Author: TM Attorneys

South Africa has a rich heritage, from the indigenous fauna and flora to the languages spoken in the country as well as our culture and traditions. Many of the indigenous people of South Africa have traditions that are passed down orally from generation to generation. As an example, during special occasions, there will be a praise singer reciting a person’s history. What the praise singer recites is more than a person’s history. This historical work includes the origins of a person such as a specific clan name (different from one’s surname), and other clans they are related to. Some indigenous families have an animal that represents their clan name. A praise song also includes that specific animal that represents the clan.

 

Are the current intellectual property (IP) systems enough to protect our rich heritage which includes our oral history, traditional wear, artwork as well as other historical artifacts? In 2004, South Africa adopted the Indigenous Knowledge Systems Policy. The Policy was developed through an interdepartmental effort which aimed to provide guidance for the “recognition, understanding, integration and promotion of South Africa’s wealth of indigenous knowledge resources”¹. A key focus area of the policy is the protection of indigenous knowledge and the holders of this knowledge against exploitation. This includes ensuring communities are adequately remunerated and given due recognition for use of their indigenous knowledge.

 

The Department of Trade and Industry developed a policy framework that looked at how traditional IP systems (patents, trade marks, geographical indications, copyright and designs) can be used to protect traditional knowledge systems. Many countries around the world are also considering the best ways to protect their traditional knowledge. Intergovernmental organisations such as United Nations Educational, Scientific and Cultural Organization (UNESCO), World Intellectual Property Organization (WIPO), World Trade Organization (WTO), United Nations Environmental Programme (UNEP), and United Nations Conference on Trade and Development (UNCTAD) have also been involved in talks regarding the best way for countries to protect traditional knowledge/indigenous knowledge.

 

Intergovernmental talks are still ongoing regarding how to protect IP and will continue for quite a while. The South African government, however, has already taken steps to protect traditional knowledge, genetic and biological resources. This was done through an interdepartmental approach wherein the DTI amended the Patents Act, 1978, and the Department of Environmental Affairs and Tourism (DEAT) amended the Biodiversity Act to protect genetic resources in one instance¹. However, one cannot use these systems to protect folklore, traditional attire, artworks and other cultural artefacts. Further, IP systems alone are not enough to protect traditional knowledge and must be accompanied by other unique laws that will ensure adequate protection of this traditional knowledge.

 

Some of the biggest limitations of protecting traditional knowledge through IP systems include the fact that these systems mostly provide for an individual to protect their IP and not communities which may require to protect their IP collectively¹. The other limitation is that most of the traditional IP systems have a limited period of protection. This is a great challenge since most traditional knowledge requires perpetual protection. Therefore it is necessary to have sui generis systems to protect traditional knowledge.

 

To this end, South Africa has passed the Protection, Promotion, Development and Management of Indigenous Knowledge Act, 2019. The aim of the Act is to “provide for the protection, promotion, development and management of indigenous knowledge… to provide for the management of rights of indigenous knowledge communities… to provide for access and conditions of access to knowledge of indigenous communities…”². Further, the objects of the Act include prevention of the misuse and misappropriation of indigenous knowledge, equitable distribution of benefits and to provide for the registration, cataloguing, documentation and recording of indigenous knowledge.

 

This would of course, include protection of indigenous knowledge such as praise songs. To demonstrate this, the eligibility criteria for protection of indigenous knowledge include that it should have been passed down from generation to generation within an indigenous community; it was developed within an indigenous community; and is associated with the cultural and social identity of that indigenous community. The Act has made great strides in preventing misuse and misappropriation of indigenous knowledge and requires that “Any person who intends to use indigenous knowledge for commercial purposes must— (a) apply in the prescribed manner for a licence authorising the use of that indigenous knowledge; and (b) enter into a licence agreement with the trustee of the relevant indigenous community for the use of that indigenous knowledge…”².

 

An interesting aspect of the Act is the period of applicability of the license agreement. If the subject of the agreement is functional in nature, then the licensee is obligated to pay royalties for 20 years after the date of the agreement. If the subject is an indigenous cultural expression, then the obligation to pay royalties expires 50 years after the date of the agreement. Subject matter that is functional in nature is indigenous knowledge that is scientific and/or technical in nature. Interestingly, this indigenous knowledge would be likely to be protected through patents and such protection also lasts for 20 years from date of application of the patent. This shows how there is harmony between some of the traditional IP systems and the sui generis Act.

 

The Act is very ambitious in its intentions to protect indigenous knowledge since it offers protection for indigenous knowledge originating from a foreign jurisdiction if the protection is reciprocated by said jurisdiction for indigenous knowledge originating from South Africa. Further, the Act makes provision for protection of indigenous knowledge in instances wherein the indigenous knowledge originates from a foreign jurisdiction as well as in South Africa. The indigenous community in South Africa will be assisted to make arrangements with the indigenous community in the foreign jurisdiction to ensure that both communities share the proceeds from commercialisation of the indigenous knowledge equitably.

