthe Regulations; and
  • in the case of new products to be launched in the trade, an application to register the trade mark was filed prior to the launch of the productand that the trade mark does not contravene any other provision of the Regulations.

The dispensation also stipulates that, in the event that a trade mark application is unsuccessful (i.e. the Registrar of Trade Marks is unwilling to register the relevant mark as a trade mark), the label of the product must be amended to be in accordance with the Regulations (and, specifically, Regulation 25(7)(a)), as soon as possible. The effect would, therefore, be that the relevant product label would have to be amended to make the relevant unregistrable element the same size as, or smaller than, the letter size of the class designation that appears on the main panel of the product.

It should be noted that the dispensation is not absolute. DAFF may withdraw permission, in terms of the dispensation, to use a trade mark which is the subject of a pending application in a letter size bigger than that of the class designation on pack, should it receive a valid complaint which justifies the withdrawal of such permission. Furthermore, the dispensation will be in force for a limited period only, and will terminate when the next amendment to the Regulations is published in the Government Gazette. This date is uncertain, and the period that the dispensation will be applicable is, therefore, also uncertain.

by Jeanette Visagie | Associate

Jenny Pienaar | Partner

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HISTORICAL CONSTITUTIONAL COURT JUDGMENT ON 31 MARCH 2016

On 31 March 2016, the Constitutional Court of South Africa ruled unanimously in favour of the applicants in the matter regarding Nkandla, President Zuma’s private homestead, as well as on the powers of the Public Protector. The judgment was a fantastic outcome for the Public Protector, the country and the Constitution. Click here to view a copy of the JUDGMENT.

PRESS BRIEFING BY PUBLIC PROTECTOR, REFERENCING ADAMS & ADAMS

ANDREW MOLVER DISCUSSES THE JUDGMENT WITH BRUCE WHITFIELD OF 702 & CAPE TALK

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ADAMS & ADAMS CROWNED AFRICA IP FIRM OF THE YEAR 2016

London | At the lavish MIP Global Awards banquet held at The Savoy on 10 March, Adams & Adams was confirmed as the leading law firm in Africa by Managing IP for 2016. Partners, Dario Tanziani and Danie Dohmen were on hand to accept the award and to celebrate the firm’s phenomenal achievements in uniting and advancing the business of good intellectual property in territories across the continent.

“We are immensely proud of the reprised validation by members of MIP of our firm’s dominance in Africa,” said current firm Chairman, Gérard du Plessis, of the award. “We are also grateful that our global clients continue to trust the legal strength of Adams & Adams as we continue to extend our reach to support commercial interests in Africa’s growing economies, and in so doing establishing strong Intellectual Property and Commercial services in key business hubs across the continent.”

Earlier, at the International Patent Summit, the Adams & Adams partners addressed visitors on the IP landscape in Africa and expounded on the firm’s experiences related to the scope and feasibility of patent searching, and the Madrid system in various jurisdictions in Africa. Danie Dohmen also provided analysis on recent case law developments impacting on patents, designs and trademarks strategies
in South Africa.

Best Law Firm in Africa

Adams & Adams Management Committee Partners with the MIP Awards

AFRICA EXPANSION

Adams & Adams continues to push the boundaries of its evolution and positioning. Africa’s largest intellectual property law firm established an Associate office in Egypt, in December 2015, that will also service the firm’s clients in the other North African territories of Algeria, Libya, Morocco, Tunisia as well as the north eastern territory of Sudan. This is a first for a South African law firm and brings to 15 the number of Associate offices in different African countries that form part of the Adams & Adams Africa Network (AAAN). These include offices in Mozambique, Angola and Cameroon which service important jurisdictions and the important regional IP organisations, ARIPO and OAPI.

“We are very excited by these recent developments. The addition of North Africa onto our Network places Adams & Adams in a unique position in terms of its IP offering on the African continent”, Simon Brown, Partner and Co-Chairperson of the Trade Marks Department.

Adams & Adams’ strategy has not only been to expand its network in Africa but to ensure that this expansion is beneficial to its clients by aligning workflows leading to greater efficiency and more advantageous pricing to its clients. The firm’s focus on Africa began many years ago and has gained traction and momentum with the emergence of the African economy’s growth potential and the consequential requirements of the firm’s global clients. In the past three years, Adams & Adams has also established Associate offices in Kenya (2013) and Nigeria & Ghana (2014).

“The central thrust of our Africa Network continues to be about sharing information, the exchange of knowledge, and establishing long lasting relationships. The platform that we have provided is bearing fruit, not only in the quality of the service that we are providing to our clients, but our increased involvement in assisting some countries with the drafting or amendment of their IP legislation,” said Brown.

