Page 12 – CIP – The Anton Mostert Chair of Intellectual Property

South Africa is no stranger to the fever that accompanies the discovery of gemstones or precious metal in a particular region. Indeed, for decades the mineral riches of our nation were legendary across the world and the object of several battles for imperial, colonial or feudal control over the diamond, gold, platinum and coal fields of South Africa. As a testament to this, the foothills of Table Mountain is home to the Rhodes Memorial dedicated to the fervently imperialist, English mining magnate Cecil John Rhodes, former Prime Minister of the Cape Colony, founder of De Beers Consolidated Mines and, at the time of his death, one of the richest men in the world.

Today, despite the fact that 50% of the world’s gold deposits are to be found in South Africa, we are no longer the greatest gold producing country in the world. And yet we operate the two deepest mines in the world. Clearly we are prepared to go to extraordinary lengths to exploit our natural resources to the full extent.

Therefore, it follows that our Government should be well versed in the practice of protecting our national resources from exploitation by foreigners and alien encroachment. After all, a single region of the Western Cape is home to a greater diversity of flora than all of Western Europe. Consequently, one would be forgiven for thinking that Government is a zealous champion of our proudly South African exports.

Alas, this is not the case. ROOIBOS is a perfect case in point. For decades the Afrikaans word “rooibos” (meaning red bush) has been used to identify the dried leaves, infusions or extracts of the Aspalathus linearis plant indigenous to the fynbos area of the Western Cape. After it was discovered that ROOIBOS holds several health benefits over other teas due to its high level of natural antioxidants and lack of caffeine, as well as its therapeutic application to relieve tension, digestive disorder and allergies, ROOIBOS became popular the world over. This rise to fame was significantly aided by the South African owned Annique range of health and beauty products containing ROOIBOS as the primary ingredient, established as early as 1968.

However, 45 years later the SA Rooibos Council is still fighting an uphill battle to gain control over use of the name ROOIBOS. Recent reports in the media about a trade mark registration application for the name ROOIBOS in France by Compagnie de Trucy is only the latest in a long line of cases involving untoward prospecting.

At this point one might well ask; what will it take to stay the rush for South Africa’s indigenous resources?

Once again, the case of ROOIBOS provides an answer. Like many other herbal-derived products, ROOIBOS is used as an indication of the type and the origin of the product after the fashion of “Darjeeling” and “Ceylon”. Therefore, since trade marks serve as a badge of origin, it follows that trade mark registration offers a solution to the ROOIBOS problem. However, as the incumbent of this Chair has pointed out, ROOIBOS will likely fall foul of the test for a registerable trade mark because it is a generic English word incapable of distinguishing the product of one manufacturer from that of another. The same holds true for the ubiquitous “Chai” tea products.

Thus, if trade mark protection is likely unavailable, certainly the Department of Trade and Industry (DTI) should be able to bring to bear more powerful tools for the protection of uniquely South African products. The DTI is, after all, the Government body entrusted with all matters of intellectual property in South Africa and therefore expert in the field. Once again, alas no.

Even though South Africa is a signatory to the TRIPS agreement, through which most of the world must observe the protection of a product designated to a particular region (known as geographical indications or GI’s), the DTI and its inexpert advisors remained blissfully unaware of an intellectual property statute (introduced by the DTI itself) drafted for precisely this purpose. This statute, the Merchandise Marks Act of 1941, in section 15 provides for the protection of a mark or word through declaration by the Minister of Trade and Industry that, once made, provides the basis for protection of that mark as a GI everywhere in the world. In fact, a word or mark decreed under section 15 is granted far greater protection than under the Trade Marks Act, at no cost, in perpetuity, subject to criminal (as opposed to civil) sanction, far more expeditiously and beyond the scope of a mark used in the course of trade.

Therefore, clearly the ROOIBOS problem is solved. The law exists to protect it, it costs nothing and the DTI has the power to grant such protection. Once again, alas no. As with all matters in South Africa today, if there is no political advantage there is no political will. As a result, the DTI was informed of the mechanism created by the Merchandise Marks Act a decade ago and again recently by several national newspapers and even on national television by the incumbent of this Chair, Professor Owen Dean. And yet, the DTI did nothing.

Eventually, it took extraordinary and hereto unseen action by a member of the academic fraternity to spur the DTI into action. Earlier this year, Professor Dean met with Ambassador Roeland van de Geer, Head of the Delegation of the European Union to SA, and Mr Axel Pougin de la Maisonneuve, Head of the Political Economic and Trade Section of the EU Delegation, to discuss the ROOIBOS problem.

Upon learning about the nature of protection under the Merchandise Marks Act, and particularly the rigidity of protection it offers, Ambassador Van de Geer undertook to raise the matter with Dr Rob Davies, Minister of Trade and Industry.

Two months later, on 12 July 2013, South Africa finally staked its claim to the ROOIBOS name with the publication of notice 722 of 2013 in the Government Gazette (full text here ) in terms of the Merchandise Marks Act.

It was with great delight that this Chair received the news that, for once, the DTI respected its role as the guardian of intellectual property rights enough to heed the advise of intellectual property experts. The notice now lists ROOIBOS and 5 variations of the name as prohibited marks or words. These are: RED BUSH, ROOIBOSTEE, ROOBOS TEA, ROOITEE and ROOIBOSCH.

Any interested party may now submit comments or concerns about the envisioned protection with the Registrar of Trade Marks for 30 days. Thereafter, a promulgation period follows after which a final notice will be published to declare these terms prohibited words under the Merchandise Marks Act. (UPDATE: The period for commentary and promulgation has since been completed and the final notice published in the Government Gazette. See note at the end of this post for the full text).