 

It is encouraging to see our indigenous knowledge afforded such protection. For a country that celebrates its diversity and has such a rich heritage, it would have been tragic to miss the opportunity to optimally commercialise our indigenous knowledge and recognise as well as compensate the communities that own this knowledge.

 

Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney

For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys (@TshayaMashabela on Twitter).

References:

1. http://www.rci.uct.ac.za/usr/rcips/resources/policy.pdf
2. https://www.gov.za/sites/default/files/gcis_document/201908/4264719-8act6of2019protectpromodevelopmanagementindigenousknowledgeact.pdf

Tembeka Ngcukaitobi wrote an article on 9 August 2018 titled “Let the world know that women were once not “persons” in the eyes of the law”¹. He was referring to the 1912 case of Incorporated Law Society v. Wookey. Madeline Wookey applied to serve articles at a law firm and the Law Society refused to register the articles1. At the time, the Cape Charter of Justice stated that any person suitably qualified could apply for admission as an attorney¹. The Law society argued that the term “persons” did not include women¹. As a result, Wookey was denied the opportunity to qualify as an attorney.  Keep in mind that white women were only allowed to vote on 19 May 1930, while black men and women could only vote from 27 April 1994.

 

It is shocking that until recently, black women were considered perpetual minors by law. This meant that unless she was emancipated, a black woman had no independent powers save as to her own person and as specifically provided². Women were always under the guardianship of a male (her father; then her husband; after the death of the husband then the eldest son becomes the guardian)³. Despite all these hurdles and impossible odds, women have always fought to get their voices heard and to take their rightful place at the table. This explains why, despite all the obstacles facing women, there have been great achievements from them. We will be celebrating some of these phenomenal women this Women’s Month. The four phenomenal women we are featuring in this blog are Professor Keolebogile Shirley Motaung, Ms Nneile Nkholise, Dr Esther Mahlangu, Ms Palesa Mokubung and Ms Tumelo Tshaya Mashabela.

 

Professor Keolebogile Shirley Motaung is a Biomedical Scientist who holds a D.Tech Biomedical Technology from Tshwane University of Technology (TUT) in conjunction with University of California, Davis in the USA⁴. She was the first female at TUT to receive a Fulbright Scholarship to pursue her doctorate at UC Davis⁵. Her research and innovation focused on the role of medicinal plants in tissue engineering of bone and cartilage. Based on her research, she established her own company, Global Health Biotech (Pty) Ltd during 2016⁴. Prof Motaung has received multiple awards for her efforts to bridge the gap between science and entrepreneurship⁴.

 

Another phenomenal innovator that we are looking at is Ms Nneile Nkholise. Her company, iMED Tech, develops prosthetics for cancer and trauma patients. The company was established during 2015 while Ms Nkholise was studying for her Masters in Mechanical Engineering at the Central University of Technology. The company has created a positive impact across the African continent. Ms Nkholise has experience in 3D printing technologies which she uses to develop her custom-made products.

 

Dr Esther Mahlangu was born on a farm in Middleton, Mpumalanga. She learnt how to paint from the age of 10 and was taught by her mother and grandmother⁶. Dr Mahlangu is a pioneer who uses the crafts of the Ndebele people to create breathtaking artworks⁶. Her work has been exhibited across the world and has brought her significant success in the art markets⁶. Dr Mahlangu was also commissioned to add her designs to British Airways planes, BMW vehicles, vodka bottles, billboards, and food packaging for products such as Albany bread and Tastic rice.

 

Ms Palesa Mokubung is a designer based in Johannesburg and she is the founder of the Mantsho clothing label⁶. In August 2019, Swedish retailer H&M announced that Mantsho would be collaborating with them⁶. This was the first ever collaboration between H&M and an African designer⁶. The Mantsho brand has modern and edgy designs that celebrate Africa’s culture and vibrancy.  Palesa’s innovative designs make her standout from the crowd.

 

Ms Tumelo Tshaya Mashabela is the first black female patent attorney in South Africa. She graduated with an engineering degree from the University of Cape Town and obtained her LLB from the University of South Africa (UNISA). She qualified as a patent attorney and has since established her own law firm, Tshaya Mashabela Attorneys. Ms Tshaya Mashabela has 16 years’ experience in the field of intellectual property (IP) with over 11 years as a patent attorney. She is passionate about creating IP awareness and ensuring that entrepreneurs and SMEs know the value of the creations of their minds. She is the bridge between innovators and the market and always ensures that innovators extract the most value from their creations. During 2018, she won an award for Professional Excellence awarded by the Department of Science and Innovation in collaboration with the South African Research and Innovation Management Association. She was an Independent Contractor contracted to UNISA to develop content for post-graduate diploma in IP management.

 

There are many more phenomenal women that we would like to celebrate, and we will do so in future blogs. We have a long way to go before achieving gender equality, but these women are leading the way and showing those who follow in their footsteps that it can be done. From not being considered as “persons” in the eyes of the law to such unbelievable achievements… It is clear, that this woman can!

