Getting High on Intellectual Property Rights

Unless you’ve just come off a social media cleanse, you will have heard that the Constitutional Court recently issued a decision declaring certain provisions of the Drugs and Drug Trafficking Act and the Medicines and Related Substances Act unconstitutional. The provisions in question were found to infringe upon the right to privacy, entrenched in Section 14 of the Constitution.

In a nutshell, the 74-page decision (lengthy, even by lawyer standards), means that it is now legal for adult persons to possess and use cannabis in private and to cultivate cannabis in a private place for personal consumption…in private.

While the decision does not change the law on trading in cannabis and cannabis products, some consider it South Africa’s first step towards joining the ranks of countries in which cannabis trade and use (whether it be medicinal or recreational) has been legalised. There are certainly a number of local stake-holders advocating for this.

Legalising the commercialisation of cannabis has the potential to boost the local economy, including the agricultural industry, the manufacturing industry and the Fast-Moving Consumer Goods sector.

Globally, brand owners have recognised the potential and have been looking at ways to invest in the cannabis industry, either by way of licence agreements or product extensions. For instance, studies have shown that the consumption of alcohol has decreased in countries or states where cannabis has been legalised. This has encouraged breweries to experiment with cannabis in their products. Cannabis-infused beers are already a global trend and a brewery in Canada is currently looking into brewing a beer from cannabis instead of barley.

South African companies are clearly already taking notice of the incredible potential. A locally crafted beer containing hemp (a less scary variety of cannabis which is border-line legal) has just become available in stores. The beer is called Durban Poison and can probably be found at your nearest Tops! outlet (if you’re asking for a friend)! Be warned though, hemp contains little to no tetrahydrocannabinol (THC), the stuff in cannabis responsible for the “high”, so the buzz you’ll feel is probably from the alcohol.

To get ahead of the curve, brand owners may wish to start developing a strategy to surf the marijuana wave. The possibilities are endless, from the more obvious (dry cannabis to brownies and medicinal oils to ointments) to the more inventive (candy to beauty products or even dog treats), not to mention paraphernalia and services to help consumers “light up”, “bubble up” or “brew up”.

New goods and services demand a strong IP focus and new strategies. Any solid strategy will include trade mark protection.

In certain jurisdictions, this has proven to be difficult. For instance, in the USA, it is still not possible to obtain a federal trade mark registration for cannabis products.  The registration of a trade mark for goods or services that are not lawful is prohibited in terms of local trade mark laws. Although cannabis use (either recreational or medicinal) is legal in some States, it remains illegal in others.

Locally, two possible obstacles arise.

Section 10(12) of the Trade Marks Act prohibits the registration of a mark of which the use would be contrary to law, contra bonos mores (contrary to public policy or morals) or likely give offence to any class of persons.

What is considered moral or offensive changes with time. For instance, an application for BITCH in class 25 covering clothing was refused in 1998 but the trade mark SKINNY BITCH for wine and other alcoholic beverages has existed on the register since 2005. The mark BITCH in class 3 for soaps, perfumes and cosmetic products was also accepted in 2011 and has since proceeded to registration.

An application filed for FAT BASTARD in class 33 covering alcoholic beverages was also provisionally refused in 2007 on the basis that it was offensive, but this decision was reversed after submissions were filed explaining how the trade mark was adopted and that it has widely been used without complaint from the public.

Thanks to some fancy marketing footwork, the face of cannabis has transformed globally. “Artisanal” (hipsters, rejoice!) and “luxury” cannabis products are all the rage now in countries like the USA and the Netherlands. In addition, trendy packaging and a professionally run industry have gone a long way to alter market perceptions. That seems to have seeped through to our local market which is still, relatively speaking, quite conservative. An application for the device of a cannabis leaf (below, left) in class 25 for clothing, shoes and accessories, was rejected in 1998 but an application to register the word mark CANNABIS CLOTHING was accepted, subject to conditions, in 2016. The CANNABIS ENERGY DRINK label (below, right) was also registered in 2015, with no apparent issues.

Durban Poison, the internet tells me, is the street name for a specific strain of cannabis. The mark DURBAN POISON is not objectively offensive, but those who understand the reference may take offence to its use as a trade mark in relation to beer (or any other product for that matter). The brewery selling Durban Poison beer may run into difficulties on this basis should it seek statutory protection for the mark. However, looking at the potentially offensive marks already on the trade marks register, it may well fly…at least on the first obstacle.

Another possible obstacle would be Section 10(2)(b) of the Trade Marks Act which prohibits the registration of a mark which is descriptive of, amongst others, the kind or quality or other characteristic of a product. Marks which are common or reasonably required for use in the trade will fall foul of Section 10(2)(b).

It is arguable that, since the beer in question does not contain the Durban Poison strain of cannabis, but rather hemp, the trade mark is not descriptive of the goods in question. This leads us back to the first obstacle in Section 10(12), which also prohibits the registration of a mark which is deceptive. Using the mark DURBAN POISON in relation to a beer not containing the Durban Poison strain of cannabis is perhaps deceptive.

Apart from trade mark laws, various other laws and regulations may also come into play, including labelling and advertising laws, as well as plant breeders rights and plant variety laws. One would imagine that the cannabis industry would be as strictly regulated as the tobacco industry in South Africa. Non-compliance with such laws may also lead to problems if you’re seeking trade mark protection.

In addition to trade mark protection, brand owners should look at other forms of IP available to them. Formulations and medical and non-medical indications for cannabis products or even genetically modified cannabis may qualify for patent, plant variety and/or copyright protection, provided the necessary requirements are met.

Domain names should also not be forgotten. A quick search revealed that <cannabis.co.za> has already been snapped up! So too has <durbanpoison.co.za>. A <dot.cannabis> gTLD is not yet available but, once (or if) it is, brand owners should consider registering their most valuable trade marks in this space to explore new opportunities and avoid third-party abuse.

For now, the commercialisation of cannabis (apart from hemp) in South Africa is theoretical, since the cultivation and use of cannabis is only allowed in private. However, legitimate commercial opportunities will inevitably shape policy and decisive IP strategies will pay dividends. Choosing a protectable brand from the start is essential!

KAREEMA SHAIK

Senior Associate
Trade Mark Attorney

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Blockchain | Friend or Foe of the Patent System?

The rise of blockchain technology, and particularly cryptocurrencies, has influenced various aspects of the global economy and the technological landscape.  The concept of a blockchain was invented in 2008 to serve as a public transaction ledger for the Bitcoin cryptocurrency. However, blockchain technology is not limited to Bitcoin and other cryptocurrencies. Since then, the principles of blockchain technology have been applied in various fields, such as financial services, retail, digital rights management, anti-counterfeiting, medicine and real estate.

Growing interest in blockchain technology also has an impact on the patent system.  Innovation in a certain field of technology typically leads to an increase in the number of patent applications filed in that field.  The number of patent applications filed for blockchain-related inventions is on the rise and the overall number of patent applications for 2018 is expected to be well over a thousand.  Unsurprisingly, financial firms are among the top blockchain-related patent applicants.

However, not all inventions are patentable.  In order to be patentable, an invention must be new and inventive, and must also not be excluded from patentability based on its subject matter.  In most jurisdictions, inventions that relate purely to abstract ideas or business methods, or which relate to computer programs as such, are not patentable.  This is a grey area in South African law, as there is not yet any reported case law to provide guidelines with which to determine how “technical” a claimed invention should be to avoid falling foul of the subject matter prohibitions in our law.  Our courts are likely to follow the European approach which requires the invention to provide a novel technical solution to a technical problem.

Blockchain technology could also be used to improve the structure and efficiency of the patent system itself by enhancing its record-keeping and transactional capabilities.  For instance, consider a public digital ledger with trusted records of patent-related transactions, such as transfers of ownership.  More broadly speaking, the technology could be applied in intellectual property registries to facilitate actions such as identifying fake registration certificates, providing evidence of creatorship or providing evidence of use of a trade mark.

While blockchain technology could benefit the patent system, it may also challenge the patent system or hurt its credibility.  Some experts believe that blockchain-related patents will eventually result in the next smartphone-style patent war in which entities will fight to monopolise the implementation of certain digital ledger technologies.  To make things worse, non-practising entities, more commonly known as patent trolls, may enter the fray with aggressive tactics in an attempt to profit from blockchain-related patents which they own, but do not actually use.

The issue of patent infringement and enforceability should also be considered.  A patent is territorially limited, while blockchain systems are inherently distributed.  It may therefore be difficult to enforce, say, a South African patent, against an alleged infringer whose system is spread out across several territories and who carries out only certain aspects of a patented method in South Africa.

At this stage, the nature and scope of the influence of blockchain technology on the patent system is not yet clear.  When the dust settles, it will certainly be interesting to see whether the patent system is flexible enough to embrace the benefits offered by advances in blockchain technology, while also coping with the resulting challenges.

HUGO BIERMANN

Associate
Patent Attorney

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COMMERCIAL COURT REVIVED TO SPEED UP LITIGATION PROCESS

The Commercial Court has recently been revived in the Gauteng Division of the High Court of South Africa. This Court was originally established in terms of the Supreme Court Act 59 of 1959 (Practice Note No. 1 of 1996: Commercial Court Practice Direction), but was never fully operational. However, the Judge President of the Gauteng Divisions of the High Court of South Africa, Justice Dunstan Mlambo recently published the directives of the Commercial Court, effective from 3 October 2018.

The purpose of the Commercial Court is to promote the efficient conduct of litigation in the High Court and will assist litigants with the faster resolution of commercial matters. The Commercial Court will deal with a variety of matters that have their foundation in a commercial transaction or commercial relationship, and includes disputes arising from the following non-exhaustive list:

  • the export or import of goods;
  • the carriage of goods by land, sea, air or pipeline;
  • the exploitation of oil and gas reserves or other natural resources that do not involve Administrative Law;
  • insurance and reinsurance;
  • banking and financial services;
  • the operation of markets and exchanges;
  • the purchase and sale of commodities;
  • medical scheme matters;
  • commercial matters arising out of business rescue and insolvency cases;
  • all commercial matters affecting companies arising out of the Companies Act 71 of 2008 and its interpretation;
  • arbitration;
  • delictual cases that take place in a commercial context for, e.g. unlawful competition cases;
  • generally, appropriate contractual matters; and
  • intellectual property cases.

Litigants may transfer a trial action or an application in a commercial matter to the Commercial Court by delivering a letter to the Judge President or Deputy Judge President, setting out reasons why the case is a commercial case, or should be considered as such, which would warrant a transfer under the Commercial Court Directive.

The Commercial Court Directive is specifically designed to ensure that matters are trial ready by the inclusion of various case management conferences, the resolution of interlocutory matters and by introducing timetables by which the litigants will be bound.

For more information on the Commercial Court, or should you require assistance with a commercial matter, please contact the Adams & Adams Commercial Litigation Team at mail@adamsadams.com

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Mia de Jager | Candidate Attorney

GREGOR WOLTER

Partner
Commercial Attorney

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MALAWI BECOMES LATEST MEMBER OF MADRID SYSTEM

On 25 September 2018, the World Intellectual Property Organisation reported that Malawi deposited its instrument of accession to the Madrid Protocol. This makes Malawi the 102nd member of the Madrid System.

The Madrid System enables trade mark proprietors in Malawi to file a single international application for trade mark protection in up to 117 territories. The Madrid Protocol is set to come into force in Malawi on 25 December 2018.

Malawi’s current trade mark legislation does not provide for the registration of trade marks in terms of the Madrid Protocol.  However, on 2 February 2018, Malawi’s President assented to Trade Marks Act no. 2 of 2018 (“the New Act”).  The New Act makes provision for the registration of trade marks in Malawi in terms of the Madrid Protocol.  However, the New Act has yet to come into law and will come into operation on a date appointed by the Minister by notice published in the Gazette.

Given the current challenges  at  Registry, particularly the lack of fully digitised records, we strongly recommend seeking  national TM protection, until such time as the Malawian Trade Marks Office is fully automated and Madrid designations are being processed in conformity with the relevant regulations.

For assistance with intellectual property prosecution and enforcement in this jurisdiction, e-mail Malawi@AdamsAdams.com

 

SOMAYYA KHAN

Partner
Trade Mark Attorney

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MOHAMED JAMEEL HAMID

Associate
Trade Mark Attorney

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NIGERIA | NATIONAL STRIKE WILL AFFECT REGISTRY OPERATIONS

Adams & Adams’ Associate Office in Lagos, Nigeria, has advised of two significant events that will result in the temporary closure of the Trade Marks Registry in that country.

In the first instance, the Nigerian Labour Congress declared a nationwide strike in Nigeria from 27 September 2018. All government offices, including the Trade Marks Registry, will be closed for the duration of the strike action. The online payment platform for government revenue, Remita, will also be closed, meaning payment of trade mark, patent and design applications will be disrupted. The duration of the strike is unknown at this stage.

Secondly, the Federal Government of Nigeria has declared Monday 1 October 2018 a public holiday, in celebration of Nigeria’s Independence. The Trade mark, Patent and Design Registry, as well as other government offices, will also be closed on this day.

We will continue to communicate with our Associate Office and provide updates. For further queries regarding the prosecution and enforcement of IP rights in Nigeria, please e-mail Nigeria@AdamsAdams.com

SIMON BROWN

Partner
Trade Mark Attorney

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THERESE DAVIS

Senior Associate
Trade Mark Attorney

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ESME VOOGT

Associate

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BOTSWANA | REGISTRY INTERRUPTION EXPECTED

The Botswana Companies and Intellectual Property Authority (CIPA) will be relocating to new offices in Gaborone between 28 September – 28 October 2018. While some delays in the processing of matters are to be anticipated, please rest assured that we are working closely with our colleagues from our Associate Office in Gaborone to ensure that the Registry will process all matters without incurring undue delays.

For any questions or requests for more detailed information on this, please communicate with us at Botswana@AdamsAdams.com

STEPHEN HOLLIS

Partner
Trade Mark Attorney

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SBONGAKONKE KHUMALO

Associate
Attorney

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NETWORK MEETING DISCUSSES ROLE OF IP IN EMERGING ECONOMIES

The Africa Network Meeting brings together intellectual property practitioners and registry officials, representing 23 jurisdictions, for the largest summit of its kind on the continent.

The 6th annual Africa Network Meeting was held at the offices of Adams & Adams in Pretoria, South Africa from 13-14 September 2018. It was attended by intellectual property practitioners and registry officials representing 23 jurisdictions across the African continent and is the largest meeting of its kind on the continent and the only meeting allowing African IP professionals to meet and discuss emerging IP issues on the continent. Boutique IP law firms are rare in Africa. Most IP attorneys on the continent operate as part of larger commercial law firms which may have little or no institutional IP knowledge or backup. It is for this reason that the Africa Network Meeting has evolved into a platform where the sharing of ideas and experiences across all areas of IP has become essential to the professional development of IP practitioners on the continent.

The theme of this years’ event was “The role of Intellectual Property in Emerging Economies.” In his opening remarks, Adams & Adams Chairman, Gérard du Plessis, stressed the need for robust analysis and discussion on the state of IP systems on the continent as the protection and enforcement of IP was an essential factor in growing Africa’s economies. Ludwick Marishane, a young South African entrepreneur – named by Google as one of the ’12 Brightest Young Minds in the World’ – was invited as Guest Speaker for the event. Ludwick is South Africa’s youngest patentee and inventor of the DryBath product, a waterless hygiene product which he invented at the age of 17. Ludwick gave insights into his entrepreneurial voyage and engaged the delegates in robust discussions about the role that IP should play in encouraging growth and development in Africa.

Head of the Trade Marks Division at the Companies & Intellectual Property Commission (CIPC) of South Africa, Ms. Fleurette Coetzee led a panel discussion with officials from OAPI, Nigeria and Zimbabwe. This provided an opportunity for representatives from these jurisdictions to provide updates on the status of digitisation in their offices. The IP registries in most African countries are poorly funded and face shortages of IT and human resources which affect their ability to render efficient and effective IP services to applicants wishing to protect their IP rights. The reports delivered by the panel revealed that significant progress has been made. However, while most countries have introduced some level of automation and online services, improvement will be slow as a result of resource shortages and the lack of technical proficiency of new staff.

For the first time in the Africa Network Meeting’s existence, brand owners Absa and AB InBev, were invited to discuss their branding strategies in Africa. Both Absa and AB InBev provided delegates with insights regarding their marketing and branding strategies in Africa. Absa, a South African based bank with offices across Africa, has recently undergone a brand relaunch. Delegates were treated to insights into the process when launching a new brand. Jenny Moore, Head of Special Projects, Marketing Corporate Relations at Absa Group Limited also shared some of the challenges faced during the process.  “The timing (and confirmation) of registration when launching, or re-launching a brand is of vital importance and we need to be sure that our partners at the IP registries understand the pressures of our industries,” commented Taryn van Schalkwyk, Head of IP, Group Legal at Absa Group Limited.

Pieter van den Bulk, Global Director Intellectual Property at AB Inbev, the World’s largest brewing company, based in Leuven, Belgium, stressed the importance of the African market place. Pieter made reference to the different marketing and legal approaches to protecting and enforcing their brands on the continent. Whilst challenges certainly remained in processing cases through some Registries and the courts, the improvement on both the legislative and operational front in many African countries must be commended.

Lita-Miti Qamata, Senior Associate at Adams & Adams moderated a panel of IP practitioners from Nigeria, Uganda, South Africa and Kenya who were given an opportunity highlight and discuss recent trade mark litigation matters in their countries. This was followed by a presentation by Partner, Kelly Thompson, who discussed IP issues in social media in a presentation entitled “Protecting brands in the era of Trump, Tweets and Twitter Stars”

Danie Dohmen, Partner at Adams & Adams, moderated a panel aimed to update delegates on recent changes in the patent field in ARIPO, Madagascar and Ethiopia with a particular focus on the status of substantive examination of patent applications in their jurisdictions.

Adams & Adams Partner, Werina Griffith’s closing presentation on Rapid Prototyping provided the perfect précis to the Africa Network Meeting discussions – with a warning that the disruptive technologies of the 4th Industrial Revolution require an accelerated and discerning response from a legislative and administrative perspective.

The meeting provided an excellent opportunity for delegates to share experiences and ideas. It is hoped that the meeting will continue to grow and provide a platform for the exchange of ideas and development of capacity in the IP field on the African continent.

GERARD DU PLESSIS

Partner & Firm Chairman
Trade Mark Attorney

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SIMON BROWN

Partner
Trade Mark Attorney

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NICKY GARNETT

Partner and Head of Africa Patents
Attorney

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WIPO COURSE AIMS TO LIFT PATENT DRAFTING PROFICIENCY IN AFRICA

Robust and effective intellectual property systems are needed to promote innovation and develop industries in Africa. They not only help local inventors and companies to come up with new inventions and products, but also encourage foreign companies to invest in the region. Accordingly, IP systems are one of the foundations needed to drive sustainable economic development on the continent. This was the view of Mr. Kenichi Kasahara, Deputy Head of Mission of the Japanese Embassy in Zimbabwe, in launching the first in a series of Patent Drafting Courses in Africa.

The week-long course was held at the headquarters of the African Regional Intellectual Property Organization (ARIPO), in cooperation with the World Intellectual Property Organisation (WIPO) and the Japanese Patent Office.

The WIPO Global Innovation Index (GII) 2017 report suggests that while financial investment, legal frameworks and institutional infrastructure create a supportive environment for innovation, human capital is fundamental in determining the success of innovation. “The patent drafting course thus addresses this important aspect of human capital in aiming to improve patent literacy and related special skills,” said Ms. Aida Dolotbaeva, Legal Officer in Patent Law Division at WIPO. “Patent Drafting skills are one of the important competencies to aid an increase in the use of national and international patents systems, since filling a patent application is the very first step for the active use of the patent systems.”

Adams & Adams Partner and Patent Attorney, James Davies, joined a prestigious line-up of course lecturers which included WIPO’s Aida Dolotbaeva, James Snaith from Kilburn & Strode London, and Masaharu Kizu from SOEI Patent & Law Firm in Tokyo. Davies, as well as sitting on various panel discussions, also delivered three lectures relating to patent claim drafting and design, including an introduction to the theory of patent claims, drafting description in relation to claims, and dependent claims.

“The proficiency of these participants, be they researchers, inventors or legal advisers, is of great consequence to our business and to the IP teams within our Adams & Adams Africa Network, and so we were eager to get involved in the course. The whole programme seemed to be well received by those who attended, and we look forward to being involved again,” added Davies.

