THE LAW OF PROMOTIONAL COMPETITIONS | Ts & Cs APPLY

Anyone who has ever entered a competition will know these two phrases very well: “the judges’ decision is final” and “no correspondence will be entered into”. Trouble is, these may not in fact be lawful conditions because they could infringe consumers’ rights.

It might also be unlawful when organisers of a competition say, in the fine print, that they “reserve the right” to change the terms and conditions or even to suspend or cancel the competition altogether.

According to attorney Danie Strachan, under the Consumer Protection Act these well-known elements of the “Ts&Cs” that seem to apply to most competitions might actually violate consumers’ rights to “fair, just and reasonable terms and conditions”.

Strachan, a partner at Adams & Adams, has just received a doctorate in law, focussing on promotional competitions and, among other issues, the pitfalls that consumers and organisers should take care to avoid.

Strachan said since the Consumer Protection Act took effect in 2011, promotional competitions have fallen mostly under that law, though they were also still partly regulated by the legislation on lotteries. This in turn meant when there were disputes over aspects of promotional competitions, the courts would look at whether the rights of participants as consumers were properly considered and protected by the organisers.

Many charities did not realise that under the new laws they were not entitled to use promotional competitions to raise funds, and that in 2008 the Supreme Court of Appeal had actually declared a competition unlawful on the basis that it was not a promotional competition, but rather a fund-raiser for charities under the umbrella of the South African Children’s Charities Trust.

To qualify as a promotional competition, it was essential that the competition must be aimed at “promoting a producer, distributor, supplier, or the sale of any goods or services” and it cannot be conducted for any other purpose, such as fundraising.

The fact that consumers are protected under the law when they enter competitions like this means, for example, that it would be unlawful for the organisers to show a picture of the vehicle being offered as a prize and for it to turn out that the vehicle offered to the winner was something quite different. That would amount to misleading the people who entered the competition. Similarly, if the organisers said participants could “win a year’s supply of milk” it would be misleading if in fact the prize was a maximum of one litre of milk a day. To avoid legal action, the organisers must spell out precisely what was being offered as well as the terms and conditions that applied.

What about the lucky winner? – Organisers of many competitions insist that the winner be photographed and that image is then used for further marketing material. In fact however a competition rule that “requires” the winner to allow the organisers to use their photograph in this way would be invalid. The consumer who enters such a competition must always have the choice to refuse to participate in further marketing or to have their photograph taken.

Another issue dealt with by Strachan is the broader question of privacy for everyone who enters competitions. Obviously the organisers will be trying to extend the range of their marketing efforts to as many consumers as possible; but that doesn’t mean they are entitled to infringe the right to privacy of the people who enter the competition. While the law may allow suppliers to “conduct direct marketing” that complies with the consumer laws, they have to stop sending directing marketing to consumers who requests them to do so.

Will there be any serious consequences for a supplier who simply ignores the law on questions like this? Strachan points out that if the supplier won’t comply the matter could be investigated by the National Consumer Commission, either through its own initiative or following a complaint by a consumer. The commission could then issue a “compliance notice” if it believed the law had been infringed. If there was no response, the commission could apply to the National Consumer Tribunal to impose a fine. And it might be quite severe: up to R1-million or 10 percent of the offender’s annual turnover. The dispute might also be referred for prosecution, with a possible fine and/or imprisonment of up to 12 months if there is a conviction.

Strachan says all this shows organisers should be careful that they set up and run their competitions in a lawful way. “If this is not done they could face significant penalties.” But, he warned, however harsh they were the penalties would only work as a deterrent if the law were actively enforced. Thus, the National Lotteries Commission and the National Consumer Commission should monitor promotional competitions, investigate non-compliance and ensure that steps were taken against offenders. Only then would consumers be effectively protected.

For assistance in drafting promotional competition guidelines, contact Danie Strachan | Danie.Strachan@AdamsAdams.com

[Article by Carmel Rickard]

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THE COHABITATION INTERPRETATION

When asked at a recent Comic Con about the future living arrangements of their characters, Amy and Sheldon on the hit TV series The Big Bang Theory, Jim Parsons (Sheldon) quipped “Right now, there is such a new world of living together and what that means, and working that out.” 21st Century relationships come in all shapes, forms and sizes, but what are the risks of being in a long-term relationship that is not formally recognised as a lawful marriage?

“At the outset it is important to stress that there is no such thing as a common law marriage or spouse”, says Shani van Niekerk, an Associate at Adams & Adams. “The amount of time that a couple lives together does not translate into a default marriage. We’ve had clients ask us about a “six-month rule”. It’s a total myth unfortunately.”

The consequence is that at the dissolution of the relationship, or in the event that a cohabitant dies without leaving a Will, partners are left very vulnerable and without the legislative protection which married individuals enjoy. For example, when a cohabitant dies without leaving a valid will, the partner has no right to inherit under the Intestate Succession Act. A cohabitant also cannot rely on the Maintenance of Surviving Spouses Act to secure maintenance should a partner pass away. There’s no legal obligation on either person to maintain the other – meaning no enforceable right to claim maintenance from each other.

So what can you do to protect your interests in a cohabitation relationship? Shani suggests taking a leaf out of Sheldon’s script. “The only way to be protected in our law is to enter into a cohabitation agreement. Such an agreement is in the best interests of both parties in a relationship and clarifies the expectations of the partners.”

A cohabitation agreement regulates the rights and duties between partners, and could almost be compared to an ante-nuptial contract in a civil marriage. The agreement can provide for the division and distribution of assets if the relationship ends, the rights and obligations towards each other with regards to maintenance, and parties’ obligations and respective financial contributions towards the joint home. A cohabitation agreement will be legally binding as long as it contains no provisions that are immoral or illegal, however it is important to note that a cohabitation agreement will not be enforceable insofar as third parties are concerned.

In a long-term relationship where marriage is not considered or possible, a cohabitation agreement is the smart way to live together without the fear of the future. Chatting to an experienced family law attorney and getting a cohabitation agreements drawn up may help you avoid the financial risks and potential trauma of a possible break-up.

Contact Adams & Adams for help in setting up your agreement, telephone 012 432 6000 or email:

Shani van Niekerk (Associate) | Shani.vanNiekerk@AdamsAdams.com

David Scheepers (Partner) | David.Scheepers@AdamsAdams.com

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IP COMMENTARY | MAURITIUS DRAFT INDUSTRIAL PROPERTY BILL

The Mauritius Draft Industrial Property Bill is open for comment [Download Here]. We are in the process of studying the draft, but in the meantime we are able to offer the following initial comments pertaining to Trade Marks in the Bill. This is a Bill which seeks to consolidate all aspects of IP into a single piece of legislation.