Once this process is completed, hopefully by mid October, the use of these terms will be subject to the “Rules of Use for Rooibos” published along with the notice. These rules stipulate, in no uncertain terms, how ROOIBOS products should be identified and labelled. The guidelines also distinguish between pure ROOIBOS products, ROOIBOS blended teas or infusions, blended teas or infusions containing ROOIBOS, ROOIBOS flavoured teas or infusions with liquid flavours, and other products containing ROOIBOS. In all of these cases the SA Rooibos Council’s right to control the use of the term ROOIBOS is exerted with care and conspicuously circumscribed to permit all forms of legitimate use.

As a result, Ambassador Van de Geer indicated that under these circumstances the EU are likely to apply the same regulations to the GI specification description when the application for ROOIBOS is brought before the EU Commission and foresees that such protection will likely be extended to ROOIBOS. Once this process is complete, by operation of EC Regulation 510/2006, every member state of the EU would be obliged to refrain from using the ROOIBOS mark (or any of the other marks listed) without the express permission of the SA Rooibos Council and subject to the Rules of Use of Rooibos. This rule is known as the national treatment principle and requires every member state to provide the same level of protection to foreign GI’s as it affords to local products, regardless of whether a state of reciprocity exists or not. In addition, every trade mark registrar in Europe, including the pan-European trade mark office (OHIM), will be obliged to refuse the application for registration of any trade mark that contains any of the prohibited ROOIBOS word marks or derivatives thereof.

According to a report in The Guardian (25 July 2013), the ROOIBOS industry in South Africa is worth an estimated R600 million per annum, which equates to 0.6% of gold production in 2012. Impressive as this figure may be, it is obvious that ROOIBOS earnings would have been much higher had the DTI guarded our intellectual property fields as well as Government protects our gold fields. Fortunately, for the first time in a long time the hope exists that the DTI will take its mandate seriously. If it does, the future of “Karoo Lamb”, “Grabouw Boerewors” and “Kalahari Tea” (to name but a few) seem so much brighter.

The protection of ROOIBOS is certainly a victory over adversity and it has cleared a way through the minefield of burocratic lethargy and obstinate ignorance toward a new era of mining in South Africa.

The DTI should be commended for moving in support of the ROOIBOS industry and the protection of our indigenous resources. All that remains is the desire, so often expressed by this Chair and every other notable authority on intellectual property law, that the DTI will act in an equally sage manner regarding the Intellectual Property Laws Amendment Bill. After all, it is impossible to dig for gold with the aid of a spoon. An altogether more serious tool is required, which has been supplied in the form of the James/Dean Bill on the Protection of Traditional Knowledge. If ROOIBOS is anything to go by (and it clearly is) our indigenous resources run much deeper than mere cultural expressions and the hope is expressed that Government will be inspired by its success in this regard to carry on in the same, carefully informed, manner.

Cobus Jooste

UPDATE:

The final notice for the protection of ROOIBOS and related marks has since been published in the Government Gazette No. 36807, Notice 911 of 2013 (full text here ). Therefore, as of 6 September 2013, use of any of the listed terms is subject to the Rules of Use for Rooibos.

The first notice for the protection of HONEYBUSH / HEUNINGBOS and related marks has been published in the Government Gazette No. 36736, Notice 817 of 2013 (full text here ). The 30 day period for commentary has since lapsed, and the final notice will be published soon.

I have a confession to make. I plead guilty as charged. I admit that I am a white male establishment lawyer. I practised for 35 years as a partner of a prominent attorneys firm specialising in the field of intellectual property law (“IP”). Thereafter, upon retirement, I became a Professor of IP Law.

This makes me a member of that heinous and much vilified group of lawyers who are charged with the crime of wishing to preserve its privileged position and therefore overtly or covertly being against transformation in the legal profession and willing to practice deceit and manipulation in order to achieve its goal. On this charge I plead not guilty. I will set out my defence below.

To begin with, I am accused of guilt by association. The fact that there may perhaps be some guilty individuals in my group (I personally have not met any), does not mean that the whole group is guilty of the crime. Sweeping generalisations do not constitute evidence. Hard facts are what are required. If some members of my group appear to have transgressed, let’s have the specific facts on which the charge is based and the matter can then be addressed.

Before the new dawn of 1994, and before the advent of any express policies of affirmative action or transformation in the legal profession, I recognised the need to bring people of colour into the IP legal profession. It made good economic and business sense apart from considerations of fairness and redressing previous imbalances and wrongs. My firm and I began actively recruiting black articled clerks or candidate attorneys (“CAs”). We were fortunate to acquire the services of some excellent candidates and we devoted considerable time, energy and resources into giving them the best training and opportunities that we could muster.

Past experience with CAs has shown that many of them graduate to becoming attorneys, a significant proportion use the training to acquire basic skills and experience to become advocates, while a small minority move on to the corporate and business world. However, with black CAs the trend proved to be different. I personally trained around ten CAs and not one of them remained in legal practice, either as an attorney or at the Bar as an advocate. They were all snapped up by big business, which were prepared to offer remuneration packages well beyond what law firms could afford. Consequently this excellent training ground failed to produce good legal practitioners that could be fed into the legal system. This was not, however, for want of trying on our part.

Despite this trend, I am happy to say that my firm has managed to produce a few first-class black practitioners, but way too few to meet social and political needs. The firm currently has a black female Chairperson (who holds the position on merit) and another black female partner has served with distinction as President of the South African Institute of Intellectual Property Law, the professional body that regulates the practice of IP law.

The manner in which expertise and excellence is developed in the legal profession is from the bottom up. This has worked well since time immemorial. Young talent in the attorney’s profession and at the Bar is nurtured and it blossoms in due course, giving rise to first-class practitioners who can achieve fame in the profession and go on to become judges. This is what I and my colleagues have sought to achieve with black CAs. However, we have been frustrated in our efforts by the diversion of the stream of black talent away from the professions and into commerce. The system has not been fed with the requisite supply of black talent.

The process that I have described is a gradual one. Talented black lawyers cannot arrive overnight. In this situation one establishes a foundation and then constructs a magnificent building on it. The going has unfortunately been slow and this is where the problem lies and needs to be addressed.