Recently, Adams & Adams was the first southern African Intellectual Property Law Firm to join the international Inventor Assistance Program. The Inventor Assistance Program (IAP), a WIPO initiative in cooperation with the World Economic Forum, is the first global programme of its kind. It matches developing country inventors and small businesses with limited financial means with patent attorneys, who provide pro bono legal assistance to secure patent protection.

JAMES DAVIES

Partner
Patent Attorney

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REPORT | AFRICA ECONOMIC ASSESSMENT – TOP 20

The Africa Country Benchmark Report (ACBR) of 2017, by Adams & Adams’ research and intelligence partner, In On Africa, evaluated the performance of all 54 African states across four distinct areas of focus, being business, economics, politics and society. Of particular interest to commercial stakeholders is the economic assessment, which is split into five complimentary economic-related ‘segments’ – employment, growth, inclusion, strength & diversity, and trade & investment.

Mauritius achieved top honours in this thorough economic evaluation of African countries, which drew data from 34 international indices and ranking systems. The results reinforce Mauritius’ position as a robust African commercial hub, with highly effective regulatory and trading structures. The success of the island nations was further emphasised by the inclusion of the Seychelles (4th) and Cape Verde (5th) in the top five results. Southern Africa’s top performers were Botswana (2nd) and South Africa (3rd).

The table below presents the results of the 20 best-performing countries on ACBR’s economic assessment. These results are based on data from indices such as the World Bank’s ‘Ease of Doing Business’ index, the WEF’s ‘Global Competitiveness Report’ and the Heritage Foundation’s ‘Index of Economic Freedom’.

The five segments of the economic evaluation are defined as follows:

  1. Employment – The capacity of the economic environment to provide chance for employment, including the ease with which someone can find a job and how efficiently the country can adopt new labour practices.
  2. Growth – The extent to which a country exhibits characteristics that encourage financial and infrastructural growth, including non-restrictive policies and initiatives that bolster entrepreneurship and market participation.
  3. Inclusion – A measure of a country’s ability to provide a level playing ground for all those who participate in market activities, including socio-economic barriers to entry.
  4. Strength & Diversity – The economic resilience of a nation, enhanced by the diversification of income and operations, and often reinforced by regulations and initiatives aimed at preventing collapse and encouraging core economic development.
  5. Trade & Investment – An indication of how well the country’s business sector interacts with global market participants, including their ability to invest internationally, and to be invested in by foreign interests.

For information or assistance in regard to expanding to- or filing in- any of these jurisdictions, e-mail africaip@adamsadams.com

NICKY GARNETT

Partner and Head of Africa Patents
Attorney

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ANDRE VISSER

Partner
Commercial Attorney

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MODERN FAMILIES | SURROGACY IS AN OPTION

Robbie Williams and Ayda Field have welcomed a third child together via a surrogate after a “long and difficult” struggle to have another baby. How does surrogacy work in South Africa?

Go to varsity, meet your soulmate, get married and have babies.  This is how the fairy tale goes, right?  Unfortunately conceiving a baby is not as easy for some couples and the fairy tale comes to an abrupt stop.

For some couples a baby is conceived within minutes of opening a bottle of red wine and adding the vital ingredients – romantic background music and a few candles. Unfortunately for some couples conceiving naturally is not only a stressful and difficult process but also unfortunately completely impossible.

The rise of the modern family has created the need for ‘modern conception’. Fortunately, the fairy tale does not have to end in misery for same-sex couples or couples who cannot conceive for medical reasons. The route to the final chapter of the fairy tale may have to include a few additional twists and turns along the way. Adoption might be the first possibility that comes to mind, but not all parents are able to adopt, or adoption is just not an option for them.  Surrogacy is therefore becoming more and more popular.

Many celebrity couples have brought children into this world through surrogacy.  Amongst them are Nicole Kidman, Elizabeth Banks, Tyra Banks, Jimmy Fallon, Lucy Liu, Sarah Jessica Parker, Elton John and Ricky Martin; and most recently, Robbie Williams and his wife Ayda. Surrogacy is clearly a key to the long-term fulfilment of your dream to raise, care for and love a beautiful child.

A surrogate is a woman (“the surrogate mother”) who carries the baby on behalf of the future parents or parent, referred to as the “commissioning party/ies”) who are medically unable to do so.  Surrogacy in South Africa is regulated by chapter 19 of the Children’s Act 38 of 2005.

“Regulated by the Children’s Act” means that in order for future parents / the commissioning parties to make use of a surrogate as a means to start or complete their family, they need to comply with the provisions of the Act. Failure to comply with the provisions of the Children’s Act will result in serious consequences for all the parties concerned, in particular it will affect the rights and obligations (responsibilities) of the parties in respect of the child.

An important aspect of statutory compliance with the Children’s Act is that all the parties will need to conclude a written agreement with each other prior to embarking on the process of surrogacy. This agreement must be confirmed by the High Court and be made an Order of Court PRIOR TO THE SURROGATE BEING INSEMINATED.

Some of the most important aspects to remember when considering surrogacy are:

  1. A surrogate mother’s motivation to assist commissioning parents must be altruistic. She may as such not receive a financial benefit for being a surrogate, other than being re-imbursed for her expenses, the ambit of which are regulated by the Children’s Act i.e. medical expenses or loss of income due to her not working;
  2. At least one of the commissioning parents need to be the biological parent of the child to be born from a surrogate mother. That means that one of the commissioning parents would need to provide either an egg or sperm for purposes of the artificial fertilisation. It entails that where one of the commissioning parents is conception infertile (does not have viable eggs or sperm), then donor eggs or sperm may be used provided one of the commissioning parents utilises his/her egg or sperm with the donor’s material for the artificial fertilisation process.
  3. The surrogate mother and commissioning parents must, at the time of concluding the agreement, be domiciled in South Africa. If a surrogate mother is married or in a relationship, her husband and / or partner should also agree to her becoming a surrogate. This requirement also applies to a single commissioning mother who is in a permanent relationship at the time.
  4. Provided the agreement is confirmed by the High Court, a child/children born from a surrogate mother will, by law be regarded as the lawful child/children of the commissioning parents, and the surrogate mother and her partner will have no parental rights or obligations towards the child.

Due to the sensitive nature of surrogacy and the complexity of the agreement and process to be followed, it is of the most utmost importance that the surrogacy agreement be drafted by an experienced attorney. If you attempt to proceed with surrogacy without having a legally acceptable contract approved by the High Court, the baby will legally belong to the birth mother, the surrogate mother.

Contact Shani van Niekerk from Adams & Adams for advice and assistance with your surrogacy journey.

SHANI VAN NIEKERK

Associate
Family Law Attorney

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URGENT NOTICE REGARDING LIBYA TRADEMARKS OFFICE

Civil unrest in the run-up to national elections scheduled for 10 December 2018 has led the Libyan Government to declare a State of Emergency. This has led to many government institutions being temporarily affected, including the Libyan Trademarks Office. All current deadlines have been postponed, until further notice, as the Trademarks Office is not fully operational, and its staff members are not fully present. There is uncertainty as to when the state of emergency will be lifted and the functions of the Trademarks Office, in particular, will resume. We are closely monitoring the state-of-affairs and are meeting with our North African associates, who will hopefully provide some further clarity, at the annual Adams & Adams Africa Network meeting which will be held at our offices on 13 September 2018 and 14 September 2018. We will update our website with any further developments, as and when they occur.

For additional queries regarding intellectual property rights protection in North African jurisdictions, e-mail AfricaIP@AdamsAdams.com

 

Notice issued by Trade Marks Dept. Adams & Adams

Maureen Makoko | Associate
Chiraag Maharaj  | Candidate Attorney

JANI CRONJE

Partner
Trade Mark Attorney

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MAUREEN MAKOKO

Associate
Attorney

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SHARING IS NOT CARING – IT’S IN YOUR NDA

Do not disclose confidential information, new designs, ideas or inventions without appropriate protection in place – a non-disclosure agreement (NDA).

You may lose the chance to obtain any protection for your IP if you do not register the IP before you disclose a design or invention to another person or business. As a general rule, confidential information can no longer be protected once it is in the public domain. You can avoid losing protection by disclosing the design, idea, invention or other confidential information to another person under the protection of a non-disclosure agreement.

Make sure it is clear that the non-disclosure agreement covers the information you are disclosing and that the terms of any non-disclosure agreement are appropriate. If the information is valuable we recommend seeking legal advice before disclosing the information and for preparation of the agreement. Avoid downloading NDA examples from the internet.

If your idea is worth protecting, ask a lawyer to draw up the agreement for you.

 

There are a number of types of IP that can be registered which include trade marks, design rights and patents. IP can be one of the most valuable assets of a company’s business, as it can prevent competitors from using your brand name for similar goods or services, add value to your company by giving it assets which it can licensed, and can be used to demonstrate your company’s worth to potential investors.
It is worthwhile considering IP registrations from the early stages of any business, and developing an IPfiling strategy, as many jurisdictions operate a “first to file” registration system and you may lose the possibility of obtaining any protection if you do not register the IP before you disclose your design or invention to the public.
You should take steps to register IP in jurisdictions that are relevant to your business. Registration is crucial to protect and commercially exploit your IP.

WHAT IS A TRADE MARK?

A trade mark, generally speaking, is any mark used, or proposed to be used, to identify goods or services, and to distinguish those goods and services from a competitor’s products or services. That ‘mark’ can be any sign that can be represented graphically, including a device, name, signature, word, letter, numeral, shape, configuration, pattern, ornamentation, colour or container for goods, or any combination thereof. A ‘device’ can be any visual representation.

WHAT IS A PATENT?

A patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention for the term of the patent. A patent is a limited property right the government gives inventors in exchange for their agreement to share details of their inventions with the public. A patent is a right granted to anyone who invents any new, useful, and non-obvious process, machine, article of manufacture, or composition of matter. Like any other property right, it may be sold, licensed, offered as security, or transferred.

WHAT IS COPYRIGHT?

Copyright protects the form of expression of ideas, not the ideas themselves. Many types of works are protected by copyright, such as product literature, content on your website, photographs, drawings, software, films, paintings, logos, lyrics and compositions, etc. Our copyright laws protect the copyright owner against anyone who copies or otherwise reproduces or adapts the work without the owner’s consent. A created work enjoys copyright protection and is protected as soon as it exists, provided that it is original and meets all the requirements.
As copyright is an unregistered right, you should include a copyright notice on your website and marketing materials to alert third parties of your rights.
For individual works you can use the © symbol as follows: “© 2018 Adams & Adams”. The year indicates when the work was made available to the public.

WHAT IS A REGISTERED DESIGN?

South Africa has many talented designers active in the field of furniture and lighting, cutlery, crockery, furniture designs, textiles, jewellery and wine and product labels.
South African designers and their product designs are highly regarded both locally and internationally and many of them have exhibited, and sold their products overseas. Some of the local trend setters are Haldane Martin, Heath Nash, Maxhosa by Laduma, Atang Tshikare, Gregor Jenkin and Anatomy, to name a few. Many local architects have become involved in designing furniture and interiors to complement their designs. Architects Silvio Rech and Lesley Carstens are pioneers in this field. Design protection is an area that is often underestimated and ignored by local designers.
Aesthetic and functional designs can be registered in South Africa. Functional designs are designs that have features which are necessitated by the function of the article to which the design is applied and are to a lesser extent relevant for this discussion. Aesthetic designs are however very relevant in the world of designs and can be utilised to obtain strong statutory protection for a period of 15 years.

If you need more information, send an e-mail to entrepreneur@adamsadams.com.

ANDRE VISSER

Partner
Commercial Attorney

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AFRICA | SOCIO-ECONOMIC THUMBNAIL – Q3 2018

Economic Overview

In many African countries, political transitions and economic reform initiatives have supported investor confidence and are predicted to contribute strongly to business and investment activities going into the second half of 2018. Sub-Saharan Africa experienced a palpable sense of economic optimism motivated by the political transitions and economic policy reforms introduced by the new investor-friendly administrations in Angola, South Africa and Zimbabwe.

Rapid growth has particularly been notable in non-resource intensive economies such as Ghana, Ethiopia, Cote d’Ivoire, Djibouti, Senegal and Tanzania, which rank among the world’s top 10 economies of 2018, according to the World Bank.

East Africa experienced robust economic growth in the past few years, averaging 5.9% in 2017, and forecast to continue accelerating in 2018 and 2019. Growth in the region is favoured by a rebound of agriculture from last year’s drought, strong household consumption, as well as public investment in infrastructure and mineral exploration and exploitation.

The growth outlook for the North African region is more favourable than other regions, aside from East Africa, with average growth projected at 5.0% in 2018. However, the geopolitical tensions and slower pace of reforms, as well as renewed volatility in oil prices constitute key downside risks.

Investment Opportunities

The signing of the African Continental Free Trade Area (AfCFTA) by 44 countries, in late March this year, was a historical moment for the continent. The AfCFTA aims to create a single, liberalised and diversified African market for goods and services, which will constitute a more balanced and sustainable export base. Some of the most anticipated benefits of the AfCFTA include a new, dynamic business climate driven by free movement among member states, accelerated infrastructure development, and increased inflows of foreign direct investment (FDI).

Another key progressive trend across Africa is the scaling of digital technologies, with data, design and the emerging fintech sector driving technological advancement. Africa’s underdevelopment provides huge opportunities for technological innovation. While the continent remains the leader in mobile money, with annual revenue of over US$22 billion, blockchain technology and cryptocurrencies are advancing conspicuously and transforming the way Africa does business.

The energy sector has also seen innovations in renewable energy across the continent. Out of the 168GW of total capacity that was installed in 2016, 33GW was renewable energy. The African Development Bank (AfDB) estimates yearly investment requirements of around US$65-90 billion in order to achieve universal access to electricity across the continent by 2025. The alternative energy sector thus presents an unprecedented opportunity for investors to consider.

PwC Megatrend Analysis 2017

SIMON BROWN

Partner
Trade Mark Attorney

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THE PROTECTION OF WELL-KNOWN TRADE MARKS IN ANGOLA

Although no express provision is made for the protection of well-known marks in the Angolan Industrial Property Act, 3/92 of 1992, well-known marks are in fact afforded some protection in Angola.

In practice, the Registrar will refuse or annul a trade mark if it constitutes a reproduction, imitation or translation of a mark that is well-known in Angola, if it is used for identical or similar goods or services and is liable to cause confusion.  A mark may also be refused or annulled where the mark, although used on goods or services that are not identical, constitutes a reproduction, imitation or translation of another mark that enjoys high renown in Angola, and the use of the mark is intended to take unfair advantage of, or may be detrimental to the distinctive character or renown of the mark.

Similar to the definitions contained in the Mozambique Industrial Property Code, a mark is considered well-known by the Angolan registry if it is well-known among the interested local public as a result of the promotion of the mark in Angola. A mark will be considered a mark of high-renown when it is well-known among the interested public as a result of the promotion of the mark in Angola or worldwide.

Notably, and an important fact to remember when instituting opposition proceedings based on the well-known status of a mark in Angola, the proprietor of a well-known mark or mark of high renown may only institute proceedings where they have registered or applied to register their own trade mark in Angola, albeit after the date of the application that they wish to oppose.

Although Angola is a first-to-file jurisdiction, given that the relevant legislation is silent on the protection and enforcement of well-known marks, it is difficult to predict how the authorities will apply the principles of protection to well-known marks.  A pattern that seems to be emerging from a slew of recent trade mark opposition rulings is that it is easier to succeed in an opposition based on well-known mark rights if it is a foreign entity that has applied to register the mark that you want to oppose, rather than a local entity.

In all instances though, in both Mozambique and Angola, the well-known mark proprietor will need to submit a wealth of convincing evidence as to the mark’s notoriety, preferably including, where available, evidence of local use or recognition in the country.  This can take the form of invoices to local entities, a listing of local retailers that stock the products, any country-specific websites or social media profiles, any local or at least Portuguese advertisements or local news articles or other publications that mention the mark.

Despite the fact that Angola acceded to the Paris Convention for the Protection of Industrial Property on 27 December 2007, the registry appears to give little regard to the provisions regarding the protection of well-known marks when considering an opposition filed against a local Angolan entity.

Ideally, the proprietors of well-known marks would be well-advised to prioritise the filing of their own trade mark applications in Angola, before a wily entrepreneur gets there before them.

ROBYN MULLER-MABUZA

Associate
Attorney

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ROAD ACCIDENT FUND TRIVIA: WHAT IS A MOTOR VEHICLE?

It sounds obvious enough, but the first thing that a potential RAF claimant must prove is that he / she was involved in a motor vehicle collision (failing which he / she cannot successfully claim from the RAF). Section 3 of the Act that guides the Fund expressly and unequivocally states that the objective of the Fund is to compensate victims of motor vehicle collisions. So what do the courts regard as fitting the description: “motor vehicle”?

Section 1 of the Act is the point of departure and it defines a motor vehicle as “… any vehicle designed or adapted for propulsion or haulage on a road by means of fuel, gas or electricity, including a trailer, an agricultural or any other implement designed or adapted to be drawn by such motor vehicle.” As broad as this definition is, courts are, from time to time, called upon to adjudicate on whether a vehicle qualifies as a motor vehicle for the purposes of the Act. This can, to a certain degree, be attributed to ever-introduced inventions, developments and technical advancements etc, most of which the legislature could not have foreseen during the implementation of the Act.

The courts have previously been called on to decide whether shuttles; Golf Cars; Caterpillar 769 trucks; mobile Hobart ground power unist; flatbed transporters; folks lifts; and Hamm 18 pneumatic tyre rollers (PTRs) are motor vehicles. In determining whether or not a ‘vehicle’ qualifies as a motor vehicle, courts seem to be more inclined to adopt a broad interpretation of the definition and generally commence by construing a “motor vehicle” definition, then defining the key words of the definition, and thereafter considering and applying tests that have been developed over the years.

In Berry, D C and Another vs SPE Security Patrol Experts and RAF, the court held that a Golf Cart is a motor vehicle. In RAF vs Mbendera and Others, the SCA held that a Caterpillar 769 is also a motor vehicle as defined by the Act.

The issue In Vogel vs RAF, was whether the Hobart ground power unit, which supplies electricity to jumbo jet aircraft, was a motor vehicle. The High Court found that it did qualify. But on appeal by the RAF, the SCA overturned the High Court’s decision.

In Chauke vs Santam, the Plaintiff was injured by a forklift while walking and he instituted action against Santam in the Magistrate Court. The Defendant successfully raised a Special Plea that the forklift is not a motor vehicle in terms of the Motor Vehicles Accidents Act. The Plaintiff subsequently appealed unsuccessfully to the Witwatersrand Local Division of the Supreme Court and later, to the SCA. In RAF vs Van Den Berg, the issue was whether a PTR qualified as a motor vehicle and the SCA held that it did.

The determination of whether something qualifies as a “motor vehicle” in terms of the Act is then largely based on the court’s interpretation of “motor vehicle” definition – key words of the definition, interpreted against the vehicle’s features, what the vehicle is able to do and an expert witness’s description of the vehicle. Courts have developed tests, whereby they look at the features of the motor vehicle in question, its intended use, where it is intended to be used, etc. Further, courts have developed approaches to apply in such cases and an objective approach i.e. a reasonable man approach and “common sense approach” are ostensibly preferred by courts. The court would, therefore, ask whether a reasonable man would see or think that a vehicle in question is a motor vehicle. In addition to this, courts ordinarily call an expert (someone who has a superior knowledge of the motor vehicle concerned) to provide necessary evidence about the vehicle. For example, in Santam, Mr Bhayla, who was a foreman at Santam was called to provide a thorough description of the forklift, how it operated and provided court with several photographs of the concerned forklift.

In Berry, Mr Johnson, who was a director at E-Z-Go (from where the Plaintiffs had hired a Golf Car) was called to give evidence about the Golf Cars. The courts consider the presence or lack thereof, of features, like petrol driven engine, steering wheel, headlights, rear lights, pedals, forward and reverse gears, side and rear mirrors, safety belts, whether a vehicle is inherently unsafe or could be unsafe, speed limit, gearbox, direction indicators, type and make of tyres, hooter, the size of the vehicle, etc. The presence of most of these features would ordinarily suggest that a vehicle concerned is a motor vehicle.