A brief summary of the changes is outlined below:-

  • Definition of a trade mark has been extended to also cover collective and certification marks. Specific grounds for the invalidation of a certification mark were added, but no similar provisions for collective marks are included.
  • Grounds for refusal of a trade mark expanded, the most notable being that a mark shall not be registered if it consists exclusively of the shape of the goods or where the shape is necessary to obtain a specific technical result.
  • Registration of a trade mark on the basis of honest concurrent use or other special circumstances may be permitted.
  • The Bill provides that if a filing formality deficiency is notified, the applicant has two months to correct that deficiency.  The filing date then becomes the date of correction of the deficiency, rather than the original filing date.
  • The Bill also provides for the division of an application into two or more applications, which will then be treated independently, retaining the original filing date.  (Useful when facing citations)
  • A remedy for unregistered marks is provided – The earlier user of a trade mark that is neither registered nor the subject of a pending application, will entitle the owner to oppose a confusingly similar trade mark by presenting the relevant evidence of such use.
  • International exhaustion of rights – the right to be accorded by the registration of a trade mark shall be exhausted once the product is put in the market by the registered proprietor or with his consent in Mauritius or any other country in the world.
  • The Bill provides for additional defences to trade mark infringement, similar to the South African Act. The defences added include:
  1. Specific provisions dealing with exhaustion of rights.
  2. If a mark is used to truthfully indicate the goods or services originating from the owner of the trade mark.
  3. Use of a trade mark to provide information regarding the intended purpose, use of compatibility of the product or services, including spare parts.
  4. Indications of a descriptive nature
  5. Own name / place of business provisions similar.
  • The proviso to the defences is that:
  1. Use must be compatible with honest practice and the mark must not be used in a manner that causes confusion.
  2. The use must not take unfair advantage of, or be detrimental to, the distinctive character or repute of the mark.
  • The Bill amends the provisions dealing with trade mark infringement. It seems that only use of the identical mark in respect of the identical goods / services is covered (section 98(1)). The provisions dealing with similar marks or goods / services where not retained. This seems to be an omission in the Bill.
  • The Bill makes provision for partial cancellation, and expressly states that a cancelled trade mark registration is void ab initio.
  • New terminology – The head of the IP Office will be the Director as opposed to Controller under the current Act. The Bill also provides for the establishment of the Intellectual Property Council to serve as a co-ordinating body between private and public stakeholders for the effective national IP policy and enforcement.
  • The scope and composition of the Tribunal for the adjudication of IP matters defined.
  • New provisions are made for registration of Geographic Indications, defined as an indication which identifies any goods as originating in the territory of a country, or a region or locality in that country, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin. The nature of the right, scope and duration outlined.
  • The provisions relating to International Registrations via the Madrid Protocol are set out, although Mauritius has yet to join the Madrid system.
  • The Bill introduces a statutory prescription period of 5 years for any proceedings in terms of the Bill.

For further information and feedback or advice, contact our team now.

Megan Moerdijk | Partner

Kagisho manyashi

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Trade Mark Attorney

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wensel Britz

Senior Associate
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GULFTEX v GULF | TRADE MARK OPPOSITION IN KENYA

In a recent decision of the Assistant Registrar of Trade Marks in Kenya, an opposition to trade mark application no. KE/T/2012/76147 GULFTEX (depicted below) in class 4 by Gulf International Lubricants was upheld.

gulftex-logo

The opposition was based on prior registrations in Kenya for the GULF trade marks in class 4, in respect of the identical goods (being oils and lubricants), and the fact that these trade marks are well-known.

gulf-logoWhen assessing the similarity between the GULFTEX and the GULF and GULF logo marks, the Registrar took into account that while marks must be viewed as wholes, marks are identical where they reproduce, without any modification or addition, all the elements constituting the mark, or where when viewed as a whole, they contain differences so insignificant that they can go unnoticed by an average consumer.

The Registrar found that the dominant element of the marks is the word GULF and that the addition of the suffix “TEX” to the word “GULF” by the Applicant is insignificant and does not enable the Applicant’s mark to act as a badge of origin for the goods in respect of which registration is sought in class 4. This was found to be due to the fact that the Applicant had admitted that the term “TEX” is borrowed from the English term “texture” which had been incorporated in the Applicant’s mark to denote that texture of the products. The term was found not to distinguish the mark.

While the Registrar again recognised that the marks must be considered as wholes, without splitting them into their respective elements, the Registrar did find that the structure of the trade mark is key when considering the similarity of the two marks and that where prefixes are identical or similar, confusion or deception is likely to occur, as compared to where the similar or identical elements are suffixes.

In an effort to distinguish the goods covered by the application as compared to the goods covered by the prior registrations for the GULF and GULF logo marks, the Applicant argued that the parties’ products had different characteristics such as colour, dropping point, the soap type, texture, temperature range and viscosity.

The Registrar held that these type of characteristics are not relevant when assessing the similarity of goods and that the test established and applied in other cases, including the case of British Sugar PLC vs James Robertson and Sons Limited, is applicable.

Contrary to what the Applicant argued, the Registrar found that the mark GULF has nothing to do with the character of goods in class 4 nor is it descriptive of such goods.

The GULF trade mark was found to be a strong mark which should be afforded protection.

With regard to the second ground of opposition, the Registrar went through the exercise of discussing all of the factors and evidence which is required in order to prove that a mark is well-known, particularly in Kenya, but found that insufficient evidence had been adduced to prove that the GULF trade marks are well-known in Kenya.

Registration of the GULFTEX trade mark in class 4 was nevertheless still refused on the basis that it is so similar to the GULF trade mark that registration would be contrary to the provisions of Section 15(1) of the Trade Marks Act, Cap 506 of the Laws of Kenya, and results in a win for Gulf International Lubricants Limited.

By Lisa van Zuydam | Associate

Kelly Thompson | Partner

KELLY THOMPSON

Partner & Chairperson of Trade Mark Litigation
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‘TIS THE SEASON OF COUNTERFEITING | BRAND HOLDER REMEDIES

Dealing in counterfeit goods is unlawful as set out in the Counterfeit Goods Act no. 37 of 1997.

Brandholders who wish to protect their brands against the importation, manufacture and sale of counterfeit goods may rely on their intellectual property in the form of trade marks or copyright in order to apply for a formal search and seizure warrant.

Once the warrant has been granted, a search and seizure operation will be executed by the relevant law enforcement agencies. The counterfeit goods found at the premises will then be formally seized, transported to a designated counterfeit goods depot and securely kept as evidence.

Brandholders may elect to pursue civil and/or criminal proceedings against the infringer. The remedies set out in the Counterfeit Goods Act can be far-reaching.

During the festive period, the sale of counterfeit goods is rife and we are in a position to assist brandholders with any concerns pertaining to the importation, manufacturing and sale of suspected counterfeit goods in South Africa.

For more information, please contact our anti-counterfeiting team.

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ARIPO | 40th ANNUAL COUNCIL SESSION IN HARARE

 

 

ARIPO held its 40th Administrative Council Session in Harare, Zimbabwe from 5 -7 December 2016 . During the session,  the Administrative Council approved amendments of the Harare Protocol which regulates the filing and prosecution of patents, utility models and industrial designs. The approved amendments include new provisions regarding the following:

  • Inventions excluded from patentability
  • Requesting substantive examination .
  • Restoration of rights in respect of patents, utility models and industrial designs
  • Post grant  amendment  of the claims

The Administrative Council also approved an increase  of the  official fees in respect of patents and the introduction of new fees for certain patent related services.

We expect the  amendments  to  come  into effect from 1 January 2017. Should you require additional information on patent and design protection in ARIPO, please feel free to contact us.

nicky garnett

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nthabisheng phaswana

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simon brown

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

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CHANGES TO TRADE MARK LAW INTRODUCED BY LIBERIA IP ACT

 

The new Liberian Industrial Property Act, 2014 (“the New Act”) was approved by the Liberian House of Representatives on 14 June 2016 and is now in force.  The new Act repeals both the Copyright Act of Liberia 1997 and the Industrial Property Act of Liberia, 2003 (“the 2003 Act”) and provides for the protection of Copyright, Trade Marks, Geographical Indications, Industrial Designs, Patent and Utility Models and lay-out designs of Integrated circuits.