As an attorney one owes a duty to one’s client to deliver the best possible service and results for the client’s benefit. One’s standing as an attorney is dependent on the extent to which one can measure up to this standard. The client’s interests are best served by delivering good results. I seriously doubt whether anyone would challenge this assertion. This means that the best people available must be mobilised in the process. An attorney who utilises personnel that are less than the best available in all the circumstances when dealing with his client’s interests is not doing his job properly.

Whenever I briefed an advocate in any matter that I was handling, I always chose the person best suited for the matter and whom I considered was best qualified to do the job. Although English speaking, I was not influenced in any way be the language or cultural or ethnic group to whom the person belonged, or by issues of gender. Such issues were irrelevant. The guiding principle was the ability of the person to do the job on hand well. In this way I would best serve the interests of the client.

I have given mentoring and developing black talent my best shot. I believe that the black lawyers whom I have mentored over the years will testify to this. I have been willing to assist them wherever possible and to challenge them in order to promote their progress. I bent over backwards to give them opportunities commensurate with the level of their ability and experience. I subscribe fully to the objective of bringing about transformation and creating a corps of black lawyers who are well versed and experienced in IP matters. However, I stop short of utilising lawyers, particularly in litigation, no matter whether they are black or white, male or female, or to which language group they belong, if they are not in the here and now able to deliver the best possible service to my clients. When it comes to the crunch and to delivering the goods, I want the best person for the job (even the President seems to subscribe to this principle).

I am in no way exceptional. My peers in the profession think and act along the same lines that I do. It is the only way in which one can conduct a proper legal practice. It is unfortunate and regrettable if this means for the time being that black lawyers, particularly at the Bar, are not featuring to the extent that one would want. I have no doubt that things will change in due course but it is an evolutionary process. The secret lies in training and mentoring and this is the area on which we should concentrate.

And that, dear judge and jury, is my defence to the second charge levelled against me by association. I say that this defence refutes the claim that there is an elite group of which I am a part that is seeking to perpetuate its privileged position. It is up to you to decide whether or not I am guilty as charged.

Prof OH Dean

Note:

Seldom will the VineOracle descend into the dust of the arena, even when the winner is known to her in advance. But on this occasion she considers it necessary to expound upon the recent developments in IP legal development for the sake of those who care to learn. Here is her report on the match between two opposing, albeit ill-matched, forces seeking to use the intellectual property law system for the protection of traditional knowledge.

In 2004 the Cabinet approved the adoption of a policy on Indigenous Knowledge Systems, known as the IKS Policy. Pursuant to this the Department of Trade and Industry formulated a policy document on the protection and commercialisation of Indigenous Knowledge. This policy sought to recognise and protect Indigenous Knowledge as a form of intellectual property and to enable and promote the commercial exploitation of such material for the benefit of the indigenous communities from which the material originated.

In 2008 the DTI sought to give effect to this policy by drafting and publishing the Intellectual Property Laws Amendment Bill (“IPLAB”). This Bill proposed to amend the Copyright, Designs, Trade Marks and Performers Protection Acts, respectively, to introduce into them special provisions applying the subject matters of those acts to what it termed “Traditional Knowledge,” but what can more correctly be described in terms of internationally recognised terminology as “Cultural Expressions”, i.e. folklore, traditional art and music, traditional designs and signs and performances of traditional works.

IPLAB has had a very tortuous and controversial journey through the legislative process. It has been roundly condemned as being badly drafted and unworkable by a wide spectrum of people from High Court judges, academics, legal practitioners and other government departments, to business people and the cultural community. Despite all this, as well as vociferous objection by opposition parties in Parliament, it was passed by Parliament in 2012 and submitted to the President for his assent. He, however, declined to sign it on the basis that it had not been considered by the National House of Traditional Leaders, the representative body of the avowed beneficiaries of the measures to be introduced.

The main criticism of IPLAB has been that it attempts to do the impossible. It purports to grant protection to TK by bending the principles of existing intellectual property laws beyond breaking point. It amounts in effect to trying to mix oil and water. The counter- argument and proposal is that the desired protection should be granted by means of a custom made (a so-called “sui generis”) statute providing for a new species of intellectual property with its own unique characteristics and circumstance. It would thus join and supplement the existing intellectual property statutes, such as the Patents Act, the Copyright Act etc., which each regulate a separate and unique form of intellectual property. The new law would be further Act in the series of intellectual property statutes.

In order to illustrate how the government’s goal could be achieved by means of a sui generis statute, Prof Owen Dean, the incumbent of the Anton Mostert Chair of Intellectual Property Law at Stellenbosch University, prepared a draft sui generis Bill covering the same ground as IPLAB. This draft Bill was made available to the Trade and Industries Portfolio Committee of the House of Assembly at the time when it considered IPLAB. The committee either ignored or disregarded (or did not understand) this draft Bill and IPLAB was approved after substantial amendment by the Parliamentary drafting team. These amendments, however, did not remove or cure the objections to IPLAB.

The Democratic Alliance and other opposition parties, mindful of the damning criticism that had been voiced against IPLAB, felt strongly that a grave error was being made by passing it and resolved to take further steps to rectify the undesirable situation. These took the form of Dr Wilmot James, the DA’s shadow Minister of Trade and Industry, tabling Prof Dean’s draft Bill in Parliament as a Private Member Bill. Parliament is thus faced with two fundamentally different competing Bills aimed at achieving the same objective.

The beneficiaries of the two Bills, i.e. the traditional communities whose works are involved, had never really been given an educated choice as to how they felt that their works should be protected. This has been rectified. The options have now been presented to them at a recent meeting of the National Council of Traditional Leaders held in Durban. The two Bills and their effects and implications were described to them to enable them to make an informed choice as to which they prefer. The essence of the principal information put before them is summarised below.

