Enforcing IP rights in Africa

This chapter considers some of the key issues for rights holders to consider when enforcing their rights in Africa.

Substantive examination

The past few years have seen an increase in the number of patent applications filed in many African countries or with regional organisations. With the increase in patent filings, the debate over the issue of substantive examination has intensified. South Africa is considering whether there is a need for a workable examination system to replace or complement its existing registration system. The South African draft IP Policy has been hotly debated, with various stakeholders providing comments and criticisms. Thus, this is an opportune time to look at the substantive examination of patent applications not only in South Africa, but also in other African countries.

Africa comprises both national and regional filing systems for patent and utility model applications. The two regional organisations in Africa are the African Regional Intellectual Property Organisation (ARIPO) and the African Intellectual Property Organisation (OAPI).

Patent applications filed at the ARIPO Patent Office are subject to both formal and substantive examination. The national laws of some ARIPO member countries (eg, Botswana, Ghana, Kenya, Lesotho, Uganda and Gambia) provide for substantive examination of both patent applications and utility model applications. Accordingly, applications filed in these countries directly will also be subject to substantive examination. Due to a lack of technical capacity within the countries themselves, examination is usually conducted by the ARIPO examiners.

In contrast, applications filed at the OAPI Patent Office undergo no substantive examination and a patent will be granted if it meets the formality requirements. It is not possible to file in individual member states, as each OAPI member state has renounced its national IP laws. Accordingly, a patent owner wishing to obtain patent protection in an OAPI member state must apply through the OAPI head office in Cameroon. When granted, the patent will automatically cover all member states (unlike ARIPO, where it is possible to designate only the states of interest to the applicant).

Following a Kenyan Intellectual Property Institute (KIPI) review of its processing of utility model applications, KIPI recently discontinued the substantive examination of utility model applications with effect from May 1 2014 in order to align its practice with the Industrial Property Act 2001. This has caused some debate, as some feel that African countries should be aiming to increase, rather than decrease, the frequency and standard of examination.

This contrasts directly with the South African situation, where the draft IP Policy proposes the introduction of a limited form of substantive examination for patent applications related to pharmaceutical inventions. The most compelling argument in favour of this is the argument that a lack of examination allows invalid patents to remain on the Patent Register, thereby limiting the import and sale of generic drugs in a country which suffers from high rates of disease and poverty.

The debate over examination appears to have reached the Algerian authorities, which earlier this year decided to introduce a form of substantive examination for Patent Cooperation Treaty (PCT) national phase applications based solely on the results of the written opinion. Unfortunately, this change in procedure took place without corresponding amendment of the national legislation, notice to users of the patent system or – most importantly –improvement of internal capacity. This has resulted in the strange situation of the registry rejecting applications on substantive grounds, but lacking the technical expertise to deal with the responses filed. Further, the legislation permits no amendments. In light of the difficulties raised by this development, it is hoped that the authorities will reconsider their decision.

Madagascar took similar steps a few years ago and introduced a similar form of examination for PCT national phase applications. Examination is now based solely on the written opinion. However, it appears that the Patent Office has some technical ability and amendments are permitted by legislation, so at least there is an opportunity to overcome objections raised by the Patent Office and have the patent proceed to grant in proper form.

These recent developments raise the question of whether Africa needs a workable examination system. Further, does Africa have the capacity (ie, the knowledge base and technical expertise) to manage and sustain substantive examination efficiently? Vast investment in infrastructure and substantial human resources capacity are required in order to develop a suitable knowledge base with the relevant level of expertise in order to carry out substantive examination.

One of the biggest challenges faced by African patent offices is the lack of infrastructure, preventing them from managing filing processes and procedures effectively. This must be addressed before substantive examination is implemented. However, some African countries have well-functioning registries and effective examination systems (eg, Kenya and Egypt).

ARIPO is another example of a well-functioning system. It conducts substantive examination based on consideration of the PCT international search report and the written opinion, together with substantive evaluation of the application by qualified examiners. In this way ARIPO efficiently manages the process of substantive examination.

Apart from a drop in numbers in 2009-2010, there has been a steady increase in the number of patent applications filed in ARIPO over the past eight years, showing that users of the system have confidence in its examination procedure.

Figure 1. ARIPO patent filing statistics 1984-2012

It is clear that Africa needs a workable examination system. However, to achieve this it needs to build capacity and provide future examiners with the necessary skills and resources. South Africa was recently ranked last of out 148 countries in maths and science instruction, and recruitment of people in these areas is notoriously difficult. Existing research organisations have neither the capacity nor the legal expertise required to examine the 10,000 patent applications filed in South Africa annually. Thus, there is a long way to go before South Africa has the capacity to implement an effective examination system independent of existing examination systems such as the PCT.