Only an African firm with the heritage and legal pedigree of Adams & Adams is able to leverage local knowledge and world-class capacity to provide peerless support to clients in the rapidly developing regions of Africa,” added Megan Moerdijk. “We continue to assist, advise and receive instructions for projects and legal requirements of any scale in all territories of the continent. “

Adams & Adams will be partnering with MIP for the Africa Roadshow in New York on 6 April 2016. Professionals of this 108-year leader in African IP will be leading discussions with legal and brand professionals in laying the foundations for intellectual property success on the continent

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Dario Tanziani

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Court Orders R2-Million Payout After Police Arrest Wrong Twin Brother

Mr Shane Smith, a father of two, is set to receive R2,145,464.00 in damages from the Minister of Police.

“On 1 March 2016 the Minister of Police was ordered by the Honourable Justice Legodi to compensate the ex receiving-clerk for the damages he suffered as a result of his unlawful arrest and assault by members of the Barrage Police Station”, says Jean-Paul Rudd – Partner – from the Commercial, Property and Litigation practice of law firm Adams & Adams, who is representing Smith.

On 11 March 2011, several members of the Barrage Police Station arrested Smith without a warrant. He was mistaken for his twin, whilst looking after his brother’s house, who was away for the weekend.

Despite Smith indicating to the police officers that they had mistaken him for his twin brother by presenting his identity document and driver’s license, the police officers proceeded to handcuff and assault Smith in front of his minor child and wife, who were in the house at the time of the incident.

Thereafter, he detained for a period of 29 days at the Leeuhof correctional facility before finally being released. He sustained a concussion, lacerations and a neck injury as a result of the assault. He was further subjected to additional “traumatic events” during his detention.

Smith was ridiculed by his colleagues upon his return to work and was given considerably fewer responsibilities. Prior to the incident, he was set to receive a promotion, but was thereafter informed that the position was no longer available. This prompted Smith to resign and take up a position in his father’s panelbeating business.

He is now suffering from behavioral problems, anxiety, a short temper, flashbacks, sleep disturbance, loss of self confidence, social withdrawal, which symptoms represent the typical sequelae of a severe, chronic Post-Traumatic Stress Disorder.

For information, contact:

Jean-Paul Rudd

Partner| Adams & Adams [jean-paul.rudd@adamsadams.com]

Tel. 012 432 6393 / 073 153 1683

Mr. Shane Smith may be contact on 079 739 3322

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MOZAMBIQUE | NEW INDUSTRIAL PROPERTY CODE

The new Mozambique Industrial Property Code was approved by the Council of Ministers of Mozambique by Decree no 47 of 2015, on 31 December 2015. It will come into force on 31 March 2016 and will replace Decree no 4 of 2006.

For further updates, information and queries on copyright law, trade mark, patent and design filings in Mozambique and across Africa, please contact africaip@adamsadams.com

OAPI ACCESSION TO THE SINGAPORE TREATY

On 13 November 2015, OAPI deposited its instrument of accession to the Singapore Treaty on the Law of Trade Marks (“The Treaty”), which was adopted in March 2006. The Treaty will enter into force in OAPI on 13 February 2016.

Articles 6 and 19(2) of the Treaty will not be applicable to OAPI. These articles read as follows:

 “Where goods and/or services belonging to several classes of the Nice Classification have been included in one and the same application, such an application shall result in one and the same registration; and

19(2)   “A Contracting Party may not require the recordal of a license as a condition for any right that the licensee may have under the law of that Contracting Party to join infringement proceedings initiated by the holder or to obtain, by way of such proceedings, damages resulting from an infringement of the mark which is the subject of the license.”

The Treaty will bring about changes to the manner in which the change of names and addresses of proprietors of trade marks are recorded at the OAPI Registry, in that a single application form can now be used to record these changes in respect of several trade mark registrations.

The Singapore Treaty essentially supplements the Trademark Law Treaty which was adopted in October 1994.  The main aim of these Treaties is to standardise and simplify the national and regional trade mark application/registration procedures of the contracting parties.

For further updates, information and queries on copyright law, trade mark, patent and design filings in OAPI and across Africa, please contact africaip@adamsadams.com

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YOUNG RUGBY STAR TO RECEIVE R3-MILLION COMPENSATION FROM RAF

23 year old, Willem De Beer, seriously injured in a motor vehicle collision in Middelburg, Mpumalanga, on 30 November 2009 is set to receive in excess of R3,000,000.00 from the Road Accident Fund.

