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MASLOW CONFERENCE CENTRE | SANDTON WELCOME TO THE ADAMS & ADAMS IP CRAMMER 2015

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Page 1: IP Crammer Presentation 2015

MASLOW CONFERENCE CENTRE | SANDTON

WELCOME TO THE ADAMS & ADAMS IP CRAMMER 2015

Page 2: IP Crammer Presentation 2015

WELCOME

GÉRARD DU PLESSIS | CHAIRMAN ADAMS & ADAMS

Page 3: IP Crammer Presentation 2015

TRADE MARK CASE UPDATE 2015

KELLY THOMPSON | PARTNER | TRADE MARKS

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05/01/20234

Page 5: IP Crammer Presentation 2015

Société Des Produits Nestlé SA and Another v International Foodstuffs Co and Others (100/2014) [2014] ZASCA 187; [2015] 1 All SA 492 (SCA) (27 November 2014)

Page 6: IP Crammer Presentation 2015

NESTLÉ’S TRADE MARK REGISTRATIONS:

Trade mark registration no. 1999/23579 4 WAFER FINGER shape in class 30

Trade mark registration no. 1999/23580 2 WAFER FINGER shape in class 30

Both registrations were endorsed as follows:

“The mark consists of the distinctive shape or appearance of the goods”

05/01/20236

Page 7: IP Crammer Presentation 2015

IFFCO’S TIFFANY BREAK:

05/01/20237

Page 8: IP Crammer Presentation 2015

IFFCO’S TIFFANY BREAK:

05/01/20238

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SCA DECISION:

Validity of the trade mark registrations

extensive use of the shape over the last 50 years market surveys showed that a significant number of consumers

associated the shape with chocolate or confectionary as well as with Nestlé and the KIT KAT brand

a number of features of Nestlé’s FINGER WAFER shape trade marks which are distinctive and not attributable only to a technical result

05/01/20239

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SCA DECISION cont.:

Infringement shapes of the chocolate bars are identical and are used in respect of the

same goods, namely chocolate bars.

Held that IFFCO was using the FINGER WAFER shapes themselves, or on the packaging of the BREAK chocolate bar, as a badge of origin and not simply in a descriptive manner.

IFFCO made much of the fact that there was no evidence to show any actual instances of confusion of the 9 years that the products had been sold side-by-side, but the Court did not give much weight to this.

05/01/202310

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SCA DECISION cont.:

The fact that it is common in the confectionary industry to depict the actual product on the packaging does not per se mean that such use constitutes descriptive use.

In the end, the Court found that use of the shape as depicted on the packaging and its three dimensional form would be perceived as a source identifier (a badge of origin) of the goods emanating from Nestlé. The Court accordingly found infringement in terms of Section 34(1)(a).

05/01/202311

Page 12: IP Crammer Presentation 2015

SCA DECISION cont.:

Regarding dilution, the Court agreed with Nestlé’s submission that as sales of IFFCO’s chocolate bars increase, consumers will associate Nestlé’s registered FINGER WAFER shape with the product of IFFCO, or as the shape of a chocolate bar sold by a number of proprietors in SA

The loss of the unique shape of the KIT KAT bar as a distinctive attribute will inevitably result in a loss of advertising or selling power to Nestlé. This would result in ‘blurring’ of Nestlé’s FINGER WAFER shape trade mark

Economic harm “self-evident” on the facts

05/01/202312

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2. Cochrane Steel Products (Pty) Limited v M-Systems Group (Pty) Limited and another (39605/2013) GJ 29 October 2014

Google Adwords What are AdWords (and other search keywords)?

Bidding on ClearVu resulted in display of M-Systems advert

Cochrane did not have a registration for CLEAR VU! Key issue: is this unlawful competition?

Leaning on: not part of our law and cannot be used to evade passing off requirements

Passing off: internet consumers are used to sorting through adverts – will not be confused

Decision largely consistent with foreign cases

Will be heard by SCA next year!