 

Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney

For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys (@TshayaMashabela on Twitter).

 

References

 

1. https://mg.co.za/article/2018-08-09-let-the-world-know-that-women-were-once-not-persons-in-the-eyes-of-the-law/
2. https://www.jstor.org/stable/41163649
3. http://scholar.ufs.ac.za:8080/bitstream/handle/11660/1043/juridic_v27_n2_a7.pdf?sequence=1&isAllowed=y
4. https://www.dst.gov.za/index.php/media-room/latest-news/3219-webinar-to-celebrate-women-in-innovation-in-sa
5. https://southafrica.inspiringfifty.org/prof-keolebogile-shirley-motaung
6. https://edition.cnn.com/style/article/sa-designer-partners-with-hm/index.html 

Hot off the heels of the Olympic Games starting, South Africans had mixed reactions about the design team SA’s Olympic uniform. We’re not going to delve into the aesthetics of the outfits but what we would like to discuss is innovation in the fashion industry. Fashion designs are unique, they present new patterns and are pleasing to look at. These are all elements required to obtain intellectual property protection. Coco Chanel once said, “In order to be irreplaceable one must always be different”, this is the essence of innovation.

A lot of small and medium companies rarely pay attention to protecting their unique fashion designs which constitute their intellectual assets. Innovation and original creative expressions offer companies a competitive advantage, this includes those in the fashion industry¹. There is a portfolio of IP rights that can be protected in fashion, and we will discuss a few of these below.

Source: Financial Times

 

Registered Designs

The core of fashion is fresh, new designs¹. This includes handbags, jewellery, clothes, and shoes amongst others. Another aspect includes the print on textiles or materials. These can all be protected under registered designs. Let’s recap what a design is, an aesthetic design protects an appearance of an article. If a product has new and original features, they can be protected with a design registration. These features can be a pattern, a shape, configuration, ornamentation or a combination of any of these. These designs are pleasing to the eye and are judged solely by how they look, irrespective of the aesthetic quality.

An aesthetic design affords the owner of the IP right 15 years of protection. This could be considered an eternity especially for fashion items that are only relevant for one season which could last from six to twelve months¹. However, consideration must be given for items that do not go out of fashion and remain relevant with each passing season. These include Hermes and Louis Vuitton handbags; textile prints such as those used in clothing from Maxhosa designs; and shoe designs from Gucci and Christian Louboutin amongst others. Coco Chanel designed the classic Chanel suit in the 1930s and it remains relevant to this day¹. For such designs with a long lifespan, it may be worthwhile to file for design registration to prevent other designers from copying your creations¹.

Source: Pinterest

 

Trade marks

The importance of trade marks cannot be stressed enough. This is mostly the first point of connection between customers and a brand. Therefore, a lot of big fashion houses are fiercely protective of their brands¹. There is a lot of equity in the brand itself. As an example, Louis Vuitton’s brand equity was valued at $14.89 billion in 2021². Fashion houses protect their brand names through trade mark registration and some of the associated art work enjoys copyright protection¹.

Trade marks are as important for big fashion houses as they are for small and medium enterprises. As soon as a designer wants to start their own brand, the first point of call must be protection of their brand name and other relevant intellectual property rights. Fashion involves the ability to monetize a distinctive brand⁵.  Even Julius Caesar knew the value of trade marks in 46 BC, where he attempted to obtain trade mark protection. For the famous phrase that he uttered “veni, vidi, vici” which translates to “I came, I saw, I conquered”³. His rival, Cicero, obtained trade mark protection for the phrase before Caesar while he was out of town though³.

 

Patents

More often than not, we do not associate the fashion industry with patent rights. However, patent rights have played a significant role in providing companies a competitive advantage¹. For example, in 1987, a Danish company in the biotechnology field invented a method of using enzymes to treat fabrics¹. The treatment of “stone washed” denim jeans¹ revolutionised fashion since it gave the denim a worn look which is still in fashion today. The company holds over 4 000 patents.

There are other relevant IP rights such as know-how and trade secrets that are relevant in the fashion industry. The important thing is to realise the value of the intellectual capital that exists in fashion design and how to adequately commercialise it to extract value from it. One must never downplay the value of one’s creation, so as soon as you get a creative idea and wish to start a business in fashion, contact Tshaya Mashabela Attorneys and we will assist you with identifying the IP relevant to your business, assist you to develop an IP strategy and protect your IP.

 

Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney

For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys (@TshayaMashabela on Twitter).

References:

1. https://www.wipo.int/wipo_magazine/en/2005/03/article_0009.html
2. https://www.statista.com/statistics/980552/louis-vuitton-brand-value-worldwide/
3. https://www.dossey.com/blog/2015/march/oldest-trademarks-in-the-world/
4. https://www.thefashionlaw.com/intellectual-property-rights-a-primer/
5. https://www.thefashionlaw.com/intellectual-property-rights-a-primer/

 

 

Two things that can greatly alleviate poverty and other socio-economic disparities on the African continent are youth employment and entrepreneurship1. The fourth industrial revolution is presenting opportunities for youth innovation and entrepreneurship. It is imperative that Africa’s youth be empowered to enable them to overcome technology skill shortages and competencies1. 