In addition to features, courts consider the purpose of the motor vehicle, where it is intended to be used and whether it would be expected to be seen on public roads. For example, in Berry’s case, the court considered that a Golf Car is ordinarily used at airports, holiday resorts, hospitals, residential estates, and is used for moving people on road surfaces. In Mbendera, the court considered that a truck was intended to be used in the mining and construction industry, to travel on roads and haul loads. In Santam, in concluding that a forklift is not a motor vehicle, the court considered that a forklift is used for lifting, conveying and depositing heavy loads, it is not used on public roads and it lacks various common motor vehicle features. And in Van Den Berg, the court in concluding that a PTR qualifies as a motor vehicle, it considered the presence of various features; it being designed for propulsion by means of fuel; intended to be used in construction of roads, etc.

From the case law jurisprudence, it is clear that each vehicle needs to be considered on its own i.e. features, purpose, place/area where the vehicle is intended to be used, etc.

Considering that the features, purpose and intended use play a pivotal role in the determination of whether a vehicle is a motor vehicle or not, it may well be that a certain model of a vehicle is disqualified but another model of that same vehicle (e.g. forklift) is qualified – depending on the presence or lack thereof, of certain features, safety for use on public roads, etc.

It would certainly be interesting to see more cases of this nature, particularly in light of the developments and inventions of vehicles for use in various industries.

MTHO MAPHUMULO

Associate
Litigation Attorney

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THE STATE LIABILITY AMENDMENT BILL | A MISSED OPPORTUNITY FOR CHANGE

The State Liability Amendment Bill, as published in Government Gazette No. 41658 of 25 May 2018, in its preamble, aims to amend the State Liability Act, Act 20 of 1957, seeking to “provide for structured settlements for the satisfaction of claims against the State as a result of wrongful medical treatment of persons by servants of the State”.

The introduction is sought to reduce the impact of lump sum payments and aimed to ease the financial strain on the budget of provincial departments of health, in an ever-increasing climate of medical malpractice litigation in South Africa, to allow for an increase in financial resources available for provincial hospitals to provide health care services. The Bill aims to inter alia, recoup unused portions of a lump sum paid to an injured for future medical expenses and future loss of earnings that were not previously retrievable if they had died prematurely, in contrast to what had been postulated at time of settlement or adjudication, and to combat, although unlikely it would appear, what Minister of Health Aaron Motsoaledi deems to be “rampant fraud” in some provinces. [1]

The Bill specifically seeks to inter alia, introduce Section 2A to the State Liability Act, in terms of which compensation in respect of claims against the State, exceeding R1 million, are to be paid to the injured in terms of a structured settlement and periodic payments, in relation to claims for future care, future medical treatment and future loss of earnings, which further will cease once the injured has passed away. Payments are to be made, at the very least, at yearly intervals. More importantly, and possibly restrictively so, a court may in lieu of payment of the anticipated amount, order the State to provide such treatment to the injured party at a public health establishment which complies with the standards set by the Office of Health Standards Compliance, or conversely order, that a reduced amount may be awarded to be tendered for private care, akin to the compensation that would have been paid for the future medical treatment of the injured party, at a public health establishment. Minister Motsoaledi indicates that the Bill directs claimants for treatment to public healthcare facilities, in preparation of the National Health Insurance legislation to be implemented[2].

The proposed legislation to be introduced, raises certain points of contention:

  1. It derogates from the well established “once and for all” rule, that ensures finality and certainty in the resolution of delictual claims.
  2. Structured payments, as evidenced by the proposed Bill, call for proper administration facilities to be in place, to regulate and process claims and payments so awarded. The administrative burden to enforce payments continues to reside with the injured, who is forced to go through lengthy processes to ensure and enforce due payments not honoured by the state, as is currently already being experienced, which further serves to deprive the injured from immediate compensation which ought to maintain and care for his or her day to day care and well-being.
  3. The legislation is devoid of provisions catering for the furnishing of security to the courts or undertaking to be liable to pay the full capital amount, or remedies available to the injured in the alternative, in the absence of periodic payments being honoured in the long term. [3]
  4. In considering the Law Reform Commission Report, issue paper 33, [4] published for commentary, prior to the publishing of the proposed Bill, it is noted that: A) The countries used as a comparative study, such as Canada, the UK, Ireland and Australia, who employed a system of periodic or structured payments, are first world countries, whose financial resources and socio-economic circumstances differ greatly from that of a developing country like South Africa.[5] and B) Structured settlements or periodic payments, for some of these countries, are further discretionary by the courts and not legislatively made compulsory. As such the basis of their introduction in our jurisdiction carries a different weight of consideration if not equally applied.[6]
  5. Litigation and payments of compensation for medical malpractice should not be paid from operational budgets of state health establishments, further straining resources for adequate and proper medical care but rather should be separately budgeted for.
  6. A reconsideration and proper implementation of introducing compulsory professional indemnity insurance of medical practitioners should be considered, to ease the financial burden of the state, to be viewed in context of the National Health Act to be similarly implemented.
  7. The amendment of the Act serves to circumvent litigation in ensuring greater risks to recoup legal costs, brought on by periodic payments, once the litigation has finalised, in instances where lump sum payments would normally have covered within reason, the attorney and client costs not capable of being recouped on a party and party scale. An indigent injured is accordingly prejudiced, by his or her financial means, to pursue litigation as a result.
  8. In advocating for treatment at a state facility, the injured is forced to seek care from the very person or provider that caused the harm, without a guarantee that health standards are enforced and maintained.
  9. The injured is still liable at private healthcare services, for the portion of accounts that exceed public sector rates,[7] placing the financial burden on the injured and thereby limiting and negating the compensation which is received, which is to be sourced for payments of additional obligations imposed, rather than for the injured’s day to day care.

The Bill is anticipated to be passed on a date still to be determined by the President by proclamation in the Government Gazette. It is doubtful at this stage if the Bill will be able to withstand constitutional scrutiny, which will no doubt require a careful consideration of not only state interest, but also the patient’s rights. It is inherent for the patient, to have a right of recourse, to be placed in a position he or she would have been had it not been for the negligent act, which caused or contributed to his or her damage, without being burdened, restrictively, and to be forced to absorb undue hardships that would not have ensued were it not for the negligent act to start with. Ever increasing social awareness, and the constitutional dispensation, warrant an equitable approach that serves to address and find systemic solutions that aim to improve the health care system as a whole without detracting from the health care providers ability to perform its functions and duties effectively and efficiently whilst most importantly still safeguarding the patient’s interests, rights and well-being.

 by Richard Wiers | Senior Associate

[1] Article, “Staggered medical negligence bill “unfair, Business Day, dated 5 June 2018

[2] Article, “Staggered medical negligence bill “unfair, Business Day, dated 5 June 2018

[3] South African Law Reform Commission, Issue Paper 33, as published 17 July 2017 at page 44;

[4] South African Law Reform Commission, Issue Paper 33, as published 17 July 2017;

[5]  South African Law Reform Commission, Issue Paper 33, as published 17 July 2017 at page 40 – 45;

[6] South African Law Reform Commission, Issue Paper 33, as published 17 July 2017 at page 45;

[7] Article, “Staggered medical negligence bill “unfair, Business Day, dated 5 June 2018

RICHARD WIERS

Senior Associate
Attorney

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BREXIT AND THE FUTURE PROTECTION FOR OWNERS OF EUROPEAN UNION TRADE MARKS (EUTMs)

European Union Trade Marks (EUTM’s) are trade mark rights granted by the European Union Trade Marks Office (EUIPO), which rights are enforceable in all countries that are members of the European Union. It provides a useful mechanism to avoid the need to register a trade mark in each of the EU member countries separately.

The United Kingdom was until recently part of this “merry” union of countries, with the benefit that the EUTM provided brand owners with a valuable extension of their rights in the United Kingdom.

Following the United Kingdom’s decision to formally divorce from the union on 29 March 2017 (BREXIT), there has been much uncertainty as to the future protection / extension of EUTM rights in the United Kingdom. There currently is a transitioning period in place until 29 March 2019 during which the current position would remain in force.

Unless the United Kingdom and the European Union come to an agreement on the effect of EUTM rights in the United Kingdom, the default position would be that EUTM’s would have no protection in the United Kingdom and that brand owners would have apply anew to register their marks nationally with the United Kingdom Intellectual Property Office. The default position (i.e. worst-case scenario) is certainly of concern to brand owners as they would cease to have protection in the United Kingdom and would have to take steps to secure rights in their marks in the United Kingdom. Some brand owners have already adopted a “belts and braces” approach with respect to their trade marks and prepared for the worst-case scenario by applying to register their trade marks nationally in the United Kingdom.

The United Kingdom’s decision also has significant implications for South African businesses, not only from a brand registration perspective, but also from a larger trade perspective, as the United Kingdom is currently South Africa’s second largest export partner in the European Union, and the sixth largest in the world.

It was not, however, anticipated that the position would turn out to be as drastic as the worst-case scenario but, as with any divorce, the outcome may be quite uncertain if the parties do not end their relationship on good terms. Certainly, from the European Union’s perspective, it appeared to be severely angered by the United Kingdom’s decision to divorce from the union. The United Kingdom on the other hand did not want to come across as apologetic for its decision, being of the view that an aggressive stance would strengthen its bargaining position – though back home there was much disagreement as to what a good BREXIT outcome or negotiating strategy would be.

Some much needed certainly about the intended outcome came earlier this year on 19 March 2018 with the divorcing spouses agreeing to transition terms which, inter alia, ensure that there are no substantive changes to the present framework on intellectual property until 31 December 2020. This essentially bought the negotiating parties a little more than a year to iron out an agreement as to the future protection of EUTM’s.

It is envisaged that a good outcome would be that, after 31 December 2020, all EUTM’s will automatically be “cloned” onto the United Kingdom Trade Marks Register with identical rights to other national UK trade mark registrations, with no action or expense required by brand owners (i.e. the best-case scenario). This envisaged outcome was described as “agreed at negotiators level” in a draft agreement published by the United Kingdom on 19 March 2018.

If an EUTM was still pending as at 31 December 2020 (i.e. has not yet proceeded to registration), it is anticipated that its final registration would only cover the European Union member countries and not the United Kingdom. However, it is anticipated that the owners of such marks would have a grace period with in which to apply to register such marks in the United Kingdom and claim a priority date equal to that of their corresponding pending EUTM application for the same mark. Given the speed at which marks proceed to registration at the EUIPO, it is not expected that there will be many such cases.

Further clarity has recently come to light in the form of a statement by the United Kingdom Parliamentary Under-Secretary for Exiting the EU, Mr. Robin Walker on 19 July 2018. Walker stated that the United Kingdom will protect all existing EUTM’s, even after the United Kingdom leaves the European Union. New United Kingdom trade mark rights will automatically be granted, free of charge, to extend such existing EUTM’s to the United Kingdom.

Although it is only in the form of a statement, the statement corresponds with the “cloning” scenario / outcome and certainly provides much needed clarity for anxious brand owners and intellectual property practitioners. There is, however, much that still need to be ironed out in the final agreement.

Unfortunately, as with any divorce, nothing is agreed until everything is agreed, and brand owners would be wise not to rely completely on the envisaged outcome. The only way to fully BREXIT-proof trade mark rights would still be to apply to register the relevant trade mark nationally in the United Kingdom, even if only for main / core brands. It will certainly be interesting to see where the spouses land up after the divorce, not only from a brand registration perspective, but from a trade perspective in general.

Wensel Britz | Senior Associate | Adams & Adams

Steven Yeates | Partner | Adams & Adams

WENSEL BRITZ

Senior Associate
Trade Mark Attorney

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OMG! CAN YOU JUST BE CHILL!?

OMG, OMFG, WTF!?, COOL AF – offensive and inappropriate or effing cool taglines? This is a question that was recently considered by the Advertising Standards Authority of South Africa in Typo Stationery / Kathrine Marsden & Another / 2018-809F.

Popular stationery store, Typo, advertised a sparkle ball point pen. The advertisement consisted of an image of the pen, a bubble with the acronym OMFG (where the F stands for the F word) and an image of a model holding her cheeks seemingly astonished by the offer. The advertisement was circulated in an email that was sent to Typo customers.

A consumer filed a compliant with the ASA arguing that the advertisement was contrary to the Advertising Practice Code (“the ASA Code”) in that it was highly offensive and insensitive towards children.

Clause 1 of Section II – Offence

The ASA had to consider the advertisement in terms of Clause 1 of Section II of the Code which provides that advertisements should contain nothing that is likely to cause serious, wide-spread or sectoral offence. The Clause provides that the fact that an advertisement may be offensive to some is not in itself sufficient grounds for upholding an objection to the advertisement. In considering whether an advertisement is offensive, consideration will be given to the context, medium, likely audience, the nature of the product or service, prevailing standards, degree of social concern, and public interest.

The ASA looked at a series of cases in which it had considered whether the acronym OMG and the word “effing” were considered offensive.  In Department of Social Development/E Cillie/17620, the Directorate held that whilst the complainant had a personal view on the acronym OMG, it does not believe that the use of OMG is likely to cause serious, widespread or sectoral offence, especially since the term has become widely used in the media.

In Webafrica / Fibre Internet / Timothy Wege & Another / 2018 – 7354F, the ASA held that the word “effing” is not per se offensive, is commonly used and other phrases or acronyms such as “WTF” are also in common use. Considering the widespread use of the word effing and that it was used in a way intended to be humorous, the hypothetical reasonable adult would not be offended by the use of the word “effing”.

In the present case, the ASA accepted that OMFG, where the F stands for the F word, was arguably more offensive than the acronym OMG, particularly to religious people. However, the ASA, by a slim majority held that OMFG was similar to the use of “effing” or OMG and, therefore, would not be offensive to adults.

Clause 14 of Section II – Children

The ASA also had to consider the advertisement in terms of Clause 14 of Section II, which provides that advertisements addressed to or likely to influence children should not contain any statement or visual presentation which might result in harming them mentally, morally, physically or emotionally.

The ASA, again, considered previous decisions. In particular, Dial A Nerd // AA Milford / 15791, which involved a radio advertisement where the F word had been bleeped out. The ASA held that the use of the F word in the commercial, although censored, is still not desirable when young and easily impressionable children are listening to the radio.

In Webafrica Fibre Internet / Timothy Wedge & Another / 2018-7354F, the advertisements under review was a billboard which contained the phrase “Effing Fast Internet” situated on school grounds and a radio advertisement where the word “Effing” had been bleeped out. The ASA enquired whether a child imitating the commercial and using the word “effing” would be acceptable and concluded that it would not. The ASA held that it was highly unlikely that a child would not understand the meaning of “effing” as used in the context of the advertisements. The ASA noted that it is required to err on the side of caution in matters involving children.

In the Typo case, it was the placement of the advertisement which resulted in the ASA finding that the use of OMFG in the advertisement was not harmful to children. Whilst the ASA accepted that the product, a sparkle pen, would be attractive to children, the advertisement was circulated via email to Typo customers only. Typo customers were identified as aged 18 – 35. The ASA held that a child who could be harmed by inappropriate language should not have unchecked access to emails.

Therefore, whilst the ASA has adopted quite a liberal approach in holding that advertisements containing commonly used phrases alluding to the F word are not offensive to adults, the same principles do not apply to advertisements that are accessible to children. It is likely that if the phrases, OMFG, WTF, EFFING, AF are included in advertisements that are easily accessible by children, whether on radio, in print media, billboards or point of sale material, such advertisements, whilst effing cool, will most likely be found to contravene the provisions relating to children in the ASA Code.

ALISSA NAYANAH

Senior Associate
Trade Mark Attorney

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TRADE MARK PROTECTION IN RWANDA | WHAT YOU NEED TO KNOW

According to the World Economic Forum, Rwanda is one of the fastest growing economies in Central Africa. The country has come a long way since the Tutsi genocide devastated its economy more than two decades ago.  Rwandans are now generally living healthier and wealthier lives and poverty rates have fallen in recent years.

Click on the image below for a snapshot economic, political and business analysis of Rwanda (2017) – in conjunction with In On Africa. In-depth and detailed reports on all African economies are available upon request.

With the huge economic strides made by Rwanda in the past 20 years, there is a sense of a real African success story bringing hope for the future. Serious considerations for conducting or doing business in Rwanda must be made in good time.  On this note, it is also important to create awareness on protecting IP rights, including trade mark rights in the country, which is fundamental to doing business.

A trade mark registration provides protection to the owner of a mark by ensuring the exclusive right to use it to identify goods or services, or to authorise another person to use it in return for payment. The owner shall also have the right to institute proceedings against persons who infringe his rights by using the registered trade mark without his consent.

Trade mark law may also be used to hinder the activities of unfair competitors, such as counterfeiters, who attempt to use similar signs/marks to market inferior or different products or services. In a bigger sense, registering trade marks promotes initiative, creativity and business by rewarding the owners of trade marks with recognition and financial profit. The law protecting trade marks enables people with skill and enterprise to produce and market goods and services in the fairest possible conditions, thereby facilitating international trade.

The process of registering a trade mark in Rwanda involves a limited number of procedural and documentary requisites. This is designed to facilitate easy and relatively cheap registration of trade marks. For a foreign applicant, the Registry only requires that the applicant appoints a local representative law firm, submission of an application form (containing full details of the applicant, a clear reproduction of the mark and a list of goods or services in respect of which the mark is to be used), a notarised power of attorney and a certified priority document, if priority is claimed. The costs to file an application are below US$1000 (inclusive of professional fees, official fees and disbursements).

The timeframe to secure registration (provided no obstacles are cited and no oppositions are raised) is quick insofar as African countries are concerned. Applications are normally examined and published (if accepted) within 6 months of filing. If the 60 day opposition term expires uneventfully, the application proceeds to grant and a registration certificate is issued. The registration is valid for a period of 10 years from the date of filing and is renewable indefinitely for 10 year periods. The renewal process is likewise quick and hassle-free. It is not necessary to prove use of a trade mark when applying for registration, nor is this required when applying for renewal in Rwanda.

Rwanda is a member of the Madrid Protocol, Lusaka Agreement on ARIPO, The Paris Convention and the Convention establishing WIPO. This is not an exhaustive list. Being a member of these Treaties has facilitated an environment conducive to protecting trade mark rights in Rwanda.

By law, Rwanda is a first-to-file country but in practice, the Registry recognises common law user rights.  Protecting one’s trade mark rights cannot be overemphasised.  While registration of a trade mark is not compulsory, it is advisable to do so since registration provides a cost-effective way to prevent infringement and also prevents others from appropriating and registering one’s trade mark. Rwanda is booming so consider protecting your trade marks and filing for registration today!

E-mail Rwanda@AdamsAdams.com for assistance with trade mark filing and protection.

JEANETTE VISAGIE

Senior Associate
Trade Mark Attorney

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BROKEN RECORD | KENYA COPYRIGHT DISPUTE

In Incognito Productions Limited & another v Nation Media Group [2018] eKLR, the Plaintiffs sought an interim interdict against the Defendant restraining the unauthorised use of its intellectual property.  

The parties had a business relationship dating back to 2005 in relation to a music television show broadcast in Kenya, namely The Beat. However, the show’s poor performance led to the parties discussing a revamp of the show which ultimately resulted in the launch of LIT360 earlier this year.

The objective of LIT360 is to cultivate local musical talent.

The Plaintiffs claimed that the Defendant had misappropriated their concept which underlies LIT360. The basis of this claim lay in business proposals shared between the parties in 2017. Specifically, the Plaintiffs claimed to have shared with the Defendant expressions of LIT360 in the form of literary and audio-visual works, which are protectable by copyright in Kenya.

The Court rejected the Plaintiffs’ application for interim relief but made several comments relevant to the determination of the main suit. Specifically, the Court noted that the trial court would need to determine whether:

  1. LIT360 was an improvement of The Beat and therefore created with proprietary information already in the Defendant’s possession or whether, as the Plaintiffs suggests, LIT360 is a separate and distinct work which infringes its copyright;
  2. the Plaintiffs are seeking copyright protection in an idea. LIT360 seemingly originated from business proposals which eventually culminated in a pilot show, which was delivered in a tangible form to the Defendant. It is trite that there can be no copyright in ideas;
  3. the Plaintiffs’ concept is original, as required by the Copyright Act in Kenya. The Defendant claimed that the Plaintiffs’ concept is similar to two other shows aired in the USA. The Plaintiffs argued that the shows in question were broadcast via YouTube while their concept envisaged a show simulcast via television and radio. It is unclear whether this difference in delivery will affect the determination of originality.

The Court held that there was insufficient evidence to support a claim of copyright infringement. The court also refused to award an interim interdict on the ground that the Defendant, who had also invested in LIT360, and its sponsors and affiliates would suffer loss.

