Important IP Information for SA Exporters
The number of South Africans exporting products to foreign countries has grown over the last few years, but many of these exporters are unaware of the various intellectual property (IP) issues which should be addressed before they export their products. The potentially problematic IP issues can be divided into three broad categories:
- Trade marks
- Registered designs
1. Trade marks
Due to the territorial nature of IP rights, a trade mark registered in South Africa is not automatically available for use or protected in foreign countries. It is therefore essential, before one embarks on an export campaign, to ascertain whether the trade mark is available to be used in a proposed export market and that the use thereof will not infringe an existing local registration. It is highly recommended that a search be conducted prior to the commencement of use in a new market. This is done by conducting a search at the national trade mark offices or registries of each export market for any identical or confusingly similar trade marks.
In addition, it is also important for exporters to obtain protection of their trade marks in the jurisdiction into which they intend exporting their products. Separate applications will have to be filed in each jurisdiction in which trade mark protection is sought. The cost of conducting an availability search for a trade mark can cost from R2 000 to R5 000, per country. The cost of filing a trade mark application can be from R3 000 to R13 000, per country. Costs for filing trade mark applications internationally can be high if there are a number of countries involved. There are, however, systems which make it possible to file a single application for registration of a trade mark in a number of countries. These systems are the international " Madrid" system, the "CTM" system in Europe, the "ARIPO" and "OAPI" systems in Africa.
The Madrid system
The international registration of trade marks (the Madrid system) is an effective and relatively inexpensive way for trade mark owners to secure protection of their trade marks in a number of countries by filing a single international registration application with a centralised office in Madrid. South Africa has approved the ratification of the Madrid Protocol but has, not yet acceded to it. South African companies therefore cannot yet make use of this system, unless they have a real and effective industrial or commercial establishment or domicile in a country that is a member of the system. When South Africa does become a member of the system, the system will have to be used with care because one of the risks of using the system is that an international registration may be subject to a "central attack". If the base registration is attacked, the entire international registration will fall away unless the proprietor converts the application to a separate national application in all the countries in which it has been filed using the system. In addition, some countries, in particular countries in Africa, have signed up to the Madrid system, but have not made the requisite changes to their national legislation. Consequently, the international registrations may not be valid and enforceable in these countries
The CTM system
The CTM system, which relates to a European Community Trade Mark application, is useful to South African exporters. At present, the CTM will provide protection in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia and the United Kingdom.
A Community Trade Mark is unitary in nature and is valid in each of the countries that is a member of the European Union. The application is a simple procedure and results in considerably reduced costs compared with the overall costs of national registrations in all or many of the 25 countries of the European Union. It is, however, dependent upon the mark being available for registration in all of the countries and the procedure is relatively slow, often taking over 18 months for a registration to be granted, even if no objections are encountered and the application is not opposed.
Again, if the CTM application is opposed or cancelled in one of the countries which forms part of the European Union, the entire application will be affected and may be lost (the applicant may, however, convert the application into a national application).
The approximate charges for filing a CTM application are in the region of R19 000, which is particularly cost-effective, considering the number of countries involved.
The OAPI and ARIPO systems
The OAPI and ARIPO systems are regional systems in Africa which make it possible to obtain trade mark protection in a number of African countries by filing one trade mark application. South Africa is not a member of these systems, but South African companies can use these systems.
The OAPI member states are Benin , Burkina Faso, Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea, Gabon , Guinea, Guinea Bissau, Ivory Coast, Mali, Mauritania, Niger, Senegal and Togo, which are, in the main, French-speaking countries situated in West Africa. OAPI registrations automatically extend to all member states as at the date of filing, and it is neither necessary nor possible to designate individual member states. The cost of an OAPI application is approximately R11 000.
The ARIPO system relates, in the main, to English-speaking African countries in Sub-Saharan Africa. Unfortunately, although Botswana , Namibia, Uganda, Lesotho, Swaziland, Zimbabwe, Malawi and Tanzania have acceded to this system, only Botswana has enacted its national law to recognise the ARIPO system. Accordingly, since there is only one member state in which rights flowing from an ARIPO registration can be enforced, this system is not an effective system at this time.
