Author Archives: DMKisch

Your business risk in selling products to a consumer

Articles imagesThe Consumer Protection Act 68 of 2008 (CPA) came into effect on 1 April 2011. A concise definition of consumers are persons to whom goods or services are marketed, who have entered into transactions with suppliers, users of particular goods or recipients/beneficiaries of services and if the consumer is a juristic person then it will be considered a consumer if it has a turnover or asset value of less than R2 million.

Section 55, states that a consumer has the right to receive goods that are reasonably suitable for the purposes for which they are intended, must be of good quality, in good working order and free of any defects.

The above section brings about the implied warranty in terms of section 56 wherein a consumer can within six months after the delivery of any goods return the goods to the supplier, without penalty and at the supplier’s risk and expense. If the goods fail to satisfy the requirements and standards contemplated in section 55, the supplier must, at the direction of the consumer, either repair or replace the failed, unsafe or defective goods or refund to the consumer the price paid by the consumer, for the goods.

It however is the latter part of section 55 regarding products being free of any defects that has made a substantial change to our common law in terms of product liability. In terms of the common law, a seller of goods is strictly liable to a purchaser for any latent defect in goods (ie. a defect which would not be apparent upon inspection by an ordinary person and which makes the goods unfit, or partially unfit, for the purpose for which they are intended to be used).

In terms of the common law, a seller of goods is strictly liable to a purchaser for any latent defect in goods (ie. a defect which would not be apparent upon inspection by an ordinary person and which makes the goods unfit, or partially unfit, for the purpose for which they are intended to be used).

Section 61 of the CPA has now changed the common law position. It provides that irrespective of negligence each producer, importer, distributor or retailer of a particular product is strictly liable for any harm caused wholly or partly as a consequence of:

  • supplying any unsafe goods;
  • had a product failure, defect or hazard in any goods; or
  • the consumer was provided with inadequate instructions or warnings in relation to any hazard arising from or associated with the use of the product.

Each producer, importer, distributor and retailer of the product is jointly and severally liable, meaning that a person who suffers harm from a defective product can bring a claim against any person in this supply chain.

Therefore a consumer will no longer be required to prove that the manufacturer or other person in the supply chain acted negligently in manufacturing or supplying the goods in question.

This is risky for any business, practising as a retailer to end consumers of a product. It is imperative that goods purchased are inspected prior to the resale to consumers. Furthermore, such businesses should ensure that they have well drafted indemnity clauses in their agreements with their suppliers in which their liability is limited by the supplier agreeing to make good any loss or consequential damages that it may incur.

Please do not hesitate to contact our Commercial Department at kevind@kisch-ip.com or merciaf@kisch-ip.com or 011 324 3025/33 with any queries, or for further information on the Consumer Protection Act, or if you require our assistance in drafting or amending your indemnity agreement.

For more information, please contact:

Anola NaidooANOLA NAIDOO
Candidate Attorney
Department: Commercial
Tel: +27 11 324 3060
Email: anolan@kisch-ip.com

Author: Anola Naidoo

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

Intent to use, or to abuse? Improper trade mark management

Articles imagesThe facts and circumstances the Supreme Court of Appeal (SCA) was seized with in Etraction (Pty) Ltd v Tyrecor (Pty) Ltd 2015 ZASCA 78 (28 May 2015), are an object lesson for trade mark proprietors, in how not to manage their affairs.

It was common cause that the Appellant, Etraction (Pty) Limited (“Etraction”), had adopted the mark INFINITY in 1995 for its motor vehicle wheel rim products and had established a business and reputation in wheel rim products under that mark.  Until 2008, it had however taken no steps to register this trade mark in respect of wheel rims, or any other related products, although it had registered other trade marks for products it dealt in.

In the interim, in 2006 the Respondent Tyrecor (Pty) Limited’s predecessor in business Falck, commenced importing and selling tyres bearing the INFINITY mark.  This mark had been used internationally by the Al Dobowi Group, following a launch of its INFINITY tyres in Germany in that year.  The Respondent Tyrecor (Pty) Ltd, in which the Al Debowi Group is an indirect shareholder, succeeded in 2008 to the Falck business of importation and distribution of INFINITY tyres.