IPLAB has been described by the Deputy President of the Supreme Court of Appeal as fundamentally flawed and incapable of delivering any protection to traditional cultural works. This sentiment has been echoed time and again by leading experts in the field of intellectual property law. The World Intellectual Property Organisation (WIPO) has expressed similar views. Even the independent organisation that did a regulatory impact assessment of the Bill at the government’s behest condemned it as unworkable and undesirable. It is difficult to find anyone outside government who has any good word to say about the Bill. If passed, the law is likely to become a complete white elephant and it will have no practical application. Indeed, it would in all probability face a constitutional challenge.

It purports to create a system which in certain circumstances will confer ownership of the property created in the State, and not in the communities themselves. Such property will be commercially exploited by the State and royalties flowing to the State from the use of the works will accrue to a trust fund administered by the State. The trust operating the fund has discretion as to how the money should be spent or allocated and no obligation is placed on it to transfer any such money to any community. Royalty payments could be viewed as a sort of tax, somewhat along the lines of the extolls to be extracted from motorists for the use of Gauteng highways.

Licensing of the traditional works is subject to onerous formalities and conditions and the State is requires to give advance approval to any licence agreement. These circumstances for licensing are not at all in accordance with the realities of the market place in the licensing of works of intellectual property and they are likely to prove to be a strong disincentive to anyone contemplating acquiring a licence.

IPLAB deprives traditional communities of rights that they currently enjoy under intellectual property law in certain respects. For instance, traditional signs are prevented from being registered as trade marks, which is currently possible.

The James Bill follows the sui generis legislation route. This approach to protecting traditional knowledge enjoys the support of WIPO, which is currently preparing a model law to this effect for adoption internationally, as well as an international treaty to promote it. It is the approved international approach. It is also subscribed to by all our neighbouring countries and the International Association of Intellectual Property, an authoritative body of experts. The James Bill, and the sui generis approach has received widespread support in South Africa including from the Department of Science and Technology, the Competition Commission, the Association of Law Societies and prominent academics and legal practitioners with expert knowledge of intellectual property law. No comment whatsoever that the Bill is pursuing the incorrect approach has been offered.

The James Bill provides for protected traditional knowledge to be owned by the community that originated it and for that community to exploit the works commercially to its own advantage. No deprivation or expropriation of a community’s property thus takes place. Licensing of traditional knowledge property takes place on a simple, uncomplicated and user –friendly basis in keeping with standing commercial practices. Payment of royalties for use of the property can be made to a trust fund operated by the state but such moneys are specifically directed to be paid to the relevant community owning the work being exploited. Provision is made for the state to enforce rights in protected works, at the election of the owner and on its behalf. All existing intellectual property rights currently available to communities are preserved and are not taken away.

Intellectual Property law is a complex and difficult field and it lends itself to specialist attention. This branch of the law is in the main practised by lawyers who have undergone specialist training in it. Lawyers with general expertise, and even High Court judges, have difficulty in coping with it. The lay public has, little knowledge or understanding of it, which is not surprising, given its specialised nature.

In order to understand IPLAB and how it regulates protection of Traditional Knowledge, it is necessary as a prerequisite to have a good and thorough knowledge and understanding of the host Acts that it will amend, namely the Trade Marks Act, the Copyright Act, the Designs Act and the Performers Protection Act, and the law created by them. This achieved, it is necessary to work out how IPLAB adapts these Acts to make (or attempts to make) them applicable to Traditional Knowledge. This is complicated by the fact that, as previously stated, the objective sought to be achieved is in fact unattainable. Several of the principles and concepts in the host Acts are distorted in a manner that makes them incomprehensible. The task on hand is daunting to even the most experienced and learned exponents of IP law. How, one may ask, are members of traditional communities possibly going to be able to begin to understand the law protecting Traditional Knowledge in these circumstances?

On the other hand, the James Bill is a relatively brief, self-contained and uncomplicated piece of legislation. Prior knowledge of Intellectual Property law is not required in order to interpret it as it has its own custom made principles and concepts. Most lawyers without any expertise in IP law will be able to understand it and interpret it. Moreover, it ought to be reasonably intelligible to the layman. Members of traditional communities will be confronted with legislation which is not shrouded in mystery and confusion and will be far better able to comprehend how and to what extent their traditional property is protected. This , after all, ought to be the objective of all legislation, particularly statutes which are aimed at protecting property belonging to relatively unsophisticated people.

The principal benefit of the James Bill is that it is capable of actually working in practice and granting the desired protection to traditional works for the benefit of the respective originating communities, in contrast to IPLAB which is doomed to becoming a dead letter if passed.

The National House of Traditional Leaders was advised to apply its collective mind to the choice of Bills and, in the event that it decides that the James Bill is the better option, to communicate this view to the government, and more specifically to Parliament, before any further steps are taken by it in relation to IPLAB.

The reader is to be forgiven for thinking that the contest is a one horse race.

Prof OH Dean

READ MORE

To read more about traditional knowledge, IPLAB and the James Bill, click here.

As the pressure on “going green” increases internationally, eyes are turned to the protection of intellectual property and its mechanisms and particularly the question as to whether the World Trade Organization agreement on Trade Related Intellectual Property Rights (TRIPS) should include special flexibilities for access and dissemination of environmental sound technologies such as they occur in the fields of health or nutrition and how can this be of benefit?

It is argued that the IP system has been associated with some limitations with regards access or spread of technologies and while there has been a call on developed nations to assist developing nations through technology transfer: has that actually been happening?

Some argue that South Africa is pushing the clean power agenda but are we paying due attention to IP laws and able to leverage this accordingly? Are our existing IP laws able to support clean power innovation.

This article aims at providing an overview of the current situation as perceived by the author.

Clean power technology is a general term used to describe products, processes or services that reduce waste and require as few non-renewable resources as possible. The Clean Technology Trade Alliance, a global initiative to drive the expansion of clean power technology, defines it as “A broad base of processes, practices and tools, in any industry that supports a sustainable business approach, including but not limited to: pollution control, resource reduction and management, end of life strategy, waste reduction, energy efficiency, carbon mitigation and profitability”

Enhancing technology transfer towards developing countries has been an integral part of the global climate change regime since the inception of the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC was established in 1992 and entered into force on 21 March 1994. The ultimate objective of the Convention is “to stabilise greenhouse gas concentrations at a level that will prevent dangerous human interference with the climate system.