In conclusion, it is important for South African exporters to protect their trade marks internationally and to ensure that they do not infringe trade marks in countries to which they export their goods. The CTM system provides a cost-effective system for South African countries to obtain trade mark protection in Europe and the OAPI system is a cost-effective system to obtain protection in West-African countries. South African companies that do not have offices in countries that are members of the Madrid system will have to wait until South Africa joins in order to make use of this system, and will have to wait until the ARIPO system becomes effective in more African countries before this system becomes worthwhile.
A South African exporter has two important considerations from a patent point of view when deciding to export a product to another country:
A. the first consideration is to check whether or not the product is already protected by a patent held by someone else in that country; and
B. the second consideration is to decide whether or not the exporter can or should protect the product in countries to which is it to be exported.
A. Checking for patents held by someone else
Exporting a product to a country where another person has a patent on that product can turn out to be very costly. If that person sues the SA exporter for patent infringement, the SA exporter will face high legal costs and will probably also lose the products and have to pay damages. In countries like the USA, the damages can be in the form of a penalty which is basically a (very) high damages award designed to deter patent infringement.
Before exporting a product, it is therefore a good idea to check whether or not the product is protected by a patent in that country. The best way to do this is to consult a patent attorney, who will be able to provide a cost estimate for conducting the patent search.
B. Obtaining patent protection in other countries
A patent protects an idea or concept underlying a new invention. To be new, the idea or concept must not be known or have been made available to the public in South Africa or anywhere else in the world (this is referred to as "absolute novelty"). To be inventive, the idea or concept must not be an obvious change to something that is already known.
Patents are territorial rights and therefore, ultimately, it is necessary to file separate patent applications in each and every country, or in some cases region, of interest in order to obtain protection in that territory. The filing of patent applications and obtaining patent protection internationally is therefore expensive and before embarking on such a project, one should make sure that one has or will have a market in the countries where patent applications are filed and that the costs of obtaining patents in those markets are justified. That being said, international companies recognize the importance of patents and to be world players, it is important for SA exporters to protect their products using patents internationally. If SA exporters do not obtain patent protection for their products in the countries to which they export, they will not be able to prevent other companies or sellers from selling the same or similar products.
The provisional patent application
The first step in obtaining patent protection is to file a provisional patent application. It is very important that the application be filed before the invention is sold or disclosed to anyone on a non-confidential basis. To check that the idea has not already been patented elsewhere, it is a good idea to conduct a patent novelty search. The cost for a patent attorney to conduct a patent novelty search could typically be from R3 000 to R12 000 (depending on the complexity of the invention and the technology). If, after conducting a search, it is believed that the invention is patentable, a provisional patent application should be filed. The provisional patent application includes a patent specification which describes the invention in detail (including drawings, if necessary) and is best prepared and filed by a patent attorney. The cost for a patent attorney to prepare and file a provisional patent application can typically be from R8 000 to R12 000, or more if the invention and technology are complex. The provisional patent application may be filed at the South African Patent Office. South Africa is party to an international treaty called the Paris Convention and the filing of a provisional patent application in South Africa keeps an option open to file patent applications internationally for one year.
The one year Paris Convention period may be used to conduct further development on the product and also to test the product in the marketplace to see if the product is successful and if it is worthwhile to proceed with the patenting procedure.
The PCT application
At the end of the one year Paris Convention period, the applicant may proceed to file complete patent applications in foreign countries of interest. Alternatively, and to delay the costs of filing patent applications in the various countries, it is possible to file an "international" patent application, known as a "PCT" application. "PCT" stands for the Patent Cooperation Treaty, which is administered by the World Intellectual Property Organisation (WIPO) in Geneva. Currently, 124 countries in the world are members of the PCT, with South Africa having joined in 2000. The cost of filing a PCT application typically ranges from R20 000 to R45 000. The main advantage of filing a PCT application is that the deadline for filing patent applications in countries or territories of interest is delayed by a further 18 months. Another advantage is that an international patent examiner conducts an independent novelty search and provides a written opinion on the patentability of the invention. This opinion can provide a good indication of whether it is worthwhile to proceed to file patent applications internationally.