05/01/202313

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AdWords example:

05/01/202314

Search term

Adword result for Outsurance

Adword Result for Hippo Insurance

Natural search results

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3. Chantelle v Designer Group (Pty) Ltd

(A743/2013) [2015] ZAGPPHC 222 (24 April 2015)

Ladies undergarments and cosmetics are similar goods

Issues of similarity of marks and similarity of goods cannot be seen in isolation: the lesser the similarity between the respective goods, the greater the degree of similarity required between the marks, in order for there to be a likelihood of confusion or deception, and vice versa.

05/01/202315

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SOUTH AFRICA cont.:

Identical mark CHANTELLE – Court interpreted the famous UK British Sugar test for similarity of goods, very liberally

In contrast to the 2014 Supreme Court of Appeal case of Mettenheimer v Zonquasdrif Vineyards (use of nearly identical marks in relation to wine and wine grapes, would not be likely to lead to deception or confusion)

05/01/202316

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4. Yuppiechef Holdings (Pty) Ltd v Yuppie Stuff Online CC (12662/2014), ZAWHC

05/01/202317

court considered the nature of the Applicant’s and Respondent’s target market

confirmed the existing position that the names of both websites must be considered as wholes, and compared with reference to sense, sound and appearance, and that confusion on any of these bases would lead to infringement.

Court (surprisingly) restricted its comparison to the actual form of the logo used by Yuppie Chef and the Respondent and compared contents of respective websites

Initial confusion ignored YUPPIECHEF descriptive? Beware cleverly suggestive marks!

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1. South Africa2. OAPI (regional system)3. Nigeria4. Kenya5. Angola6. Mauritius7. Tanzania8. Zambia

AFRICA MOST ACTIVE COUNTRIES 2014/2015

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NIGERIA:

MR PRICE GROUP LIMITED V MR PRICE WEST AFRICA LIMITED (April 2015) Section 30(1)(d) of the Corporate Allied

Matters Act enforced Landmark case Questions: 1. Is the CAC is the only authority that can determine

whether a company name conflicts with section 30(1)(d) of CAMA?

2. Does the CAC have the power in terms of Section 31(4) of CAMA to direct a company (that had been erroneously incorporated) to change its name or have that name deleted from the Register?

05/01/202319

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KENYA:

Weetabix Limited v Manji Food Industries Limited – March 2015

KIPI decision (ruling of Assistant Registrar of Trade Marks) MULTIBIX confusingly similar to WEETABIX Registrar took into account the nature of the purchasers,

strength of the mark, similarity of marks and goods

05/01/202320

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KENYA:

05/01/202321

Webtribe Limited t/a Jambopay v Jambo Express Limited [2014] eKLR

Registered trade mark JAMBOPAY used in Defendant’s company name and domain name

Defendant disputed jurisdiction of High Court of Kenya in respect of company name – court confirmed that it does have such jurisdiction

Commentary on apparent lack of harmony between Trade Marks Act and Companies Act

Merits: lack of evidence

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THANK YOU

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LATEST ANTI-COUNTERFEITING STRATEGIES REVEALED

GODFREY BUDELI | PARTNER | TRADE MARKS

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LATEST ANTI-COUNTERFEIT STRATEGIES:

1. Registration and recordal of client’s trade marks in China:

The General Administration of Customs in China (GACC) is one of the most effective authorities re: examination of goods leaving its borders.

In 2012 alone, GACC detained approximately 15 000 containers. Increases the chances of detention alleviating them reaching other

markets.

05/01/202324

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2. Customs/Police Training: Increased Customs/Police training in Africa. In the past, focus was on training for enforcement agencies domestically. Established footprint in Africa now conducting training in the Sub-

Saharan African countries regularly. Established direct contact with Customs/Police in several African

countries. Good working relationship with international enforcement agencies like

Interpol, World Trade Organisation and World Customs Organisation. Various ports’ being used to push counterfeit goods into the continent,

including Dar es Salaam, Mombasa, Luanda, Maputo and Walvis-bay. Formal Customs recordal system in place in South Africa, Mauritius,

Morocco, Tunisia, South Sudan, Zimbabwe and Ethiopia. Informal recordals are possible in most other countries.