The final decision in this case is highly anticipated, as the court will seemingly be required to develop the law regarding originality in the context of copyright law. In addition, this case will reveal the extent to which a concept or expression of an idea needs be reduced to material form to be eligible for copyright protection.

KIM RAMPERSADH

Senior Associate
Attorney

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SPLITTING HAIRS IN KENYA | TRADE MARK DISPUTE

In Style Industries Limited v Sana Industries Co. Limited [2018] eKLR, the Plaintiff, Style Industries, sought an interim interdict and an Anton Piller order against the Defendant, Sana Industries, a long-time competitor of the Plaintiff.

Both parties trade in relation to, inter alia, hair extensions in Kenya.

The Plaintiff had acquired the mark VIP COLLECTION in class 26 in Kenya in relation to “Hair additions, hair pieces and braids, weaves and wigs” from a predecessor. The acquisition of that company’s assets effectively resulted in the Plaintiff acquiring the mark, VIP COLLECTION and the goodwill attaching to that mark.

The Plaintiff claimed that in October 2017 it noticed that its turnover in relation to products branded with the mark VIP COLLECTION had plummeted. This was attributed by the Plaintiff to the Defendant’s trade in similar products bearing the mark VIP PREMIUM COLLECTION.

The Plaintiff sought an interdict from the Court claiming that the Defendant’s conduct infringed its right to use the mark VIP COLLECTION to the exclusion of all others and that its conduct would continue unless restrained by the Court. The Anton Piller order was sought on the ground that it would allow the Plaintiff access to the Defendant’s premises and authority to seize products in its possession to which the mark VIP PREMIUM COLLECTION had been applied until the end determination of the suit.

In its defence, the Defendant argued that, like it, the Plaintiff had used the mark VIP COLLECTION as an indication of the quality of its goods rather than as a trade mark. It also alleged that the claim by the Plaintiff that it had suffered economic loss as a result of its conduct was a misrepresentation. In fact, it claimed that this could be attributed to the prolonged general elections which took place at that time. The Defendant also pleaded that the get-up of its VIP PREMIUM COLLECTION mark rendered it distinguishable from the Plaintiff’s mark VIP COLLECTION.

Despite this, the Court found:

  1. that the Plaintiff had made out a prima facie case of trade mark infringement;
  2. that the Plaintiff stood to suffer irreparable loss which could not be adequately compensated with an award of damages; and
  3. that the balance of convenience favoured the Plaintiff as it was entitled to use of the mark VIP COLLECTION. Indeed, the Defendant who had been using the mark VIP PREMIUM COLLECTION since 2008 did not attack the validity of effect of the Plaintiff’s mark.

However, the Court did not award the Anton Piller order. The Court found that the order, which is aimed at the preservation of evidence, would be pointless, as the Plaintiff did not make out any case which suggested that evidence would be destroyed by the Defendant. In addition, both parties had adduced evidence of the Defendant’s use of the conflicting mark in their papers.

The Court’s decision to refuse the Anton Piller order, which would otherwise have given the Plaintiff access to the Defendant’s business and therefore an unfair advantage that did not appear to be warranted, appears to be a sensible one. The decision on the merits also appears to be correct. Whether or not the Plaintiff’s trade mark would withstand an attack on the grounds that it is generic, which was pleaded by the Defendant, is perhaps a different question.

KIM RAMPERSADH

Senior Associate
Attorney

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A NO-NONSENSE GUIDE TO THE LEGAL ASPECTS OF FRANCHISING

A Franchise Agreement is a sophisticated form of Licence Agreement.  It is therefore necessary to first look briefly at what a license is and what can be licensed.  The image below sets out the essentials of a License Agreement.  You will note that at the core, it is a contractual business relationship between a licensor and licensee.  The licensor is either the proprietor or a holder of certain intellectual property rights or technology which he allows the licensee to use in return for some sort of remuneration or other advantage.

Intellectual property rights which can be licensed include statutory or non-statutory intellectual property rights. Statutory intellectual property rights include patents, designs, trade marks and copyright whereas non-statutory intellectual property rights include know-how, trade secrets, customer lists, formulas, business methods, personnel training and manuals.

The object of a license is almost invariably to commercially exploit technology or intellectual property. To ensure the long term success of a License Agreement i.e. to achieve a win/win situation, it is recommended that the license must be structured in such a way that it is to the mutual benefit of both parties.

TYPES OF FRANCHISES

Although it is often said that there are two main types of franchising, namely (i) product and trade mark or trade name franchises and (ii) business format franchising, this is not an accurate explanation. A more correct approach is to view a product or trade mark franchise, as franchising in a simpler form in that the franchisee is only entitled to use the franchisor’s name or trade mark and product. This type of franchising is prevalent amongst motor vehicle dealers, soft drink bottlers and certain fuel service stations. Thus in a product or trade mark franchise only a single or a limited number of intellectual property rights are used.

The opposite end of the scale is a full business format franchise in terms of which the franchisee uses the franchisor’s entire business concept, which includes the name, trade marks, copyright, goodwill, know-how, trade secrets, trade dress and similar intellectual property. It is clear that in a full business format franchise numerous intellectual property rights are licensed to the franchisee to use. The two customary “types” of franchises are therefore at opposite ends of a continuum. It is of course for the franchisor or proprietor of the intellectual property to decide precisely what makes commercial sense and what he is going to allow the franchisee to use.

DEFINITION OF FRANCHISING

The International Franchise Association defines a full business format franchise as follows:

“Franchise operation is a contractual relationship between the franchisor and the franchisee in which the franchisor offers or is obliged to maintain continuing interest in the business of the franchisee in such areas as know-how and training, wherein the franchisee operates under a common trade mark, format or procedure owned or controlled by the franchisor, under which the franchisee has or will make a substantial capital investment in his business from his own resources.”

It is apparent that the key elements of the definition include:

(1)        a contractual relationship,

(2)        the franchisor offers or is obliged to maintain a continuing interest in relation to the know-how and training,

(3)        the franchisee operates under a common trade mark, format or procedure,

(4)        owned or controlled by the franchisor, and

(5)        the franchisee has or will make a substantial capital investment from his own resources.

The licensing of intellectual property to the franchisee is a central theme of the Franchise Agreement. The three most important areas of intellectual property in most franchise systems are trade marks, copyright and know-how.

TRADE MARKS

In terms of the Trade Marks Act, a trade mark includes any sign capable of being represented graphically including:

–           A device, logo or representation.

–           A name or signature.

–           A word, words, phrase or slogan.

–           A letter or series of letters.

–           A numeral or series of numerals.

–           The shape and configuration of a product or part thereof.

–           The pattern and ornamentation appearing on a product, packaging or advertising material.

–           A colour or combination of colours.

–           A container for goods, or any combination of the aforementioned.

It is often said that the corner stone of the Trade Marks Act is distinctiveness. To be registrable and so as to function as a trade mark, the mark must distinguish the goods and services in relation to which it is used from the goods or services of others.

COPYRIGHT

The next important area of intellectual property is copyright. Generally speaking, copyright is the right given to the creator, author or other person who may own the copyright of certain types of works, not to have that work copied or reproduced without authorisation. Copyright exists in various types of works including literary works such as manuals, documents, articles, promotional materials, disclosure documents, novels and publications. Artistic works include logos, labels, menus, advertisements and diagrams. Computer programmes also enjoy copyright.

A critical point to remember is that generally the author of copyright work is also the owner thereof, unless the work was made by an employee during the course of his employment. In this instance the employee will be the author, but the employer will be the owner. It is therefore essential that copyright in all works including logos, promotional materials, company documentation and other works which are prepared externally or outsourced, even if they have been paid for, are competently transferred to the franchisor in writing. If this is not attended to, although the franchisor (and the franchisees) will be able to use any such materials, the franchisor will not be the owner thereof.

KNOW-HOW

The term know-how usually refers to a wealth of technical knowledge, commercial information and experience developed and acquired by a fairly specialised production organisation. It is often reduced to the form of an operating manual or reflected in similar documentation. Many of the success features of franchises reside in the know-how, trade secrets and confidential information. It is important to note that if know-how or trade secrets are “leaked” or become public knowledge, it will no longer be possible to protect it and it may become valueless. Competent confidentiality provisions should therefore be included in the Franchise Agreement or in the employment contracts.

FRANCHISE AGREEMENT PROVISIONS

Next we turn to the Franchise Agreement itself. Due to the nature and complexity of a Franchise Agreement, it is the intention in this article to only highlight a number of important clauses or provisions which need to be considered when preparing or considering a Franchise Agreement.

DEFINITIONS

As in any other agreement, the parties must be properly identified and described. It is essential in a Franchise Agreement that the intellectual property being licensed is also properly identified and described in the Agreement. Definitions should therefore include inter alia, the trade marks, copyright, trade dress, know-how, trade secrets and other intellectual property.  The definitions should also include a description of the franchised business, the products and services. Further, bearing in mind that the proprietor or holder of the intellectual property is allowing the franchisee to use the intellectual property, definitions should also be included as to precisely what intellectual property will be used in which territory and for what period. Provisions should therefore be included for inter alia the territory, commencement date, the termination date and renewal.

GRANT

One of the most important terms in a Franchise Agreement is the grant clause. When considering this clause it should be borne in mind that there are various types of License Agreements. The first is an exclusive License or Franchise Agreement where certain intellectual property rights are given exclusively to a franchisee to use for example in a certain area. This franchisee will therefore be able to exclude all others including other franchisees and the franchisor from operating in that area. It should be borne in mind that where exclusive licenses are given, minimum performance standards or other safe guards should be put in place in the best interests of the franchise system.

The second type of License Agreement is that of a sole Franchise or License Agreement. Using the same example, in this instance the franchisee is given the sole right to operate a franchise or outlet in the specific area. This however, does not exclude the franchisor, who will be able to open one or more outlets and compete directly with the franchisee in that area.

Finally, there is an ordinary license or franchise in terms of which a franchisee is given the right to use the intellectual property, but enjoys no exclusive or sole rights whatsoever. For example, if he is given an area within which to operate, the franchisor and other franchisees will also be entitled to operate in the same area.

PAYMENT

The clauses relating to payment usually include at least three types of payment. These are the upfront lump sum, which is usually described as a franchise fee and which is paid to obtain the license or franchise. The breakdown of this amount usually includes the costs of setting up the outlet, costs of training, legal costs and an amount for goodwill. In newer franchises the amount attributed to goodwill is usually smaller, whereas in the more established franchises larger sums are requested for the established goodwill.

Royalty payments are also made by the franchisee to the franchisor. These could be fixed monthly, quarterly or annually. Alternatively, amounts based on a percentage of turnover are paid. These royalties are payable in lieu of the ongoing use of the intellectual property. The royalty figures have also been described as a management service payment, possibly to justify or to enhance the franchisee’s perception that he is also receiving management services from the franchisor. It can however cause difficulties in that the franchisee can refuse to pay the management service fee, if no services are rendered to the franchisee.  This difficulty may not be relevant if royalties are paid, for the reason that if the intellectual property is used, the royalty is payable.

It is common practice in full business format franchises, that each franchisee contributes a fixed amount or a fixed percentage of turnover on a regular basis towards the promotion and advertisement of the franchise operation. These monies must be paid into an independently managed fund. This fund is usually managed by the franchisor in consultation with the franchisees.

In certain franchises administration is attended to on behalf of the franchisees by the franchisor in return for which the franchisee may pay to the franchisor a  fixed monthly sum or a small percentage of turnover.

FRANCHISOR OBLIGATIONS

The next essential part of the Agreement are the obligations of the franchisor. The franchisor’s obligations are divided into initial and ongoing obligations. Initially the franchisor will assist with the setting up of the premises or outlet, furnish the franchisee with the operations and procedures manual, disclose the entire franchise system to the franchisee and train the franchisee.

Ongoing obligations of the franchisor include additional necessary training from time to time and also to assist with problems, management and to provide guidance, in addition to the ongoing management and development of the franchise system. It is essential in the long term best interests of the franchise system that the Agreement includes positive obligations and duties on the franchisor to render these services.

FRANCHISEE OBLIGATIONS

The obligations of the franchisee are usually fairly extensive. These should include provisions that the franchisee should operate the franchise strictly in accordance with the franchise system, usually as set out in the operations manual. In addition to fairly standard terms such as, for example, an obligation to pay all sums due timeously and to engage and properly train suitable staff, provisions should be inserted to the effect that the franchisee should enhance and promote the intellectual property, goodwill and reputation of the franchise at all times. In addition, the franchisee should also advertise and promote the franchise in accordance with the directions, requirements and specifications of the franchisor from time to time.

These provisions are essential so as to ensure a common brand, identity, consistency and quality. The franchisee should also in this regard allow regular inspections so as to ensure quality control.

Where monies are paid on a percentage of turnover, it is essential that the franchisee be obliged to give full access and assistance in respect of accounting records to the franchisor.

Ideally a franchise system should have a comprehensive operations manual. This should be a dynamic annexure to the Franchise Agreement and the agreement should provide that the franchisee shall act in accordance with the manual, as amended from time to time. This will enable the franchisor, where it makes prudent commercial sense to develop the business, to do so without having to continually sign updated Franchise Agreements.

ASSIGNMENT / CESSION/ALIENATION OF RIGHTS

The Agreement should contain a provision preventing the franchisee from ceding, assigning or in any way alienating any of his rights or sub-franchising without the written consent of the franchisor. This is an added protection to the franchisor and greater franchise system in that it will prevent franchisees from selling or alienating their rights, thereby possibly introducing unskilled and inappropriate franchisee persons into the business.

TERMINATION

The termination clause should be comprehensive in the best interests of the entire franchise system and/or other franchisees. In addition to standard provisions such as timeous payment, the clause should include provisions entitling the franchisor to cancel the Agreement if the franchisee fails to act in accordance with the operations manual, performs inadequately or maintains poor quality standards. Further, if there is any challenge on the proprietorship of the franchised intellectual property, this should also be a ground for possible termination of the Agreement.

AFTER TERMINATION

The Agreement should also provide for an after termination clause in terms of which the franchisor will be entitled to after the termination of the contract to retrieve all materials, documents, programmes and products bearing, reflecting or embodying the intellectual property of the franchisor or which is associated with the franchisor.  An option entitling the Franchisor to acquire the assets of the franchised business, should it so wish, may be prudent additional protection.  Similarly, an option to take over the lease of the premises of the franchised business, should also be considered.

RESTRAINT OF TRADE

So as to protect the franchise system, it is certainly advisable to insert restraint of trade provisions. These should be reasonable with regard to territory, nature of activity and period. Of concern here is that although it is often in the best interests of a franchise system to have all franchisees sign the same Franchise Agreement, this may not be appropriate in this instance. For example, if a franchise system sells three sizes of franchisee outlets, it would be inappropriate to have the identical restraint of trade provisions in each instance. A restraint of trade provision could be quite reasonable in the instance of a multi-million rand franchisee outlet rendering services to clients from a large area, whereas the same provisions could be unreasonable when considered in the light of a far smaller franchisee outlet. If a court finds a restraint of trade provision “unreasonable” it will be unenforceable. It is therefore prudent to rather include narrower or more reasonable restraints than broader restraints which may be unreasonable and therefore unenforceable.

Consideration should also be given, wherever possible to the protection of intellectual property rights, such as customer lists, data, know-how, trade secrets and confidential information, in this clause.

DISCLOSURE

It is necessary for the franchisor to furnish the franchisee with a competent disclosure document fourteen days prior to signature of the Agreement. It is therefore advisable to have a provision in the Agreement confirming that the franchisee was furnished with the disclosure document more than fourteen days before the date of signature and that he is happy that he has been furnished with sufficient reasonable information so as to place him in a position where he was able to properly assess whether to buy the franchise or not.

CONFIDENTIALITY

It is advisable that confidentiality agreements be signed by relevant staff in franchisee outlets so as to protect the know-how, trade secrets and confidential information of the franchise system. These clauses could also be inserted into employment contracts.

SURETYSHIP

Where appropriate, members or shareholders of close corporations, companies or other corporate entities should be requested to sign suretyship agreements so as to make them personally liable and accountable to the franchisor.

COMPETITION COMMISSION CONCERNS

It is appropriate to also deal with the Competition Act and the concerns of the Competition Commission. The concerns of the Competition Commission have included horizontal relationship collusion, vertical relationship collusion, retail price maintenance, exclusive territories, exclusive dealing, tying of products and intellectual property rights.

Retail price maintenance appears to be a primary concern of the Competition Commission in that a franchisor cannot dictate minimum prices or maximum discounts to its franchisees. Further, prices should also be recommended, rather than fixed and there should be no sanction or penalty if the recommended prices are not adhered to.

Very broadly speaking, with regard to exclusive territories, exclusive dealing and the tying of products, despite the fact that such provisions may at first blush reduce competition, when looking at all the facts and at the franchise system in detail, justifications or defences of efficiency, technology or other pro competitive benefits, may be raised. The difficulties with intellectual property rights appear to revolve around refusals to grant licenses to third parties and where there are excessive charges for the use thereof. Here defences or justifications would be possible if the Intellectual Property, for example, enhances efficiency in the franchise system and that exclusivity and protection of owners’ investment, as well as the importance and value of the intellectual property being used, can be justified in the circumstances.

CONCLUSION

Setting up a franchise system or obtaining advice on a franchise agreement and on intellectual property are complex areas of law.  It is therefore recommended that you utilise the services of specialised franchise attorneys or consultants (for the business aspects thereof), so as to ensure you are properly protected.

EUGENE HONEY

Partner
Trade Mark Attorney

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OAPI | PROTECTED GEOGRAPHICAL INDICATIONS PROJECT ENTERS SECOND PHASE

Protected geographical indications. Which products to select? This question was at the centre of a seminar held recently at the headquarters of OAPI. The meeting chaired by Mr. Denis Bohoussou, DG for OAPI, and led by Mr. Philippe Pedelahore technical assistant of the project in support of the establishment of Geographical Indications for the Member States of OAPI, reviewed the results of the identification and selection of agropastoral and artisanal products carried out in the OAPI area, which could be integrated into a protection approach as geographical indications.

Many products have already received consideration, such as:

  • Gari sohui flour and Agonlin oil from Benin.
  • Red cocoa and the Bafia pineapple, both from Cameroon.
  • Attiéké des Lagunes and Baoulé Pagnes from Côte d’Ivoire.
  • Friguiagbé’s Pineapple from Guinea.

Once finalised, this selection work will mark the beginning of a process that, in the long run, could allow these products to be awarded the “protected geographical indications” label at OAPI.

STEPHEN HOLLIS

Partner
Trade Mark Attorney

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7 KEY INSIGHTS ON ZIMBABWE’S NEW IP POLICY AND IMPLEMENTATION STRATEGY

Recently, Zimbabwe launched its first national Intellectual Property Policy and Implementation Strategy [2018-2022] (“the Policy”). The Policy was drafted with the assistance of WIPO, and involved interface meetings and workshops with various stakeholders.

In reviewing the policy and implementation strategy our team has published the following observations regarding its objective and roll-out.

1.

The Policy acknowledges the important role that Intellectual Property Rights (“IPRs”) play in cultural, economic and social development. It also recognises the fact that Zimbabwe has impressive IP potential, which can be harnessed to develop its economy. The utilisation of this potential has, in the past, been substandard. This has been attributed to a lack of understanding and knowledge regarding IP and IPRs. Consequently, it has not been able to fully benefit from the exploitation of its IP assets. Part of this challenge has been as a result of the absence of an IP policy to guide and give direction as to how Zimbabwe can economically exploit IP into the development plans of the country. It is therefore prudent that appropriate measures and strategies are put in place to ensure that IPRs are efficiently protected and used to enhance such development.

 

2.

The Policy’s overall objective is ensuring that the entire Intellectual Property governance framework, such as diverse laws and regulations, strategies, action plans, treaties, protocols, practices etc., leverages Zimbabwe’s IP potential for inclusive and sustainable economic growth and development. The specific objectives which the Policy seeks to effectively pursue include:

  • Raising and consolidating IP awareness amongst the general public;
  • Informing stakeholders about the economic benefits of IP;
  • Enhancing IP knowledge and professional skills capacities;
  • Encouraging the mobilisation of IP through acquisitions and own creations;
  • Protecting IP;
  • Inspiring the commercialisation of IP; and
  • Enhancing IP trading mediation capacities.

 

3.