The Court found that the evidence showed that there was awareness, from the year 2006, of the sale of INFINITY tyres in South Africa – and that the Appellant Etraction was aware of this inter alia because it was an exhibitor, together with the then importer and distributor Falck, at the Tyre Expo Africa 2006 exhibition where the latter was promoting its INFINITY tyres.

Etraction took no steps in 2006 or thereafter to object to Falck’s importation and distribution of tyres under the INFINITY trade mark. Had Etraction objected to Falck’s use in 2006, the objection may then have been warranted. It had a reputation in the mark INFINITY in respect of motor vehicle wheel rims, and might then with some justification have contended that use on tyres would be likely to be associated with the Etraction wheel rim business.

Instead, Etraction sat idly by while Falck from 2006 onwards, and Tyrecor from 2008 onwards, increased distribution and advertising of INFINITY tyres.  Moreover, the Appellants appear on the basis of the following facts cited in the SCA judgement, progressively to have acquiesced in the Respondent Tyrecor obtaining vested rights in its business of promoting and distributing tyres under the INFINITY mark :

  • On 17 and 18 March 2008 Tyrecor addressed e-mails to Etraction offering to supply it with INFINITY tyres. The e-mails enclosed photographs of the tyres that Tyrecor was offering to supply and set out the prices at which it was offering the tyres. On 26 March 2008, Tyrecor sent an e-mail recording a meeting its representative had with the Appellants representative.  It read as follows:

    “I would once again like to thank you for affording me the time to meet with both of you today to introduce our products. We are very proud of the INFINITY brand and believe that we will be able to add value to your organization.
    I sincerely hope that we can establish a beneficial relationship in the near future. Please do not hesitate to contact me should you require any additional information”.
  • Within three weeks after that meeting Etraction applied for registration of the mark INFINITY in relation not only to wheel rims for vehicles, but also to tyres.  It had not, however, conveyed to Tyrecor either at the aforesaid March 2008 meeting, or when shortly thereafter filing its application to register the mark INFINITY that it objected to Tyrecor using the mark.  Nor did it give any notice of its application to Tyrecor until it had secured registration of the mark, which occurred on 19 May 2011.  During the three years between the date of its application and registration, Tyrecor continued to trade and built up its business in the sale of INIFINITY tyres without any inkling that Etraction objected thereto, or that it intended itself to enter the market for tyres under that brand name.  In 2011, Tyrecor’s turnover from this trade exceeded R100 million.

On the basis of these facts and the Appellant’s evidently supine and acquiescing conduct, the SCA confirmed the partial expungement by the Court a quo of the Appellants registration no. 2008/08612, removing “tyres” from the specification, and in so doing upheld the dismissal of Appellant’s claim for infringement by Tyrecor. The basis in law for this finding, which involved a consideration of the meaning of bona fides for two separate and distinct purposes, was as follows:

Trade Mark infringement and the defence of “prior use”

Etraction, on securing registration in May 2011 of its INFINITY mark in class 12 covering both wheel rims and tyres, instituted infringement proceedings against Tyrecor.

Tyrecor raised a defence under Section 36(1) of the Trade Marks Act.  This section precludes a trade mark proprietor from interfering or restraining a third party from using the same (or confusingly similar mark), if that third party had made continuous and bona fide use of the mark in question from a date prior to the registrant’s first use of the mark, or prior to its registration thereof, whichever was the earlier.

The SCA held on the facts summarized above that Tyrecor (initially through its predecessor in business Falck and thereafter itself since 2008) had enjoyed continuous and bona fide use of the INFINITY mark in respect of tyres from a date prior to Etraction’s application (i.e. in 2008) to register the mark in respect of inter alia tyres, and thus that the provisions of Section 36(1) applied.

Etraction’s contention that Tyrecor did not have rights arising from its distribution of INFINITY tyres (i.e. in that it was itself not the manufacturer that had applied the mark to the tyres, and was thus not the proprietor of the mark), was dismissed on the basis that Tyrecor had established user rights in its business in the distribution and promotion of INFINITY tyres – and more specifically that its interest in a business in goods under that mark, was a protectable interest for purposes of Section 36(1).