South Africa is facing one of its biggest challenges yet, a youth unemployment rate of 63%2. This is alarming as the youth is our greatest resource as a country and yet they are the most vulnerable. At Tshaya Mashabela Attorneys, we want to play our part in empowering the youth and enabling them to be innovative. We’ve compiled a list of programmers aimed at empowering the youth:

Tshepo 1 million:

Tshepo is a Gauteng Provincial Government youth empowerment initiative designed to help young people (regardless of the level of education) to access opportunities such as skills training, learners hips and entrepreneurial development opportunities. Get more information at tshepo.mobi/Home 

Source: https://www.oecd.org/gov/youth-governance.htm

The Innovation Hub

The Innovation Hub (TIH) is a wholly owned subsidiary of the Gauteng Growth and Development Agency and was established to promote economic development and competitiveness within Gauteng by nurturing innovation and entrepreneurship. The TIH offers innovators support from the ideation stage to product development. They have incubators in several sectors such as agroprocessing, ICT and the green economy to name a few. Get more information from www.theincubationhub.com 

Technology Innovation Agency

The Technology Innovation Agency (TIA) is a national public entity that plays a key role in bridging the innovation gap between R&D from Universities, science councils and private sector, and the commercialisation of this R&D. TIA focuses on technology development and assists innovators and SMEs from proof of concept to pre-commercialisation. To this end, TIA established the Seed Fund, Technology Development Fund and the Commercialisation Support Fund. For more information visit the TIA page at www.tia.org.za

Source: http://gaindereve.com/3-conseils-pour-reussir-tout-type-de-startup/

East London Industrial Development Zone

The South African government established several industrial development zones IDZ) in order to reposition itself in the world economy by attracting foreign direct investment and export of value-added commodities. One such IDZ is the East London IDZ and in order to enhance the competitive and comparative advantages of this IDZ as an investment destination, they have established the Science and Technology Park. They offer innovators and entrepreneurs facilities for laboratory testing, a design center, training platforms and incubator services. For more information visit elidzstp.co.za 

Incubators

There are also multiple incubators around the country that help to speed up growth and success of start-ups. Examples are the Riversands Incubation Hub, Standard Bank Incubator and Shanduka Black Umbrella.

Source: https://www.riversandsihub.co.za/

We are aware that data costs can be astronomical and yet access to the internet is one of the fundamental requirements for youth development. There are places where you can get access to free WiFi to work on your ideas and innovations. 

Tshwane has several zones of free WiFi for its residents offering 500mb/day. In addition to that, through the TshWi-Fi app, the City of Tshwane provides Tshwane youth with free access to the IBM Digital-Nation Africa (D-NA) programme, allowing local entrepreneurs and communities access to knowledge, skills and tools to innovate, design, develop and launch their own digital solutions3. Please visit www.tshwifi.com to find your closest internet zone.

The City of Johannesburg has also established 1000 WiFi hotspots across the city offering 300mb/day. This is not much but it will definitely go a long way in assisting youth to access the information they require to innovate. You can also visit a McDonald’s or StarBucks if you can and make use of their free WiFi facilities, be prepared to at least buy a cup of coffee first though!

Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney

For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys (@TshayaMashabela on Twitter).

References:

1. https://www.nepad.org/blog/innovation-and-entrepreneurship-opportunities-africas-youth-within-4th-industrial-revolution
2. http://www.statssa.gov.za/?p=14415
3. http://www.tshwane.gov.za/Pages/WIFI.aspx

 

Innovation and Intellectual Property Systems in Africa

The United Nations projected that by 2050, Africa’s population would more than double and increase from 1 billion in 2019 to 2.4 billion in 2050¹. This will be a young population as half of it will be under 25 years of age¹. Concerns have been raised about the capacity of the African economy to absorb this young population into its job market¹.

Over 60% of the unemployed people in Africa are youth¹. This is also reflected in the South African unemployment statistics wherein 63% of youth aged 15 to 24 years is unemployed². It is clear that Africa requires innovative solutions to deal with the impending influx of youth in the job market. The World Intellectual Property Organisation (WIPO) states that the more developed an economy is, the more it innovates, the inverse is also true³. However, it is not all doom and gloom for Africa, since some economies break this pattern and perform better than anticipated.

Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.africafc.org%2F&psig=AOvVaw3By9zTh7iM_bSgsPqaT1ch&ust=1623104890758000&source=images&cd=vfe&ved=2ahUKEwi_ieyEh4TxAhUDgHMKHQKsDyQQr4kDegUIARCHAQ

Sub-Saharan Africa is one of the economies performing above expectation for the level of development³. Looking at knowledge and technology outputs as a measure, South Africa’s position has been fluctuating. One of the things looked at in measuring knowledge and technology outputs is patent filings including Patent Corporation Treaty (PCT) applications, scientific articles and intellectual property receipts⁴. During 2019 South Africa dropped from number 55 to number 57 from the previous year and this is also reflected in the significant decrease of patent filings in the country. Kenya maintained a steady increase in its patent filings and moved from number 78 to number 72 in terms of knowledge and technology outputs rankings.