05/01/202325

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3. In Market operations (Admission of Guilt Fine System): This system requires approval of the Magistrate’s court within the

jurisdiction. System was introduced in Johannesburg and Port Elizabeth in 2013. Involves arresting of suspects, finger prints taken, docket opened and an

admission of guilt negotiated. The fine agreed upon is payable to the State and criminal records against

the Suspects. The Suspect’s details may also be handed over to the Department of

Home Affairs. Voluntary surrender of infringing goods and details of the supplier may

be obtained. Goods destroyed immediately. This is a cost effective and efficient strategy without launching fully

fledged civil and/or criminal proceedings.

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05/01/202327

Senior Magistrate has now been approved the system for the Durban area. Discussions currently underway to roll this system out to Pietermaritzburg

and Western Cape areas.

4. Online enforcement:

Developed online enforcement strategies. Identify cases that require escalation to investigation as opposed to a

simple take-downs.

Page 28: IP Crammer Presentation 2015

5. Out of box options

A) Landlords liability:

We are working together with the Commercial Crime Unit, Organised Crime and the Asset Forfeiture Unit in an effort to hold the landlords of problematic buildings liable for their tenants’ dealing in counterfeit goods. The idea is to seize these buildings and to shut the entire operation down once and for all.

This project started mid 2013 and is an on going project. In response to our demands, the landlords have adopted a more co-

operative approached and surprisingly agreed to supervised building audits.

Several meetings held with landlords attorneys to discuss way forward.

05/01/202328

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B) Targeted and specialised investigations:

Top end investigators are now emerging in the wake of the complicated web in which the international syndicates organisations operate. Proper investigations are required to determine the source/origin of the counterfeit goods (be it locally or abroad).

This type of investigations include market surveys in South Africa and some Sub-Saharan Countries.

Assist brand holders to put effective brand protection strategies in place plus allocate enough budget for implementation.

05/01/202329

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WHAT TO EXPECT IN 2016:

05/01/202330

More collaboration between stakeholders.

Increased number of Admission of Guilt Fine Operations.

Admission of Guilt Fine system to be rolled out to Western Cape and Pietermaritzburg areas.

Dedicated State Prosecutors to deal specifically with dockets involving

counterfeit goods.

Controlled deliveries.

Implementation of BMA.

Page 31: IP Crammer Presentation 2015

THANK YOU

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DEBBIE MARRIOTT | PARTNER | TRADE MARKS

COPYRIGHT LAW DEVELOPMENTS

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CASE LAW UPDATES

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Quill Associates case

Quill licensed use of BIQ software to West Rand District Municipality Randfontein + Westonaria + WRDM = Uni-City Municipality Argued: extended license orally for R and W to use BIQ, but BIQ

not be loaded to separate servers Quill/WRDM license terminated R & W argued WRDM’s entitlement to use BIQ ad infinitum,

also extended to them

05/01/202334

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Quill Associates case

Oral evidence heard in trial Preponderance of probabilities

– court agreed conditional extended license to use was terminated

Randfontein and Westonaria ordered to pay Quill reasonable royalty of R4.75million and R5.75million for the unlawful use of BIQ software

05/01/202335

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Atelier v Kilnworx

Generally: © author/s = © owner Commissioned works: photograph, painting/drawing of a portrait,

gravure, cinematographic film, sound recording IFF money + made

pursuant to commission =>person commissioning = © owner

Vs. Commissioned software, logos, all other works =>© author/s = © owner person commissioning = © licensee?

05/01/202336

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Atelier v Kilnworx

commissioner retained equitable interest in logos=> entitled to assignment

UK case law – 1998 Classic FM case: business efficacy to contract => assume can stop unauthorised third party use, i.e. able to own © or exclusive license to use

Griggs case (2005): qu bought © ownership, or a © license? Kilnworx case: implied term that Kilnworx would own ©; equitable that

entitled to take assignment UK law: equitable interest vs legal interest

05/01/202337

Page 38: IP Crammer Presentation 2015

Atelier v Kilnworx

SA law: officious nosey bystander may import tacit terms into contract

BUT rather always take assignment in writing upfront

05/01/202338

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Copyright Amendment Bill 2015

LEGISLATIVE UPDATE

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05/01/202340

New classes of works: Craft works BUT = artistic works

Recognition of and improved access to orphan works = owner cannot be located. Work preserved and shared BUT through State-controlled, not State-owned, licensing

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05/01/202341

Extension of restricted acts – reproduction and sharing over internet

Technical protection measures – prohibition of circumvention

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Improved access for disabled people

Broadened scope of infringement exemptions through “fair use”, especially re education

Improved control and regulation of royalty collection societies.

