WHY BOTHER WITH INTELLECTUAL PROPERTY RIGHTS

WORLD INTELLECTUAL PROPERTY DAY 2022 REFLECTIONS

The 26th April of each year is known as World Intellectual Property Day, a day which has been designated by the United Nations agency, the World Intellectual Property Organization (WIPO) to celebrate innovators and the role of intellectual property (IP) for innovation, whilst also raising awareness of the importance of IP. The theme for 2022 is “IP and Youth – Innovating for a Better Future.” This theme is relevant to the African continent given its youthful population coupled with the fact that the youth are “an incredible and largely untapped source of ingenuity and creativity.” Whilst the focus this year is to raise awareness amongst youth on IP, there is a real opportunity to also create broader awareness in society on what is IP and how it affects us in different areas of our lives. To that end, as we celebrate the “fresh perspectives, energy, curiosity and can do attitude, not to mention their hunger for a better future” of the youth, which according to WIPO are already reshaping approaches and driving action for innovation and change, we also need to highlight importance of IP in business and society.

In today’s increasingly knowledge based economy, IP has become a major currency and asset to any business. WIPO defines IP as creations of the mind and classifies it into industrial property and copyright. Industrial property comprises inventions (patents), trademarks, industrial designs, and geographic indications of source. IP includes the brand(s), logo(s) and tag line(s) of a business, which are protected by way of trademarks.

The main requirement for such protection to subsist, is that they must be distinctive and have capability to distinguish the goods and services of one business from that of another in the ordinary course of trade. Examples include the names such as Bathu, Nike, Drip and Adidas when used in relation to footwear or clothing, as another feature of trademarks is that it must be protected within one or more of 42 classes. In this case, Class 25 is designated for “clothing, footwear, headgear.” This could also explain why one may find a trademark protected in one class by one party and then in another class by another party. This is possibly the case when it comes to the yellow colour that we have become accustomed to in relation to MTN and telecommunications, which could be used by other companies in different industries. Trademarks are protected for a period of 10 years which is renewable at expiry, in perpetuity.

Patents are used to protect technical ideas or what is often termed an invention, which is defined as something new, inventive (often referred to as non-obvious to a person skilled in the art) and has industrial applicability.

The first requirement for an idea to be patented, i.e., to be new means that it must not have been disclosed to the public in any manner or form immediately prior to the filing of a patent application for the invention. As such, it is important to keep the invention confidential until a patent application has been filed at the patent office. If one discusses it with other people without any restrictions on what they can do with the information, the idea will no longer be seen as new. This therefore brings us to an important tool that businesses must use non-disclosure agreements (NDA) or confidentiality agreements. These are signed by the parties to ensure confidentiality is maintained during and after exchange of information for the purposes of exploring a business relationship of some sorts, including seeking technical assistance or funding to develop the idea further. NDAs are also an important tool to be used to maintain confidentiality of trade secrets, which is business information whose value lies on it being kept confidential. For such information to be regarded as a trade secret, it is important that a company puts in place mechanisms to ensure that it does not become generally known.

The mechanisms of access to the information to keep it confidential must match the value of the information and the need for it remaining secret. Unlike patents and trademarks, trade secrets do not require registration. Often an idea that could be protected through a patent is instead protected through trade secrets in cases where reverse engineering is not easy, and the confidentiality of the idea could be maintained for periods, as long as, or longer than the validity of a patent which is 20 years from the date on which it is applied for.

Examples include the Coca-Cola formula and KFC recipe. In other words, trade secret protection does not have duration but lapses when the information falls into the public.

When one goes into the supermarket to buy a bottle of antiperspirant body roll-on, they are confronted with different shapes of bottles, some of these are unique and could be protected by way of registered designs registration, which protects the aesthetic features, patterns or configuration of an article produced by an industrial process. The duration of protection is typically 15 years (aesthetic designs) although for some designs, only 10 years is available (functional designs).

Geographical Indications (GI) of source is another form of IP that protects the source of origin of goods. This is the reason why only sparkling wine made from grapes that grow in a certain region in France, can be called Champagne.

Sparkling wine from South Africa and other parts of the world is never referred to as Champagne but rather simply as sparkling wine or MCC or some other name. South Africa also has a GI - Rooibos. GIs are a special breed of IP akin to trademarks except that the rights accrue to a region or country, whereas the other forms of IP have rights that accrue to natural or juristic persons.