Source: These statistics were obtained from https://www.globalinnovationindex.org/

Looking at the whole of Africa and reaction to the COVID-19 pandemic, a study of 1000 new or modified technologies have been developed worldwide. Africa developed 12.8% of these innovations³. Looking specifically at the fields of the technologies, 57.8% were in ICT, 25% were based on 3D printing and 10.9% were in robotics. The countries with the most innovations were South Africa (13%), Kenya (10%), Nigeria (8%), and Rwanda (6%).³ The World Health Organisation (WHO) has recommended more investment into ICT infrastructure, robotics, artificial intelligence, drones and mechatronics.³ This will encourage innovation amongst the youth and create opportunities that do not exist now. With more innovation, incentives are required to encourage the sharing of ideas and even more innovation. What systems does Africa have to protect people’s intellectual property?

Source:https://www.google.com/url?sa=i&url=https%3A%2F%2Fyalantis.com%2Fblog%2Fprotecting-intellectual-property-for-technology-companies%2F&psig=AOvVaw3-ArgqmffVdxA8qpeFLtFf&ust=1623105052838000&source=images&cd=vfe&ved=2ahUKEwir3JDSh4TxAhVygM4BHQXQDwMQr4kDegUIARDrAQ

It is well known that SMEs play a vital role in a country’s economy and that we now live in a knowledge era wherein businesses compete in this knowledge economy⁵. Intellectual Property rights are essential for SMEs and should not just be considered a must have for big companies. Intellectual property must be recognised by SMEs as a necessary asset for economic and future growth⁵.

 

Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.fieldfisher.com%2Fen%2Flocations%2Ffrance%2Fservices%2Fintellectual-property&psig=AOvVaw3-ArgqmffVdxA8qpeFLtFf&ust=1623105052838000&source=images&cd=vfe&ved=2ahUKEwir3JDSh4TxAhVygM4BHQXQDwMQr4kDegUIARDpAQ

Intellectual property rights are territorial rights. This means that for every country you seek protection in, you have to file individual applications to get protection. In Africa, we have two regional patent offices namely the African Regional Intellectual Property Organization (ARIPO) and Organization Africaine de la Propriété Intellectuelle (OAPI). These regional patent offices represent 65% of the countries on the African continent⁶. South Africa is neither a member of ARIPO nor OAPI, as a result, all applications for IP protection must be filed individually for South Africa or designated via a Patent Corporation Treaty filing. The ARIPO member states include Botswana, The Gambia, Ghana, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia, Rwanda, São Tomé & Príncipe, Sierra Leone, Somalia, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe. The legislation for ARIPO is the Harare protocol which enables ARIPO to provide protection for patent rights, industrial designs as well as utility models. The Banjul protocol empowers ARIPO to protect Trade Marks, whilst the Swakopmund Protocol enables ARIPO to protect traditional knowledge and expressions of folklore⁶. The Arusha protocol protects new plant varieties⁶.

OAPI member states include Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Ivory Coast, Mali, Mauritania, Niger, Senegal, Togo, and Union of the Comoros. OAPI is not a designation based system, it is centralised and member states do not have national IP offices, only national liaison structures. The uniform legislation for the OAPI filing system is the Bangui Protocol and it protects: patents, trademarks, industrial designs, trade names, geographical indications, plant breeders’ rights and literary and artistic works.

There are two fundamental differences between ARIPO and OAPI. The first being that ARIPO is a designation based system wherein you must designate the ARIPO states in which you seek protection in. The fees you pay will depend on the number of countries you wish to designate, also, you will not have IP protection in the states you have not designated. On the other hand, OAPI does not have a designation system. The second difference is that ARIPO conducts substantive examination where the validity of your IP is tested. There is no substantive examination for OAPI applications.

Other ways that innovators can protect their ideas is filing in the individual countries where they seek protection (not OAPI member states as they do not have individual patent offices). For more international coverage of IP rights, one can file a PCT application and designate OAPI and ARIPO regional offices as well as individual countries that are not part of these regional filing systems.

Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney

For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys (@TshayaMashabela on Twitter).