Many papers, conferences and policy development work in collaboration with WTO, OECD (The Organisation for Economic Cooperation and Development (OECD) provides a forum in which governments can work together to share experiences and seek solutions to common problems. The mission of the OECD is to promote policies that will improve the economic and social well-being of people around the world) and the ICTSD (Founded in 1996, the International Centre for Trade and Sustainable Development (ICTSD) is an independent non-profit organization based in Geneva, Switzerland. ICTSD’s vision is a sustainable world supported by national, regional and international trade policy and frameworks that favour inter- and intra-generation equity. ICTSD aims to ensure that sustainable development is advanced through trade-related policy and agreements) have seen the light guiding initiatives on development and access to clean power technologies.

The role of intellectual property rights (IPRs) in the transfer of climate change technologies has emerged as a particularly contentious issue in the past few years. Clean energy investments in particular as the technologies involved are both research and capital-intensive and investors want to be able to capture the benefits from their technological innovations through strong IPRs. At the same time, IPRs can be perceived as a barrier to the access and transfer of clean energy technologies from developed and emerging economies to developing countries.

The analysis of the impact of IPR regimes on technology innovation and transfer in clean energy technologies is a relatively young field of research in which comprehensive empirical and econometric analyses have only recently been undertaken. Most of the research on how IPRs affect technology transfer in clean energy is inconclusive, partly because information is not readily available and methodologies are not necessarily comparable.

If one looks at the patent landscape an increase in patenting clean energy technology as opposed to fossil fuel energy can be seen. The patenting activity across all clean energy technology appears to be dominated by Japan, US, Germany, Korea, Great Britain and France. Recent OECD work has shown that in the case of African markets very few (about 1%) climate mitigation and adaptation technologies are actually protected under IP regimes. The importance and impact of IPRs on the transfer of technology are likely to be context specific. In remote rural locations of low-income countries for example, the need to expand energy access requires the rapid deployment of well-known renewable energy technologies, for which IPR protection might be less critical.

The policy debate on IPRs and access to clean technologies recently continued at an ICTSD workshop in South Africa. Specific suggestions were the expanded use of TRIPS flexibilities to facilitate access to clean technologies by developing countries by promoting patent pools and funds to finance technology transfer of clean technologies, to facilitate licensing (including compulsory licensing), fast tracking of green patent applications or even excluding certain clean energy technologies from patent protection in developing countries.

It is arguable that the World Trade Organisation agreement on Trade Related Intellectual Property Rights (TRIPS) provides a framework sufficiently flexibility for access to these technologies. Article 7 of TRIPS states the objective to be “The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.” There is no specific limitation on the type of technologies it applies to. Article 66 provides for assistance to developing economies and Article 31 specifically provides for compulsory licenses under given circumstances. Leveraging the access to clean technologies through TRIPS is possible, it is simply a matter of interpretation and application by the various member countries.

The WTO actively cooperates with the OECD in different ways. The WTO Director General regularly participates to the OECD Ministerial Council Meeting (MCM) and OECD Forum. It is my view that through this collaboration the guidelines and policy issues are addresses and disseminated. In April 2013 the OECD published its revised and non-binding policy for investment in clean energy infrastructure. Areas covered by the policy guidance for investment in clean energy infrastructure includes intellectual property and particularly addresses “What steps is the government taking to protect intellectual property rights for clean energy technologies? What steps is the government taking to facilitate patenting of innovations in clean energy? Has it set up a ‘fast-track’ system to reduce the time for patent application?”

Whether it is the drive of WTO, OECD, ICTSD or UNFCCC, many countries have in fact implemented fast tracking of green patent technology applications with the European Patent Office (EPO) and USA being the most sophisticated. In the case of the EPO a new patent classification system was implemented dedicated to climate change mitigation technologies, which enables a continuous and reliable flow of data on selected technologies and their application in the energy field. The EPO uses the features of the patent system to produce structural transparency regarding climate change mitigation technologies, the EPO is delivering a significant contribution in the fight against climate change and sending a strong signal that the Office is ready to assume broader responsibility in a societal context.

On the South African Agenda to comply with the TRIPS agreement and other international, regional and bilateral agreements and stakeholder demands,

South Africa has over the years updated and reformed its IP and patent laws, related legal frameworks and institutions. As a member of WTO South Africa is obliged to mandate a minimum level of patent protection for inventions. Provided that the patentability requirements are met inventions covering clean technologies are patentable. The South African Patents Act does not discriminate between inventions. As it stands clean power is no more advantaged or disadvantaged than any other industry. South Africa is a non-examining country, thus patents are granted relatively quickly and as such an accelerated granting of these type of inventions, may not necessarily lead to any advantages.

South Africa has incorporated basic flexibilities such as compulsory licensing, government use and ex-officio licences and research exemptions into our patent law. The legal regime allows for voluntary licensing, including prohibitions on certain anti-competitive licensing practices.

The South African Patents Act makes provision for compulsory licensing (Articles 55 and 56) as well as licenses of Right (Article 53). Article 53(1) states “At any time after the date of the sealing of a patent, the patentee may apply to the registrar for the patent to be endorsed with the words ‘licences of right’ and where such an application is made the registrar shall, if satisfied that the patentee is not precluded by contract from granting licences under the patent, cause the patent to be endorsed accordingly.”

Article 56(d) allows compulsory licensing if “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.”

As such the legal framework allows for access to technology where it is not “freely” available.

It is a fine balance of protection and freedom to use. Moreover, the patent system provides a legal framework to support technology transfer through licensing agreements, and without patents to protect their products and processes, the innovative technology leaders may be reluctant to engage in technology transfer and associated investments. In South Africa we must foster innovation and growth and therefore have to establish and/or maintain a high quality patent system and enforceability of IPRs. This however, in alignment with TRIPS framework, must not be to the detriment of public interest.