Intent to use, or to abuse?

The second context in which the meaning of bona fides was considered on appeal, was in relation to Etraction’s own intention to use the INFINITY mark in respect of tyres. On the facts, the court found that Etraction had never had any bona fide intention to use the mark INFINITY on tyres, holding in this connection that its conduct in obtaining a registration covering tyres was for an ulterior purpose, and that it was carried out surreptiously. It accordingly confirmed that its registration was liable partially to be expunged by the removal of tyres from its specification.

The judgment canvasses in detail Etraction’s failure in 2006, when it learnt of Falck’s commencement of the distribution of INFINITY tyres, to object to that distribution – and the adverse inferences to be drawn from that failure to object. This finding begs the question:  had Etraction objected to Falck commencing distribution of INFINITY branded tyres in 2006, would continued use have been “bona fide” use of the INFINITY mark for purposes of a defence under Section 36(1)?

The SCA in making its finding on the issue of Etraction’s bona fides, cited with approval the judgment in Rembrandt Fabrikante en Handelaars (Edms) Bpk v Gulf Oil Corporation [1], wherein it was held that:

“…an ulterior purpose, unassociated with a genuine intention of pursuing the object for which the Act allows the registration of a trade mark and protects its use, cannot pass as a bona fide user”;

and also the judgment of Harms JA in AM Moolla Group Ltd v The Gap Inc [2], wherein it is stated:

“For present purposes, it suffices to say that “bona fide” user means a user by the proprietor of his registered trade mark in connection with the particular goods in respect of which it is registered with the object or intention primarily of protecting, facilitating, and furthering his trading in such goods, and not for some other, ulterior object”.

Similarly, the court referred to the European Court of Justice case of Ansul, where it was stated that: “When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real…”.

Conclusion

The essence of a trade mark is its capacity to distinguish one trader’s goods and services, from those of competing traders.  This fundamental characteristic is the basis of the well-known dictum in Kinetex Africa (Pty) Ltd v Coverite (Pty) Ltd 1967(3) SA 307(10) , citing Kerr On Injunctions – “the life of a trade mark depends on the promptitude with which it is vindicated”.

The facts in the Etraction/Tyrecor matter illustrate what occurs when rights in a trade mark are not promptly vindicated – and that failure to assert rights as soon as third party conduct impinges upon them, allows such third parties to acquire vested rights.  It shows further that obtaining a trade mark registration, while simultaneously acquiescing in the establishment of competing third party rights, will be of no avail, and will be regarded by our Courts as sharp practice.

[1] 1963 (3) SA 341 (A) at 351 C-F

[2] (123/2004) [2005] ZASCA 72; [2005] 4 All SA 245 (SCA) at para 42

For more information, please contact:

Zama ButheleziZAMA BUTHELEZI
Attorney
Department: Trade Mark
Tel: +27 11 324 3027
Email: zamab@kisch-ip.com

Author: Zama Buthelezi

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

Can you rely on your suretyship in business rescue?

Articles imagesSo you think it’s safe to offer credit to a company or close corporation just because you have a suretyship in place? The Companies Act 71 of 2008 (“the Act”) and recent case law may change your thinking.

Once business rescue commences, the company enjoys a personal moratorium in terms of section 133(3) of the Act which precludes a creditor from claiming against a company, including in respect of suretyships which the company stood surety for, as this action is suspended for the duration of business rescue. Should a creditor wish to retrieve the company debt, the creditor would need to enforce a suretyship against those who stood as surety/ies for the company debt.

It is important to note that while a creditor’s claim against the company is suspended, so is the legal time limit to institute legal proceedings there for, however, prescription is applicable when enforcing the suretyship and therefore it is imperative that a creditor knows when the outstanding debt became due and payable in order to avoid the prescription of the creditor’s debt.