References:

1. http://documents1.worldbank.org/curated/en/860711510585220714/pdf/WPS8241.pdf
2. http://www.statssa.gov.za/?p=14415
3. https://www.afro.who.int/news/covid-19-spurs-health-innovation-africa
4. https://www.globalinnovationindex.org/
5. https://techpoint.africa/2021/04/26/intellectual-property-and-medium-sized-enterprises-taking-your-ideas-to-the-market/
6. https://www.wipo.int/patents/en/topics/worksharing/regional-patentoffices.html

 

Small and medium enterprises (SMEs) are the engines of the world economy. Over 90% of businesses worldwide are SMEs and 70% of people that are employed in the private sector, work at an SME. SMEs are key drivers to job creation, innovation and growth. According to the World Bank, “relative to large firms, SMEs enhance competition, entrepreneurship, job growth and spur economy-wide efficiency, innovation and economic growth.”1

President Cyril Ramaphosa has stated on many occasions that the growth of the South African economy will be sustained by SMEs, as is the case in many countries around the world.2 However, data is very sparce about South African SMEs, there is not sufficient information regarding the types of SMEs that exist, the fields in which they dominate, number of people employed and contribution to GDP amongst others.2 This means that there is a significant probability that most policies and support initiatives may be created based on a lot of estimates and assumptions rather than true facts about SMEs.2

Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.vectorstock.com%2Froyalty-free-vector%2Fsme-small-and-medium-enterprise-word-lettering-vector-14450218&psig=AOvVaw0X8yoqWIgRnL80t8Vb8fka&ust=1619534707970000&source=images&cd=vfe&ved=0CA0QjhxqFwoTCMjn2J-TnPACFQAAAAAdAAAAABAR

The Department of Trade and Industry estimated that there are around 2.2 million SMEs in South Africa.2 However, a study conducted on South African SMEs found that there are only 250 000 formal employing SMEs. These firms account for 28% of employment as opposed to the international figure of 70% employment.2 South African SMEs have not reached their full potential and capacity of job creation which is tragic as South Africa has an unemployment rate of over 30%. A lot more has to be done to understand these SMEs and how to structure support initiatives such that they provide customized support for them. One of the key factors that contribute to the growth of SMEs is intellectual property.

A report by the European Union IP Office found that SMEs that have filed for protection for at least one intellectual property right (IPR) are 21% more likely to experience a subsequent growth period and 10% more likely to become a high growth firm (HGF).3 The likelihood increases by 9% for an SME that has filed at least one patent and increases by 13% for SMEs that have a trademark.3 SMEs that have multiple IPRs (patents, trademarks, designs etc.) are 33% more likely to achieve high growth than SMEs with just one category of IPR.3

Diagram obtained from https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/reports/2019_High-growth_firms_and_intellectual_property_rights/2019_High-growth_firms_and_intellectual_property_rights.pdf

Thus, the question of whether or not IP systems are relevant to SMEs is a resounding yes, SMEs that want to be HGF require IP systems to thrive. South Africa is one of the 193 member states of the World Intellectual Property Organization (WIPO), which administer 26 international treaties pertaining to the protection of IPR. Innovators are able to obtain protection for their copyright works, trade marks, patents, plant breeders’ rights and designs.4 Despite the strong IP systems, most SMEs lack awareness thereof and clarity of its relevance to businesses. The biggest limiting factor, however, is how it appears expensive and time consuming to obtain IPR, from the SMEs perspective. This results in SMEs not fully exploiting their innovations and creations.

A significant number of SMEs have lost opportunities of growth and income generation due to lack of protecting their brands, inventions and designs. This is because instead of identifying the value of the IP and what strategy they are going to adopt for growth from the beginning, they only realise the value of their IP when its already too late. The avenue available to defend their IPR is through lengthy court processes where ownership has to be painstakingly made clear. In addition to the research conducted by EUIPO, there other compelling reasons for SMEs to protect their IP and in a paper by Muredzi and Mkhali (2015)5, these were summarised as follows:

• Strong market position and competitive advantage (IPR grants exclusive rights to prevent third parties from infringing one’s rights thus an opportunity to establish a dominant position in the market); IP gives enterprises the exclusive right to prevent others from commercially using a product or service, thereby reducing competition for their innovative product and enabling the enterprise to establish its position in the market as a pre-eminent player.
• Higher profit or returns on investment (IPR may increase the ability to recover money spent on R&D); has invested a significant amount of money and time in R&D, using the tools of the IP system is important to recover the SME’s R&D investments and obtain
  higher returns on its investments.
•  Additional income from licensing or selling (assigning) IPR; (assigning) IP. IP owner may choose to license or sell the rights to other enterprises in exchange for lump sum payments or royalties, in order to generate additional income for the enterprise.
• Creating bargaining power; of interest to others may be useful when SME’s are seeking authorization to use the IP assets of others. In
  such cases, enterprises often negotiate cross-licensing agreements, which are agreements by which each side authorizes the other enterprise to use its IP assets in the manner specified in the licensing contract.
• Enhanced ability to acquire funding at reasonable interest rates;
• Provides credibility to investors and enhance ability to attract investors; rates of interest .In some circumstances, SME’s seeking to commercialize a new technology may be able to more easily raise capital, based on their IP assets, for example, by including information about their IP assets in their business plans while approaching investors, financial institutions, government agencies, etc.
• Credibly threaten or take action against imitators; and
• Positive image for SMEs.

Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Finnovation.ox.ac.uk%2Ftechnologies-available%2Ftechnology-licensing%2Fsme-smart-ip-scheme%2F&psig=AOvVaw0a2rELEhajcCYGAW8R5cfD&ust=1619538558191000&source=images&cd=vfe&ved=0CA0QjhxqFwoTCPDWjsGhnPACFQAAAAAdAAAAABAD

South Africa has several programmes aimed at supporting SMEs with taking their ideas to market as depicted in the flow diagram above. There are some privately run incubators and a lot that were established by government. We will mention a few starting with the work done by the Technology Innovation Agency. The TIA is a national public entity that plays a key role in bridging the innovation gap between R&D from Universities, science councils and private sector, and the commercialisation of this R&D. TIA focuses on technology development and assists innovators and SMEs from proof of concept to pre commercialisation. To this end, TIA established the Seed Fund, Technology Development Fund and the Commercialisation Support Fund.

The Innovation Hub (TIH) is a wholly owned subsidiary of the Gauteng Growth and Development Agency and was established to promote economic development and competitiveness within Gauteng by nurturing innovation and entrepreneurship. The TIH offers innovators support from the ideation stage to product development. They have incubators in several sectors such as agroprocessing, ICT and the green economy to name a few. There are countless other support programmes, please contact us if you require further information.

Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.syntegon.com%2Fcompany%2Fresearch-and-development&psig=AOvVaw2aVmV1S2HXr5MJ7xDnoFUS&ust=1619602189817000&source=images&cd=vfe&ved=0CA0QjhxqFwoTCPCEyMKOnvACFQAAAAAdAAAAABAD

Although more still has to be done, we have foundations to help SMEs with protecting their IPR and taking their ideas to market. It is apparent that the biggest stumbling block for SMEs is a lack of knowledge and awareness about IP and its value that it brings to a company. One of the greatest tasks ahead is thus to continue to create awareness about IP in as many SMEs as possible. SMEs have the potential to enable South Africa to reduce its very high unemployment rate. As a result, a lot has to be done to improve the chances of survival and growth of these SMEs.

Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney
For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys (@TshayaMashabela on Twitter).

References:
1. http://documents1.worldbank.org/curated/en/860711510585220714/pdf/WPS8241.pdf

2. https://www.smallbusinessinstitute.co.za/wp-content/uploads/2018/10/SBIbaselineAlert1final.pdf
3. https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/reports/2019_High-growth_firms_and_intellectual_property_rights/2019_High-growth_firms_and_intellectual_property_rights.pdf
4. https://www.wipo.int/tools/en/gsearch.html?cx=016458537594905406506%3Ahmturfwvzzq&cof=FORID%3A11&q=patent+landscape+south+africa#gsc.tab=0&gsc.q=patent%20landscape%20south%20africa&gsc.page=1
5.https://www.researchgate.net/publication/281624058_Using_Intellectual_Property_for_Business_Growth_The_Case_of_SME’sin_SADC_-_A_Review

What came first, the chicken or the egg? Do intellectual property rights promote more innovation and technological advancements or is necessity indeed the mother of all invention? In other words, with or without the incentive of Intellectual Property Rights (IPR), would we still have rapid advancements in technology and other fields?

These questions become even more pertinent in these times of COVID-19 pandemic. Should COVID-19 vaccines and other related technologies be protected by patents thus making them potentially unaffordable for low-income countries? On the other hand, should there be a patent ban on these vaccines and related technologies to enable more access to much needed resources in low-income countries?

The justification for IPR is that “…the IP system is required to incentivise new inventions of vaccines, diagnostics, and treatments, which might dry up in its absence.”¹ However, poor countries argue that “…rich countries will benefit from new technologies as they come onto the market, while poor countries continue to be devastated by the pandemic. The proposal states that IP rights such as patents are obstructing affordable COVID-19 related products. A temporary ban would allow multiple actors to start production sooner, instead of having manufacturing concentrated in the hands of a small number of patent holders.”¹

Image obtained from: https://www.investigate-europe.eu/en/2021/patents-vs-protection-a-covid-19-vaccine-for-all/

Rich countries such as the UK, USA, Canada, Norway and EU are of the opinion that there are ways to ensure equitable access to the COVID-19 vaccine where IP will not create a barrier for poor countries to gain access to it. The ways in which the poor countries propose to create equitable access is through:

• voluntary licensing,
• technology transfer arrangements, and
• the donor-funded COVAX Advance Market Commitment for vaccines.¹

We understand that South Africa and India are however, of a different view. The two countries have called for the World Trade Organisation (WTO) to ban IPR relating to COVID-19 vaccines and related technologies. This they say, is to ensure that not only rich countries but poor countries too would gain access to much needed COVID-19 vaccines and related technologies. They argue that with IP systems in place, rich countries will benefit from COVID-19 vaccines and related technologies whilst poor countries will continue to be ravaged by the pandemic due to lack of access. They posit that IP rights especially patents, impede the development of affordable medical products to help fight the pandemic in poor countries. They suggest that the ban will increase the opportunity for collaboration, allowing more producers to enter the space and increase scalability within a short period.