As was the case of HIV/AIDS drugs, governments, industry and activists grappled with the issues that affect access to life-saving medicines, and attempts to find solutions to these problems.

Finding the appropriate balance between encouraging innovation through intellectual property protection and making much needed technology more widely available is not an easy task. Maybe what we need is an IP and climate change agreement that moves beyond the current IP framework provided by TRIPS and other known related IP frameworks.

With respect to the topic of clean power technologies, whether the South African government has an agenda for pushing clean power is debatable. Quite some investment is made on alternative energy sources such as the building of power stations, I am afraid I do not see the same investment in clean fuel energy projects.

Dr Madelein M Kleyn

Patent Attorney

References:

OECD 2012; Haščič et al., 2010; UNEP, EPO, ICTSD, 2010

Patent landscape report published in 2010 by United Nations Environment Programme (UNEP), the European Patent Office (EPO) and the International Centre for Trade and Sustainable Development (ICTSD) announced in joint project on the role of patents in the transfer of climate change mitigation technologies

http://search.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=ENV/EPOC/WPCID/RD(2012)1&docLanguage=En

29 May 2013 – UN workshop on clean technologies – South Africa

Warner/Chappel Music, a music publishing company in the United States of America, claims and exerts copyright in the ubiquitous song “Happy Birthday to You”. It requires that royalty payments should be made to it each and every time this song is sung or used in public. This is a startling proposition as most people probably assume that the song is in the public domain and is free for use by all. An American documentary film maker agrees and is objecting to having to pay royalties to include the song in a film. It has consequently commenced legal proceedings before the US court seeking a declaration that the song is out of copyright and in the public domain. These court proceeding are currently attracting attention world-wide due to their somewhat bizarre nature.

According to the court documents, the song first saw the light of day in the late eighteen hundreds as “Good Morning to You” and its rights were assigned to Clayton Summy, who published it in 1893. No mention is made of the identity of the author of the song. The song was revised three years later. It is claimed that the copyright (if it existed at all) in both the initial version and the revised version expired in 1921 and 1924, respectively, under US copyright law.

By virtue of international copyright treaties and the South African Copyright Act, 1978, provided they can be said to be original, these songs of American origin would probably have been eligible for copyright in South Africa, but their term of protection would have been determined by South African law. The relevant term would have been the life-time of the author plus 50 years after his/her death. While, as has been mentioned, the identity and lifetime of the author(s) are not known, it is probably safe to assume that such author(s) are long since deceased and that the further fifty year period expired a while ago. Mothers giving birthday parties for their children, and indeed the populace as a whole, in South Africa (irrespective of what the position in the USA may be) can thus heave a collective sigh of relief that they will not be acting unlawfully and perhaps be subjected to criminal prosecution when “Happy Birthday” is sung to birthday boys/girls without having obtained prior authorisation and paid royalties for its use. Birthdays can thus be truly happy, or at least unblemished by any unpleasantness over well-meant renditions of the song.

Alas, this happy situation may be about to change and celebrants of birthdays who do not obtain the necessary licence for singing “Happy Birthday” may in future bring the full wrath of the law down upon themselves through their unlawful conduct. Moreover, this situation could prevail in perpetuity.

You may well ask: how is this possible? What folly can bring this about? The law must truly be an ass! That may well be so, but that description can better be visited on the legislature that would pass a law that creates this situation. Particularly when it has been warned time and time again that the legislation in question is ridiculous and entirely without merit but has chosen to ignore all the expert advice that has been given to it.

The culprit is the much vilified Intellectual Property Laws Amendment Bill that has occupied the time and attention of the lawmakers since at least 2008, i.e. for more than five years. It was passed by Parliament last year, but fortunately in one of his more lucid moments the President declined to assent to it and sent it back to Parliament on a technicality. It has once again been passed, unamended, by the House of Assembly and is currently before the Council of Provinces, where it is expected to be passed shortly. After another visit to the Presidential desk, for application of the million Rand signature, it could become law by the end of the year. Unless, of course, the President has an epiphany and sees the light as to the worthlessness of the Bill and consigns it to the trash can where it rightfully belongs.

The Vine Oracle has written or sponsored numerous articles on the shortcomings and non-sensical nature of the Bill. It categorised the surreal outcomes of the Bill as the misadventures of the Mad Hatter in Wonderland in an article published under that title on this blog on 1 November 2011.

One of the effects of the Bill is to protect so-called “traditional” songs and the like as newly contrived species of literary and/or musical works, being categories of works eligible for copyright under existing copyright law. These “traditional” works will thus be sub-categories of the classes of musical and literary works. The general principles of copyright will be applicable to the new sub-categories, but special terms and conditions contained in the amendment will also apply to them. These special provisions include that the communities from which they originate will be considered to have authored and to own the copyright (whether the actual author of the work is known or unknown), and that works in the nature of folklore will be protected even if they have been in existence since time immemorial. Moreover the copyright in these “traditional” works will last forever.

So, in Wonderland a song that can be categorised as “traditional”(as contemplated in the Bill with its often incomprehensible definitions) will be protected by copyright even though it has been around for ever and is presently in the public domain , and looking ahead into the future, that protection will endure until kingdom come. If this does not cause a state of severe shock, consider the implications of a song like “Happy Birthday” qualifying as a “traditional” work. It will be lifted out of the public domain and made the subject of perpetual copyright owned by the community that originated it.

In terms of the manner in which “traditional works” and “community” are defined (the definitions are embarrassingly wide and imprecisely formulated), the song “Happy Birthday” arguably qualifies as a “traditional” song protected by the amendment. Ah, but wait a moment you say, the amendment only purports to deal with protection for South African traditional works and makes the protection of foreign works subject to reciprocity and the issuing of a Ministerial decree! Therefore this proposition can’t be correct. This may be what the legislature in its wisdom thinks, but like so many other aspects of the Bill, it has got it wrong.