Anti-counterfeiting activities

As business environments improve, Africa’s urbanisation and middle class are growing rapidly. Over the past decade, six out of the 10 fastest-growing economies worldwide were in sub-Saharan Africa. On the technological front, Africa is Facebook’s fastest-growing market and the second-biggest mobile market in the world.

However, these developments have not just created legitimate business opportunities as demand for products across all sectors grows – the market for counterfeit goods in Africa is also on the rise. No industry has been spared the scourge of counterfeit goods and all goods are targeted, from consumables to pharmaceuticals.

The global counterfeit medicine industry is estimated to be worth approximately €75 billion a year. Interpol estimates that around 30% of all medicines in Africa could be counterfeit and, according to the World Health Organisation, around 100,000 deaths a year in Africa are attributable to the counterfeit drug trade. Counterfeit medicines include so-called ‘lifestyle’ drugs such as aspirin, antacids and analgesics, but increasingly also drugs such as anti-malarials, cancer medication and anti-retrovirals. Serious efforts are being made by brand holders, Interpol and other national and international authorities to address this issue.

In June 2012 Angolan Customs seized one of the largest consignments of counterfeit drugs (specifically, anti-malarials) in history. The consignment was large enough to treat more than half of Angola’s annual malaria patients.

As a consequence of the boom in the counterfeiting industry, rights holders and law enforcement agencies have come together to combat the influx, manufacture and distribution of such goods and to promote awareness among consumers.

There have been widespread efforts to train officials on anti-counterfeiting procedures and how to identify counterfeit goods in respect of numerous brands. Some of the more recent activities include the following:

• Following an April 2013 workshop for the Kenyan Anti-counterfeit Agency and the Kenyan Copyright Commission, a search and seizure operation was conducted at a large manufacturing facility in Mombasa, where more than 700 pairs of counterfeit footwear, together with footwear moulds, were seized and destroyed.
• Following a June 2013 workshop for Interpol, Customs and the police in Namibia, in-market operations were conducted at Chinatown premises in Windhoek, Oshikango and Oshakati. During these operations the police seized more than 100,000 counterfeit items. In addition, R3 million in cash was confiscated from a suspect.
• Following a September 2013 workshop for Interpol, as well as customs and police officials from Namibia, Botswana and Zambia, raids were conducted at several malls in Gaborone, where officials seized over 50,000 counterfeit items. Similar operations were conducted in December 2013 in Botswana.
• In early 2014 Interpol, the police and Customs in Namibia conducted raids at Chinatown malls in Windhoek and Oshikango, where more than 60,000 counterfeit items were seized.
• Training was conducted at 17 container freight stations in Mombasa and seven in Nairobi, Kenya. In subsequent in-market operations, numerous counterfeit goods, including counterfeit oil filters, were seized.
• In early June 2014 raids were conducted in Dar-es-salaam, Tanzania by the Fair Competition Commission, Interpol, the police and Customs. Counterfeit oil filters were also seized there.

Further training sessions and in-market operations are due to take place in the near future in various African countries, including Botswana, Rwanda, Nigeria, Mozambique, Angola and Mauritius, involving Interpol, the police and Customs. Training, increased consumer awareness and proactive enforcement measures are critical to eradicating counterfeit operations. The first step to combating the infiltration of counterfeit goods into the African market is to stop them at the point of entry.

Several African territories provide for formal customs recordal processes (ie, Morocco, Tunisia, Egypt, Mauritius, Ethiopia and South Africa). Such applications should be filed to record brand holders’ rights – particularly in Mauritius and South Africa, where the customs recordal process is well established and efficient.

While other African countries have no formal recordal system, it is possible to approach Customs informally to look out for protected brands and to facilitate notification. These territories include Kenya, Namibia, Libya, Tanzania, Liberia, Uganda, Somalia, Ruanda, Burundi, Sao Tome & Principe, Seychelles, Djibouti, Gambia, Zambia, Mozambique, Eretria and Ghana.

Africa is brimming with opportunities in all business spheres and there is much scope for innovation and investment. However, rights holders must adequately protect and enforce their rights. This is virtually impossible without the assistance of national law enforcement agencies. Therefore, rights holders should actively participate in the empowerment of such agencies through training and support.