The Regulations are still being drafted and there is, accordingly, still some uncertainty regarding a number of aspects.

Types of marks

Liberia acceded to the Madrid Protocol in 2009, although its national legislation did not make provision for the filing of international trade mark applications.  One of the most significant developments is that the New Act makes provision for the filing of international applications under the Madrid Protocol. Provision is also made for honest concurrent user applications, the registration of non-traditional trade marks, including colour and shape marks and Certification marks, which is defined as:

a sign that is used to indicate the specified standards or characteristics, including quality, origin or method of production, have been complied with in respect of goods or services as certified by or under the control of the holder of the registration of the mark”.

The New Act has also redefines a “collective mark” as:  “any mark that belongs to a collective organization such as a cooperative, an association or a federation of industries, producers or traders”.

Registrability and opposition

The New Act provides for a wide range of circumstances in which a trade mark cannot be registered.

After the examination of an application, the application will be published for opposition purposes and any interested person may, within the prescribed period and in the prescribed manner, file with the Director General a notice of opposition. The Act does not, however, prescribe the opposition term and no Regulations, in this regard, have been implemented as yet.  The opposition term is therefore uncertain.

Infringement

The New Act entitles the registered proprietor to prevent an unauthorised third party from carrying out the following acts:

  1. affixing an identical mark on goods in respect of which the mark has been registered, or on goods associated with the services for which the mark has been registered, or on the containers, wrapping or packaging of such goods;
  2. suppressing or distorting the mark for commercial purposes after it has been affixed;
  3. manufacturing, selling, offering for sale, distributing or stocking material bearing the relevant mark or may be used as labels, containers, wrappings, packaging, business paper or advertising;
  4. using, in the course of trade, a mark identical or similar to the registered trade mark, in relation to any goods or service, where such use may cause a risk of confusion or association with the registered proprietor, provided that were an identical mark is used in relation to the exact goods in respect of which the mark has been registered, a likelihood of confusion shall be presumed;
  5. using, in the course of trade, a mark identical or similar to the registered trade mark, in relation to any goods or services, where such use may cause unfair economic prejudice to the registered proprietor, or take unfair advantage of, dilute or otherwise be detrimental to the distinctive character or advertising value of the trade mark, or would take unfair advantage of the reputation of the mark or registered proprietor; and
  6. using publicly, a mark identical or similar to the registered trade mark, even for non-commercial purposes, where such use may dilute the distinctive character or advertising value of the mark, or would take unfair advantage of the reputation of the mark or registered proprietor.

It is interesting to note that use of an identical or similar mark to the registered trade mark, in the course of trade for non-commercial purposes may constitute trade mark infringement. The New Act also purports to protect the advertising value of a trade mark.

The New Act stipulates a number of acts which shall be regarded as use of the mark in the course of trade, including the use of a mark in oral communications, irrespective of the means of communication or media used.

The New Act sets out various acts which shall not constitute trade mark infringement, such as the parallel importation of genuine goods, provided that the goods and its packaging or wrapping have not suffered any alteration or damage.

Cancellation and invalidation of registered trade marks

According to the New Act, any interested person may request the Director General to invalidate the registration of a trade mark in relation to some or all of the goods or services for which the trade mark has been registered.  Invalidation proceedings based on prior rights may, however, only be filed within 5 years after the date of registration of a mark, unless the mark was registered in bad faith. There is no time limit on filing a request for invalidation on any other ground.

A registered trade mark may be vulnerable to cancellation if:

  1. the mark has not been put to genuine use in Liberia, in relation to the goods and services in respect of which it has been registered, within 3 years after registration of the mark, and there are no justified reasons for such failure to use;
  2. substantive use of the mark has been suspended for an uninterrupted period of three years and there are no justified reasons for such failure to use;
  3. as a result of any act or failure by the registered proprietor, the mark has become a common name or the only effective designation available for use in the ordinary course of trade in respect of the goods or services for which it is registered; or
  4. as a result of the manner in which the registered proprietor used the mark, or allows the mark to be used, the mark is likely the mislead the public, particularly as to the nature, quality or geographical origin of the goods or services in respect of which it is registered.

If use of a registered mark commenced or resumed after the expiry of the three year period referred to above and not less than one month before cancellation proceedings is instituted, the registration will no longer be vulnerable to cancellation. The onus is on the registered proprietor of the mark to show that the mark has been used during the relevant period

Well-known marks

A well-known distinctive mark shall be infringed by the unauthorised use of a mark identical or confusingly similar to that distinctive mark, where such use would indicate a connection between the goods and services of the owner of the well-known mark or the reputation of the mark or its owner is likely to be damaged by such use.

The Act lists the following factors which shall be taken into consideration to determine whether a mark is well-known:

  1. the degree of knowledge of the sign among members of the relevant sector of the public within Liberia;
  2. the duration, scope and geographical extension of the use and/or promotion of the mark, inside and outside of Liberia;
  3. the existence and age of any registration or application for the mark in Liberia or elsewhere;
  4. actions taken to defend the mark, in particular any decisions made by national or foreign authorities, where the mark was considered to be well-known; and
  5. the amount spent on promoting the mark, the establishment, activity or relevant goods or services to which the mark applies.

The New Act expressly states that a mark will be considered to be well-known if it is generally known in one relevant sector of the public. The various relevant sectors of the public are referred to as:

  1. actual or potential consumers of the relevant type of goods or services;
  2. persons involved in marketing or distribution channels of the relevant type of goods or services; or
  3. the entrepreneurs in the business circles relating to the relevant type of goods, services, establishment or activity.

Licensing and assignment

Licensing of a registered trade mark is recognized and licence agreements must provide for the effective control by the licensor, of the quality of the goods or services of the licencee in connection with which the mark is used. If the agreement does not provide for such quality control, or such control is not effectively carried out, the agreement will be invalid.

Assignments shall be in writing and duly executed.

by Lize-Mari van Dyk | Associate

EU IP DEVELOPMENTS AND THE IMPACT OF BREXIT FOR HOLDERS OF EU IP RIGHTS

EU IP DEVELOPMENTS

A number of changes, which came into force on 26 March 2016, were made to the EU Regulations, affecting EU trade marks and designs.

The Office for Harmonisation in the Internal Market (OHIM) is now known as the European Union Intellectual Property Office (EUIPO) and a Community trade mark (CTM) is now referred to as a European Union Trade Mark (EUTM).

Article 28 of the Regulations provides that trade marks registered for class headings will now only be protected for goods/services that fall within the literal meaning of the goods/services listed in the class heading (and any other goods/services specifically listed). This will severely limit the scope of protection of some EU trade marks and trade mark proprietors will now no longer be able to claim wide rights in an entire class heading. Owners of EU trade mark applications/registrations filed before 22 June 2012 and which were filed covering the broad class headings were allowed to amend their specifications to use more specific/precise wording by submitting a written Declaration between 23 March 2016 and 23 September 2016, in line with the requirements of the EU Regulations. No extension of the deadline of 23 September was allowed. The Regulations provide that the Declaration would be examined and published in the EU Bulletin. If no acceptable Declaration was filed in time, proprietors’ EUTM registrations are deemed to protect only the goods/services covered by the literal meaning of the class heading.