The Copyright Act protects foreign musical and literary works as if they were South African works, and to the same extent. This is known as affording “national treatment” to foreign works. South Africa is obliged by international treaties of which it is a member, namely the Berne Convention and the Agreement on Trade Related Aspects of Intellectual Property (the TRIPS Agreement), to afford national treatment to the works of all other member countries

Traditional literary and musical works are, as previously stated, sub-categories of “literary” and “musical” works. Since our law protects foreign literary and musical works in terms of the principle of national treatment, it follows that all sub-categories of these classes are included in that protection. Our legislature will thus in its bounteous generosity grant the full gamut of protection to foreign traditional songs and other works even though those countries do not reciprocate with protection of South African traditional songs and works, for the simple reason that they have not been sufficiently mad-cap to attempt the impossible by seeking to protect traditional works under copyright law.

Warner/Chappel Music can be consoled with the thought that, in the likely event that the US court determines that “Happy Birthday to You” is in the public domain in the United States (this is true of the rest of the world), at least there is a small corner of the planet, at the southern tip of Africa, namely Wonderland, where, thanks to the efforts of the Mad Hatter, the song continues to enjoy copyright that will last forever. It will have to be content with extracting royalties for usage of the song from only South Africans, but this is better than nothing. It will certainly owe a vote of thanks to our legislature. But the South African populace should not feel the same way.

Prof Owen Dean

In the past three days, six articles appeared in six different national newspapers referring to Prof Dean’s landmark inaugural lecture at Stellenbosch University regarding the unconstitutional impact of Government’s proposed ban on tobacco branding on trade mark property rights. Prof Dean was also interviewed on this topic by 702 Talk radio (listen here) and 567 Cape Talk (listen here) on this topic. The full text and podcast of Prof Dean’s inaugural lecture is available here.

Click on an image to enlarge:

CAPE ARGUS – 29 May

CAPE TIMES – 31 May

DIE BURGER – 30 May

PRETORIA NEWS – 31 May

THE MERCURY – 30 May

VOLKSBLAD – 30 May

Prof Dean was interviewed by Kieno Kammies for 567 Cape Talk radio today (31 May 2013) on World No Tobacco Day. Prof Dean discussed why Government’s proposed ban on tobacco branding (by means of plain packaging) is unconstitutional and amounts to brand genocide. The interview relates to his inaugural address and subsequent publications. This interview followed on Prof Dean’s previous interview with 702 Talk Radio (listen here).

You can listen to the interview on Cape Talk radio here.

Description (from Cape Talk):

Prohibiting trademarks amounts to brand genocide
Today is World No Tobacco Day. Every year, the World Health Organisation and partners mark this day, highlighting the health risks associated with tobacco use and advocating for effective policies to reduce tobacco consumption. Tobacco use is the single most preventable cause of death globally and is currently responsible for killing one in 10 adults worldwide. The theme for World No Tobacco Day 2013 is: ban tobacco advertising, promotion and sponsorship. Have you ever paused to wonder what Google’s most valuable asset is? Is it its massive bank of computer hardware, its portfolio of software, or its real estate holdings? No, it is the trademark Google, valued at $44,3 billion and rated as the most valuable in the world. It constitutes nearly a third of the company’s total value. The strength and value of a trademark depends on the extent of its use. If such use is discontinued, the trademark will wither and die. Think of Studebaker for cars, Instamatic for cameras, Cavalla for cigarettes, and Ipana for toothpaste. They were all famous trademarks, but have now faded away. If trademarks are not used, they die. Valuable items of property are destroyed in this manner. This same scenario is about to unfold before our very eyes. The World Health Organisation has instigated a global war against smoking and tobacco products. Several countries have banned advertising and the promotion of tobacco products and brands. This has severely dented the usage of tobacco trademarks. The war has now entered a new phase and a second offensive has been launched with Australia at the forefront, and other countries, including South Africa, following suit.
Guest: Prof. Owen Dean
Organisation: Stellenbosch University
Position: Professor of Intellectual Property Law, Faculty of Law

Prof Dean was interviewed by Bruce Whitfield on 702 Talk Radio for “The Money Show”. The topic of the interview was

Five reasons: Why prohibiting the use of trademarks on tobacco products makes no sense.

This interview followed on the topic of Prof Dean’s inaugural address at Stellenbosch University.

You can listen to the radio interview here:

We all know GOOGLE. It is a facility that enables us to source information on the Internet. The word GOOGLE indicates the identity of a particular service provider and distinguishes those services from similar services rendered by others, such as YAHOO. Each service provider designates its particular services by means of such a mark. The word GOOGLE is a brand or trade mark fulfilling its role as a “badge of origin”. It is exceptionally well-known, worldwide. This renown or repute has been brought about by extensive public exposure of the mark to the public through use of it in advertising, on banners and on product packaging etc. It is a household word.

GOOGLE is one of the largest and most successful multi-national companies. Have you ever paused to wonder what its most valuable asset is? Is it the massive bank of computer hardware, its portfolio of software, or its real estate holdings? No, it is the trade mark GOOGLE. This trade mark has been valued at $44.3 billion and is rated as the most valuable trade mark in the world. It constitutes nearly a third of the company’s total value.

A trade mark is created and sustained by being used in trading activities, i.e. in advertising, on labels etc. The strength and value of a trade mark is dependant on the extent of its use. If such use is discontinued, the trade mark will wither and die. Think of trade marks like STUDEBAKER for cars, INSTAMATIC for cameras, CAVALLA of cigarettes, IPANA for tooth paste. They were all famous in their day but they have now been extinguished on account of non-use. Like flares shot into the night sky, they have burned brightly for a while but have faded away to nothing. Trade marks die if they are not used. Valuable items of property are destroyed in this manner.

This scenario is about to unfold before our very eyes.