Image obtained from: https://www.dsmranddtaxcredits.co.uk/will-a-covid-19-vaccine-be-patent-protected/

It is important to note the following existing measure available to the South African government, compulsory licensing. According to the South African Patents Act 57 of 1978 section 56:

“(1) Any interested person who can show that the rights in a patent are being abused may apply to the commissioner in the prescribed manner for a compulsory licence under the patent.

(2) The rights in a patent shall be deemed to be abused if—

(a) the patented invention is not being worked in the Republic on a commercial scale or to an adequate extent, after the expiry of a period of four years subsequent to the date of the application for the patent or three years subsequent to the date on which that patent was sealed, whichever period last expires, and there is in the opinion of the commissioner no satisfactory reason for such non-working;

(c) the demand for the patented article in the Republic is not being met to an adequate extent and on reasonable terms;

(d) by reason of the refusal of the patentee to grant a licence or licences upon reasonable terms, the trade or industry or agriculture of the Republic or the trade of any person or class of persons trading in the Republic, or the establishment of any new trade or industry in the Republic, is being prejudiced, and it is in the public interest that a licence or licences should be granted…”²

According to the Patents Act, the government has a solution to exorbitantly priced pharmaceuticals or cases where the patent holder is not able to meet the country’s demand. Pharmaceutical companies have already expressed a willingness to offer voluntary license agreements.

It is understandable why pharmaceutical companies, especially those in the rich countries are opposed to the IPR ban. Developing new drugs is a lengthy, complicated and highly costly exercise. With every new and complex disease that is discovered, more money is spent attempting to develop a cure or treatment.⁴ Pharmaceutical companies spend a whopping 17% of their revenues on research and development (R&D), this is the highest expenditure in any industry.⁴ To put it into perspective, on average, a pharmaceutical company spends about $4 billion to develop new medication, sometimes, it can be as high as $10 billion.⁴ So, which came first, the chicken or the egg? Will pharmaceutical companies continue to invest so much into R&D if they have no chance to recoup their expenses or will they continue to innovate?

Image obtained from: https://www.europeanpharmaceuticalreview.com/article/121900/patents-and-approvals-medicines-vaccines-and-diagnostics-for-covid-19/

On the other hand, millions of people living with HIV/AIDS have died due to lack of access to treatment. Access is defined by the WHO as: “…having medicines continuously available and affordable at health facilities that are within one hour’s walk of the population…”.³ The majority of African countries spend a disparate amount of their scant resources on procuring medication. “Africa imports 70% of its pharmaceutical products, with India alone accounting for nearly 18% of imports in 2011. Pharmaceutical imports in Africa include up to 80% of the antiretroviral drugs (ARVs) used to treat HIV/AIDS.”³

In 2001, 39 pharmaceutical companies took the South African government to court for their plans to manufacture and import more affordable and generic HIV/AIDS medication.³ They claimed that the government undermined their IP rights by the government’s planned actions. The case was later withdrawn. Evidence shows that local production of medicines increase access and reduces the cost of these medicines. The WTO, in recognition of this, permitted a waiver of 10 years for poor countries to manufacture generic drugs using IPR from big pharmaceutical companies.³

With this history in mind, what is fair? Do we ban IPR of pharmaceutical companies relating to COVID-19 vaccines and related technologies, despite the costs of R&D that these companies plowed into development of these technologies? Or do we put the health of people first and promote equal access especially to people in poorer countries? This would help prevent the “HIV/AIDS” mistake and prevent unnecessary deaths. Can we find a middle ground that will make both low-income governments and big pharmaceutical companies happy?

An EU spokesperson maintains that there is no evidence that IPR limit access to COVID-19 medicines and technologies.¹ The Chair of the WHO Solidarity Trial of COVID-19 treatments, John-Arne Røttingen, is in agreement with the voluntary licensing route as the best one.¹ The reason being that IPR is the least of poor countries’ worries in terms of access. The biggest barrier according to John-Arne Røttingen is infrastructure, production facilities and know-how especially since COVID-19 vaccines and therapeutics are “complex biological products”.¹ For this reason, non-exclusive licenses and technology transfer of products would enable a faster establishment of production lines as was the case with the agreements established between AstraZeneca and Novavax with the Serum Institute of India.¹

It is difficult to imagine the big pharmaceutical companies continuing with their rigorous R&D without the prospect of recouping even half of those costs. It is also difficult to imagine the loss of lives simply because medicines are too expensive, and access is limited to the lucky few that can afford it.

Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney

For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys.

References:

1: https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)32581-2/fulltext

2: http://www.cipc.co.za/files/9513/9452/7965/Patent_Act.pdf

3: https://www.un.org/africarenewal/magazine/december-2016-march-2017/dying-lack-medicines

4: https://www.proclinical.com/blogs/2020-9/why-does-it-cost-so-much-to-develop-new-drugs#:~:text=The%20high%20level%20of%20R%26D,can%20sometimes%20exceed%20%2410%20billion.