When a business rescue plan fails to provide for suretyships, the common law position becomes applicable. The common law position is that the obligation of a surety is accessory in nature, thus the extinction of the principal obligation extinguishes the obligation of the company. It is this position that questions the enforceability of a suretyship against the sureties of a debtor company. The two recent court judgments, Turning Fork (Pty) Ltd t/a Balanced Audio v Greed and Another 2014 (4) SA 521 (WCC) and New Port Finance Company (Pty) Ltd v Nedbank Ltd (30/2014) ZASCA 210 are vital to understanding the enforceability of a suretyship.

From the above it is generally accepted that the principal debt is discharged by an agreement between the principal debtor and the creditor or by the release of the principal debtor, the surety is released unless the deed of suretyship provides otherwise.

Some light can be found in section 155(9), in that a compromise does not affect the liability of any person who is a surety of the company and thus the rights of a surety are preserved. Therefore, you may proceed against a surety for the debts of a company in business rescue at the commencement of the business rescue proceedings when the company is enjoying the protection of the personal moratorium, which protection the surety cannot invoke. However, when the business rescue plan is silent on the creditor’s right against such surety, you may not proceed against the surety for the debts of the company which is in business rescue after such plan is adopted and which provides for the discharge of the debt by agreement between the principal debtor and the creditor or release of such company’s obligations to the creditor.

So what should you do? A creditor must ensure that when entering into a suretyship to recover the debts incurred by the company, that the surety relinquishes the benefit of excussion (the right to require the creditor to claim from the principal debtor before claiming against the surety) and agrees to pay the debt of the company should the company enter into business rescue regardless of what is stipulated in the business rescue plan. Furthermore, creditors of the company in debt must ensure that they attend the meeting of creditors when called by the business rescue practitioner. Creditors must furthermore ensure that at the meeting, the business rescue plan takes into account suretyships and the ability for creditors to enforce same regardless of the fact that the company in debt is in business rescue.

Please do not hesitate to contact our Commercial Department at kevind@kisch-ip.com or merciaf@kisch-ip.com or 011 324 3025/33 with any queries, or for further information on suretyships or business rescue, or if you require our assistance in drafting or amending your suretyship agreement.

For more information, please contact:

Anola NaidooANOLA NAIDOO
Candidate Attorney
Department: Commercial
Tel: +27 11 324 3060
Email: anolan@kisch-ip.com

Author: Anola Naidoo

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

Protection of clothing IP

Articles imagesA number of businesses in South Africa are related, directly or indirectly, to the design and manufacture of clothing, garments, apparel and fashion accessories. For these companies the issue of protection of Intellectual Property presents a number of challenges that other manufacturing sectors do not face.

Clothing design and manufacture is a rapid process, with even small labels being expected to launch relatively large product ranges on a seasonal basis. This makes blanket protection of products prohibitively expensive and places severe constraints on the forms of IP which can be used. For instance, clothing design generally occurs in a space where mass manufacture limits the available copyright that can be applied. The clothing industry is also a relatively mature technological space, which significantly limits the scope of protection which can be obtained. By the same token, however, a small difference from the prior art (such as a single distinguishing feature) can form the basis for a successful application.

With these issues in mind, there are still a number of avenues open for protection of IP in the clothing and fashion industries. Where a technological innovation is present that sufficiently differentiates an invention from the prior art, protection by means of patent may be used. Designers or manufacturers seeking to protect only the visual aspects of their products may instead rely on registered designs and trademarks.

Registered designs, like patents, are territorial in nature and require novelty. Here this means that the design itself must not form part of the state of the art prior to registration or release. Registered designs are also required to be original or not commonplace in the art, both of which can be broadly understood as meaning that the design must be the original work of the applicant.

Once granted, registered designs can provide a number of advantages for designers seeking to protect a product; as they are relatively cheap to lodge and can be rapidly used to provide protection. In addition, an applicant can register a design up to six months after it is released to the public. Registered designs can also be applied for a number of products common to the clothing industry; including the garments themselves, fabric patterns, and logos or visual designs applied to garments. Finally, registered designs can be applied to sets of items in certain circumstances.

