Brand theft Africa
Theft of brand and intellectual property is becoming an increasing problem for South African companies looking to expand on the rest of the continent. Dianna Games, chief executive officer of consultancy Africa at Work, says the list of brands that have suffered either outright pirating or intellectual property theft in Africa range from newspaper title Business Day to hotel chain City Lodge. International brands such as Honeywell, Crowne Plaza and InterContinental Hotels Group have also suffered trademark theft and infringement on the continent.
“Intellectual property laws do exist in many African countries but the problem is that they’re not always applied, which makes it very difficult for victims to take any action,” says Games. “It can create real damage to a brand when the pirated version doesn’t deliver in the same way as the genuine article but people believe it is the same thing when in actual fact it isn’t.”
Games says a classic example is the Intercontinental Addis Hotel in the Ethiopian Capital, Addis Ababa, which has no link whatsoever the original Inter
Continental Hotels, the worldwide chain with a presence in more than 60 countries. She explains that there are also City Lodge and Crowne Plaza hotels in Nigeria’s commercial hub, Lagos, which are in no way linked to the origi nal companies of t he same name.
Johannesburg-based newspaper, Business Day, is another South African brand that has suffered from attempted cloning in Nigeria, according Nathi Maramnco, BDFM Publisher’s chief operating officer.
“There is no link between Business Day, Johannesburg and the Business Day in Lagos, Nigeria,” says Maramnco. “However, they continue to steal our brand and intellectual property, which is a huge bone of contention between us at the moment.”
Maramnco says Business Day Lagos was originally started by the old Johnnic Holdings, which had a controlling stake in the paper before deciding it would prefer to part ways with its Nigerian partners. According to Maramnco, Johnnic sold its stake to a local entrepreneur more than a decade ago only to see it expand into Ghana and attempt to dupe
advertisers into thinking that it is part and parcel of the BDFM stable in Johannesburg.
“They attempt to make it look like a carbon copy of the paper in South Africa and certain local financial services companies have even advertised with them in the mistaken belief that they are part of the Business Day in Johannesburg,” explains Maramnco. “There seems to be no enforcement of intellectual property laws in Nigeria.”
Games says franchise-type businesses are particularly at risk of having their ideas or brands stolen in Africa. A case in point is the rise of Nigeria’s Chicken Republic, which was founded by a former Chicken Licken franchisee. Instead of continuing to pay franchise royalties to the South African parent, the intrepid businessman simply rebranded his outlets as Chicken Republic after having learned the ropes from the South African business. Today Chicken Republic has more than 65 stores throughout Nigeria and Ghana, according to its website. “There’s a lot of risk in franchising because your franchisees get to learn about your business and can t hen simply open up their own operation that ends
up being one of your competitors,” says Games. “That could be especially problematic if they try to operate under a slightly tweaked version of your brand.”
Famous Brands CEO Kevin Hedderwick told Finweek that the fast-food group has been fortunate to avoid having any of its brands pirated in Africa thus far. However, he does point out that the group has not been entirely untouched by trademark squabbles.
“We have never had instances of brand theft but we did de-franchise a Steers restaurant there many years ago and it was a painful process getting the branding removed even though the store was closed,” says Hedderwick. Another tricky risk when operating in Africa is when a company in a completely different line of business uses your brand name. Games says a perfect example is that of Nigeria’s Honeywell Group, a conglomerate with operations in the energy, engineering, services and real estate sectors. The group has caused a few headaches for Honeywell International, a Fortune 100 technology group with operations across the world but with ambitions of expanding in the West African nation.
Jani Cronjé, a senior associate at Adams & Adams Attorneys, says that it’s important for South African companies to remember that trademark laws are jurisdictional. In other words, just because your brand is registered as a trademark in South Africa, doesn’t mean it will be protected in the other 53 countries across the continent.
“While some African countries do have intellectual property legislation in place, the problem is that it’s often either very outdated or very new, with no enabling regulations published, which often leaves our clients with few available remedies,” says Cronjé. “The other problem is that litigation in Africa is normally protracted and very expensive. In certain countries, the courts will also favour a local firm over an international one, which can be problematic.”
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