05/01/202342

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State to own copyright if State-funded – arbitrary deprivation, contrary IPR from Publicly Financed R&D Act

State to own copyright - where rights holder cannot be located OR where author unknown OR DeceasedBUT State should not own copyright in orphan works – rather empower State to grant licenses

05/01/202343

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New criminal offences, including: failure to pay re-sale royalties for artistic work –

payable every time work sold to new party

for directors unless without knowledge, or all due diligence exercised to prevent offence

for manager, secretary or other officer if committed with the consent of, collusion with or is attributable to any negligence on his part

05/01/202344

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Content regulation for broadcasters

Protection of performers’ economic and moral rights

Contrary international agreements, eg Berne Convention, TRIPS Agreement

05/01/202345

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THANK YOU

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JAC MARAIS | PARTNER | COMMERCIAL, PROPERTY & LITIGATION

TRANSFER PRICINGStrategies under the spotlight

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1. Section 31 of the Income Tax Act (1962)

2. OECD guidelines – IP

3. Unpacking the Arms Length Principle

INDEX

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(2) Where—(a) any transaction, operation, scheme, agreement or understanding constitutes an affected transaction; and any term or condition of that transaction, operation, scheme, agreement or understanding—(i) is a term or condition contemplated in paragraph (b) of the definition of ‘affected transaction’; and(ii) results or will result in any tax benefit being derived by a person that is a party to that transaction, operation, scheme, agreement or understanding,the taxable income or tax payable by any person contemplated in paragraph (b)(ii) that derives a tax benefit contemplated in that paragraph must be calculated as if that transaction, operation, scheme, agreement or understanding had been entered into on the terms and conditions that would have existed had those persons been independent persons dealing at arm’s length.

05/01/202349

Section 32 of the ITA

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It is set forth in Article 9 of the OECD Model Tax Convention as follows: where “ c o n d i ti o n s a r e m a d e o r i m p o s e d b e t w e e n t h e t w o e n t e r p r i s e s i n t h e i r c o m m e r c i a l o r fi n a n c i a l r e l a ti o n s w h i c h d i ff e r f r o m t h o s e w h i c h w o u l d b e m a d e b e t w e e n i n d e p e n d e n t e n t e r p r i s e s , t h e n a ny p r o fi t s w h i c h w o u l d , b u t f o r t h o s e c o n d i ti o n s , h a v e a c c r u e d t o o n e o f t h e e n t e r p r i s e s , b u t , b y r e a s o n o f t h o s e c o n d i ti o n s , h a v e n o t s o a c c r u e d , m a y b e i n c l u d e d i n t h e p r o fi t s o f t h a t e n t e r p r i s e a n d t a xe d a c c o r d i n g l y ”.

05/01/202350

UNPACKING THE ARMS LENGTH PRINCIPLE

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05/01/202351

UNPACKING THE ARMS LENGTH PRINCIPLE: WHO’s TAX IS IT ANYWAY?

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Comparable Uncontrolled Price (CUP)

Profit based methods‐ Profit comparison methods

(TNMM) Profit split methods (“PSM”)‐

05/01/202352

APPLYING THE ARMS LENGTH PRINCIPLEThe Various Tests

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Transfer pricing key to IP migration strategy

Future impact of transactions

05/01/202353

CLOSING REMARKS

Page 54: IP Crammer Presentation 2015

ASHLIN PERUMALL | SENIOR ASSOCIATE COMMERCIAL, PROPERTY & LITIGATION

EXCHANGE CONTROLAND ITS INTELLECTUAL PROPERTY

CHALLENGES

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INTRODUCTION Exchange control –

Exchange Control Regulations Currencies and Exchanges Act, 1933

Controls used to protect foreign currency reserves by blocking expatriation of currency and assets as well as regulatory inward investments

Applies to both inbound and outbound investments/transactions

Comprises: Act, Regulations, Orders and Rules, Rulings and Circulars, Manual

05/01/202355

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Implementation of any such structure requiring SARB approval where approval is denied is prohibited and would constitute a violation of South African law

05/01/202356

WHY IS EXCON IMPORTANT?