While registered designs can protect the product itself, trademarks allow a designer or manufacturer to protect their brand. Here the purpose of a trademark is to protect a ‘mark’ (defined as any sign capable of graphical representation) for the purpose of distinguishing goods and services from one another. Trademarks are therefore required to be distinctive in relation to similar goods and services, and must be either in use or intended for use as a trademark.

Trademarks, once registered, have significant advantages over other forms of IP protection. They apply to the brand rather than a given product, and can serve to ward off competing services which would seek to capitalise on the brand’s reputation by means of mimicry or misrepresentation. A trademark, once filed, can also (theoretically) last for as long as it is renewed. Finally, trademarks may be applied concurrently with registered designs where logos are concerned. However, the registration of trademarks has significant time and cost implications.

Given the short lifespan of individual clothing designs when compared to the long lifespan of a brand or label, many existing fashion houses have chosen to simply forgo design protection in favour of trademarks. A careful mixture of approaches may still, however, yield the best results when judiciously applied. Patents may be considered for specific cases where critical technology is concerned, while registered designs may be applied more broadly to individual designs or sets of similar designs. Trademarks, in turn, may be used to protect the brand the products reside in, and may be augmented by other measures such as defensive company name registration.

In deciding the right mix of protection to use, the designer or owner should carefully weigh the time and cost of protection against the benefits it provides on a case-by-case basis.

For more information, please contact:

THOMAS GERARD SCHMIDT
Candidate Attorney
Department: Patents
Tel: +27 11 324 3031
Email: thomass@kisch-ip.com

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

 

Mobile apps – how do you protect them?

Mobile_Apps

During the last few years, there has been a staggering growth in the number of mobile applications (‘apps’) that have become available for download in leading app stores, and there is no sign of this trend slowing down anytime soon. The question that all developers face is whether it is possible to protect the underlying concept(s) of my newly developed app, or any other computer program for that matter and if so, how do I go about protecting same?

In terms of South African copyright law, computer programs (including apps) as such qualify for copyright protection. Therefore, as soon as an original computer program is reduced to a material form, it is automatically protected by way of copyright. Unfortunately, copyright protection only extends to the particular embodiment of the source code and layout on the screen of a mobile device, and will not afford any protection against copying of the concept(s) on which the computer program is based. The result is that in very few instances copyright would afford a computer program sufficient protection.

So, if it turns out that copyright does not provide an app with the desired degree of protection, is there another option that developers could look into in order to protect their apps? The answer to this question could be a patent. According to South African patent law, any invention is patentable in general if it is new, involves an inventive step and is useful in trade, industry and agriculture. Although our Patents Act (‘the Act’) does not define what an invention is, it at least provides a list of items that are not regarded as patentable. One of the listed items is a “program for a computer”. Fortunately, the Act states further that the list of items is unpatentable “only to the extent to which a patent or an application for a patent relates to that thing as such”. The reason for listing computer programs as such might well be for the fact that they are the subject of copyright protection.

Our South African courts have unfortunately not yet been asked to adjudicate on the patentability of computer-implemented inventions. However, the European Patent Convention, which deals with the granting of European patents, includes a similar exclusion relating to computer programs, and there has been a significant amount of case law in Europe in this regard. The approach that the European Patent Office follows, and which should be followed in South Africa, is that computer-implemented inventions, as with all inventions, are patentable only if they have technical character, are new and involve an inventive technical contribution to the prior art.

Therefore, once a new app has been developed, it is advisable to approach and obtain the inputs of a patent attorney as soon as possible and before the app is disclosed to the public. Otherwise, if it later turns out that the app is of a technical character and has a unique functionality and no patent application was filed in respect of same, the developer would not be in a position to prevent others from developing another app performing a similar function.

For more information, please contact:

Werner van der MerweWERNER VAN DER MERWE
Associate Attorney
Department: Patents
Tel: +27 11 324 3073
Email: wernerv@kisch-ip.com

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

#facebook #twitter #brandprotection

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By Ruan Dickinson

1.49 billion… that is the massive number of active users on Facebook which is the world’s largest social media platform. In second place we have Twitter with an average of 316 million active users per month. Just to put it in perspective that means that an average of 21% of the entire population visits Facebook on a monthly basis. Facebook and Twitter falls within the top brands of the world and have invested countless hours and money to protect and grow their businesses to what they are today.
But what does this unthinkable numbers of active users even mean to social media giants like Facebook and Twitter? Well let me state the obvious first, it means money, power, control and an endless list of opportunities. However, (and I think you know what is coming)… with great power comes great responsibility, especially from an intellectual property perspective. These companies have to manage a massive amount of intellectual property matters daily.