A global war has broken out against smoking and tobacco products. Instigated by the World Health Organization. Countries, South Africa included, have banned advertising and promotion of tobacco products and brands. This has severely dented the usage of tobacco trade marks. The war has now entered a new phase and a second offensive has been launched with Australia at the forefront. Other countries are following it into battle and the South African government has indicated that it will soon take up arms and join them.

The new offensive attacks the use of brands on the packaging of tobacco products, by means of legislation banning pictorial trade marks. The Australian so-called “plain packaging” legislation allows the use of only word trade marks, in plain print of very small size, against a faun coloured background, to appear, along with anti-smoking wording and lurid pictures of potential damage to health, on the product packaging. This legislation sounds the death knell of all logo and label trade marks, most of which are registered separately under trade marks legislation. Such trade marks are, by virtue of their enforced discontinuation of use, destroyed, literally by the stroke of a pen. Valuable items of property are summarily obliterated. This form of mass extermination amounts to brand genocide.

The question may be asked whether it is equitable and reasonable that valuable items of intellectual property should be destroyed in this manner in pursuit of the goal of curtailing smoking. Is diminishing the ability of the public to distinguish the cigarettes produced by one company from those produced by another company, in other words curtailing the function of a trade mark as a “badge of origin”, likely to stop new smokers from entering the market? Is this destruction of property by the state lawful?

Major international tobacco companies brought this question before the Australian Supreme Court in a challenge to the constitutional validity of the plain packaging legislation. It was argued that the legislation infringed against the clause of the Australian constitution that protects private property. The court conceded that the prevention of the use of trade marks amounted to the “taking” of property from the trade mark owners but found that such action did not give rise to the “acquisition” of that property by the State as contemplated by the property clause. It therefore held the legislation to be constitutionally valid.

The decision of the Australian court precipitated victory celebrations around the world, including in South Africa, as though VE Day had arrived. The assumption was made that if plain packaging legislation could survive a constitutional challenge in Australia, it necessarily follows that the same will apply in other countries. Following this decision the South African Minister of Health glibly stated that this country will emulate the Australian legislation and a draft bill to this effect is expected any day.

Is our Minister being too gung ho and jumping to conclusions too hastily? The property clause in our constitution differs significantly from the equivalent clause of the Australian constitution. Our property clause provides essentially that no law can permit an arbitrary deprivation of property and that, moreover, if a deprivation of property amounts to expropriation, reasonable compensation must be paid. Compared to the Australian constitution, the emphasis is on the deprivation of property rather than on its acquisition by the state.

There can be little doubt that preventing trade marks from being used, and thereby destroying them, amounts to a deprivation of property. The crucial question is whether, in the circumstances of the matter, the deprivation is arbitrary as contemplated by the property clause. “Arbitrary” in this context has been interpreted to mean that there is no sufficient correlation between the objective sought to be achieved and the deprivation of the property. It is felt that the mere presence of a logo, as distinct from a word trade mark in plain print (which is allowed), on a cigarette pack is unlikely to be the root cause of a non-smoker deciding to take up smoking. The destruction of a logo trade mark is thus arbitrary in the context.

There is legal authority for the proposition that the total destruction or nullification of property, which does not entail the passing of ownership of it to the state, can amount to expropriation of that property. This is certainly the situation that prevails in the present instance. Is the Minister willing to pay compensation to the tune of millions of Rand for every trade mark destroyed? Brand genocide could turn out to be an expensive exercise!

It therefore appears that, if the Minister goes ahead with his proclaimed intention of cloning the Australian plain packaging legislation, he is likely to encounter a strong challenge that his legislation is unconstitutional. The battle won against tobacco trade marks in Australia is thus only of local significance and a fresh battle, with a different outcome, may be looming in South Africa.

The moral of the story is that, if the Minister wants to curtail smoking, and really believes that this is achievable by means of legislation, he should look elsewhere than at trade marks (which are but irrelevant pawns in the game) in order to achieve his objective.

Prof. OH Dean

(Based on his inaugural lecture delivered at Stellenbosch University on 21 May 2013)

A NOTE FROM THE VineOracle

As Prof Dean points out, GOOGLE is the most valuable trade mark (or trademark for our American readers) in the world in 2013. This fact is established by the authority on brand valuation, namely BrandFinance in a report on the global value of trade marks, commissioned by Forbes. However, the trade mark value of a company must be distinguished from its brand value. Brand value refers to the commercial value of the company’s presence in trade at the moment and considers additional factors besides the value of the trade mark to calculate the dominance of a particular brand. Depending on which factors (other than the established trade mark value) are included in the brand valuation and the method of calculation (which are proprietary and includes subjective factors) the brand valuation may differ depending on the institution that produced the results. Conversely, the trade mark value for the global rankings is calculated according to the royalty relief valuation (the present value of the estimated future cash flows attributable to the brand, based on what a company without a trademark would have to pay to license it through a third-party broker) and focuses exclusively on the monetary value of the trade mark (or portfolio of marks) itself.

The difference between brand and trade mark valuation is clearly illustrated in the case of GOOGLE when considering the divergent outcomes of two separate brand valuation rankings for 2013.

According to Millward Brown’s BrandZ Top 100 listing (see infographic below), which considers a combination of the trade mark/financial value and the brand contribution (based on the consumer viewpoint) calculated as a dollar amount, GOOGLE ranks as the second most valuable brand ($113,669 m).

According to Brand Finance (who produced separate trade mark and brand value rankings), which uses a discounted cash flow technique to discount estimated future royalties to arrive at a net present value of the trademark and associated intellectual property (the brand value), GOOGLE ranks as the third most valuable brand ($52,132 m).

On 21 May 2013, Prof Owen Dean delivered his inaugural address at Stellenbosch University to a select audience of 130 academic peers, University officials and delegates. The topic of Prof Dean’s address was “Deprivation of Trade Marks through State Interference in their Usage”.

The full text of Prof Dean’s article is available here.

The illustrations used during the lecture is available here.

You can listen to the lecture here. (NOTE to on-campus users: Open Inetkey to listen to the recording).