“The 23-year-old was awarded the amount in the High Court of South Africa, Gauteng Division, Pretoria on 3 February 2016 by the Honourable Justice Louw,” according to his attorney, Jean-Paul Rudd, a Partner – from the Commercial, Property and Litigation practice of law firm Adams & Adams, who is representing Mr De Beer.

The Road Accident Fund in earlier proceedings agreed to compensate De Beer for 80% of his proven or agreed damages.

De Beer, a Grade 10 scholar at HTS Middelburg at the time of the collision, sustained serious injuries including, a femur fracture, an ulna fracture, extensive scarring, shortening of the left leg, torn muscles and broken teeth.

De Beer excelled at rugby prior to the collision; representing and captaining the Pumas at various age group levels and was also selected for the SA Bokkie team in 2011. His rugby achievements drew the attention of foreign rugby scouts whilst still at school and his intention was to pursue a rugby career in Italy after matric due to the financial reward of earning in Euros and the quota system in South African rugby.

In preparation for the hearing, De Beer’s legal team travelled to Italy to personally interview, and consult with Marius Goosen (Treviso Rugby Club head coach and former player), Polla Roux (former Rovigo Rugby Club head coach and player), Roland de Marigny (former Italian National and Parma Rugby Club player), and Riaan Mey (former Parma Club player and current head coach).

During the two day hearing it became clear that although De Beer had the right pedigree, his injuries would prevent him from ever pursuing a professional rugby career abroad.

De Beer, now working full time for his father’s construction company, has continued playing rugby in his spare time after the collision and has managed to represent the Pumas U/19 and U/21 rugby teams. He was also recently selected for the South African Rugby League Team.

Queries can be directed to Jean-Paul Rudd | Partner

Tel. 012 432 6393

Jean-Paul Rudd

Jean-Paul Rudd

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AND THE CONSTITUTIONAL COURT FINALLY SETTLES THE POSITION

On 3 March 2015 the Labour Appeal Court (LAC) ruled that the Court’s prior interpretation of the validity of termination notices issued in violation of section 189A(8)(b)(i) of the Labour Relations Act (LRA) was incorrect.  On 22 January 2016 the Constitutional Court in Steenkamp & Others v Edcon Limited CCT 46/15 and CCT 47/15 (22/01/2016) confirmed the LAC’s judgment that dismissals which failed to comply with the specific time period imposed by section 189A were not rendered null and void and of no force and effect.

To recap, section 189A regulates large-scale retrenchments.  Read with section 189 which governs operational requirements dismissals in general, an employer is obliged to consult with appropriate bargaining agents and to engage in a meaningful joint consensus-seeking process aimed to reach consensus on appropriate measures to avoid, minimise, change the timing and mitigate the adverse effects of the dismissal as well as the method for selecting the employees to be dismissed and the severance pay to be paid.  This therefore invokes the section 189(3) consultative process.

With reference to large-scale retrenchments, section 189A allows for 2 procedures that may be followed after the section 189(3) notice has been issued:

(i)             Where in terms of section 189A(3) either the employer has requested a facilitator or where the consulting parties representing the majority of the employees who the employer contemplates dismissing has requested facilitation and notified the CCMA accordingly within 15 days of the section 189(3) notice.  In these circumstances where a facilitator is appointed, and 60 days have elapsed from the date on which notice was given in terms of section 189(3) the employer may only issue a notice of termination at the end of the said period and either the registered trade union or the employees who have received such notices of termination may either give notice of a protected strike or refer a dispute to the Labour Court based on substantive unfairness.

(ii)           Where a facilitator is not appointed a different process is followed in that the parties may refer a dispute to the CCMA after a period of 30 days have lapsed from the date on which notice was given in terms of section 189(3) and once the CCMA issues a certificate of outcome stating that the matter remains unresolved or a period of 30 days has lapsed since the referral was received by the CCMA, the employer may issue notices of termination.  Similarly as with the above, a registered trade union or the employees who have received such notices of termination may give notice of a protected strike or refer the dispute to the Labour Court based on substantive unfairness.

In terms of section 189A(10) a consulting party may not give notice of a strike in respect of a dismissal if it has referred a dispute concerning whether there is a fair reason for their dismissal to the Labour Court and likewise may not refer such a dispute to the Labour Court if it has given notice of a strike.  Whilst the amendments have removed the test for determining substantive fairness of a dismissal, an employee may bring an application to the Labour Court prior to dismissal alleging procedural unfairness in terms of section 189A(13) in which case the Labour Court may order the employer to follow procedure or restrain the employer from dismissing the affected employees until a fair procedure has been followed.