As for the hundreds of millions of people permanently on these websites it creates an excellent platform to advertise your brand and to get your name out there. As such, countless businesses create profiles and post adverts on these social media platforms to attract custom and to build their reputation. However, because of the nature of the publicity, it can also be extremely harmful to your business if someone is using your name, logo or trade mark in such a way that it may confuse others. As this sort of infringement is relatively new, people are unaware of what steps to follow and of the severe damage that it can be caused to their businesses.

Therefore, if you come across any potential infringement to your intellectual property it is best to act immediately so that the reputation of your business remains unharmed. When faced with such a matter there are certain steps to follow. Firstly, when you are unsure whether or not infringement is taking place it is best to seek legal advice. Once it is established that your intellectual property rights are being infringed, you may want to consider approaching the other side directly as to lodge a complaint through Facebook as the issue might get easily resolved without going through a time consuming dispute. When the matter is being handled through Facebook or Twitter you will need to provide them with information including your company name, account, trade mark(s), trade mark registration number(s), office of registration, goods or services covered by the registration and the username of the reported account. Furthermore, you will be required to submit a declaration incorporating a description of how you believe your intellectual property rights are violated.

Once your claim has been submitted with Facebook or Twitter they will review the alleged infringing content and may take certain actions against the alleged infringing party including but not limited to, removing the infringing content, suspending the account and allowing the infringing party time to take down the reported content. The social media companies will also provide the infringing party with your full details so that they can contact you directly should they be of the view that the content is not of an infringing nature. When you are on the receiving end of a warning from Facebook or Twitter due to a claim of alleged infringement the same as above apply. You will be provided with the full contact details of the other side to counter their application which removed your content from the platform should you feel that the content was not of an infringing nature.

Due to more than 30 billion pieces of content being posted on Facebook per month and over 500 million tweets being posted on Twitter per day it is completely impossible to stop others from posting content on these platforms which are infringing your intellectual property rights and simultaneously confusing the market in respect of your business. However, a good tool to use to minimise the risk of any possible confusion is to fully complete your profile on these platforms by providing your company’s full contact details, website address, biography, all trade marks and posting regular updates on your company’s profile. By doing the latter all the people viewing your profile on Facebook or Twitter will be able to clearly distinguish between the “real business” and any infringing pieces of content being loaded onto other profiles.

Facebook and Twitter have created new challenges when it comes to intellectual property infringement and the way we deal with it. When faced with these challenges it is best to seek immediate legal advice to protect what is rightfully yours and prevent others from harming your brand in the virtual world.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

The Trademark Clearing House

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By Vicky Stilwell

The Trademark Clearing House (TMCH) is a centralised repository service for the validation and protection of trade marks. The TMCH is operated by ICANN, which is in the process of launching some 1900 new generic top level domains (gTLD’s). The gTLD’s that have been launched to date include .world, .business, .network, .software, .auction, .property and .investments, to name a few. A bank, for example, may want to register its trade mark under the gTLD .bank. There may also be several additional relevant gTLD’s, such as .finance and .loan.
The TMCH provides a unique central process for the validation of trade marks for strategic defensive purposes. The main advantage is that it affords trade mark owners, who have validated their trade marks with the TMCH, the opportunity to register domain names, matching their trade marks, within the “sunrise period” following the launch of each new gTLD, before such domain names are made available for registration by the general public. In addition, if a trade mark owner has validated his trade mark with the TMCH he will be notified of the launch dates of all new gTLD’s as such launch dates are announced by ICANN.