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COMMON MONETARY AREA (CMA)

05/01/202357

Countries South Africa Swaziland Lesotho

No Excon requirements between any of the members of the CMA

Lesotho and Swaziland have their own Excon Authorities, Acts and Regulations but in terms of the CMA Agreement, their application must be at least as strict as that of the RSA

Page 58: IP Crammer Presentation 2015

AUTHORITIES IN SOUTH AFRICA

05/01/202358

The Minister of Finance - delegated to SARB most powers, functions and duties

Financial Surveillance Department (FSD) Certain banks appointed as Authorised Dealers Closed door policy Department of Trade and Industry (DTI) acts

as advisor to SARB where transaction involves local manufacture of products; or the provision of certain services

Page 59: IP Crammer Presentation 2015

RELEVANCE TO INTELLECTUAL PROPERTY

05/01/202359

Exchange control is very important to consider in respect of IP

Areas to consider regarding IP Assignment out License in License out (between related persons)

Other considerations: Loop structure Tainted IP

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05/01/202360

ASSIGNMENT (EXPORT) OF IP

Export of IP

Non-CMAResident

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ASSIGNMENT (EXPORT) OF IP

05/01/202361

Regulation 10(1)(c) Excon Regulations Prohibits the export of any capital without prior

exchange control approval from the FSD Oilwell (Pty) Ltd v Protec International Ltd and Others 10(1)(c) amended 8 June 2012 Capital now includes intellectual property rights Exported:

Cession, assignment or transfer Creation of a hypothetic or security over

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05/01/202362

Practical consequence: very difficult to obtain Excon approval for export of capital

2015 Update: relaxation for international venture capital markets

Sectors: technology, media, telecommunications, exploration, and research and development sectors

Primary listing offshore or to raise capital and loans offshore on the back of their IP assets

Strict criteria

ASSIGNMENT (EXPORT) OF IP

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LICENSE IN

05/01/202363 05/01/2023

Royalties

Non-CMAResident

IP License

Page 64: IP Crammer Presentation 2015

LICENSE IN

05/01/202364

i.e. Offshore licensor license to a South African resident licensee and South African Resident pays royalties

2 Scenarios: DTI: local manufacture of products or the provision

of certain services – Approach DTI SARB: Trade mark (not re a manufacturing agreement);

lease; distribution; design; technical; management; software; and copyright – Approach authorised dealer

Focus on: Royalty Rate (4% - 6%)

Page 65: IP Crammer Presentation 2015

05/01/202365

LICENSE OUT

IP License

Non-CMAResident

Royalties

Page 66: IP Crammer Presentation 2015

LICENSE OUT

05/01/202366

i.e. South African resident licensor license to an offshore licensee and offshore licensee pays royalties

30 April 2009 – ito SARB Policy Communiqué = this requires SARB approval

Focus on: arm’s length agreement

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LOOP STRUCTURE

05/01/202367

Loop structure = prohibited by SARB Loop structure - investment in an offshore entity by

a South African resident and subsequent investment by such offshore entity back into South Africa

Indirect investment by the South African resident in South Africa

Definition of capital in Reg 10(1)(c) includes IP rights –the prohibition against loop structures could be extended beyond ownership to wider transactions (e.g. license agreements)

Page 68: IP Crammer Presentation 2015

TAINTED IP

05/01/202368

Tax consideration: Not strictly Excon but often relevant in Excon/IP matters

Income Tax Act, 1962 (the ITA) IP = ‘tainted intellectual property’ if IP is:

created in South Africa; transferred to a non-resident; and then licensed back to the South African person for a royalty

South African entity will not be entitled to deduct the royalty paid for income tax purposes in terms of section 23I of the ITA for tainted IP

Page 69: IP Crammer Presentation 2015

KAREEMA SHAIK | ASSOCIATEALISSA NAYANAH | ASSOCIATE

gTLD UPDATE .sucks, .sex and other developments

Page 70: IP Crammer Presentation 2015

What is a Top Level Domain Name?