Changes to fees payable for trade mark applications were also implemented after 23 March. The official fee to file one application now only covers one class, where it previously covered up to 3 classes. A number of changes were also introduced regarding the enforcement of EUTM applications but I will not detail any here.

The Regulations also provide that “in order to allow for more flexibility while also ensuring greater legal certainty with regard to the means of representation of trade marks, the requirement of graphic representability should be deleted from the definition of an EU trade mark. A sign should be permitted to be represented in any appropriate form using generally available technology and thus not necessarily by graphic means, as long as representation is clear, precise, self-contained, easily accessible, intelligible, durable and objective“.  The removal of the graphic representation requirement should make it possible to apply for the registration of non-traditional trade marks in the EU.

The European Commission has expressed clear intentions to reform and harmonise copyright law across the EU in terms of its Digital Single Market Initiative. It has been submitted that this will be the EU’s most significant copyright reform. On 14 September 2016, the President of the European Commission, Jean-Claude Juncker, at his State of the Union Address, addressed problems with current EU copyright laws. The most controversial of the proposals is a new reform to provide publishers with rights already afforded to authors, performers, film and record producers (similar to current copyright laws) for online use of their news publications, so that they would be fairly remunerated for their work made available online. The proposal would also allow publishers to benefit from possible future restrictions to hyperlinking, following the recent CJEU decision in GS Media BV v Sanoma & Others.  The idea is to allow publishers to secure license fees from search engines and other intermediaries who use their content for up to 20 years from publication and to place extra obligations on them for when users and third parties upload infringing content.

The proposed reforms have been welcomed by many news and media agencies, saying the proposal has addressed the unsatisfactory situation whereby high quality content produced by press publishers contributes to the success of many online platforms that do not make a significant contribution to the content and where publishers do not benefit from an appropriate share of the value produced. However, the proposals have also been heavily criticised and petitioned by many who feel that they are more of a regression in the digital area (rather than amounting to reform) and will have the effect of limiting access to information and/or increasing the price of content online.

Mozilla, the creator of internet browser Firefox has stated that the proposals will create an environment of legal uncertainty for online users/businesses and result in blocking of freedom of speech and innovation online and create unnecessary barriers of entry for small businesses. They also stated that clauses relating to fair dealing or fair use in a clearly defined way should have been included in the proposals and that it is up to the European Parliament and EU member states to review the proposals and make amendments. OpenMedia.com have said the proposals strike a blow at the very foundations of an open internet and if made law, the EU will fall behind when it comes to digital innovation. Concerns have mounted that what will follow will be similar to what happened in Spain when the introduction of a similar law led to the closure of many businesses who relocated to countries and markets outside of the EU. There are clear competing interests at hand but nevertheless, Mr Juncker expressed on 14 September that the EU Commission is on track to implement the reforms by the end of this year.

IMPACT OF BREXIT FOR HOLDERS OF EU IP RIGHTS

There is a general consensus that the UK’s decision to exit the EU has and will continue to affect how clients do business across various sectors in the UK and EU.  While we may have already witnessed some economic effects, we are yet to see the long term consequences that Brexit will have on the UK’s trade, imports and exports, banking and financial services, various areas of the law, etc. It is impossible to cover all the likely ramifications relating to Brexit in a simple article but I will say that the legal consequences are likely to develop and materialise over some length of time. Here, I discuss the possible impact Brexit may have on intellectual property rights, with a particular focus on trade marks.

Currently, a single trade mark application filed in the EU (EUTM) provides protection in 28 member countries of the EU, once it has proceeded to registration.  A registered community design (RCD) is similar in that it also provides protection in the EU by way of a single registration.  Brexit will not affect UK national trade mark and design registrations.  However, Brexit has sparked concerns regarding clients’ trade mark and design rights in the UK where they secured protection via an EUTM or RCD. In a recent Adams & Adams article by Claire Bothma and Simon Brown (dated 24 June 2016), it was stated that in the short term, a UK exit from the EU will have no effect on existing EUTM registrations but that once the UK’s withdrawal from the EU has been ratified, we believe that current EUTM registrations would no longer cover the UK. The article also states that we expect that appropriately enacted legislation will be implemented to ensure that such rights continue to have force in the UK and that there will likely be transitional provisions available to partially convert existing EUTM registrations into UK national trade mark registrations, which may also enjoy the same (earlier) filing dates.  As such, the mentioned article provides that, for now, clients’ trade mark rights in the UK, covered by an EUTM registration, appear to be secure.

However, uncertainties do remain until the UK formally exits the EU.  We hope that transitional arrangements will be implemented to partially convert registered EUTMs to national UK trade mark registrations, at the UK Trade Mark Office, while preserving their original filing dates, but there is speculation that this would be an enormous administrative undertaking and may not be feasible.  By contrast to EUTM applications, a national UK trade mark application requires the applicant to declare either that the mark is in use or that the applicant has a bona fide intention to use the mark in the UK.  As such, the UK Trade Mark Office might require proof of use before EUTM registrations can be converted into national trade mark registrations in the UK (if they are vulnerable to a non-use attack).  There are also questions regarding the validity of registered EUTMs whose geographical use is specific to the UK.  With regard to the latter, proprietors of registered EUTMs who have used their trade marks only in the UK for now, should consider operating in other EU member states to avoid cancellation actions on the basis of non-use.

As a result of the uncertainties present and in order to minimise any risks during the transitional period (where negotiations to exit the EU may be a lengthy process), it is advisable that owners of EUTM registrations which consider the UK to be an important market, to consider filing national UK trade mark applications now, rather than wait and see what happens when the UK formally exits the EU. One could also consider applying to extend an existing International Registration (in terms of the Madrid Protocol) to the UK, if that country was not originally designated at the time of filing an International Registration. For any new trade marks requiring protection, I recommend filing in both the EU and UK, if both territories are important to clients’ businesses.

By virtue of its current EU membership, the UK enjoys benefits of various Free Trade Agreements (FTAs) that the EU has negotiated with third countries, including the U.S.A.  The free movement principles currently provide that most goods can be traded and moved between EU member states without tariffs and customs duties, irrespective of the origin of the goods.  It has been submitted that after the ratification of Brexit, there is a strong likelihood that the UK will lose those benefits and will have to re-negotiate its own FTAs with various countries, separately from the EU, at the same time that it negotiates its withdrawal from the EU.  This will undoubtedly have an effect on clients’ UK IP rights as anything influencing trade, generally, influences IP rights.

Current EU legislation provides that judgments of a court in one EU country will generally be recognised in another EU country.  Having regard to the UK’s close relationship with the EU for many years, there has generally been a gravitation towards a “European” interpretation of its laws.  Now, the question is how will English judgments be treated post Brexit? Will there be a movement away from a “European” interpretation of the law?  Currently, it is not clear to what extent EU principles and laws will continue to apply in the UK.  Some commentators have advised that, in general, EU laws will no longer apply in the UK unless they have been implemented in the UK by Acts of Parliament.  Some commentators have expressed the view that if the UK remains part of the European Economic Area (EEA), most of the UK’s intellectual property laws are likely to stay closely aligned with EU law but if the UK steps out of the EEA, its laws may begin to depart from EU law over time. Clients enforcing their IP rights will most likely need to initiate proceedings in the EU and UK separately, once the UK formally withdraws from the EU, which will increase IP enforcement costs.