Patent applications internationally
At the end of the 18 month period of the PCT, if it is decided to proceed with obtaining patent protection, patent applications must be filed in countries or regions of interest. There are three regional systems that may be of interest to SA exporters. These systems are the European regional system (which covers the European countries), the ARIPO system (which covers 15 countries in Africa – basically the sub-Saharan English speaking countries, but not including South Africa) and the OAPI system (which covers 16 countries in Africa – basically the West-African French speaking countries). In most other countries in the world it is necessary to file patent applications on a country by country basis. The cost of filing international patent applications can range from R15 000 to R40 000, depending on the country or region. In addition to this, many countries and regions carry out their own searches and patent examinations and these procedures can take from one to five years or longer (depending on the country or region), and the costs involved in the examination procedure can be the same as, or more than, the initial filing costs. After grant, a patent lasts 20 years from the filing date of the application.
Exporters of plants should also be aware that there are international mechanisms for protecting plant varieties. Please contact Spoor & Fisher if you require more information on "Plant Patents" or "Plant Breeders’ Rights".
It is thus important for SA exporters to obtain patents internationally to protect their markets and products and to stake their claim in the international arena. Obtaining patents internationally is, however, a long-term project and can be costly, and one should have a strategy and ensure that the costs are worthwhile before embarking on an international patent filing program.
3. Registered designs
Whereas patents protect ideas and concepts, a registered design protects the shape or appearance of an article. Although a registered design has a narrower scope than a patent and also generally has a lesser term than a patent (usually 10 or 15 years), it can still provide valuable protection for an article. The requirements for obtaining a registered design are also less onerous than obtaining a patent and cost less than patents.
In many countries, the novelty requirement for filing a design application is not "absolute", although there are time limits for filing design applications and it is advisable to file the design application before the article is disclosed on a non-confidential basis.
Generally, like trade marks and patents, registered designs are territorial rights, which means that separate design applications should be filed at the design registries of all jurisdictions where design protection is required. In South Africa, the cost of filing a registered design application through a patent attorney can be from R3 000 to R5 000. In terms of the Paris Convention, it is possible to file design applications in foreign countries within 6 months of filing an initial design application in South Africa. The cost of filing design applications in other countries can be from R10 000 to R20 000, per country. The cost of filing design applications in a number of countries can therefore be substantial. For this reason, various countries have acceded to or are acceding to treaties which provide for multi-jurisdictional design protection through the filing of a single design application. Two of the important treaties are The Hague Agreement concerning the International Registration of Industrial Designs and the European Community Design system.
The Hague Agreement
The Hague Agreement provides for the registration of industrial designs in a number of jurisdictions by filing a single design application at WIPO in Geneva. Unfortunately, the Hague Agreement is currently not of much use to South African companies because South Africa is not a party to this agreement. At the moment this is not a major drawback, because only a small number of industrialised countries have to date become signatories to the Agreement. When South Africa and more industrialised companies become signatories to this Agreement, it will be of more use.
The European Community Design The European Community Design, on the other hand, can provide South African exporters with cost-effective design protection in all countries that are members of the European Union. The advantages of registering a European Community Design are that the process is simple, relatively inexpensive for the number of countries involved (typically in the order of R15 000) and by filing a single application, design protection can be obtained in all member countries of the European Union. The initial term of a European Community Design is five years, but this term can be extended, on payment of renewal fees, to twenty five years.
The European Community also provides protection for designs that have not been registered, but the duration of a non-registered Community Design is only three years.
As is the case with patents, registered designs can help South African exporters protect their markets internationally. South African exporters should, however, also be aware of the possibility of other parties having registered designs and should ensure that their products will not infringe registered designs in countries to which they export products.