The TMCH also notifies the owners of validated trade marks if any third party registers, or attempts to register, a domain name matching their validated trade mark. This is of great assistance to trade mark owners in preventing so-called “cybersquatting”.
A trade mark owner that wishes to enforce his rights and take action in respect of a domain name that has been registered by a third party may file a complaint in terms of ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP) and rules or its Uniform Rapid Suspension System (URS) rules, the latter of which is a lower cost, faster path to relief which can be used by trade mark owners in the most clear-cut cases of infringement.
A large number of new gTLD’s have already been launched, and there are many still to come. It is therefore important for brand holders to validate their trade marks with the TMCH as soon as possible to enable them to enforce their trade mark rights and to register domain names with extensions that are relevant to their businesses during the sunrise periods of the relevant gTLD’s. The TMCH validation process allows for the validation of trade marks for a 1, 3 or 5 year period.

In the event that you require any further information regarding validation of trade marks with the TMCH, the new gTLD’s that have, or are still to be, launched, or the domain name dispute resolution process, please contact Vicky Stilwell at vickys@dmkisch.com or Robin Richardson at robinr@dmkisch.com.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

The pitfalls of joint ownership in IP

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By Thomas Schmidt

The Montana Meth Project, an American non-profit organisation, infamously popularised the phrase “meth: not even once” as part of a media campaign to raise awareness about methamphetamine use. In Intellectual Property law, replacing the word “meth” with “joint ownership” would admirably encapsulate the feelings of some attorneys on this matter.

Joint ownership of IP occurs wherever two or more applicants cannot separate their contributions to a given piece of IP, and so apply for protection of the same subject matter together. In South African Law joint ownership is recognised in Patents, Design Registrations, Copyright and Plant Breeder’s rights. Almost without exception, the existence of other joint owners severely restricts the ability of an applicant to develop, use, promote and generally enjoy the fruits of the jointly owned IP.

A representative can be found in the form of joint ownership of patents. In terms of the South African Patents Act 57 of 1978, joint applicants for a patent are deemed to have ownership of it in equal, undivided shares where no other agreement to the contrary is present. Further, consent of all joint patentees is required to make, use, exercise, sell, grant licences, assign his interests in the patent, or institute any proceedings related to the patent. In effect, each joint patentee is granted a negative right against the other/s over any matter not directly related to the maintenance of the patent. This extends to the court, where joint patentees are allowed to institute proceedings for infringement on their own. Even here, however, they must give notice to every other joint patentee. In the event of disputes between joint applicants, any applicant may apply to the Commissioner of Patents to decide the matter in dispute.

Taken together, the above is a recipe for strife. Even where good intentions are evident on both sides (a state of affairs which money tends to dilute), the inability of one joint patentee to act without the other can paralyse any attempts to properly exploit the invention. Short of a truly comprehensive agreement, there will always be cases where one of the joint inventors is unwilling or unable to provide consent. And when one obstreperous partner can effectively veto any aspect of the commercialisation of the patent, the potential for brinksmanship becomes exceedingly high.

In order to avoid the pitfalls of joint ownership, care should be given to the legal relationships governing the people involved in creating the IP. These legal relationships can be managed by putting agreements in place which set out clear rules for dealing with the IP, and which provide mechanisms for resolving potential conflict between the joint owners. Several options are available to joint IP owners in this regard. Joint patentees may retain their joint ownership but conclude a Joint Ownership Agreement in terms of which one party is authorised to make, use, exercise, sell, grant licences, assign his interests in the patent, or institute proceedings related to the patent independently of the other, or they may assign the IP to a separate IP holding company in which both parties hold shares and have a board of directors manage the IP. Alternatively, the parties may wish to deliberately re-separate the IP by assignment thereof from one party to the other party or by both parties to a third party or by cross-licensing. It is good practice to have all parties involved sign Non-Disclosure Agreements in order to preserve the novelty of inventions, and contracts of employment should always include clauses assigning the rights arising from IP from the employee to the employer so as to ensure that any IP that is created is capable of being exploited.

The above-mentioned approaches all, of course, involve a certain amount of care and investment on the part of the stakeholders. This investment, however, is amply rewarded in the form of regularising of relations and de-escalation of conflicts that arise from issues of ownership.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.