Since some of the UK’s copyright law is based on international Conventions (such as the Berne Convention and WIPO Copyright Treaty), the UK’s copyright law should remain unaffected by Brexit and it is unlikely that the UK will repeal its national copyright legislation (i.e. the Copyright Designs and Patents Act 1988).  In this regard, it has been submitted that the UK will retain EU law influences derived from the EU Copyright Directive and decisions of the CJEU (Court of Justice of the European Union). In the long term, however, UK copyright law might start to diverge from EU law.  This remains to be seen.  It is currently uncertain whether or not the UK will be involved in the EU’s Digital Single Market initiative (mentioned above).

UK patent law is based on national UK legislation, in the form of the Patent Act 1977.  Currently, patent applicants may secure protection for their inventions in the UK in 2 different ways: a) by filing a national patent application at the UK’s Intellectual Property Office (IPO) or b) by filing a European patent application at the European Patent Office (EPO).  On 2 August 2016 the IPO published its first official Statement since the EU referendum regarding the impact of Brexit on IP rights in the UK. The primary message in the Statement is that the UK remains a part of the EU until the negotiations to exit are concluded. Regarding patents, the IPO confirmed that the UK will remain part of the European Patent Convention system since this Convention was not established through EU legislation. As such, it will still be possible for applicants to apply for European patents designating the UK via the European Patent Office.  However, the UK’s involvement with the EU’s proposed unitary patents and Unified Patent Court (UPC) system has been the topic of much debate since the Brexit vote.

The EU member countries have spent over 40 years trying to establish a unitary patent that would cover multiple EU countries and a common Court for patent disputes. This, to simplify patent processes and reduce costs for businesses. Twenty five of the EU states signed the Unified Patent Court Agreement (UPCA) in 2013 in this regard. It was required for the UPCA to be ratified by 13 countries (including the UK) in order for the Agreement to come into force. 10 countries have ratified the Agreement so far and it was expected that the UK would do so before the end of 2016 and that the new unitary patent system would come into force in early 2017.  After the EU Referendum vote, much speculation followed as to whether the proposed unitary patent and UPC would happen at all (as the UK was a required signatory to the agreement and one of the countries needing to ratify the UPCA for it to come into force) or whether it would be delayed. Another question raised was whether the remaining UPC countries would possibly re-negotiate a new UPC Agreement specifically excluding the UK. On 2 August, the IPO advised that for now, while the UK is still a member of the EU, it will continue to participate in meetings regarding the proposed unitary patents and Unified Patent Court (UPC) system.  The Chartered Institute of Patent Attorneys (CIPA) has indicated a strong preference for the UK to participate in the proposed Unified Patent Court.

On 13 October 2016 at the London IP Summit, Alexander Ramsay (the chair of the UPC Preparatory Committee) said that delays to implement the UPC System on account of Brexit should be avoided and that the UK government should make a swift decision as to whether it still wants to be part of the UPC or not. He confirmed that the UPC will continue regardless of whether the UK participates or not and that if the UK opts out of the UPC, or cannot provide a definitive answer, the agreement would have to be re-negotiated. Another panellist at the summit, Dr Ben Grau (patent attorney), advised that he believes it could be up to 5 years before a decision is made and a solution is reached. It seems there will only be clarity on the issue once the UK formally withdraws from the EU and all Brexit related negotiations have been completed.

Various contracts involving IP rights such as, inter alia, license agreements and manufacturer and distribution agreements will need to be reviewed by clients in terms of Brexit implications, e.g. whether to identify the UK separately from the EU in certain clauses and whether to specifically identify UK laws associated with IP enforcement. If negotiating new contracts, clients should consider whether provisions should be included to cover the transitional period and likely changes after the UK’s formal withdrawal from the EU.

On 8 June 2016 following a proposal from the European Commission, the European Parliament and the Council adopted a Trade Secrets Directive that aims to standardise the national laws in EU member countries against the unlawful acquisition, disclosure and use of trade secrets. According to the European Commission, “a trade secret is a form of intellectual property that is a valuable piece of information for a business that is treated as confidential and which gives that business a competitive advantage”. Member states of the EU are required to implement the Trade Secrets Directive by 9 June 2018.  Following the Brexit decision, it is now unclear if the UK will implement domestic legislation to enforce the Trade Secrets Directive by the abovementioned deadline.

Brexit should not affect the UK’s membership of the World Intellectual Property Organisation (WIPO), set up under the WIPO Convention.

The UK and EU are also members of the World Trade Organisation (WTO) in their own right but the European Commission alone represents the EU and all EU member states (including the UK) in practically all WTO meetings. As such, the influence of Brexit on the UK’s membership of the WTO and how the UK will engage in future meetings will now need to be addressed.

Although EU intellectual property laws will remain in effect until the UK formally withdraws from the EU (i.e. at least another 2 years away), clients (including South African businesses) should be mindful of the anticipated changes in securing and maintaining their IP rights in the UK.  Feel free to contact us should you have any questions relating to the above.

By Catherine Wojtowitz | Associate

 

 

 

INTRODUCING | ADAMS ON AFRICA

Adams on Africa is a new quarterly digital publication by Africa’s largest IP firm and one of the continent’s most prestigious commercial, corporate and property law practices. 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

 

STARTING A NEW CONVERSATION

Africa’s Time Waits For No One. That’s the statement of fact and spirit that pivots the recently-launched advertising and marketing campaign of Adams & Adams – Africa’s largest intellectual property law firm and one of South Africa’s foremost corporate, commercial and property practices.

In introducing the new campaign to staff and clients, Partner and Chairman, Gérard du Plessis described the thinking behind the statement and the imagery; “The pace of development and growth in Africa is startling and exciting. It’s no longer a case of whether Africa is ready, but rather a proclamation that Africa is not waiting for you anymore – so let us help you get moving. We’re already representing around 240 Fortune 500 companies with their African success stories – both commercially and with their intellectual property portfolios.”

The expression “Africa’s time waits for no one” is intended to turn an often-used and cynical idiom about “African time” on its head, and is designed to initiate a discussion about what South Africans, as Africa citizens, are doing to promote Afro-optimism and be part of economic and social prosperity on the continent. “Interestingly, this theme originated through our involvement as sponsors of the King IV report on corporate governance,” adds du Plessis. “The question of good corporate citizenship is central to King IV and forces firms such as ours to not only be responsible in our business dealings, but to also be a positive force for change on our continent.”

Celebrated illustrator, Kerby Rosanes, was commissioned to draw recognisable African animals and features in his trade mark pencil vector style. “The unique drawings that accompany each campaign posters are a reference to our African roots – but each image is then given a dramatic twist,” explains Head of Marketing, Natalie Stephan, “Each drawing is given a geometric treatment that offers the impression that there is an explosion of energy and success out of a carefully planned stage – we want to show our audience that business success in Africa is never an accident, it is a planned evolution – and Adams & Adams, through our experience and attitude, can be a keystone of that design and plan.”

The new advertising campaign is currently flighting on billboards along the N1 and M1 highways, as well as on digital boards in Sandton and at certain Gautrain stations. A print advertising campaign is more expansive in its messaging and includes a central tagline “Helping you write your African Success Story.” The verb “write” is interchanged with other words such as “protect”, “create”, “design”, “cultivate” and “share”, depending on the practice area that is in focus.