Core sectors which the Policy focuses on are: Agriculture; industry; health; education, training and professional skills development; environment; culture; trade; tourism and small and medium sized enterprises (SMEs). These sectors have been prioritised as they contribute to the growth of the economy. Summarised below are the key issues which the Policy will focus on in each sector:

Agriculture

Since Agriculture is the backbone of Zimbabwe’s economy, it is important to ensure that correct measures are put in place to protect the IP-related issues applicable in this sector. Accordingly, the Policy will focus on Geographical indications, Plant Breeders Rights, Indigenous Knowledge Systems and Biodiversity. These protection systems should be leveraged to ensure that the agricultural sector in Zimbabwe thrives.

Industrial

In the case of the Industrial sector, the Policy will seek to, amongst other things, strengthen the management of Intellectual Property Systems and develop IP portfolios. In addition, through a functional innovation system, it will promote interactions between innovators and researchers on the one hand, and the industry on the other.

Health

Quality medicines, which have saved and improved the lives of many, have been entering the market as a result of the strategic use of Intellectual Property. The Policy will therefore promote access to medicines at affordable prices through the exploitation of the TRIPs flexibilities, and research and development in the area of pharmaceuticals.

Education, training and professional skills development

Since IP knowledge in Zimbabwe is limited, the Policy will ensure that local capacities are developed to provide specialised IP knowledge and professional IP skills on a practical level.

Environment

In correspondence with international undertakings to which Zimbabwe is a signatory, the Policy will pursue the effective implementation of The Convention on Biodiversity and The Nagoya Protocol. This will ensure that the process of harnessing IPRs for socio-economic transformation does not conflict with the preservation of Zimbabwe’s environment for current and future generations.

Culture

Zimbabwe’s cultural heritage and geographic indicators will be protected and leveraged as central and integral elements of the country’s IP assets portfolio.

Trade

Since the country has been exporting most of its products (such as diamonds and platinum) as unprocessed raw materials, the growth of the economy has suffered due to the small returns obtained from these unprocessed and semi-processed products. Zimbabwe has therefore found itself in a position where it exports most of the products in raw form (realising very little profit) and then imports the finished products at a higher cost. The Policy will therefore seek to correct this by applying rigorous border measures which will protect economic entities operating in the national market (whether they are locally or internationally owned business). This, in turn, will create a beneficial investment environment.

The Policy also recognises the need to strengthen the manufacturing capacity of the country’s manufacturing industry so that value can be added to raw materials which are exported. The IP system will enable this through mechanisms such as licensing arrangements and technology transfer.

The thrust of the policy will be to increase international competitiveness of Zimbabwean industry and products through the application of science, technology and innovation. IP is a key enabler of innovation and creativity, as well as an incentive for investing in research and development.

Tourism

With tourist numbers rising in the first quarter of 2018, it is no wonder that the emphasis of the Policy will be to leverage certain IP assets to promote competitiveness through increased tourist activities in the national market. These IP assets include certification marks, geographical indications, indigenous knowledge systems, service marks and destination branding. Essentially, these IP assets can be used to promote the quality of relevant local tourist industry services, rurally-focused and agri-driven tourism, the learning of different cultures, and to distinctively position their market offer.

SMEs – small and medium scale enterprises

SMEs contribute significantly to the economy in Zimbabwe as they generate employment and contribute to the economic growth and development of the country. The Policy will therefore focus on appropriate legislation targeting Utility Models, Collective marks and Geographic Indicators.

 

4.

The Policy also defines the concepts of ‘intellectual property’ and ‘IPRs’ and places specific emphasis on the need to protect trade secrets and traditional knowledge.

 

5.

The vision of the Policy is to transform the country into a globally competitive one, with a dynamic Intellectual Property System that propels creativeness and innovativeness or inventiveness, and effectively guides the promotion, acquisition and commercialisation of Intellectual Property for sustainable economic growth and development.

 

6.

Six key considerations which guide the generation of strategies for the implementation of the Policy include: the enhancement of domestic capacities to generate IP, the promotion of the acquisition of IP, the promotion of commercial exploitation of IP, putting in place reliable IP laws and regulations and enforcement mechanisms, regional and global appreciation and supporting the industrial transformation of the economy.

 

7.

Actions to be taken to implement this Policy include:

  • Raising and consolidating IP awareness among the people of Zimbabwe. The measures taken to achieve this goal will form part of an outreach programme targeting the general public, specific stakeholder groups and key stakeholders in the public and private sectors, as well as the civil society.
  • Consolidating IP literacy and professional skills. To enable the economy to generate its own IP, a competitive pool of local IP experts needs to be systematically built and sustained. This can be achieved through introducing individual courses and integrated programmes on IP matters in the curriculum of domestic and education and training institutions.
  • Enhancing the IP domestic governance framework through bridging the gaps, providing comprehensive protection of Zimbabwe’s IP concerns and interests, and ensuring that competition is not stifled by the application of IPRs.
  • Enhancing domestic fiscal capacities to finance IP generation and commercialisation. In this case, the Government of Zimbabwe will mobilise and provide incentives to various financial institutions. In addition, a round table of relevant stakeholders will be organised by the Government to assess the situation and devise a practical IP finance system that will assist and nurture creativity and encourage innovation and inventiveness.
  • Developing an integrated IP economy in the country by taking measures which will promote IP entrepreneurship and develop the IP market.
  • Enhancing domestic institutional capacities for IP administration. Here the Government needs to strengthen the national IP office, establish a system for IP management at tertiary institutions and the private sector, institutionalise a mechanism for licensing control and establish a model national licensing system, establish Technology and Innovation Support Centres and a strategy for the promotion and communication of intellectual property activities.

It is refreshing to see how the Policy acknowledges IP as a strategic asset for promoting innovation and technological development and will prove to be a most useful tool in guiding the country’s efforts to leverage IP for sustainable economic growth and development.

A comprehensive action plan, results-based monitoring and evaluation framework and indicative budget will now need to be designed in order for the Policy to be deemed complete and ready for implementation. We will be monitoring the implementation of the policy in earnest.

Adams & Adams, through our Associate Office, is available to provide any assistance in securing protection for trade marks, designs and patents, and any advice regarding copyright law in Zimbabwe. For further updates, information and queries on copyright law, trade mark, patent and design filings in Zimbabwe, e-mail zimbabwe@adamsadams.com

LAUREN ROSS

Partner
Trade Mark Attorney

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NONDUMISO MSIMANG

Senior Associate
Trade Mark Attorney

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MELISSA SCORER

Associate
Attorney

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WHITE PAPER | HOW WILL THE COMPETITION AMENDMENT BILL AFFECT YOU?

The public hearings on the Competition Amendment Bill (“the Amendment Bill”) have been tabled by Parliament’s Portfolio Committee of Economic Development for 28 & 29 August 2018.

The Competition Amendment Bill, if approved, will amend the Competition Act 89 of 1998 (“the Act). The main objective of the amendments is to address two persistent structural constraints on the South African economy, namely, the high levels of economic concentration in the economy and the skewed ownership profile of the economy. The Amendment Bill aims to address these structural constrains through seven key focus areas.

To read comments on the Amendment Bill, download our latest White Paper below.

JAC MARAIS

Partner
Commercial Attorney

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MISHA VAN NIEKERK

Senior Associate
Commerical Attorney

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ESWATINI | SWAZILAND NAME CHANGE MADE OFFICIAL BY NOTICE IN GAZETTE

We previously reported that, at Independence Day celebrations on 19 April 2018, King Mswati III announced that the country’s name, Kingdom of Swaziland, would change to Kingdom of eSwatini.  This name change was made official by Legal Notice No. 80 of 2018 published in the Gazette of 11 May 2018. The Notice is deemed to have come into force on 19 April 2018. The Notice further provides that reference to Swaziland in any written law, international agreement or legal document shall be read and construed as a reference to eSwatini.

The validity of this Notice/name change has, however, been challenged by the Institute for Democracy and Leadership (Ideal) and its director, Mr Maseko. They have brought an application against the King’s decision. The application essentially argues that the name change is not in line with the constitution of the country, as citizens of Swaziland were not involved in the decision-making process. The constitution prescribes legislative processes which were not followed; instead the name change was merely announced during the Independence Day celebrations.

It is unclear whether the application will be granted, but we will be keeping a close eye on this case and will report developments. From a trade mark point of view, we understand that the Registry has not yet published official trade mark documents reflecting the new name (CLICK HERE TO READ: What would it cost?), but will do so once current stocks are depleted. Until we have confirmation from the Registrar that new documents lodged with the Registry are to reflect the new name, we shall continue using the current official documents, reflecting the Kingdom of Swaziland.

Further developments will be reported, but should you have any queries, please contact us at swaziland@adamsadams.com.

NONDUMISO MSIMANG

Senior Associate
Trade Mark Attorney

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TUNISIA AND SOMALIA JOIN COMESA

The Republic of Tunisia and the Federal Republic of Somalia were admitted as members of the Common Market for Eastern and Southern Africa (COMESA) during the COMESA Heads of States and Governments Summit held on 18 and 19 July 2018 in Lusaka, Zambia.

COMESA now has 21 member states – Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Swaziland, Tunisia, Uganda, Zambia and Zimbabwe.

COMESA is a regional trade bloc aimed at establishing a free trade area, amongst other things.  COMESA’s vision is to “be a fully integrated, internationally competitive regional economic community with high standards of living for all its people ready to merge into an African Economic Community” while its mission is to “endeavour to achieve sustainable economic and social progress in all Member States through increased co-operation and integration in all fields of development particularly in trade, customs and monetary affairs, transport, communication and information, technology, industry and energy, gender, agriculture, environment and natural resources”.

For additional information regarding commerce and intellectual property in these regions, e-mail tunisia@adamsadams.com or somalia@adamsadams.com

NISHI CHETTY

Partner
Trade Mark Attorney

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AMINA SULIMAN

Senior Associate
Trade Mark Attorney

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UDI PILLAY

Senior Associate
Attorney

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PATENT LITIGATION IN SOUTH AFRICA | WHAT YOU NEED TO KNOW

Did you know that patent matters in South Africa are adjudicated in a specialised court: the Court of the Commissioner of Patents? The Commissioner effectively has the powers of a High Court judge and the specialised court functions in a very similar way to a division of the South African High Court. The Commissioner has the power to grant injunctions against infringers as well as to order delivery-up, the payment of damages or the payment of a reasonable royalty.

This, and other essential information relating to patent litigation and patent office procedures in South Africa, is provided in the latest edition of Patents 2018 – a Getting The Deal Through publication. The South Africa chapter is authored by Adams & Adams Partner, Russell Bagnall, who provides answers to questions regarding: types of enforcement proceedings, trial format and timing, standing to sue, standards of proof, inducement/contributory infringement, infringement by foreign activities and by equivalents, discovery, litigation timetable and costs, appeals, alternative dispute resolution, absolute novelty, obviousness or inventiveness, patent unenforceability, voluntary and compulsory licensing, patenting timetable and costs and patent office appeals and opposition and patent duration and modification.

Download a pdf version of the South African section here, or download the Global Guide here.

Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through – Patents 2018 (Published: April 2018). For further information please visit www.gettingthedealthrough.com.

RUSSELL BAGNALL

Partner
Patent Attorney

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BURNBERRY | PRODUCT DESTRUCTION AS IP STRATEGY

Luxury British clothing brand BURBERRY recently ‘came under fire‘ for destroying clothing items worth more than £28 million (almost R500 million).

It is no secret that well-known and highly coveted brands spend millions on advertising, promoting and protecting their brands and Burberry is no different.  Burberry’s history dates back to 1856 and its iconic Burberry check design is known the world over.  To what extent would Burberry go to protect the iconic status that it has built up for more than 150 years – lights, camera, flames?

Burberry’s annual report which, in addition to reporting on the £2.7bn revenue in the 2017/2018 financial year, also declared that “the cost of finished goods physically destroyed in the year was £28.6m”.  This figure is up more than £2 million from £26.9m in the previous year.

Burberry has since its disclosure, announced that the goods were disposed of in a responsible and environmentally friendly fashion – claiming that the energy generated from burning the goods was captured.  To this end, Burberry’s financial reports also indicated that the company is committed to reducing, reusing and recycling any waste that it creates- this is supported by the company’s five-year partnership with Elvis & Kresse, which aims to transform at least 120 tonnes of Burberry leather off-cuts into a range of new products.

Burberry joins a bevy of luxury brand companies such as Richemont, the luxury goods holding company of Cartier, Montblanc and Piaget, who bought back and destroyed more than £400 million worth its luxury watches; Louis Vuitton and Chanel who for years have been rumored to destroy unsold items. The practice of destroying branded products, which appears to be common for luxury brands, apparently also extends to other fast fashion retailers who are rumored to destroy tons of unsold clothing items.

Fashion is fickle and maintaining the exclusivity and ultimately the commercial magnetism of a luxury brand will depend largely on the consumer’s demands.  An oversupply or sale of the unmistakable Burberry trench coat, or any item, at a reduced price does little to maintain the attraction and exclusivity surrounding the purchase and ownership of a luxury branded item.

A further driving force behind the destruction of luxury goods is to avoid the goods being sold on the ‘grey goods’ market. ‘Grey goods’ are genuine goods which are sold without the consent of the brand owner and usually results in the goods being sold at a lower price than that of the authorised distributor in the country of import.  Although the sale of grey goods will generally not amount to trade mark infringement in South Africa, the reseller must, in terms of the Consumer Protection Act, ensure that consumers are made aware of the fact that the products are grey goods.

From a branding and intellectual property perspective it is easy to see why large luxury corporations would destroy unwanted goods.  What is less straightforward, however, is justifying the practice against the global background of socio-economic sensitivities.

By Robyn Müller-Mabuza | Associate

DEBBIE MARRIOTT

Partner
Trade Mark Attorney

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ROBYN MÜLLER-MABUZA

Associate
Trade Mark Attorney

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WITH THIS AGREEMENT I THEE WED. AND PROTECT

Planning your ‘happily-ever-after’ is no easy feat. Between finding a venue, coming up with a world war-thwarting seating plan and orchestrating photography and flowers, couples find themselves managing a lot during the engagement period. Understandably then, the conclusion of the marriage agreement between two persons hardly receives the due consideration and attention it requires. For most brides and grooms, discussions and negotiations regarding the finances, assets and adverse future scenarios is a serious mood killer. In the sort of environment we encounter today, an antenuptial agreement is no longer a nice-to-have. It’s an absolute necessity.

Generally referred to as a ‘prenup’, the marriage arrangement is correctly called an antenuptial agreement (or ‘ANC’) in South African Law. Let’s face it, ‘antenuptials’ generally have a bad rap in society. The most common argument put forward against having an ANC is that it means that the parties must consider the possibility of the marriage breaking down. And that creates suspicion and doubt. We find that when the couple ignores the ambient noise and negativity from friends and family and approach the negotiations with an objective and business-minded attitude, they quickly realise that the agreement also addresses economic risk and other factors.

An antenuptial agreement can be especially important if either of the parties are involved in high risk business endeavours, have inherited or accrued large amounts of monies, have children from a previous relationship, or property registered in their names, and they wish to avoid the consequences of being married ‘in community of property’.

Contrary to popular belief, an antenuptial agreement is not just for the rich and famous. It can, if properly formulated, serve to protect spouses from their partners’ existing debts, future debts or insolvency; stipulate how property should be distributed; preserve family inheritances; or ensure that a spouse does not structure his or her finances by means of a trust to the detriment of the other party. An antenuptial agreement is also not only relevant upon divorce but can also benefit a surviving spouse in the unfortunate event of his or her partner passing away.

It is important for individuals to be aware of the different marital regimes and to understand the implications thereof, well before getting married. Parties who don’t sign an ante-nuptial agreement are automatically married ‘in community of property’. This means that there is only one pot of gold, or perhaps one pot of coal. This marital regime does not offer a husband or wife any protection against monetary claims by third parties. And in the unfortunate event of one spouse being sequestrated, the couple will lose everything. Parties who intend to explore risky business ventures should be wary of getting married in community of property.

In certain circumstances, it is possible to change your marital regime by means of an application to court.

A marriage ‘out of community of property’ can either include or exclude the accrual system. The accrual system entitles a spouse to share in the accrual of the spouse whose estate has accrued more than his or her estate as at the date of divorce or death. The result, on a proper application of an accrual claim under normal circumstances (but not always), is that the parties share equally in the combined value of the assets and liabilities that they each acquired after the date of their marriage up to the date of divorce or death.

Regardless of whether the accrual system is included or excluded the parties are protected against third parties and retain financial independence. Couples can get quite creative with what they wish to be included as part of the terms of their union. A balance however, always needs to be achieved to ensure that the marriage does not kick off with bitterness. Fairness is a key ingredient in any agreement. Tailor-made provisions should be capable of being given effect from a practical perspective and it should be ensured that they don’t go against the moral convictions of society, in which event such a provision will not be enforceable.

An antenuptial agreement needn’t be a mood killer, but rather viewed as an asset that protects you and your loved ones in future. Seek guidance and assistance from an experienced family law attorney at least three months before the wedding bells start ringing.

by Shani van Niekerk | Associate

SHANI VAN NIEKERK

Associate
Attorney

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FRANCHISING IN SOUTH AFRICA | 2018 OVERVIEW

Prominent international food and beverage franchises as well as fashion and apparel franchises maintain significance in the local market. However, due to economic challenges and a weak exchange rate, some foreign franchisors encounter difficulties with their local franchisees.

The health and education sectors have shown notable growth. Despite a tough economy, the franchising sector has maintained its steady growth and adaptability, managing to attract global franchise brands. This is the opinion of Danie Strachan and André Visser, Partners at Adams & Adams, in their latest assessment of the developments in the franchising market in South Africa, as part of the Thomson Reuters Practical Law Series.

Most foreign franchisors prefer to enter the South African market by way of master franchise agreements or, in some cases, area development franchises. Some franchisors also enter into joint ventures with local parties due to the imperatives of complying with black economic empowerment legislation. This is particularly relevant in the case of organisations that wish to do business with the South African Government. To download the South Africa Chapter on Franchising, CLICK HERE.

For additional information regarding the Franchising services offered by Adams & Adams CLICK HERE.

BookBlock-Franchising-in-SA

Reproduced with permission from Thomson Reuters Practical Law 2018 and the Associations of Corporate Counsel.

DANIE STRACHAN

Partner
Attorney

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ANDRE VISSER

Partner
Commercial Attorney

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SEEING THE FUTURE | AN INTERVIEW WITH JOHAN DU PREEZ

At the recent International Conference of the Licensing Executives Society (LESI), senior Partner, Johan du Preez was presented with a Service Recognition Certificate for service to the organisation as President of LES South Africa for two terms, for service as an international delegate, and for service chairing the LESI Trademarks and Licensing Committee.

His involvement with LES began in 1990 when he attended his first National Conference in Swaziland. He soon became involved with the organisation and planning of local conferences, training courses and speaking events. Johan was elected as a board member of LES (SA) in about 1995 and he assisted fellow Adams & Adams Partner, Alan Lewis, in organising the expanded LES Delegates Meeting which was held in Cape Town.

He became Secretary to the Board in 1997 and was elected Vice President in 1998. LES (SA) tendered for an International Conference and was awarded the 2001 International Conference in Cape Town.  He became President of LES (SA) at the end of 2000 and was President during the 2001 LESI Conference. He remained President until the end of 2002.

From 2002 to 2007, Johan participated and fulfilled many rolls in LES (SA) and the Chapter was again awarded another LESI Conference – hosted in Sandton in 2010. He was again the Chair of the Organising Committee and President of LES (SA) at the time of the Conference, from 2009 until beginning of 2011. Johan is the only LESI member that has organised two International Conferences while being a national President – no mean feat for such a large society.

More recently, Johan was approached by Audrey Yap, incoming International President in 2020, to arrange the LESI “Winter Planning Meeting” in South Africa. Probably his last LESI activity, this will complete Johan’s full circle of involvement with the organisation.

We congratulate Johan on this fantastic achievement in recognition of his work with the LESI. In a recent wide-ranging video interview with Johan du Preez, we asked him about his involvement with LES, the important work that the organisation carries out, and lessons for young lawyers. He also gave us a unique glimpse into the future of law and the future of Africa’s economies. Watch our summary clips below, or watch the full video here.

THE INTERVIEW | ALL ABOUT THE LICENSING EXECUTIVES SOCIETY

Founded in 1972, and incorporated in 2000, LES International (LESI) is the umbrella organization of national and regional associations for licensing executives. A Board of Directors and Board of Delegates, consisting of representatives of all national and regional societies, oversee the activities of LESI.