Expanding your footprint into Africa

Africa’s growing market has become the next frontier for many businesses from other continents. Opportunities for rights holders are plentiful and foreign companies should consider expanding their footprint into Africa. However, in doing so, they must be aware of some of the challenges they may face.

Before entering a local market in Africa, a company should first identify the specific countries that might be of interest. It is also important to speak to another party which is active in the specific country in order to gain insight from its perspective. Usually, foreign businesses consider the bigger African economies to be the first port of call. Many organisations use South Africa as a starting point and then expand to other prominent markets on the continent. Some organisations focus on countries such as Nigeria, Kenya, Tanzania and Ghana. There is also much interest in Mozambique and Angola, particularly in the mining and resources industries.

If a company intends to commercialise its intellectual property in Africa, it should prioritise the registration of the relevant intellectual property. It should apply for registration of the relevant trademarks and, if applicable, ensure that patent protection has been obtained. This exercise must not be delayed, especially since many African countries operate on a ‘first to file’ basis. It is also sensible to check whether the relevant trademark is already in use in the applicable jurisdiction.

Foreign rights holders use various strategies to get their brands into the African market. For manufacturers, the simplest way of doing so is to appoint distributors in the relevant countries. However, it would be wise to screen potential distributors to confirm their credentials and verify their capabilities. A manufacturer should be wary of appointing a distributor on an exclusive basis unless that distributor has proven experience and capacity or the distribution agreement allows the manufacturer to appoint additional distributors if the distributor is not maximising the market.

Competition and consumer protection law is rapidly developing in Africa. This legislation deals with issues such as price fixing and product liability. If an African country has passed such legislation, the manufacturer must ensure that the agreement does not breach those laws.

Often, African countries have local registration requirements that might pose challenges to foreign manufacturers. For brand owners that distribute regulated products (eg, pharmaceuticals and communications equipment), this might create barriers. In some countries distributors must be registered with the applicable authority. In a number of cases, local laws require that the applicant for such certification be owned by citizens of the relevant country. In that case, the manufacturer must consider the situation carefully before it allows the distributor to register products in its own name. In some African countries, the foreign organisation might be required to register a local company in order to do business in that jurisdiction.

Some African countries might have legislation that seems unusual to foreign companies, such as exchange control laws. Exchange control legislation regulates the outflow of capital from certain African countries to parties in other countries. In some countries, ‘capital’ might even include intellectual property. This can create various challenges for a foreign party. In a licensing or distribution arrangement, it may mean that the licensee or distributor in the African country must obtain regulatory approval in order to pay royalties or other fees to the manufacturer or licensor. Often, distribution or licence agreements also deal with improvements to the licensor’s intellectual property. Exchange control regulations might require the distributor or licensee to obtain approval in order to transfer the rights in such improvements to a foreign party.

In some circumstances, transactions with licensees and other parties might lead to litigation. Litigation in African countries is often time consuming and cumbersome. Foreign companies must be prepared for costly proceedings which might take several years to resolve. In order to minimise this risk, a company should obtain legal advice from a lawyer in the relevant jurisdiction in order to ensure that the applicable agreement is enforceable and that its provisions are appropriate.

Although Africa might pose unique challenges to foreign rights holders, those challenges are not insurmountable. Many multinational companies have reaped the rewards of expanding into Africa’s burgeoning markets and have achieved great success. If a foreign rights holder devises an appropriate strategy and carries out proper investigations, it could add its name to those success stories.

Adams & Adams

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Pretoria, 0081

South Africa

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Lucy Signorelli

Partner

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Lucy Signorelli is a partner in the trademark litigation department and is one of three partners heading up the anti-counterfeiting team. She is a qualified attorney and trademark practitioner with 14 years’ experience. She holds BProc and LLB degrees from the University of Pretoria and specialises in trademark litigation, particularly relating to anti-counterfeiting.

Nicky Garnett

Partner

[email protected]

Nicky Garnett, a law graduate from the University of Natal (Pietermaritzburg), has headed up the Africa patents department for the past six years. She is originally from Zimbabwe and her current areas of practice include patent and design filing and prosecution in Africa. Ms Garnett also made a significant contribution to the writing of the Adams & Adams book Practical Guide to Intellectual Property in Africa.

Danie Strachan

Partner

[email protected]

Danie Strachan specialises in corporate and commercial law, consumer protection, data protection, franchising and IP commercialisation. He is a member of the Law Society of the Northern Provinces and a fellow of the South African Institute of IP Law. He is also a qualified trademark practitioner. Mr Strachan holds an LLB degree (cum laude) from the University of Pretoria.