Another form of IP we come across in business daily is copyright, which protects literary and artistic works (e.g., novels, poems and plays, films, musical works, artistic works - drawings, paintings, photographs, sculptures; and architectural designs). Some works protected by copyright include user manuals, recordings, reports, marketing and music videos, brochures and any work when reduced to a material embodiment, including software code, etc. There has to be some originality to the work for protection to subsist. Whereas trademarks require registration (unless protected by common law), there is no mandatory registration for copyright and the rights subsists in the work as soon as it is reduced to a material form.

In business, other than use of NDAs to protect one’s IP, it is important to regulate ownership of IP arising from employment and other contractual relationships. For example, when one outsources the development of software, the copyright of the final product belongs to the developer as the author, unless the agreement signed with the developer states to the contrary and makes provision for the assignment, in writing of the copyright.

In the case of an employment relationship, often it is common to include a clause in the employment contract that any IP developed by the employee during the course and scope of their employment with the company belongs to the employer. Even where such clauses exist, it is prudent to have a company IP policy which also clearly sets out incentives and other benefits that may accrue to those employees that come up with new IP, particularly in the case, for example, of employees that are not expected to invent or come up with innovations of value to the company, outside the scope of their employment. Notwithstanding, a company cannot claim rights to an invention made by a former employee more than one year after the termination of employment contract. For the innovators, entrepreneurs, and any business, it is also important to carefully review any agreement that one signs, to understand the implications in respect of any IP developed. One critical aspect of IP is that it is territorial as the enforcement of the rights is done by governments in each country. As such, rights must be applied for in countries of interest, and the decision as to which countries to apply for such rights, is a commercial decision. The main considerations being manufacturing locations as well as sizes of markets where one’s goods would be marketed and sold, but to name a few. The territoriality feature of IP means that if my competitor has patents in Japan, USA, China,

Nigeria, Kenya, and Germany, but no patent in South Africa, I can freely copy their invention in South Africa, i.e., manufacture and sell the products and services embodying the invention, without fear of being sued for infringement or violation of their patent. However, if I were to export any excess products to any of the countries mentioned above, where they have a patent, I can be sued for infringement because of valid patents in those countries.

IP Rights in Use: Licensing is one way of obtaining rights from the owner of the IP to use and it cones into place by signing a licence agreement. A licence agreement is similar to a lease or rental agreement in that the ownership of the asset does not transfer from one party to the other, but rather rights to use, under agreed terms and conditions which include some payment consideration which may be a percentage of sales (often referred to as royalty) or a lump sum payment, or even some equity in a business. This agreement also sets out the duration of the licence, performance obligations, territory where licence is valid, any special conditions to the use of the IP, including rights to sublicense the rights to other parties. Ownership of the IP remains with its owner (the licensor), except that the person getting the licence (also referred to as licensee) gets to use the IP. A licence agreement can either be exclusive, non-exclusive, or sole. In the case of an exclusive licence, only the licensee is allowed to make use of the IP, while in the case of a non-exclusive licence more than one party is granted rights, and in the case of a sole licence, only the licensee together with the licensor may use the IP.

The last point I wish to deal with in this article is the value in other people’s IP (OPIP). We have seen that already with licensing where one can access someone else’s IP without having to own it. Another key consideration is where certain IP is not protected in one’s country but elsewhere. As already highlighted, one is not restricted to copy and use it in their own territory where there is no protection. This would also be the case where the rights have expired, as would be the case when 20 years have lapsed since a patent was applied for, or renewal fees were not paid and the patent fell into the public domain.

The agreement establishing the African Continental Free Trade Area (AfCFTA), which seeks to foster intra-Africa trade, also recognises the importance of IP in respect of trading of goods and services within the continent. As indicated earlier, with IP rights being territorial in nature, it is therefore important for those that seek to benefit from the AfCFTA to think carefully about where they wish to trade and how to ensure that IP relating to their goods and services that will be traded, is properly protected accordingly.

For youth, innovators, entrepreneurs, and any businesses operating in Africa, as we commemorate World Intellectual Property Day 2022, let us pay attention to IP. Whatever your business or your occupation in life, if you are not aware of the importance of IP and how it affects every aspect of your business and life, you are not paying attention. May the insights in this article be the starting point of being savvy about IP and its role in your business and life.