Gérard du Plessis

Partner & Firm Chairman
Trade Mark Attorney

View Profile

AFRICA | REGIONAL HIGHLIGHTS

Dr Kanayo Nwanze, President of  the International Fund for Agricultural Development, recently opened the Africa Together Conference at Cambridge University with the question: “When more than three hundred million men, women and children still live in poverty on the African continent, a land with so much wealth and potential, we must ask ourselves what our role (as Africans) is in engendering an inclusive Africa? Development starts with people, not structures. We must invest in our people.”

More than 8 000 miles to the south of the Africa Together Conference, the delegates at the Africa Network Meeting in Pretoria were tackling a similar question – how to preserve the legacies and intellectual capital of Africa for Africans.

Renowned actor, director, writer and playwright, John Kani, welcomed the intellectual property law professionals who had gathered for the 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 his time in Hollywood – including his latest role as an African monarch in Marvel’s 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 joked. “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.

In welcoming the attendees, both Gérard du Plessis, Chairman and Simon Brown, Partner, stressed the importance of IP law professionals and IP administrators in sharing their experiences and updates on IP developments and legislation 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 that allows for the centralised registration and management of trademarks. Of the 37 African territories who are currently members of the Madrid Agreement/Protocol, only seven have properly “domesticated” the protocol through appropriate amendments to their national trademark legislation, together with the implementation on enabling regulations.

Speaking at a recent Madrid system think-tank at Adams & Adams, Stephen Hollis, Partner, 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 trademark legislation is not considered to be enacted properly until the so-called ‘enabling regulations’ have been promulgated. Enabling regulations supplement and complete trademark 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”.

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

Queries regarding trademark, patent, design and copyright registrations, prosecution and litigation in Africa should be directed to mail@adamsadams.com  or through the website www.adamsadams.com

REGIONAL HIGHLIGHTS

NORTH AFRICA

Egypt

The Ministry of Supply and Internal Trade introduced a new system of enforcing the protection of trademarks and of limiting infringements. Through a smartphone application or text message, consumers will be able to verify instantly whether or not a particular product is genuine. The verification message would include the product’s name and expiration date. Trademark owners are able to place a sticker on all products that are sold in the Egyptian market and are registered with the Egyptian Trademarks Office.

Egypt’s Ministry of Trade and Industry also amended the rules overseeing the registration of factories qualified to export certain products to Egypt. The new decree requires factories and companies to export listed products and to register their trademarks with the General Organisation for Export and Import Control (GOEIC). egypt@adamsadams.com

Algeria

The North African state of Algeria became a member of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks in the fourth quarter of 2015. It gives a trademark owner the possibility of having a mark protected in several countries by simply filing one application with a single office. Brand owners in Algeria will also benefit by gaining access to the territories covered by the Madrid Protocol for international trademark protection. However, Megan Moerdijk, Partner at Adams & Adams, encouraged brand owners to consult with her office first as the effectiveness of the Madrid Protocol – particularly referencing enforcement – has not yet been fully tested in Algeria. algeria@adamsadams.com

Tunisia

Tunisia became one of the latest African territories to ratify the WIPO’s Beijing Treaty on Audiovisual Performances. The Beijing Treaty on Audiovisual Performances, adopted in June 2012, deals with the intellectual property rights of performers in audiovisual performances. It grants performers four kinds of economic rights for their performances fixed in audiovisual fixations, such as motion pictures: 1. The right of reproduction. 2. The right of distribution. 3. The right of rental. 4. The right of making available. tunisia@adamsadams.com

Morocco

Effective March 2016, the official fees for trademark applications submitted online has been increased by 20%. Renewal official fees have also been increased by 20%. morocco@adamsadams.com

EAST AFRICA

IP developments in East Africa, especially the EAC will be significantly shaped in the near future by implementation of the EAC Customs Union protocol which permits free movement of goods. More countries in the region are adopting border measures to curb counterfeits, but brand owners need to remain vigilant, not only in registering IP rights, but also changes in user licenses or distribution agreements.

Kenya

In May 2016 the International Convention for the Protection of New Varieties of Plants (UPOV Convention revised in 19 March 1991) entered into force in Kenya. Kenya was the first country in Africa to join Union internationale pour la protection des obtentions végétales (UPOV) when it became a member in 1999 and subsequently domesticated the 1961 Act of the UPOV Convention in the Kenya through Seed and Plant Varieties Act Cap 326.

Kenya’s Copyright Board (KECOBO) has published two sets of draft proposals of amendments to the Copyright Act on collective management organisations (CMOs). With regard to assignment and licenses, the draft seeks to modify the procedure for verification of assignment of copyright works from outside Kenya. The proposed procedure requires KECOBO to issue a certificate of verification upon successful application for verification with necessary supporting documents. Thereafter, the verified assignment shall be entered in the Copyright Register upon payment of a registration fee as set out in the Second Schedule. For queries in this regard, email kenya@adamsadams.com

Ethiopia

The Council of Ministers Regulation No. 273/2012 of December 2012 on Trademark Registration and Protection brought into force changes such as the application of cancellation and invalidation procedures and the extension of the renewal period from six to seven years. Priority claims are now recognised and the international classification of goods and services will be followed. ethiopia@adamsadams.com

Uganda

The Industrial Property Act, 2014 for patents, utility models, technovations and industrial designs is undergoing a review with respect to the employee/employer relationship on inventions. uganda@adamsadams.com

Tanzania

A new Industrial Property Act is being developed that will ensure the consolidation of patents and trademarks, and include industrial designs and trade secrets. tanzania@adamsadams.com

Rwanda

Rwanda became a member of the Madrid Protocol in 2013 and the IP registry is expected to be ready to start receiving and implementing new applications using the Madrid System. Related to this, Rwanda has also started using an Industrial Property Automation System, which has made filing of trademarks and patents easier and faster, while automatically keeping record of all applications submitted. Clients are encouraged to email rwanda@adamsadams.com for assistance and details of the effectiveness of the Madrid system in Rwanda.

WEST AFRICA

Ghana

Ghana has amended its Trademarks Act and has expanded the meaning of a “trademark” to now include: “…colours, numerals, shapes, holograms, sounds or a combination of any of these elements, or slogans, where they are not long enough to be protected by copyright”. The Trademarks Registry has not yet, however, recorded any applications to register sounds or holograms. ghana@adamsadams.com

The Gambia

Adams & Adams continues to synergise and expand its African network. Sub-saharan Africa’s largest intellectual property law firm, Adams & Adams, recently 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.

“Our focus has always been to add exceptional value to our clients’ experience,” says Simon Brown, Partner and Chair of the Africa IP Committee. “We target strategic associations with firms whose work ethic and standards mirror those of our own. At the heart of this approach is a desire to enhance the experience for the client and to add a high level of comfort to clients 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 firms 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.” thegambia@adamsadams.com

Nigeria

This year, Nigeria passed the Cybercrimes Act, which paves the way in finding solutions to the upsurge of cybersquatting and other internet offences that are currently increasing by the day in Nigeria. The Cybercrimes Act specifically criminalises the act of cybersquatting and therefore makes it an offence to register or use an internet domain name with bad faith i.e. with an intent to profit from the goodwill of a trademark belonging to someone else or to make a profit by selling the domain name to the rightful owner. nigeria@adamsadams.com

SOUTHERN AFRICA

Mozambique

The Mozambique Industrial Property Code was recently approved by Act No. 47/2015 – the most significant IP legislative development in the past decade. The code establishes specific rules applicable to the protection of industrial property rights, and defines the rights and obligations arising from the granting of intellectual property rights. mozambique@adamsadams.com

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 a third 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 extendable 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 a 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. zambia@adamsadams.com



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

 

POWER TO THE PUBLIC | AN INTERVIEW WITH ANDREW MOLVER

On 31 March 2016, the Constitutional Court of South Africa ruled unanimously in favour of the applicants in the matter regarding Nkandla, President Jacob Zuma’s homestead, as well as the powers of the Public Protector. Andrew Molver, Partner at Adams & Adams, offers his insights into this pivotal ruling.

