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AFRICA: A TRADEMARK RISK NOT WORTH IGNORING – DARREN OLIVIER

Trademark owners should make plans both to develop their brands’ presence and to protect their rights in (and from) Africa.
Trademark owners should make plans both to develop their brands’ presence and to protect their rights in (and from) Africa.
 
Brand investment into Africa is modest by world standards as companies in the West have tended to focus on emerging economies in Asia and the Middle East. In addition, the number of trademarks filed annually by African-based companies is not especially large. For example, the total number of filings at the Office for Harmonization in the Internal Market (OHIM) using African addresses between 1996 and 2007 was 2 288 – or just over 1% of filings originating from outside the European Union. 
 
However, there are recent signs of a ‘trademark warming’ in Africa:
 
• African governments are becoming increasingly outspoken on the need to protect intellectual property;
• Counterfeiting is rising significantly, reflecting both a market for brands and a need for proper brand protection;
• Africa’s largest inward investment deal was signed last year;
• The continent’s European filings at OHIM were at their highest in 2007 relative to previous years; and
• The continent will host FIFA’s World Cup Football event, a traditional showcase for multinational brands, in 2010.
 
Bearing in mind that the African continent is the second most populous in the world, and hence a significant potential market, Africa’s call for attention on the trademark manager’s budget spreadsheet should be getting louder.
 
Legal Developments in Africa:
 
South Africa has launched its own alternative dispute resolution procedures and rules for its country-code top level domain (ccTLD), while the Nigerian Internet Registration Association has agreed to regulate ‘.ng’, Nigeria’s ccTLD.
 
Both these developments should enhance the need for registered trademark protection to assist in defending against cybersquatters (according to the Coalition Against Domain Name Abuse (CADNA), instances of cybersquatting increased by 248% in 2007 on 2006 worldwide).
 
In British American Tobacco Kenya Ltd v Cut Tobacco Kenya Ltd, Kenya’s Court of Appeal held in December, that there can be no proprietary rights in a particular colour. This means that there is a need for other forms of trademark protection to protect the packaging of one’s products.
 
The World Customs Organization now regards African countries as the main concern in Europe’s fight against counterfeit goods, which are said to be worth over $200 billion in trade every year. South Africa, Tanzania, Zambia and Zimbabwe have all conducted recent high-profile raids to prevent counterfeits from entering their market. This should encourage brand owners to file defensive applications in counterfeit hotspots or otherwise consider whether there is a dormant market into which they should tap.
 
The Cape High Court of South Africa held in favour of Crocs Inc and others defending an appeal brought by Shoprite Checkers against a counterfeit goods seizure by them in South Africa. However, Crocs lost a similar case against Moresport in the High Court (Transvaal Division) a few months later. This is one indication of the high instance of counterfeiting in SA and the attention it deserves – for example the latter mentioned decision (involving Moresport, was fought using both Senior and Junior Counsel which is a significant expense).
 
The Board of Appeal of the African Regional Industrial Property Organization (ARIPO) issued its first appeal decision last August. The case involved competing applications for the marks FONES 4 U by two different proprietors filed on separate dates. The board stressed that ARIPO should “strictly observe the [Banjul Protocol on Marks] with respect to time limits information delivery, procedure and processing of applications, procedure on appeals and rules of natural justice”. This decision illustrates ARIPO’s commitment to creating an effective registration system for its signatories, a reputation which ARIPO has struggled to attract so far.
 
The Japanese Patent Office has agreed to establish a significant fund aimed at assisting Africa in developing human resources in the IP field. 
 
Other encouraging developments include:
 
• Ministers in a number of countries, notably Botswana and Zambia, have spoken out on the need for effective IP protection;
• Regulators have cleared the Industrial Commercial Bank of China’s (ICBC) bid to purchase 20% of Africa’s largest banking group (Standard Bank) for R36,7 billion ($4,9 billion); and
• Angola is tipped to have the fastest growing economy in the world by The Economist.
 
Conclusions
 
While Africa cannot yet claim to be at the forefront of IP protection in comparison with the United States or Europe, properly spent funds should assist in persuading brand owners to invest in Africa. The ICBC deal is seen as a strong vote of confidence in Africa and the 2010 World Cup will shine a spotlight on Africa (and on companies’ brand protection).
 
As over 70% of all EU filings from Africa come from South Africa, EU and even US law firms looking to strike reciprocity deals may be inclined to use a single firm for all their African trademark requirements.
 
For a number of reasons (including low legal costs and similarities in legal systems), South Africa may also be considered as a cost-effective destination for outsourcing the management work of all or part of a brand owner’s trademark portfolio.
 
As Africa is home to numerous languages, advice may be required on filing for translations and even transliterations to protect properly one’s brand. For example, Google recently opened an office in South Africa which offers its search services in Afrikaans, Sesotho, Zulu and Xhosa.
 
As overall filings from Africa appear to be increasing too, brand owners outside of Africa may extend their watching services to cover some African based competitors.
 
The filing and enforcement of trademarks in Africa can be somewhat daunting because of different cultures, poor communications systems, a sometimes overly easygoing attitude and, occasionally, pure ignorance.
 
However, things seem to be changing. One need only ask McDonald’s Inc of the problems and huge cost it had to incur in trying to get its trademark back from an infringer in South Africa in the mid-1990s: Africa is a risk not worth ignoring.
Darren Olivier is a director at Bowman Gilfillan and co-author and founder of the Afro-IP blog (http://afro-ip.blogspot.com/)
(d.olivier@bowman.co.za)
 
 
   

 

In association with Bowman Gilfillan Africa GroupMember of Lex MundiMember of Employment Law Alliance