WHAT THE ROLE OF LES INTERNATIONAL IN GLOBAL BUSINESS? 

HOW IS THE LICENSING EXECUTIVES SOCIETY STRUCTURED?

“I was always involved with the Trademarks, Designs and Merchandising Committees and became Vice Chair of the Trademarks Committee when Martin Schneider was Chair, in 2012/3. I became Chairman of the Committee in 2014 to date.”

WHAT WAS YOUR ROLE WITHIN THE LES ORGANISATION?

HOW DID YOU GET YOUR START WITH ADAMS & ADAMS AND LES? 

“The LESI Committees I’ve served on were, over the years, always involved with projects either that are industry or region specific. For instance, we studied royalty rates in License Agreement applicable to trade marks, designs and merchandising and the LESI recently published those results as part of a bigger project.”

LESSONS IN GROWING YOUR LAW PRACTICE

THE PRIVILEGE OF WORKING ON LES COMMITTEES

“Our committee also presented the LESI submissions to the Public Consultation on the possible revision of the Tobacco Products Directive 2001/37/EC to the Board and we were represented at a meeting during the INTA Conference where several professional bodies were present. I delivered a paper on this in Australia in 2009. We again dealt with this in Belgium in 2015. At the same conference I delivered a paper a paper on 3D printing – more specifically on 3D printing a way from control and the specific statutory rights, not only IP, that could be infringed by such actions.

THE INTERVIEW | ALL ABOUT THE FUTURE OF LICENSING AND LAW

LICENSING IN AN ECONOMY OF BLUEPRINTS

WHAT ABOUT LICENSING AND IP IN AFRICA?

“Society is moving from a volumes economy to a customised economy of blueprints. Blueprints will be the new commodities”

WHAT DOES THE LES ACCOLADE MEAN FOR YOU PERSONALLY?

JOHAN DU PREEZ AT THE LES INTERNATIONAL CONFERENCE AFTER ACCEPTING HIS CERTIFICATE OF RECOGNITION.

SINGING HIS LAST SONGA | KENYA COPYRIGHT DISPUTE

In an ongoing copyright dispute over a music application in Kenya – Evans Gikunda vs Patrick Quarcoo & Two Others – the Plaintiff is seeking an interdict for infringement of his intellectual property, damages and an order directing the Defendants to disclose their profits acquired from subscriptions to a music streaming application (SONGA) created by the Plaintiff.

The Plaintiff claims to have created the music app between 2012 and 2016. In 2013, he was employed at the 2nd Defendant (Radio Africa) and, at that time, was approached by the CEO of the 1st Defendant to partner with him to market the app.

The Plaintiff subsequently left the employ of the 2nd Defendant in 2016 and later learnt that the 1st and 2nd Defendants had sold the app to the 3rd Defendant (Safaricom- a leading mobile network operator in Kenya). The Plaintiff then approached the High Court in Kenya for the relief set out above.

Songa | The app at the centre of the copyright dispute

Ownership of the copyright subsisting in the SONGA app is crucial to the determination of this dispute.  This means that the Court will need to consider, inter alia, exceptions in the Kenyan Copyright Act to the general rule that the author is the owner of the copyright subsisting in a work.

In addition, the Plaintiff will need to establish that:

  1. he created his app (which was previously known under several different names) outside of the course of his employment with the 2nd Defendant;
  2. the app marketed and used by Safaricom constitutes a reproduction or adaptation of his app; and
  3. damages will not constitute sufficient compensation for any loss suffered, hence the request for an interdict.

This ‘David vs Goliath’ saga is expected to be a hotly contested dispute!

by Kim Rampersadh | Senior Associate

KIM RAMPERSADH

Senior Associate
Trade Mark Attorney

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YES AND NO | CONFUSION OVER SIERRA LEONE’S NEW TRADE MARKS ACT

Trade marks in Sierra Leone are currently governed by Trade Marks Act no 17, Cap 244 of 1960 (as amended by the Laws (Adaptation) Act no 29 of 1972) based on the old UK Act (the Old 1960 Act).  The Law is heavily outdated. However, a new Act, Trade Marks Act no 8 of 2014 has been drafted and there is much controversy about whether or not the New Act has yet come into force.

The New Act was signed by former President Koroma during September 2014 but was apparently returned to Parliament to sort out various technical difficulties before coming into force.  The Old 1960 Act is still in force and trade mark applications are still being filed using the old (pre 1938) UK Classification of Goods, which does not provide protection for any services.

The Assistant Registrar at the Sierra Leone Registry (OARG) recently announced that a “decision” was taken last month to bring the New 2014 Act into force. It is still not clear if the correct legal processes were followed.  The Registry has not issued any formal notification stating that the New 2014 Act is in force.  Also, no new Regulations have been drafted as yet.  Be that as it may, the country that has had its fair share of hardship (devasted by a Civil War, ending in 2002, and having suffered a severe Ebola outbreak, ending in 2016) desperately needs updated IP laws to provide adequate protection of IP rights.  Creating awareness on the importance of protecting IP rights, including trade mark rights, cannot be overemphasised as it creates an environment conducive to promoting business, innovation and creativity.  The promulgation of the New 2014 Act is long overdue.

Some anticipated changes in terms of the New 2014 Act include:

  • Moving over to the International Classification system;
  • Giving recognition to International Trade Mark Agreements signed by Sierra Leone (which may be interpreted to give recognition to International Registrations since the country is a member of the Madrid Protocol);
  • Collective marks will be recognised for protection;
  • The renewal term will change from 14 years to 10 years;
  • Recognition will be given to well-known marks;
  • An IP Tribunal will be established which will be given considerable powers, such as hearing appeals, invalidations, infringements and criminal offences;
  • Express recognition will be given to priority rights as provided in the Paris Convention;
  • Assignments will need to be published once they are recorded;
  • Licensing provisions have been included in the New Act;
  • Additional grounds for opposition have been included in the New Act;
  • More detailed provisions regarding infringement have been incorporated and infringements will be extended to similar goods, damages may be awarded for infringement and intentional infringement will be a criminal offence;
  • The new Act deals with unfair competition, trade names, false trade descriptions and has created many offences.

As mentioned above, no new Regulations have yet been drafted.  The New Act, however, provides that Regulations made under the Old 1960 Act shall remain in force until they are expressly revoked or amended. This will likely be problematic considering the Old Regulations refer to the old UK Classification system (which does not recognise services) and the New Act expressly provides that the Nice Classification system is to apply and makes reference to, protection of services.

Currently, there is confusion at the Registry as to whether it should apply the Nice Classification system or continue to apply the old UK Classification system and it is not clear if protection of services will be possible in Sierra Leone until the Regulations have been amended.

The changes incorporated into the New Act are of importance to all practitioners and clients seeking to protect and enforce trade marks in Sierra Leone. We eagerly await formal notification as to when the New 2014 Act will come into operation.

For further updates, information and queries on copyright law, trade mark, patent and design filings in Sierra Leone, please contact sierraleone@adamsadams.com.

SISIPHO NGOMA

Associate
Attorney

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TRADE MARKS IN ETHIOPIA | WHAT YOU NEED TO KNOW

Ethiopia is a landlocked country situated in the Horn of Africa. It has in recent years become Africa’s fastest growing economy, owing its rise to an increase in industrial activity, including investments in infrastructure and manufacturing.  China is not only its biggest foreign investor but also its largest trading partner. In light of the recent economic developments, there has been a growing need for the intellectual property laws of Ethiopia to align with international standards and practices.

In the absence of any established and enforceable trade mark legislation in Ethiopia prior to 2006, the enforcement of intellectual property rights in the country was ambiguous at best. In practice, it appeared that the publication of cautionary notices was the only option available to trade mark owners. The Trade Mark Registration and Protection Proclamation 501/2006 (“the Proclamation”), which only entered into force in early 2013, has therefore brought much needed clarity to the trade mark landscape in Ethiopia and has aligned local practice in Ethiopia with international trends in trade mark law.

Since the enactment of the Proclamation, it has become possible for trade mark proprietors to secure statutory protection for their marks, including service and collective marks. The trade mark system in Ethiopia now allows for trade mark applications to be lodged at the Ethiopian IP Office (EIPO), and makes provision for examination on formal, relative as well as substantive grounds; advertisement of acceptance; and the issuance of registration certificates with 7 year validity terms.

According to the Proclamation and formal Directives subsequently issued by the EIPO, a trade mark application filed by a foreign national or foreign legal entity, should be accompanied by a Power of Attorney (legalized up to Ethiopian Consular level); and evidence of a valid foreign registration of the trade mark from any other jurisdiction. In the absence of a foreign registration, the applicant’s certificate of incorporation will suffice. The certificate should include formal confirmation of the applicant’s commercial activities (as, for instance, described in the incorporation documentation or confirmed on a company letterhead via a notarized declaration).

Ethiopia is not yet a signatory to the Paris Convention. Notwithstanding this, the Proclamation confirms that priority may be claimed from applications filed in any Paris Convention country, if the Ethiopian application is filed within 6 months from the date of filing of the priority application. In this regard, a document confirming the priority application’s details should be submitted within three months of the Ethiopian filing date and accompanied by a legalized Power of Attorney.

Ethiopia’s formal and rather onerous filing requirements are directed towards preventing fraudulent third parties from filing trade mark applications for registration in instances where they are not the true proprietors of the mark. These requirements have however proven to be far too burdensome on trade mark proprietors and unduly delay the filing of trade mark applications in practice.

Insofar as the enforcement of trade mark rights are concerned, the Proclamation has made, inter alia, trade mark oppositions, trade mark infringement, invalidation and cancellation proceedings and customs recordal vis-à-vis registered trade marks possible in Ethiopia. The Proclamation is also quite revolutionary in that it provides for the protection of unregistered well-known trade mark and marks in which rights have been acquired through local use in Ethiopia. The legislation also prohibits the registration and use of another’s marks in relation to dissimilar goods which still suggests a connection to the proprietor of the mark or which is detrimental to the interests of the trade mark owner. The inclusion of some of these provisions are something of a misnomer in Ethiopia as they are premised on the articles of the Paris Convention and the TRIPS Agreement to which Ethiopia is not a party. Be that as it may, this shift in the law has expanded mechanisms for the enforcement of trade mark rights in Ethiopia.

In addition, it seems that we can expect the introduction of specialist IP Tribunals in Ethiopia in the coming years. Traditionally, IP disputes have been dealt with by an internal committee of the EIPO and by the Federal High Court. These tribunals have sometimes been criticised for a lack of knowledge and misapplication of the law in relation to IP matters and this has fueled the need for specialist adjudicators and forums. The development of specialist tribunals is therefore most welcome.

The recent developments of IP protection mechanisms in Ethiopia, have come at the right time and although only a single factor in the country’s development, makes Ethiopia a country to watch!

For further updates, information and queries on copyright law, trade mark, patent and design filings in Ethiopia, please contact ethiopia@adamsadams.com

by Sbongakonke Khumalo | Associate

and Kim Rampersadh | Senior Associate

KIM RAMPERSADH

Senior Associate
Trade Mark Attorney

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RECENT DEVELOPMENTS IN GOVERNMENT PROCUREMENT POLICY IN SOUTH AFRICA

Recent Government Procurement policy developments in South Africa have been aimed at placing greater reliance on public procurement as a tool for achieving expedited economic transformation and urgently addressing socio-economic imbalances deriving from South Africa’s pre-democratic past.

In the past year, this was largely performed through the implementation of the recently issued Preferential Procurement Regulations of 2017, which introduced a number of significant changes. Most notably, the regulations give government the power to apply ‘pre-qualification criteria to advance certain designated groups’ in awarding state tenders. Regulation 4 permits an organ of state to advertise any invitation to tender on the condition that only a particular category of bidders may tender, categories including those having a ‘stipulated minimum B-BBEE status level’, exempted micro enterprises (EMEs) and qualifying small business enterprises (QSEs) and bidders agreeing to subcontract a minimum of 30 per cent to various categories of EMEs or QSEs. By permitting organs of state to apply a pre-qualification criterion that requires all tenderers to have a minimum B-BBEE status level, the regulations appear to circumvent the limitations imposed by the PPPFA as to what weighting is to be attached to a tenderer’s B-BBEE status in evaluating and awarding a tender.

Whereas, under the PPPFA, a maximum of 10 or 20 points out of 100 (depending on the value of the tender) can be allocated for B-BBEE status, the new regulations elevate the importance of B-BBEE status to the extent that it can entirely preclude certain bidders from tendering at all, irrespective of how functional and cost-effective such bidders might be. This contradicts the PPPFA’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. A judicial challenge to have this regulation declared ultra vires and invalid remains imminent.

Other noteworthy changes introduced by the Preferential Procurement Regulations include:

  • A change in the threshold of the evaluation of a bid on the basis of price and preference, whereby tenders are assessed on the basis that, in contracts with a value of equal to or above 30,000 rand and up to 50 million rand (the previous threshold was up to 1 million rand), price shall count for 80 points and preference shall count for 20 points (out of a total of 100 points) and in contracts with a value of more than 50 million rand, price shall count for 90 points and preference shall count for 10 points (previously above 1 million rand); and
  • Organs of state are required to identify tenders, where it is feasible, in which the successful bidder must subcontract a minimum of 30 per cent of the contract value for contracts above 30 million rand to certain categories of qualifying entities.

The Department of Justice and Constitutional Development published a proposed Code of Good Administrative Conduct in terms of PAJA, which will apply to public procurement decisions. The Code is intended to provide guidance to administrators to ensure that the decisions they take are lawful, reasonable and procedurally fair. The Code does not impose additional legal obligations on administrators than those imposed by the Constitution and PAJA, but is there to assist administrators to comply with their legal duties and, in doing so, improve their services. The deadline for public comment on the Code was 17 February 2017 and publication of the final Code is now awaited.

The Department of Trade and Industry has initiated the Strategic Partnership Programme (SPP), to develop and support programmes or interventions aimed at enhancing the manufacturing and services supply capacity of suppliers with links to strategic partners’ supply chains, industries or sectors. The objective of the SPP is to encourage large private-sector enterprises in partnership with government to support, nurture and develop small to medium-sized enterprises (SMEs) within the partner’s supply chain or sector to be manufacturers of goods and suppliers of services in a sustainable manner and to support B-BBEE policy through encouraging businesses to strengthen the element of Enter and Supplier Development of the B-BEE Codes of Good Practice. The SPP will be available on a cost-sharing basis between government and the strategic partners for infrastructure and business development services necessary to mentor and grow enterprises. The grant will be capped at a maximum of 15 million rand per financial year over a three-year period based on the number of qualifying suppliers and is subject to the availability of finds.

To read the full South Africa chapter, CLICK HERE.

Govt-Procurement-Review-2018

The Law Reviews has published the 6th edition of the Government Procurement Review, which is available in print, as an e-book and online here. The South Africa Chapter is authored by Adams & Adams Partner, Andrew Molver; and Specialist Consultant, Gavin Noeth.

The Review’s geographic coverage this year remains impressive, covering 19 jurisdictions, including the European Union, and the continued political and economic significance of government procurement remains clear. Government contracts, which are of considerable value and importance, often account for 10 t20 per cent of gross domestic product in any given state, and government spending is often high profile, with the capacity to shape the future lives of local residents.

In the United Kingdom and European Union, the topic of Brexit still looms large. It is apparent that the United Kingdom will continue to observe the importance of procurement law both during and beyond the planned transitional period. Another prominent topic is the test for availability of damages in procurement cases, with the Supreme Court seemingly at odds with the EFTA Court on whether all or only ‘sufficiently serious’ breaches trigger a right to damages.

Looking further afield, other trends and developments covered in the Review include:

  • A pendulum swing towards deregulation in the United States on the back of President Donald Trump’s drive to reduce regulation;
  • The possible renegotiation of NAFTA, including the incorporation of anti-corruption provisions (Mexico and Canada);
  • A desire to open up procurement to SMEs and use public procurement as a tool to drive socio-economic transformations (South Africa and Chile);
  • The growing importance of electronic procurement internationally (Chile and Venezuela); and
  • An increasing recognition of the importance of public procurement in international trade deals (for example, the CETA between Canada and the EU, the CPTPP (although at the time of writing, continued US participation remains in doubt) and NAFTA).

Reproduced with permission from Law Business Research Ltd. Published July 2018.

ANDREW MOLVER

Partner
Commercial Attorney

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GAVIN NOETH

Specialist Consultant
Commercial Attorney

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PHASE 1 OF SOUTH AFRICA’S IP POLICY | WHAT YOU NEED TO KNOW

The South African government recently approved the first phase of the long awaited Intellectual Property (IP) Policy, after incorporating input from the stakeholders’ submissions and representations.

The government has earmarked the IP Policy as one of the core elements needed to thrust South Africa toward a knowledge economy. This objective is believed to be a cornerstone of the government’s broader National Development Plan which includes a greater emphasis on innovation, improved productivity and better exploitation of comparative and competitive advantages.

According to the IP Policy, although South Africa has made substantial progress in the just protection, administration, management, and deployment of IP, the country still requires a comprehensive IP Policy to promote and contribute to its socio-economic development.  The IP Policy is thus aimed at promoting local manufacture, utilising and preserving the country’s resources, encouraging innovation and empowering the domestic stakeholders to take advantage of the IP system.

The IP policy confirms the establishment of the Inter-Ministerial Committee on Intellectual Property (IMCIP) which serves as a consultative forum and drafting team aimed at achieving a coordinated approach to implementation of the IP Policy. It was decided the IP Policy would be implemented in phases, with segmentation being decided on immediate issues, medium term issues and issues requiring monitoring and evaluation. Phase I focuses on two main issues in the immediate term identified by government as:

  • IP and public health; and
  • International IP cooperation

IP AND PUBLIC HEALTH

As the IP Policy points out, disputes surrounding the intersection of IP and public health was identified in 1997 and came to the forefront during the 1999 case, PMA vs the President of the Republic of South Africa (the PMA case), where pharmaceutical manufacturers challenged amendments to the Medicines and Related Substances Act 101 of 1965 (the “Medicines Act”).  This case sparked a global dialogue regarding the intersection between intellectual property rights and access to public health. The South African Constitution recognises the progressive realisation of access to health care services, however, it also enshrines the prevention of arbitrary deprivation of property rights.

The IP Policy acknowledges there is no correlation between an increase in protection of IP and an increase in innovation. However, government believes a stronger framework is required to ensure other objectives are met, including access to public health. In the IP Policy, the government considers the following to be necessary reforms to the IP protection framework:

Substantive Search and Examination

South Africa is currently a depository patent system, which means that patents are examined for compliance with the formal requirements only. The IP Policy considers this to result in weak patents being granted which is perceived to be detrimental for both patent holders and consumers. The IP Policy thus empowers the IMCIP to implement substantive search and examination at the South African Patent Office.

The IP Policy acknowledges the limitations of resources available to the Patent Office and as such only a range of strategic sectors will initially be subject to full substantive examination and as the capacity within government expands, other fields will be identified and included. The Patent Office has already appointed examiners and has been working closely with the European Patent Office to ensure their competency. The IP Policy leaves the determination of the relevant sectors to the IMCIP, in consultation with industry and civil society. There is an indication that initial examination will include, but not be limited to, the health sector.

Patent opposition

Currently, South African patent law does not allow for opposition of a patent during or after prosecution at the South African Patent Office. The IP Policy considers the inclusion of the public in the patent application process, both pre- and post-grant, to be important in supplementing substantive examination through harnessing all information for examiners to consider in granting a valid patent. The government also believes it will encourage domestic inventors to increase their expertise by actively engaging with patents filed in their field and limit expensive court-mandated invalidation proceedings.

The IP Policy acknowledges the resource restrictions of the Patent Office and identifies three different forms of opposition proceedings. First, it makes provision for the least resource-intensive third-party observation mechanism, whereby written submissions can be made by an interested party opposing the grant of a patent. Secondly, the more resource-intensive pre-grant opposition, and thirdly, the most resource-intensive post-grant opposition mechanism. Importantly, all of these mechanisms will require development and promulgation of regulations and in some instances, potentially, enactment of legislation.

Interestingly, the IP Policy indicates a post-grant opposition process is already in force by way of administrative review of the Registrar’s decision to grant a patent in terms of the Promotion of Administrative Justice Act 3 of 2000.

Patentability criteria

At present the Patents Act 57 of 1968 (the “Patents Act”) defines the patentability criteria as novel, involving an inventive step and being capable of being applied in trade or industry. The Patents Act does not, however, go further to indicate how each of these criteria are to be assessed, leaving this instead to the South African courts.