Q: As attorneys of record for the Public Protector, what role does Adams & Adams play in the functions of her office?
A: The Office of the Public Protector is equipped with a highly skilled staff complement that manages any legal matters it’s faced with. Generally, we’re only instructed upon the anticipation or institution of formal proceedings. In that regard, our primary role has become one of defending the reports issued, findings made and remedial action taken by the Public Protector.

Q: From a personal point of view, what has it been like to work with the former Public Protector, Adv Thuli Madonsela?
A:
Working with the Public Protector has been by far the greatest highlight of my career. One of the greatest lessons I’ve learnt from her is how she remained determined to ascertain a proper definition of the Public Protector’s powers throughout the Nkandla debacle. She remained focused on helping the “Gogo Dlaminis” of the world, as she calls them, when she could quite easily have become consumed and distracted by the highly politicised and sensationalised nature of the ordeal. Even in those trying circumstances, she was steadfast in her commitment to the helpless and to leaving a legacy of empowerment to her successors by upholding the powers of her office.

Q: The powers of the Public Protector were challenged well before the Nkandla saga. How did this start?
A: The question of whether or not remedial action taken by the Public Protector is binding first arose in relation to the remedial action taken by the Public Protector in 2014 regarding the SABC and then acting-COO, Hlaudi Motsoeneng. The SABC and related parties argued that they were not bound to give effect to the Public Protector’s remedial action taken and, as they had procured an opinion from an independent law firm which cleared Motsoeneng of any wrongdoing, concluded that the findings of the Public Protector were incorrect.
In proceedings initiated by the DA as a result of the SABC’s conduct, we argued that remedial action taken by the Public Protector is legally binding and places an obligation on the subject of the remedial action to give effect to it unless and until it is reviewed and set aside by a court of law. Regrettably, the High Court did not find favour with this argument and took the view that remedial action by the Public Protector is not binding.
Fortunately, in its judgment of October 2015 in the SABC case, the Supreme Court of Appeal (SCA) set the record straight and found that remedial action taken by the Public Protector is indeed valid and binding until reviewed and set aside by a court of law and that, absent any such review, a subject of such remedial action is obliged to implement it, and cannot disregard it.

Q: Why was the Public Protector never a main applicant in either the Nkandla case or in matters beforehand? How did this help the Public Protector’s standing?
A: The SABC matter was launched by the DA, which cited the Public Protector as a respondent in the matter. The so-called Nkandla applications were launched by the EFF and the DA respectively. While the DA cited the Public Protector as a respondent, the EFF omitted to do so, which required us to apply to the Constitutional Court to intervene as a respondent in the EFF’s application.
We found it preferable for the Public Protector to be in the position of a respondent as this enabled her to abide the relief sought, as opposed to having to seek it directly, as an applicant would. This was more in keeping with the politically neutral position occupied by the Office of the Public Protector and allowed the Public Protector to avoid being drawn into the political war being waged through the litigation. In addition, by not being preoccupied with seeking the enforcement of her remedial action, the Public Protector was able to focus her submissions on obtaining a proper interpretation of her powers, which would significantly outlast any particular remedial action that formed the focus of either the SABC or Nkandla matters.

Q: Your team referred to the “Oudekraal” matter in written submissions. What is this and why was it relevant?
A: “Oudekraal” refers to the well-established principle (deriving from the matter of Oudekraal Estates (Pty) Ltd v City of Cape Town) that until a decision of an administrative nature is set aside by a court in proceedings for judicial review, it exists in fact and has legal consequences that cannot be overlooked. In its judgment in the SABC matter, the SCA found this principle to apply to reports issued and remedial action taken by the Public Protector, even if the Public Protector isn’t a typical public functionary or body, as the underlying principles arguably find greater application in her context.

Q: The Nkandla matter found that the Public Protector was correct in her assessments that the President was required to pay for a portion of the upgrades that took place at his homestead. More importantly, it confirmed the powers of the Public Protector as a Chapter 9 institution. What are those powers?
A: In essence, the Public Protector’s direct constitutional powers enable her to investigate irregular conduct in state affairs or public administration, to report on that conduct and to take appropriate action.

Q: What ideologies or approaches differentiate Adams & Adams from other commercial law firms?
A:
We try to approach our admin and constitutional matters by retaining a strong focus on why the matter is important to the client. This isn’t always obvious and often various considerations are involved. For example, in the SABC and Nkandla matters, it would have been tempting to enter the fray by siding with one of the political parties involved and attempting to enforce the remedial action in question. But what made the matters important to the Public Protector went beyond that. As mentioned, a proper definition of the powers of her office held far greater value. Apart from the objective to define the Public Protector’s powers, it was also important that she did not compromise the independence of her office thereafter. We also have a firm commitment to litigating in a manner which we believe upholds the Constitution and ensures that good law is made in its interpretation and application.


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

Andrew molver

Partner
Litigation Attorney

View Profile

DISSECTING THE NEW IP CONSULTATIVE FRAMEWORK

On 6 July 2016, the Intellectual Property Consultative Framework was approved by Cabinet, following the Draft National Intellectual Property (IP) Policy that was published for comment in 2013. Dr Charleen Rupnarain, Associate at Adams & Adams, delves deeper into what it means for intellectual property in SA.

The framework is the first step in a new process to develop a comprehensive IP policy for South Africa. Feedback from the previous Draft IP Policy focused on a lack of recognition of public comments and the new framework takes cognisance of this and seeks to remedy it by finalising the policy in a co-ordinated approach between both government and society.

The framework sets out that the IP Policy should promote the following objectives:

  • Engender the ethos of the Constitution
  • Align SA’s IP regime to the National Development Plan and industrial policy
  • Develop a co-ordinated intergovernmental approach to IP
  • Strike a balance between the creators and users of IP
  • Stimulate innovation
  • Facilitate developing key industries while balancing public interest
  • Adopt a co-ordinated approach to IP in sub-regional, regional and international forums
  • Promote public health

The new framework also recognises that there are a number of issues that will be affected. Key issues have been divided into “immediate”, “medium-term” and for “monitoring and evaluation” in order to prioritise urgent issues over ones that may require more in-depth consideration. IP issues surrounding public health (including medicines, vaccines and diagnostics) have been classed as an immediate priority in finalising the new policy, and the following are listed as immediate issues to be dealt with in the new policy:

  • Local manufacture and export in line with industrial policy
  • Substantive search and examination of patents
  • Patent opposition
  • Patentability criteria
  • Disclosure requirements
  • Parallel importation
  • Exceptions
  • Compulsory licences
  • IP and competition law

The framework also provides for the establishment of an Inter-Ministerial Committee (IMC) as an urgent need. Initually, this committee will serve as a consultative forum for formulating the IP Policy. With respect to the immediate concern of substantive search and examination of patents, the first group of twenty patent searchers and examiners has already been appointed and begun the two-year training programme. The goal is that training will be completed by December 2017 and that substantive search and examination will begin in January 2018, following the enactment of the IP Policy.