05/01/202370

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Country Codes

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Generic Top Level Domain Names (gTLDS)

05/01/202372

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05/01/202373

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05/01/202374

30 MARCH 2015

RATIONALE

MOST CONTROVERSIAL

PREMIUM DOMAINS - $2500

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DO WE BUY INTO IT?

05/01/202375

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WHAT DO I DO WITH A .SUCKS DOMAIN?

05/01/202376

Register block (not available for premium domains)

Defensive – Point to primary website

Use brand.sucks website as part of your customer care strategy

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I WILL NOT BE SUCKED IN!

05/01/202377

Too expensive

Endless possibilities

Consumer care platforms already in place

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ALREADY REGISTERED?

05/01/202378

Apply to Block

Anonymous Bid

UDRP

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05/01/202379

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05/01/202380

Rationale

Controversy

Protection for IP holders

Concerns remain

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I am a Brand Owner! What can I do to protect my rights?

05/01/202381

UDRP Procedure

Strategy - gTLDS- Core Brands- Enforcement

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THANK YOU

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JENNY PIENAAR | PARTNER | TRADE MARKS

THE FUTURE OF ALCOHOL ADVERTISING IN SOUTH AFRICA

Page 84: IP Crammer Presentation 2015

Regulated by : Liquor Act of 2003 Liquor Products Act of 1989

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CONTROL OF MARKETING OF ALCOHOL BEVERAGES BILL Approved by Cabinet on 18 September 2013

Has not yet been published Follows recommendations of the WHO Public health approach – aimed at reducing

the socio-economic impact of alcohol abuse Aims to:

restrict the advertising of alcoholic beverages; prohibit any sponsorship associated with alcoholic beverages (excl.

donations); and prohibit the promotion of alcoholic beverages

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NATIONAL LIQUOR POLICY

Published for public comment in May 2015

Outlines policy proposals intended to amend the Liquor Act adopt the Bill uniform trading hours and zoning areas raising legal drinking age from 18 to 21 raising the excise tax on alcohol

87

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An impact assessment report has been prepared Government may shift the focus away from an

alcohol advertising ban, to strict regulation of alcohol outlets

Proposed amendment of the Bill to include a levy to support health promotion campaigns and education programmes relating to the dangers of alcohol abuse

It is also proposed that Government Departments that will be negatively impacted by the implementation of the Bill are compensated through the ARA fund

RECENT REPORTS

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THANK YOU

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WYNAND FOURIE | SENIOR ASSOCIATE | PATENTS

WHEN IN AFRICA, DO LIKE THE….

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No longer the hopeless continent!

Africa is ripe with opportunity Five of the top 10 fastest growing economies are in Africa Africa has the youngest population in the world – Median age is 19 yrs From a business perspective, Africa is the future! The risk is not being in Africa, the risk is not being in Africa

(Kgomoeswana, Africa is open for business, 2014, pg 5) Foreign direct investment has risen consistently for longer than a decade

05/01/202391

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Challenges facing Africa

Africa is often misunderstood Negative publicity created through isolated incidents creates bad

sentiment and influences decisions of ignorant investors Fear for African is born out of ignorance Rampant corruption Ample resources but inability to convert it into wealth Infrastructure backlog Smaller market than Asia - Only 15% of world’s population

05/01/202392

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Positives

Resource rich Ease of doing business – World Bank Ease of doing business 2014 report

ranks 8 African countries ahead of Russia and China Backlog is opportunity for business Necessity is the mother of innovation – M-PESA (Mobile money transfer

solution started in Kenya) Large potential for growth

05/01/202393

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Do you have an African strategy? If not, why not?