The IP Policy recommends statutorily codifying various approaches to assessment of the patentability criteria, with examples being taken internationally but still considering South Africa’s unique circumstances.

Disclosure requirements

As South Africa is a depository patent system there is no duty to disclose any related state of the art, or other relevant information to the South African Patent Office. To facilitate the move towards substantive examination, the IP Policy recommends obliging applicants to furnish pertinent information to the Patent Office during prosecution.

Parallel importation

The dispute in the PMA case centered around the parallel importation of branded pharmaceutical products by the Minister of Health. This case was later withdrawn and as such the question as to whether South African Patent law allows for parallel importation of patented inventions remains uncertain. In terms of the Patents Act, there is an unrestricted exclusion of other persons from importing a patented invention.

The IP Policy intimates that this is an overly narrow interpretation of the Patents Act and considers the TRIPS flexibilities to be adequate support to allow for parallel importation of products where a counterbalancing objective is weighed, such as access to public health. It further indicates that parallel importation should be limited to circumstances where overarching regulations providing for it have been promulgated, as with the Medicines Act.

Exceptions

The IP Policy reiterates the advantages of the provisions of the Patents Act which allow for limited working of a patented invention, during the subsistence of the patent, for regulatory approval purposes only.

The IP Policy advises broadening this exception to include the working of a patented invention, during the subsistence of the patent, for research and experimental purposes.

Voluntary and Compulsory licenses

The IP Policy reiterates the current South African position in respect of patentees voluntarily licensing patented products and seeks to encourage such transactions to be fair and in the case of the health sector, to adequately balance the need for access to medicines.

The IP Policy, however, considers voluntary licenses as unable to provide the necessary level of access in certain disease areas (save for HIV/AIDS) in South Africa and thus suggests a broader set of policy options for instances where voluntary mechanisms prove insufficient.  Currently, the Patents Act provides for an application for a compulsory license but this involves a judicial process.

The IP Policy suggests that government is empowered in terms of the Patents Act to use a patented invention for public purposes in accordance with the TRIPS Agreement, but also acknowledges that currently this is limited to prior negotiation, and, absent agreement, conditions set by the courts. The IP Policy indicates that the prior negotiation is not required in terms of TRIPS. It is also unclear from the IP Policy whether government is considered to be constrained by the compulsory license provisions in the Patents Act.

IP and competition law

As IP rights create a monopoly in favour of the rights holder an obvious intersection between IP and competition law exists. The IP Policy point out that in terms of the Competition Act 89 of 1998 (the “Competition Act”), certain agreements may be exempt of the provisions of the Competition Act upon request to the Competition Commission, including those rights pertaining to various forms of IP.

The IP Policy suggests that this intersection between IP and competition law could be used to intervene in the instance where IP rights are used to distort the market to the detriment of the welfare of the consumer, such as in the health sector.

Rule of Law and Legal Certainty

In rounding off the section on Public Health and the suggested reforms, the IP Policy seeks to confirm the constraint of government through the rule of law in bringing about these reforms. Including the need for the reforms to be rational and not an abuse of executive power, as already provided for in terms of our law. These constraints coupled with the reforms themselves, it believes, will give legal certainty to the patent system.

INTERNATIONAL IP COOPERATION

The IP Policy states that multiple overlapping opportunities will be evaluated, including updating compliance with existing signed treaties and conventions, identifying treaty opportunities to help South African society as well as protecting traditional knowledge, and fostering continental and international cooperation in IP.

It is now up to the IMCIP to further implement and develop Phase I of the IP Policy and to promote a balanced and coordinated approach to the IP Policy formulation process.  It is clear that phase I will not be completed overnight and the progress of the formulation process will be followed closely by all relevant stakeholders.

By Ramon Pereira | Associate

And Gizela Lombard | Candidate Attorney

JANICE GALVAD

Partner
Patent Attorney

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RAMON PEREIRA

Associate
Attorney

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SWAZILAND | IP AND PATENT BILLS PASSED

Following the 2017 retirement of former Registrar for Trade Marks in Swaziland, Mr. Stephan Magagula, the two bills he had a hand in drafting in 2015 have now been passed into law.

The first is the Intellectual Property Tribunal Act of 2018, which seeks to establish a decision-making body – the Intellectual Property Tribunal. The Tribunal will comprise a President, sitting with 2 or more assessors, and will be responsible for hearing all matters and disputes involving intellectual property rights in Swaziland. Although this development is welcomed, the Act has entered into force without any accompanying regulations. In fact, regulations have not yet been contemplated. Therefore, until such time as regulations are formally adopted, the provisions of this Act are unlikely to be enforced or implemented.

In addition, it seems likely that, in practice, some confusion may arise as to which will be the appropriate forum for hearing, for example, oppositions. That is because the Intellectual Property Tribunal Act does not seek to repeal, for example, Part II of the Trade Marks Act of 1981, which establishes the Trade Marks Office and the position of the Registrar of Trade Marks, or section 27(5), which empowers the Registrar to make a ruling in opposition matters. It remains to be seen how the duality of the two statutory bodies’ roles will be dealt with from a practical perspective.

The second bill is the Patent Act, which Act repeals and replaces the Patent and Design Act of 1997 and the Patent, Designs and Trade Marks Act of 1936. Further information regarding this new legislation will be published at a later stage.

Due to irregularities requiring the Attorney General’s assistance, the Trade Marks (Amendment) Bill, which was also published for comment in 2015, was not passed into law. The promulgation of this Bill would be most welcomed since the Bill seeks to introduce new grounds of oppositions, recognises and protects famous trade marks, and also seeks to bring Swaziland’s national legislation in line with its international obligations under the Madrid and ARIPO filing systems. For as long as the promulgation of this Bill remains pending, trade mark owners are encouraged to file national applications in order to avoid a constitutional challenge to the validity of any registrations acquired under the Madrid and ARIPO filing systems.

For further updates, information and queries on copyright law, trade mark, patent and design filings in Swaziland, please contact swaziland@adamsadams.com

MANDY SWANEPOEL

Partner
Trade Mark Attorney

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NICOLE HAWORTH

Senior Associate
Trade Mark Attorney

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HIGH COURT ORDERS POLICE TO STOP COUNTER-INVESTIGATIONS AGAINST IPID

In an important ruling on 28 June 2018, the High Court in Pretoria ruled on a case that centred on the question of whether members of the South African Police Service (SAPS) that are the subject of investigations by the Independent Police Investigative Directorate (IPID) should be allowed to investigate members of IPID. In handing down the court’s decision, Judge Neil Tuchten confirmed that such ‘revenge investigations’ by the SAPS are unlawful.

IPID brought the matter to Court when, after IPID initiated two criminal cases against the former National Police Commissioner, Lt Gen Khomotso Phahlane, a police squad from the North West Province was appointed to investigate the same IPID officers involved in the criminal investigations of Lt Gen Phahlane.

All the members of the North West squad are currently subject to IPID investigations. In terms of the Court Order, the North West squad, led by General Ntebo Mabula must be immediately removed from any investigation by the SAPS of any of the members of the IPID investigative team and the Executive Director of IPID, Mr Robert McBride.

Investigations into the North West SAPS members are ongoing and, in light of the judgment, IPID can continue with its investigations without interference by SAPS members who are subject to IPID’s investigations.

The case highlighted the fact that there is legal provision that regulates, in the context of conflicts of interest, the conduct of IPID members toward SAPS members but there is no equivalent provision regulating the conduct of SAPS members toward IPID members. In light of this, the Court laid down a general principle that no member of the SAPS may be involved in any investigation in which the member has a personal, financial or any other interest. The order will remain in effect until such time as a standing order or a regulation is implemented to deal with conflicts of interest between SAPS and IPID.

Jac Marais, Partner at Adams & Adams, and attorney for IPID, confirmed that the judgement further strengthens IPID’s independence in the wake of the Constitutional Court judgment in 2016, that that struck down the Minister of Police’s power to suspend the Executive Director of IPID. “The judgement goes some way to restore the confidence which the public should have that IPID will be able, without undue interference, to investigate complaints against the police fearlessly and without favour or bias. Without enjoying the confidence of the public, IPID will not be able to function efficiently as the public might be disinclined or reluctant to report their cases to it.”

The Court also ordered the SAPS to pay the costs of the litigation and held that the SAPS adopted positions in relation to the application that were unreasonable and unjustified.

JAC MARAIS

Partner
Commercial Attorney

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BEING BEAUTIFUL AND WIDOWED

In South African law, a claim for loss of support may be lodged against the Road Accident Fund when a breadwinner of a family, an innocent victim of a motor vehicle accident, passes away. 

The following is an historical overview of remarriage contingencies in South Africa.

When determining the amount to be paid to the spouse of the deceased breadwinner, the probable remarriage of the surviving spouse plays an influential role in the ultimate calculation.

In the past, apart from the number of children and attitude of the spouse to the idea of remarriage, the courts would consider appearance and personality as essential factors when determining possibility of remarriage.

In Legal Insurance Company Ltd v Botes 1963 (1) SA 608 AD , the court a quo took the following into consideration:

“… adjustments must be made according to the appearance, personality, nature and attitude to remarriage of the person concerned, and indeed other factors such as the number and ages of the widow’s children.”

This attitude was re-iterated in the matter of Snyders v Groenewald 1966 (3) SA ED 785, where the court found the following:

“In determining the percentage deduction to be made, the Court has regard to such matters as the age, health, appearance and nature of the widow, as well as such other factors as the age and number and financial dependence of her children.”

Given that this attitude was held prior to our Constitutional dispensation, this view was challenged in the matter of Members of the Executive Counsel Responsible for the Department of Road and Public Works, North West Province v Oosthuizen (A671/07) [2009] ZAGPPHC 16 (2 April 2009) where it was stated that reliance on appearance is offensive and should not be part of our law.  It was further argued that remarriage contingencies should be struck down as unconstitutional as it offends the equality provisions of the Constitution.

After considering the facts of that particular case, the Court ultimately pointed out that no reference had been made to the respondent’s appearance and found that remarriage contingencies are not unconstitutional.

This archaic view of determining re-marriage contingencies was again challenged / re-visited in the case of Esterhuizen v Road Accident Fund (Unreported judgment of Tolmay J, North Gauteng Division, case no 26180/2014 on 6 December 2014) where Judge Tolmay found past judgments to be outdated and extremely offensive to women.  The court stated:

“…To take appearance and nature in consideration is not in accordance with the constitutional values of dignity and equality enshrined in our Constitution…”

In light of this approach, the court found that the following observations should be considered when determining the appropriate remarriage contingency, if any, to be applied:

  1. Widows are entitled to compensation for loss of maintenance as a result of the death of a husband, but such claim should not place the widow in a financially better position had it not been for the accident;
  2. Second marriages do not always last and may not result in financial support;
  3. Dependants (that is, children) and the age of the widow should be relied on when determining the appropriate remarriage contingency.

The most recent case law to address the issue of remarriage contingencies directly is the case of De Bruyn v Road Accident Fund L Brink de Bruyn // Road Accident Fund (Gauteng Division, Pretoria, Case no 14606/2016) where the history of such contingencies (citing various case law) was outlined, and Koch’s Quantum Yearbook was discussed.  The court found Koch’s statistics relating to “remarriage deductions” to be outdated and inaccurate.

The court referred to an article titled “Re-partnering as a Contingency Deduction in Claims for Loss of Support Comparing South Africa and Australian Law” (PER/PELJ 2007 10 (3)), where the conclusion was:

“Re-partnering is merely another of the many vicissitudes of life, namely that the claimant may enter an economically beneficial or detrimental relationship after the trial.  It is therefore to be given no more weight than any of the other vicissitudes that go to make up the general discount.  The ‘standard’ adjustment should not be increased to reintroduce the ‘remarriage’ discount by the back door.

The court agreed with this approach and held that unless special circumstances ensue, no higher than normal contingency ought to be deducted.

It is clear that while the principle of a re-marriage contingency continues to have relevance and applicability, one must be cautious in how it is applied.  If there is evidence to justify its application, then the courts should apply same with due regard to the facts of each matter.  Where there is no evidence, simply to include such a contingency on the broad assertion that the possibility of re-partnering must always exist, would offend the principles of fairness and justice.

Kerry Lynne Wiers | Senior Associate

This article also appeared in Without Prejudice | May 2018

KERRY LYNNE WIERS

Senior Associate
Attorney

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SUPREME COURT OF APPEAL UPHOLDS HIGH COURT RULING SETTING ASIDE UNLAWFUL RATES REGIME

Recently, the Supreme Court of Appeal (“SCA”) upheld a ruling handed down by the High Court in Pretoria 2 years ago, setting aside an exorbitant rates regime implemented by the City of Tshwane Metropolitan Municipality.

The unlawful property rates regime arose following the amalgamation of the former Kungwini Municipality into the City of Tshwane.  When compiling its supplementary valuation roll in 2012, the City of Tshwane incorporated properties which previously fell within the Kungwini Municipality into its jurisdiction, but re-categorised as “vacant” properties which had previously been categorised and rated as “residential”.  This was done without the prescribed notice, depriving the affected property owners of the right to object to the re-categorisation. The impact of this is that the thousands of property owners in question were no longer invoiced at the considerably lower residential tariff, and were instead rated at the vacant land tariff (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 net impact was that owners who received monthly invoices in the amount of R843.43 in August 2012, received rates invoices 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, representing an alarming increase of 716%, even without factoring in the backdating.

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.

The review was based 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 owners of the affected properties to be given 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 set aside the 2012 supplementary valuation roll insofar as it re-categorised the properties in question from “residential” to “vacant”.  The Court also set aside the City of Tshwane’s 2013 general valuation roll and all subsequent valuation rolls to the extent that they adopted and perpetuated the unlawful re-categorisation originally introduced by the 2012 supplementary valuation roll.

The City appealed the High Court’s decision to the SCA, despite conceding that it had failed to give proper notification of the re-categorization of the affected properties.  In its judgment last week, the SCA confirmed the High Court’s declaration of invalidity of both the 2012 and 2013 rolls insofar as the re-categorisation of the affected properties is concerned, and specifically recorded that its judgment applies to all affected property owners and is ‘conclusive against all persons whether parties or strangers to the litigation’. The City will accordingly be required to make significant adjustments to the rates accounts of all affected property owners.

Andrew Molver of Adams & Adams, who represented Lombardy and the other respondents in the appeal, regards the outcome as “a significant victory not only for Lombardy, who led the fight against the City, but for the thousands of individual property owners who stand to benefit from the broad application of the order handed down by the SCA”.

ANDREW MOLVER

Partner
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NAMIBIA INTRODUCES NEW INDUSTRIAL PROPERTY ACT

After years of anticipation, the Industrial Property Regulations were published in the Namibian Government Gazette on 1 June 2018. The effect of the publication is that the new Industrial Property Act No. 1 of 2012 will come into operation on 1 August 2018.

The Act repeals, amongst other legislation, the Trade Marks in South West Africa Act dating back to 1973 and introduces new legislation for patents, industrial designs, trade marks and trade names. Copyright protection is still mainly governed separately under the existing Copyright and Neighbouring Rights Protection Act 6 of 1994.

Insofar as trade marks are concerned, some of the noteworthy introductions include new requirements for assignments and provisions relating to restorations, alterations/amendments, joint ownership, licence contracts and registered users.

No provision is made in the new Act for defensive trade mark registrations, although existing registrations will remain valid. The Act also makes it possible to register collective marks, whereas previously only certification marks were registrable.

Another important change is that the non-use cancellation period has been shortened from 5 years to 3 years.

Arguably the most significant change is that trade mark infringement proceedings must now be brought before the newly-established Industrial Property Tribunal. The Tribunal will also be responsible for appeals from the Registrar. Appeals from the Tribunal to the Namibian High Court are possible.

Recognition has been afforded in the new Act to foreign well-known trade marks in accordance with Article 6bis of the Paris Convention for the Protection of Industrial Property.

Provisions are also now in place relating to multi-class applications and applications filed in terms of the Madrid Protocol and the Banjul Agreement. However, it remains to be seen how such applications will be dealt with practically by the trade marks registry.

Until such time as the Namibian Registry is capable of examining newly filed trade mark applications within WIPO’s strict 12-18 month timelines for international (Madrid Protocol) registrations, it is highly recommended for brand owners to continue to secure national registrations for their valuable trade marks in order to avoid possible enforcement difficulties from arising.  We are monitoring this situation closely, but given the Registry’s present backlogs and examination timelines, it is unlikely that the Madrid system would become a viable solution for brand owners to reliably secure statutory protection for their trade marks in Namibia any time soon.

As far as Patents is concerned, the New Act is a drastic improvement on the very outdated 1923 Proclamation. It recognises Namibia’s obligations in terms of several international treaties including the Patent Co-Operation Treaty (PCT), ARIPO, Madrid Agreement and the Hague Agreement.

The Act introduces absolute novelty and substantive examination for all patent applications. In addition, in a move that mirrors steps taken to protect and recognise the value of indigenous biological resources in other countries, the Act requires applicants to disclose details of this in the application if the subject matter of a patent application is derived from or developed with biological resources or associated indigenous or traditional knowledge.

Finally, the Act introduces a 20 year patent term and significant increases to the official fees for all IP matters.

For further updates, information and queries on copyright law, trade mark, patent and design filings in Namibia, please contact namibia@adamsadams.com

DALE HEALY

Partner
Trade Mark Attorney

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NICKY GARNETT

Partner | Head of Africa Patents
Attorney

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KAREEMA SHAIK

Senior Associate
Trade Mark Attorney

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MOROCCO | REGISTRATION AND RENEWAL CERTIFICATES NOW ISSUED ELECTRONICALLY

The Moroccan Office of Industrial and Commercial Property (OMPIC) has announced that as of 28 May 2018, it will only issue electronic trade mark registration and renewal certificates, with the OMPIC stamp.

This is in line with the office’s Strategic Plan 2016-2020 that seeks to innovate, be attentive to the needs of its customers and develop added-value services by, in this case, expediting the registration process of national trade marks in Morocco. The electronic certificate carries the same legal value for enforcement purposes.

Should you require any further information or assistance in respect of Morocco or other North Africa jurisdictions, please e-mail morocco@adamsadams.com

SIMON BROWN

Partner
Trade Mark Attorney

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WE’VE CHANGED OUR PRIVACY POLICY! | GDPR AND POPI

GDPR | MUST SOUTH AFRICANS COMPLY?

The EU’s General Data Protection Regulation (GDPR) took effect on 25 May 2018 – as heralded by the million-or-so “We’ve changed our Privacy Policy” messages we’ve all received lately. And while organisations across the EU scramble to get their affairs in order, even in South Africa we received e-mails telling us that we must become GDPR compliant by the deadline. But is this true for South Africa?

The GDPR is an EU regulation. It does not have general effect in South Africa and is not a local law in this country. But, parties that process personal information in South Africa might still have to comply with the GDPR, because the GDPR does have so-called “extra-territorial application”. A person or entity in South Africa will need to comply with the GDPR’s requirements if they process personal information of someone based in the EU. But this will only be the case if the information is processed in relation to the offering of goods or services or the monitoring of behaviour that takes place in the EU. For example, you will need to comply with the GDPR if you sell products to people in the EU or if you have a website that tracks the behaviour of people in the EU by using cookies. Of course, it remains to be seen how the GDPR will actually be enforced against parties outside the EU.

Even though the GDPR might not apply to you, it is still a good time to start getting ready for POPI – South Africa’s own data protection law. POPI is based on the GDPR’s predecessor, the EU Data Protection Directive. There are also many similarities between POPI and the GDPR.

 

IN PURSUIT OF POPI READINESS

Why it is vital that companies practically understand POPI and the consequences of not doing so now.

It is important to do a high-level analysis of the personal information in your company before embarking on the POPI implementation journey. Companies should be doing this now and not waiting for the long-anticipated commencement date.

Organisations should have already started to identify the risk areas and be working on these. Alongside this activity, there should be a task team that takes on the responsibility for POPI compliance and readiness.

There are many misconceptions surrounding POPI. Many people do not even realise that POPI is not yet properly in force. Organisations need to understand when POPI will apply to them, and when not. If they understand how POPI works, they can adapt their processes accordingly.

Some organisations will be able to remove some of their activities from POPI’s reach by making simple changes. For example, if data falls outside the definition of “personal information”, the relevant data will not be covered by POPI’s provisions. Accordingly, some organisation can change their data-gathering habits to avoid collecting data that constitutes personal information.

So what are the three key factors to consider when preparing for POPI?