The CIPC aims to repeat this recruitment process every two years with candidates from technical fields, such as chemistry, biochemistry, biotechnology, electrical engineering, mechanical and mining engineering, pharmaceuticals, and information technology. It’s been proposed that initially substantive examination of patent applications will only be in respect of certain technical fields.

The Department of Trade and Industry provided the deadline of 30 September 2016 for the public to submit comments. See A&A Comments HERE. Following this, there’ll be continuous engagement between government and the public, including round-table discussions and workshops. The goal is that the IP Policy, which will address immediate issues and provide a framework for in-built agenda, will be finalised by March 2017.


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

OIL PRICE IMPACT ON AFRICAN ECONOMIES

A sharp decline in oil prices since 2014 has had a marked effect on African economies. Of the continent’s four major oil and gas exporters, Nigeria has been the most affected, and has instituted strict capital control measures to address the country’s depleting foreign currency reserves. According to World Bank estimates, crude oil sales fund up to 75% of Nigeria’s budget. 90% of Africa’s natural gas production comes from Libya, Algeria, Egypt and Nigeria.

According to World Bank Development Economics Prospects Group (DECPG) Senior Economist Gerard Kambou, “Sub-Saharan Africa’s oil exporters, which account for nearly half of the regions aggregate output, have been hit hard by the sharp decline in the price of oil.”

While there has been no major surge in business investment or consumer spending, some analysts suggest that the current slump in the industry may be an opportune time for re-invention.

In the PwC African Oil & Gas Review, organisations identified the price of oil and natural gas as “the most significant factor that would affect their companies’ businesses over the next three years”.

PwC Africa Oil and Gas Advisory Leader Chris Bredenhann believes that there are opportunities in the sector.

“It is an opportune time for local governments that want to attract oil and gas investors to reform their regulatory, fiscal and licensing systems… Change is the way to survive in the ‘new energy future’. We need to see new business models, new products, new energy sources and new strategies to meet the new reality.”

Although most African economies are not dependent on oil, the price of oil does have a direct effect on major industries. In South Africa, for example, commodity prices affect the viability of industry and development, so fluctuations in fuel prices can influence operating costs.

Frost & Sullivan Africa Senior Economist and Programme Manager for Mobility Craig Parker says the impact is variable.

“The impact on business will vary depending on the level of fuel dependence on the value chain of the sector. The lower oil price combined with the volatility in the rand is resulting in minimal impact on lowering the fuel price. If the rand would strengthen, it will lower logistics costs for many businesses. The sectors that would be most significantly impacted would be the transport, fast-moving consumer goods (FMCG), retail and mining industries.”


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

ADDLED BY THE INTERWEBS

Can you use a competitor’s brand name as your Google Adword? There is an answer to this oft-asked question and, as one would expect from a legal standpoint, it’s: “Yes, but…”

The Supreme Court of Appeal recently had to decide whether M-Systems Group’s use of its rival’s trademark ClearVu amounted to passing off. Cochrane Steel Products, the proprietor of the ClearVu mark, had traded in high-density mesh fences under its brand since 2008. At the time of instituting proceedings though, it did not have registered trademarks. It accordingly relied on the common law remedy of passing off.

To succeed, it had to show that it had a reputation in the mark ClearVu, and that M-Systems’ use of ClearVu as an Adword would be likely to cause confusion about whether the parties or their goods were related, or came from a common source.

Although Cochrane ticked the reputation box, it fell short in demonstrating that consumers were likely to be confused. The court found that we’re a savvy bunch of Internet users, and that when confronted with Internet search results, we’re used to “separating the wheat from the chaff”. Doing so is an easy exercise as the advertisements are clearly indicated and often positioned on another part of the screen. Even in the event of an unlikely foray onto an advertiser’s page, a consumer would quickly be able to spot their blunder. For those reasons, the court saw no likelihood of confusion arising.

So, where does the “but” come in? Well, Cochrane didn’t rely on a registered trademark so theoretically the question remains as to whether use of a registered trademark as an Adword would infringe. Given that the crux of the decision was that consumers would not be confused, it’s unlikely that having a registered mark would assist. The court would probably find that Adword use of such a mark does not affect the function of a trademark, which is to serve as a source indicator.

There is potentially scope for a trump card though, being a well-known registered trademark. In that instance, the test is whether use of the identical or similar mark is likely to take unfair advantage of, or to tarnish the reputation of, the well-known mark. It does not matter whether or not confusion will arise.

So, a potential loophole for rights holders? Quite possibly.


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

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

Andre Visser

Partner
Commercial Attorney

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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.

HOWARD ROGERS

Partner
Trade Mark Attorney

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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.”

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

DALE HEALY

Partner
Trade Mark Attorney

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KAREEMA SHAIK

Senior Associate
Trade Mark Attorney

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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

ANDRE VISSER

Partner
Commercial Attorney

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HELGARD JANSE VAN RENSBURG

Senior Associate
Commercial Attorney

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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

ANDRE VISSER

Partner
Commercial Attorney

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Mariëtte du Plessis

Partner
Trade Mark Attorney

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Nishi Chetty

Partner
Trade Mark Attorney

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THE CURRENCY OF CERTAINTY

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.

DARREN OLIVIER

Partner
Attorney

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Gérard du Plessis

Partner & Firm Chairman
Trade Mark Attorney

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PHILIP PLA

Partner
Patent Attorney

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PIETER VISAGIE

Partner
Patent Attorney

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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

JENNY PIENAAR

Partner
Trade Mark Attorney

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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

NICKY GARNETT

Partner & Head of Africa Patents
Attorney

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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.

JAC MARAIS

Partner
Commercial Attorney

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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.

DANIE STRACHAN

Partner
Attorney

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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

NICKY GARNETT

Partner – Head of Africa Patents
Attorney

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NTHABISHENG PHASWANA

Partner
Attorney

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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.

Mariëtte du Plessis

Partner
Trade Mark Attorney

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Nishan Singh

Partner
Trade Mark Attorney

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Nishi Chetty

Partner
Trade Mark Attorney

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Vishen Pillay

Partner
Patent Attorney

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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.

Nicky Garnett

Partner – Head of Africa Patents
Attorney

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Simon Brown

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

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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)

Mariëtte du Plessis

Partner
Trade Mark Attorney

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Nishan Singh

Partner
Trade Mark Attorney

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Nishi Chetty

Partner
Trade Mark Attorney

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Vishen Pillay

Partner 
Patent Attorney

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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.

 

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.

Darren Olivier

Partner
Attorney

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Gérard du Plessis

Partner & Firm Chairman
Trade Mark Attorney

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Lita Miti-Qamata

Senior Associate
Trade Mark Attorney

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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:

Nishi Chetty

Nishi Chetty

Nishi Chetty

Partner
Trade Mark Attorney

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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.

Darren Olivier

Partner
Attorney

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KELLY THOMPSON

Partner & Chairperson of Trade Mark Litigation
Trade Mark Attorney

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Simon Brown

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

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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

Nicky Garnett

Partner – Head of Africa Patents
Attorney

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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.

Danie Strachan

Partner
Attorney

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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.

Claire Bothma

Senior Associate
Trade Mark Attorney

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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.

Andrew Molver

Partner 
Litigation Attorney

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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.

Danie Strachan

Partner
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.

Andrew Molver

Partner
Litigation Attorney

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