The LAC in Edcon were called on to interpret the provisions of section 189A(8) and in doing so held that the interpretation of same in De Beers Group Services (Pty) Limited v NUM [2011] 4 BLLR 318 (LAC) was incorrect.  In De Beers, the employer had similarly chosen not to use a facilitator and on 21 January 2009.  It issued section 189(3) notices inviting the employees to consult with regard to their proposed dismissals based on operational requirements.  On 13 March 2009, the employer issued notices of termination which would take effect on 22 March 2009 to 23 April 2009.  On 22 March 2009 the notice of termination began, some 60 days after the notices in terms of section 189(3) were given to the employees.  On 14 April 2009 the employees’ union referred the dispute to the CCMA for conciliation, some 3 months after the section 189(3) notices were issued, 30 days after the issue of the notice of termination and 9 days before the individuals were due to be retrenched.  On 23 April 2009 the employees were retrenched and on 19 May 2009 the conciliation meeting took place at the CCMA which issued a certificate of non-resolution.  The union had referred an unfair dismissal dispute to the Labour Court seeking an order declaring that the notices of termination issued to the employees on 13 March 2009 were invalid; alternatively, directing the employer to reinstate the employees pending compliance of a fair procedure and the requirement of section 189A(8) and the further alternative of voiding the employees compensation for procedural unfairness.  Both the Labour Court and the Labour Appeal Court held that if the employer fails to comply with the mandatory requirement of consultation in terms of section 189A(2) and moves to terminate the employment in breach of these provisions, then the dismissal must be considered to be invalid and accordingly of no force and effect.  A valid notice could only have been issued once a certificate of outcome had been produced.  This was because section 189A(2) was explicit in its language that an employer must give notice of termination in accordance with the provisions of section 189A.

In Edcon the employer had similarly chosen not to use a facilitator.  Edcon commenced with the process of restructuring during April 2013 which resulted in the termination of employment of approximately 3000 of its 40 000 employees.  In light of the fact that the facilitation route had not been followed the dismissals are government by section 189A(8) of the LRA.  51 referrals had been made to the Labour Court challenging the fairness of the dismissal and these referrals involved a total of 1 331 employees.  There was non-compliance with the time periods set in section 189A(8)(a) and (b).  The LAC sat as a Court of first instance.  The employees relied on a single cause of action namely that their dismissals were invalid within the meaning of that term as understood by the LAC in De Beers and accordingly having asserted their dismissals to be invalid and that they should be reinstated with full back pay.

The LAC in Edcon had relied on the following in the finding that De Beers was incorrectly decided:

(1)          The implicit acceptance by the AD in Schierhout v Minister of Justice 1926 AD 99 that a wrongful or invalid termination can in effect bring a contract of employment to an end is consistent in our labour law.  Employees therefore had to be either reinstated and/or receive compensation as recourse.

(2)          Sections 189A(8), (9) and (13) contemplates other remedies where there is non-compliance with the procedural provisions of section 189A(8).  The employees may embark on a strike and apply to the Labour Court to compel the employer to follow a fair procedure, interdict the employer from dismissing the employees before having done so, order the employer to reinstate the employees until it has complied with a fair procedure, or award compensation for any procedural unfairness.  Their aim is therefore to ensure that if the union or employees see a failure of procedure in the consultative process they should act immediately to rectify it as soon as the flaw is detected.  Remedies for procedural flaws should preferably be resorted to before the dismissal takes place or in its immediate aftermath.

(3)          In addition, the concept of an invalid dismissal is incompatible with what the legislator intended in terms of sections 189 and 189A respectively.  As such, the LAC were persuaded that non-compliance with section 189A(8) was not intended by the legislator to result in the invalidity or nullity of any ensuing dismissal and that the De Beers judgment would have the anomalous effect of removing conventional dismissals from the scope of Chapter 8 of the LRA and will not be assessed on the basis of fairness merely because it was procedurally premature and branded as invalid.  The Court held further that the categorisation of the dismissal as invalid leads automatically to reinstatement which is a sanction not in keeping with the purpose of the LRA with reference to section 193(2)(d).

The majority in the Constitutional Court as per Zondo J found that the LRA does not contemplate the concept of an “invalid dismissal” meaning further that a breach on the part of an employer in complying within section 189A(8) may result in the dismissals being unfair, but not invalid.  Section 189A(8), (9) and (13) referred to above contemplates appropriate remedies in these instances.

It is therefore incumbent on employers to ensure compliance with the procedural provisions of section 189A and in instances where there is a failure on the part of the employer in doing so will not result in the subsequent dismissals being rendered invalid.  The dismissals however may be challenged as ordinary procedurally unfair dismissal claims.

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