Brand theft Africa

Finweek English Edition - - COMPANIES & INVESTMENTS - Garth The­unis­sen gartht@fin­week.co.za

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.”

Chic ken

Repu Chic

vs blic ken Licke

n

Jani Cronjé

Will the real

Busi­ness Day

please stand up?

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