  1. Determine what kind of personal information you are processing and why you are processing it.
  2. Accept that POPI compliance is necessary to avoid fines and reputation damage, but that it can also make your business more efficient and streamlined.
  3. It will be important to raise awareness in your organisation. It makes it easier if people in your business are familiar with POPI’s requirements and know where the issues lie.

For organisations that retain large quantities of personal data, identify the various types of information being collected and retained. Decide whether you can limit your collection and retention practices. Determine whether you need all the information currently being retained and whether some of it can be deleted.

Are you ready for POPI? Contact Danie Strachan for further assistance.

DANIE STRACHAN

Partner
Attorney

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COPYRIGHT IN TATTOOS | A PRICKLY LEGAL QUESTION

Would it ever occur to you that a third party might be able to claim rights in your skin? In the case of art that has been inked into your skin, namely tattoo art, that may well be the case.

A tattoo is an artistic work. If it is original and reduced to a material form (which it very arguably is when it is inked into your skin), copyright subsists. In the case of artistic works, it is the artist or creator of the work who owns the copyright, namely the tattoo artist and not the person on whom the tattoo appears, irrespective of the fact that the latter has paid for his/her tattoo. In short, when you pay your tattoo artist, you pay for the tattoo, not the copyright subsisting in it.

This issue has come up for legal consideration in the United States, more recently in a matter involving Solid Oak Sketches and video game maker Take-Two Interactive. The latter is involved in the creation of the popular “NBA 2K” basketball video game series and Solid Oak Sketches has alleged that it owns the right to exploit the copyright in the tattoos appearing on a number of players in the games.

In a rather astute business move, Solid Oak Sketches purchased the exclusive rights to license certain basketball players’ tattoos from the original tattoo artists. Solid Oaks Sketches has therefore made the argument that, by reproducing detailed depictions of the body art appearing on some of these players in its games, Take-Two Interactive has infringed its copyright. In its defence, Take-Two has argued that it is only depicting the players as they appear in real life, that the focus of the game is not on the players’ tattoos, that the issue is de minimis and, in any event, that a finding in favour of Solid Oaks would result in public figures having to “seek its permission every time they appear in public, film, or photographs”, which would be impractical and untenable.

On face value, copyright infringement has indeed occurred. An original artistic work, which a tattoo undoubtedly can be, has been reproduced without the artist’s authority by a third party in the course of trade and for financial gain. At the heart of copyright law is the idea that creators, artists, should be compensated for their creativity, and there is no reason why the creativity of a tattoo artist should be discounted.

However, a tattoo artist’s rights, thanks to his medium, are less straight-forward than those of artists working on canvas or with clay. Although a tattoo is an artwork which has been reduced to a material form, the material form to which it has been reduced is on a human body. The sport stars appearing in the NBA 2K game series are human beings who, tattoo artists are well-aware, will be photographed, make public appearances and quite possibly wish to exploit their own likeness, being celebrities, for financial gain. Legally, there must be a fairly broad implied licence given by the tattoo artist to the person being tattooed to make use of the tattoo in his or her everyday life, but the argument will turn on how broad that licence might be.

Of course, the difficulty for Take-Two Interactive is that it is not making use of, for example, photographs of the players, which would be “real life” depictions of them, but rather artistic representations of them as the video game versions of them appear in the games. While Take-Two argues that its use constitutes “fair use”, the question is whether it is strictly necessary for it to have included the players’ body art in its depictions, or “avatars”, of them, and whether depictions of that nature would be covered by the implied licence mentioned above. Solid Oak Sketches argues that the answer is a clear no. If the appearance of the tattoos on the players in the game is merely incidental and of minimal focus and importance, this begs the question why the tattoos have been reproduced in the game at all. The depictions being used by Take-Two have been created by it and are not images of the basketball players and their actual skin, as one might find on the cover of a magazine, for example. It is questionable whether the “fair use” defence can successfully be invoked in Take-Two’s circumstances.

Indeed, the US District Court, in 2016, disagreed with Take-Two’s arguments that its use is fair, or that it is de minimis and its motion to dismiss the matter was rejected. One relevant consideration was the fact that, as a medium, unlike films, video games allow viewers to view images in different ways, and for as long as they like. The depiction is not fleeting or momentary.

Given the increasing popularity of tattoos in our popular culture, and quite notably with sport stars, it is recommended that public figures seek assignment of the copyright in their tattoos from their tattoo artists. The National Football League (NFL) in the United States has already been making similar recommendations to its players to avoid them getting into hot water over the depiction and commercial exploitation of their tattoos and our local sports stars in South Africa would be well advised to follow suit.

Acquiring the rights in their tattoos will prevent future claims from the tattoo artists for royalties or other compensation where public figures might wish to exploit their own image, which will naturally include their tattoos, for financial gain (for example, in advertisements, film or television). It will also allow public figures to restrain third parties, on the basis of copyright infringement, from making use of depictions of their tattoos to suggest a relationship between themselves and the public figure when, in fact, none exists. The value in the names and likenesses of celebrities is undeniable and the popularity of celebrity “endorsement deals” and sponsorships is a testament to that. A person who is in the public eye would not want to be limited in any way from exploiting his or her own image and celebrity status.

It is not inconceivable that a person’s tattoo might become so recognisable that third parties might wish to use it to call that person to mind and perhaps suggest an endorsement by that person. A good example of this is the dispute that arose around the film, The Hangover Part II, where one of the characters woke up, with shock, horror and hilarious results, to find Mike Tyson’s well-known face tattoo inked onto the side of his face. Mr Tyson’s tattoo artist took legal action against Warner Brothers for using the tattoo without authority and, although the case settled and the judge did not need to render a decision, the tattoo artist may well have succeeded in court. After all, the artist’s design did not appear on Mr Tyson’s face which, under the implied licence discussed above, would surely be allowable in a film featuring Mr Tyson, but was copied and reproduced on the face of another with the reference to the original tattoo being clear.

As the popularity of “getting inked” continues to mark the prevailing popular culture, legal issues around that ink, particularly intellectual property concerns, will become more prominent.

The matter between Solid Oak Sketches and Take-Two Interactive is one of the few body art disputes that has not, to date, been settled out of court and it will be interesting to see how this matter progresses.

By Nicole Smalberger | Senior Associate

 

NICOLE SMALBERGER

Senior Associate
Trade Mark Attorney

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THOU SHALL NOT LIE – EVEN FOR LOVE

Earlier this year eHarmony Ltd (an online dating website) had one of its advertisements banned by the ASA in the United Kingdom for being untruthful – about love. The advertisement was a billboard on a London Underground platform and read: “Step aside, fate. It’s time science had a go at love.”

It was complained to the ASA that the advertisement is misleading as there was no scientific evidence to support the efficacy of mathematical dating applications or websites – whether it was possible to find the love of your life based on science. The advertisement in issue seemed to claim that one could.

eHarmony argued that their advertisement did not make any claims other than suggesting that their matching system was scientific, and that consumers would interpret the advertisement to mean that their scientific method would suit them better, but would not believe that it was a guarantee at finding love. eHarmony submitted evidence of the workings of their algorithm. The algorithm was based on data collected from more than 50 000 married couples in 23 different countries. They claimed that the algorithm was based on certain scientific theories relating to relationships between persons. eHarmony had obtained a patent for its algorithm and submitted further proof of two published studies which reported higher levels of marital satisfaction for couples who met through eHarmony.

The ASA accepted that consumers would perceive the advertisement to refer to a dating website and that they would not understand the advertisement to imply a guarantee of finding ever lasting love. However, consumers would understand the phrase “scientifically proven matching system” to mean that scientific studies had demonstrated that eHarmony’s website offered users a significantly greater chance at fining lasting love compared to what could be achieved if they did not use the service. The ASA found the evidence submitted by eHarmony to be insufficient proof that the algorithm used for their website provided a greater chance of finding lasting love. While eHarmony’s algorithm had been shown to result in a lower percentage of marital break-ups, it was higher compared to those who had met through other online means (e.g. e-mail, chatrooms, etc.).

The ASA rejected one of the studies submitted by eHarmony on the basis that the participants in the study were offered an incentive to participate and that the data obtained was accordingly not sufficiently random and objective.

In all, the ASA held that the studies submitted did not provide objective insight into the likelihood of eHarmony’s website/algorithm finding users lasting love compared to others who did not use the service. The result was that eHarmony could not substantiate the claim. The claim “scientifically proven matching system” was held to be misleading and eHarmony was ordered to withdraw the advertisement in its current form.

Although the case was decided in the United Kingdom, the lessons to be learnt from it are equally true for businesses in South Africa. The Code of Advertising Practice of the South African ASA contains similar clauses dealing with substantiation of claims and misleading advertising in general. The merits of the decision aside, it illustrates the value of reviewing advertisements beforehand, and the need to be very careful of the content of the advertisement and how it may be perceived by the reasonable average consumer.

Quite often businesses include phrases or exaggerated statements in their advertisements, being of the view that consumer would see them as mere puffery. Puffery in its true form has always been accepted by regulatory authorities in South Africa. The reason for this is that consumers would not be prejudiced if they realised that the business is merely bragging. However, the line between puffery and misleading statements has become very thin of late and it is quite often found that a statement would not be perceived as puffery, but rather as a claim, which in many cases is misleading (e.g. best hairdresser in Cape Town).

Claims can be made either expressly or they can be implied. Businesses should be very careful in reviewing their advertising before it is published to determine whether it contains any claims and, if so, whether the claims are truthful and can be substantiated with objective (independent) research. It is not enough for the business itself to believe that the claim or statement is true. It must be capable of being substantiated objectively, and the business must have such substantiation available when called upon to provide. The Code of Advertising Practice of the South African ASA contains detailed provisions dealing with substantiation.  Apart from ASA’s code, there is also a host of labelling regulations pertaining to goods imported into or sold in South Africa that contain provisions dealing with misleading advertising.

It seems obvious, but it is certainly worth restating: avoid misleading claims, be truthful and obtain independent objective legal advice in cases of doubt.

by Wensel Britz | Senior Associate – Cape Town

WENSEL BRITZ

Senior Associate
Trade Mark Attorney

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SOUTHERN SUN ‘SQUARES OFF’ AGAINST NAMIBIAN BRAND OFFENDER

The Namibian High Court recently issued a decision (read the decision here) dealing with passing-off and copyright infringement in the matter of Southern Sun Africa (First Applicant) & Southern Sun Hotel Interests (Pty) Limited (Second Applicant) and Sun Square Hotel (Pty) Limited (Respondent).

The Applicants form part of the well-known South African hotel and entertainment group, Tsogo Sun. The First Applicant, Southern Sun Africa, a Mauritian company, is the proprietor of trade mark registrations for the SUN SQUARE logo trade mark (depicted below) in South Africa. The Second Applicant, Southern Sun Hotel Interests (Pty) Limited, owns the copyright in the SUN SQUARE logo, as an original artistic work. The SUN SQUARE logo has been used in South Africa under licence from the First Applicant for many years in relation to hotel and related services.

In Mid 2015, the Applicants became aware that the Respondent, Sun Square Hotel (Pty) Limited, was operating a hotel in the neighbouring country, Namibia, under the name SUN SQUARE, using an identical logo on its hotel signage, branding and guest amenities.

The First Applicant sought to restrain the Respondent’s unauthorised use of the SUN SQUARE word and logo marks, while the Second Applicant alleged the Respondent had infringed the copyright in the SUN SQUARE logo.

The First Applicant does not operate a SUN SQUARE hotel in Namibia, but it argued that it had established a reputation in the trade mark in the country through cross-border trade and spill-over advertising. Evidence of use of the mark in South Africa was submitted and the Court accepted that such evidence was sufficient to prove knowledge of the mark amongst a substantial number of people in the relevant sector in Namibia. The Court also found that the Second Applicant had established copyright in the SUN SQUARE logo.

The Court found that the Respondent’s unauthorised use of the SUN SQUARE word and logo marks amounted to passing-off which, the Court stated resulted, or was calculated to result, “in the improper filching of the First Applicant’s trade mark, an improper infringement of its goodwill and may cause injury to the First Applicant’s trade reputation”.

The Court consequently granted the interdict restraining the Respondent from passing itself off as the First Applicant. An interdict for copyright infringement was also granted and the Second Applicant was awarded reasonable royalties and additional damages.

The First Respondent has filed an appeal against the decision.

by Kareema Shaik | Senior Associate

DALE HEALY

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KAREEMA SHAIK

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PHOTOBOMBED? PROTECTING YOUR COPYRIGHT

It was reported some time ago that a photographer named Shaun Earl Harris is suing the South African government for an astonishing amount of R2.1 billion for copyright infringement relating to the government’s alleged unauthorised use of a photograph featuring Nelson Mandela that Mr. Harris had taken.

Mr. Harris made an impactful statement that got me thinking – “Copyright is what enables a photographer to make a living from taking photographs. What is the use of taking pictures if they steal your copyright and you can’t live?”

As copyright is not a registrable right (unlike a trade mark, patent or design) and can be quite difficult to understand, it is often overlooked.  However, its value should never be underestimated.

A poignant story that illustrates the value of copyright is that of J K Rowling, the author of the famous Harry Potter series.  Ms. Rowling licenced her copyright to Bloomsbury Publishing by permitting it to print and distribute her book in return for royalty payments.  Of course, the first book was an enormous success and the royalties and advance payments Ms. Rowling earned helped her out of her impoverished state. Six more books followed as well as a film series and much more, which met with even greater success.  J K Rowling is now a very wealthy woman – thanks to copyright.

Essentially, copyright entitles the owner of the copyright in a “work” to exploit that work for his/ her own advantage and to prevent the unauthorised reproduction or adaptation of his/ her work.

However, in order to rely on copyright, it is necessary to, firstly, prove that copyright actually subsists (i.e. exists) in the “work” in question and secondly, ownership of the copyright in the work.

There are various types of “works” that can qualify for copyright protection.  Briefly, the works in which copyright can subsist are the following:  literary works, musical works, artistic works, cinematograph films, sound recordings, broadcasts, programme-carrying signals, published editions and computer programmes.  A book would, of course, constitute a literary work while a photograph is a type of artistic work.

Before copyright may subsist and be conferred upon a work, certain requirements have to be met.  The main requirements are as follows:

  1. The author (i.e. the person who first made or created the work in question) must have been a South African citizen or domiciled or resident in South Africa when the works were created or the works must have been first made available (i.e. published) in South Africa or another Berne Convention country;
  2. The work must be original; and
  3. The work must be in a material form (e.g. written down or recorded, etc.).

While the first and third requirements are usually not that difficult to understand or prove, the second one presents more difficulty.  In order for copyright to subsist in a work, the work must be original.  This does not mean that the work must be unique, novel or inventive but simply that the work must have been the product of the author’s own labour, skill and effort.  To prove that a work is original, it is usually necessary to obtain evidence from the author of the work relating to the creation of the work in question.

Once the subsistence of copyright in a work has been established, it is then necessary to consider who the owner of the copyright in that work is.

The author of a work is usually the first owner of the copyright in such work, provided that he / she has not assigned (that is, transferred) some or all of his / her copyright to someone else.  However, there are exceptions such as, for example, where a work is created by an author during his / her employment under a contract of service or apprenticeship.  In this case, the copyright would vest with the employer.

In the case of photographs, copyright would usually vest with the photographer (who is the author).  However, there is an exception to this as well – where a person commissions the taking of a photograph and pays or agrees to pays for it in money or money’s worth and the photograph is taken pursuant to that commission, then the copyright would vest in the person who commissioned the taking of that photograph.

As the owner of copyright in a work, you would be entitled to reproduce or adapt the work in any way you like, sell (by assigning) part or all of your copyright in a work to someone else or licence third parties to make use of some or all of your copyright.  For example, an author of a book could licence a publishing house to print and distribute his/ her book, a film studio to adapt the book into a cinematograph film and a playhouse to adapt the book into a theatrical production – much like J K Rowling did.

Of course, if someone copies or commercially exploits (i.e. reproduces) or adapts the work without the owner’s consent or authority, this would constitute copyright infringement and that party could be sued for an interdict, damages or reasonable royalties.

The above is a rather simplistic account of copyright.  If you have any works that may be subject to copyright, it may be well worth the effort to contact your IP attorney for advice on how to go about protecting such works.

by Amina Suliman

AMINA SULIMAN

Senior Associate
Trade Mark Attorney

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TUNISIA (May 2018)

Representatives from Adams & Adams, Simon Brown, Nicky Garnett and Dieter Welthagen travelled to Tunis  to visit our Associate Office, as well as the Institut National de la Normalisation et de la Propriete Industrielle (INNORPI) . We met with the Director General Ms Amel Ben Farhat and a number of registry officials including Mokhtar Hamdi, Director of Industrial Property , Nafaa Boutiti, Deputy Director of Industrial Property and Hasna Rezgui ep Chahdoura, Head of Service Bilateral Cooperation Foreign Relations Unit and  Nawel Zbidi Daghma Deputy Director , Service Bilateral Cooperation Foreign Relations Unit. We were given an introduction to the varied responsibilities of INNORPI and the recently launched Industrial Property Management Program . In terms of this program, INNORPI seeks to bridge the gap between research and intellectual property protection and several Technology Transfer offices as well as technoparks and technical centres have been opened in an effort to increase the awareness of the benefits of using the IP system as a business tool. INNORPI also has an IP Academy providing  training activities for local IP Professionals and users of the IP system. They have recently started conducting substantive search and examination of patent applications. It currently has limited capacity but aims to appoint 10 examiners  covering all technical fields in the near future

Partners, Nicky Garnett, Simon Brown and Dieter Welthagen with the Director General Ms Amel Ben Farhat (centre), Hasna Rezgui ep Chahdoura, Head of Service Bilateral Cooperation Foreign Relations Unit (left), Nafaa Boutiti, Deputy Director of Industrial Property (second from left), Nawel Zbidi Daghma Deputy Director , Service Bilateral Cooperation Foreign Relations Unit (third from left), Mokhtar Hamdi, Director of Industrial Property (third from right) and Mondher Al Mensi, local agent (second from right)

SIMON BROWN

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EGYPT (May 2018)

Representatives from Adams & Adams, Simon Brown, Nicky Garnett and Dieter Welthagen travelled to Cairo to visit our Associate Office, as well as Patent and Trade Mark Offices. Our Associate Office in Egypt was opened in 2017 upon recognition of the growing importance of this country in Africa’s economic future. Our Associate Office arranged a visit for us to the Patent Office where we met with Mr Adel E Ewida, President of the Egyptian Patent Office and Dr Mona Mohamed Mohamed Yahia, Head of the Examination Department at the Egyptian Patent Office. We represent a number of local and international patent clients in Egypt and it was an excellent opportunity to see the operations of the office first hand and meet some of the Officials with whom we deal on a regular basis. The Egyptian Patent Office is well run and almost fully automated. It receives between 2500 and 3000 patent applications annually and employs 100 patent examiners with 30 specialist examiners in the pharma and biotech fields. Egypt is one of the few countries in Africa that has an established search and examination system in place with examination taking around 3 years. We discussed the Patent Prosecution Highway (PPH) program that is in place with the Japanese Patent Office and possible amendments to the legislation to allow for restoration of patents filed after the 30m national phase deadline.

Partners, Simon Brown and Dieter Welthagen with Mohamed Eldib, Adams & Adams Associate Office Egypt, Mr Adel E Ewida, President of the Egyptian Patent Office, Nicky Garnett (Partners) and Dr Mona Mohamed Mohamed Yahia, Head of the Examination Department.

The team, accompanied by representatives from our Associate office then paid a visit to the Trademarks Office which is housed in a separate building under the Internal Trade Development Authority. We met with Ms Mona Zaki, Head of the Central Department for Trademarks and Industrial Designs. We were given a tour of the offices and had discussions regarding the processing of trademark applications via Madrid. The Trademarks Office receives around 18 000 to 20 000 applications annually with around 50% being filed by foreign applicants. Unlike the Patent Office the Trademark and Designs Office is not fully automated but only has partially electronic records. We discussed issues regarding the processing of appeals by the Appeals Committee and the constitution thereof as well as the filing and prosecution timelines for design applications.

Partners, Dieter Welthagen and Nicky Garnett with Ms Mona Zaki, Head of the Central Department for Trademarks and Industrial Designs, Simon Brown (Partner) and Mohamed Eldib, at the Adams & Adams Associate Office Egypt

SIMON BROWN

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NICKY GARNETT

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DIETER WELTHAGEN

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Patent Attorney

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