European Union: South Africa: Time To Elect IP

Last Updated: 27 June 2019
Article by André Maré

Most Read Contributor in South Africa, July 2019

South Africa: time to elect IP

South Africa recently held its general national election and the result was a win for the incumbent African National Congress (ANC) party. The election was fought against a backdrop of massive unemployment and a stagnant economy. During the course of the election, there was considerable focus on the issue of property rights and particularly, the possible expropriation of immovable property, especially farms.

There’s little doubt that the government’s priorities will include kick-starting the economy and tackling the thorny issue of property rights. It would be a very good thing if the government didn’t restrict itself to immovable property. If the South African Government is indeed serious about stimulating economic growth, it should also look closely at intellectual property (“IP”).

So, where might the South African Government look for inspiration? It might well look at the UK, a country that is: (a) celebrating its anticipated prosperous post-Brexit economic freedom and all the riches associated therewith; or (b) grappling with complex issues of how to thrive outside of the European Union and the apocalyptic aftereffects of Brexit (delete (a) or (b) according to political predisposition, but if the British press is to be believed, there is no middle ground between these two positions).

At a recent House of Commons summit that was held shortly before World IP Day (yes, it’s important enough to have its own day, we anticipate that Hallmark will start printing cards for the occasion soon), the idea was to consider how UK business can use IP to stay competitive. The summit was organised by a group called the Intellectual Property Awareness Network, and attendees included IP institutions, law firms, universities and business leaders. Some of the comments made at the summit make it clear how important IP is.

One participant said this: “It is a well-known fact that 80% of a company’s value is in intangible assets such as IP, but unfortunately many British companies aren’t making it part of their business strategy.” The UK Minister for Universities, Science, Research and Innovation said this: “Britain is a world leader because of IP. It underpins everything we do in the economy itself and is fundamental to this country’s success…and we need to work together as one single IP community.”

The South African Government might also look to China for inspiration. There are many lessons to be learned from China and one of the effects of the current US trade war is likely going to be increased innovation (for instance the proposed Huawei operating system). One recent story stands out as worth mentioning. It’s been reported that a Chinese coffee chain called Luckin (known in China as Little Blue Cup) has grown from nine stores to 2 073 stores within the space of a year. The company anticipates having 4 500 stores in China by the end of this year, which means that it will be challenging Starbucks for dominance in the market. This story highlights the huge potential of the Chinese market but it also highlights the fact that there doesn’t have to be complicated technology involved with IP developments. In a case like this, it’s all about trade marks (brands) and the business method of franchising – a commercial IP arrangement that involves a trade mark owner authorising third parties to use its trade mark, and ensuring that the users (franchisees) maintain quality standards. Trade marks and franchising can create employment and opportunities for large numbers of people. This shows that commercially, successful IP does not always have to be developed by someone in a white coat or by a trendy computer nerd in a black turtleneck sipping a cortado.

The South African Government might further look at the example of the Government of Iceland, which clearly feels that IP rights are worth fighting for. The country’s Ministry of Foreign Affairs recently went to the trouble and expense of applying for the cancellation of EU trade mark registrations for the name ICELAND, which belonged to the UK retail chain that trades under that name. The basis of the claim was that the registrations were likely to deceive consumers as to the geographic origin of the goods or services, and would also make it difficult for Icelandic businesses to market their goods and services in the EU. The EU trade mark authorities agreed with the claim and cancelled the registrations.

We’re not suggesting that the government should follow everyone’s example. It may wish to avoid the example of a South African political party that contested the recent election, the Freedom Front Plus, which managed to get itself into a pickle over the unauthorised use of a spectacular photo of the famous Cape Town landmark, Lion’s Head. As one publication put it, the intellectual property right (copyright) in the picture was “expropriated without compensation” – which has a deliciously ironic ring to it in the current South African political zeitgeist.

Besides looking, the government might also do some listening. As we have reported previously, there have been significant criticisms about the proposed changes to the Copyright Act, 1978, with the most recent one being published in City Press on 17 May 2019. Demanding broader consultation, Dr Mbongeni Ngema argues that the government really does need to address the concerns of “international governments and local musicians and other creators.” Ngema says that the new fair-use provisions will “allow free use of content that will end up benefitting online content platforms, to the detriment of content creators.” They will “create uncertainty around royalty payments that may even discourage investment in South Africa’s creative product.”  

Seen against this backdrop, one hopes that government will take the lessons learnt from the Copyright Amendment Bill exercise and will apply these to the anticipated legislative changes aimed to facilitate access to medicine as envisioned by the South African IP Policy (Phase 1). Wide and sensible consultation will be required to avoid implementation delays, which will ultimately delay access to medicine by the poorest and most vulnerable in our society.

It would be unfair not to mention and congratulate the South African Government on the great strides made in the IP arena in the recent years. More can always be done. Sensible use of this valuable asset has kick started many economies and there is no reason to believe that South Africa will not be next.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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