Keys to business success in Africa (Article by Douglas Taylor in Business Day – Oct 2015): Understand the environment and the local business culture Build political capital by achieving mutually beneficial results –

not by bribery! Compromise on business model – don’t try replicate SA model Commoditise e.g. MTN, Shoprite

05/01/202394

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A noteworthy African innovation not from SA

Before the introduction of M-PESA in Kenya, almost 90% of Kenyans were unbanked

M-PESA - “Mobile money” provides a mobile payment solution for those who don’t have access to bank accounts

Easy way to store or move money and pay for services using your mobile phone

No monthly fees Affordable transaction charges

05/01/202395

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A noteworthy South African innovation

DRAADSITTER

05/01/202396

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Another noteworthy South African innovation SEEBOX

05/01/202397

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Incentivising innovation through reward

African Entrepreneurship Award US$ 1 Million prize money Three categories – Education, Environment, Uncharted More than 5000 entries from 54 African countries in 2015 3 rounds of elimination Biggest competition in Africa

05/01/202398

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Incentivising innovation through reward

Africa Prize for Engineering Innovation DRAADSITTER was a finalist Winner gets £ 25,000 and two runners-up get £10,000 each

05/01/202399

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THANK YOU

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COMMERCIAL IP: FRANCHISING

EUGENE HONEY | PARTNER | TRADE MARKS

Page 102: IP Crammer Presentation 2015

Commercial IP Franchising

Franchise Survey Results

Pan African Franchise Federation

Developments in Africa

05/01/2023102

SUMMARY

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05/01/2023103

Estimated Turnover of Franchised outlets is 465.27 billion Rand pa

About 12.5% of SA’s GDP

90% of Franchisors are optimistic about future growth in their business

SA has over 600 franchise systems

50% of SA Franchisors intend to expand outside of SA

STATISTICS OF FRANCHISING IN SOUTH AFRICA

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37% of SA Franchisors have already expanded into neighbouring countries

61% of Franchisors have been in business longer than 6 years

Total number of employees employed by Franchised outlets is estimated at 329 000 people

Franchising covers a broad range of industries

STATISTICS OF FRANCHISING IN SOUTH AFRICA

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STATISTICS OF FRANCHISING IN SOUTH AFRICABUSINESS CATEGORY

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Number of franchisors in South Africa – 1994 - 2014

Source: FASA Franchise Directory 2015Franchise Factor 2010 Highlights

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Turnover generated by franchise systems

2008 R256.46 billion

2010 R287.15 billion

2012 R302,40 billion

2014 R465,27 billion

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Initial countries involved:- South Africa; - Mauritius;- Egypt; - Zambia; and- Tanzania; - Namibia.- Uganda;- Kenya;- Rwanda;- Ethiopia;- Ghana;- Senegal;- Nigeria;

PAN AFRICAN FRANCHISE FEDERATION (PAFF)

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PRIMARY OBJECTIVES:

1. To develop franchising in Africa;

2. To facilitate and assist with franchise expansion into and between member countries.

PAN AFRICAN FRANCHISE FEDERATION (PAFF)

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PROGRESS:

1. PAFF Constitution signed in April 2015;2. Very established Franchise Associations in South Africa and Egypt;3. Steering Committees to form Franchise Associations were established

in the other countries mentioned;4. Egypt is in the process of preparing Franchise legislation;5. Establishing a website for PAFF

- It would indicate details of franchising activities in each country;- Salient legal requirements for franchising in each member country

PAN AFRICAN FRANCHISE FEDERATION (PAFF)

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PROGRESS:

6. There are steady and increasing licensing, distribution and franchise activities and arrangements into African countries;

7. It seems the trend is set to continue;8. Whilst there are certainly challenges, if you get essentials in place, like do

your homework properly per country, find competent local contacts and good relationships, tax advice, IP protection, compliant agreements and exchange control approval, the returns for many have been significant.

PAN AFRICAN FRANCHISE FEDERATION (PAFF)

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THANK YOU

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THANK YOU FOR JOINING US AT THE ADAMS & ADAMS

IP CRAMMER 2015