It has now, once again, become necessary for foreign exchange
approval to be obtained when intellectual property (including trade
marks, patents, designs and copyright) is sold to an off-shore
entity.
Regulation 10 of the Exchange Control Regulations has been amended
to provide that "capital" (referred to in Regulation
10(1)(c)) includes an intellectual property right (whether
registered or not) and "exported from the Republic"
includes the transfer of an intellectual property right to a person
who is not resident in the Republic of South Africa.
Therefore, despite the decision of Supreme Court of Appeal in
Oilwell (Pty) Limited v Protec International Limited (to the effect
that a trade mark does not constitute "capital" as
envisaged in Regulation 10(1)(c)), as a result of the amendment to
Regulation 10, foreign exchange approval will now be required in
order for a South African resident to transfer an intellectual
property right to a person who is not a resident of the Republic of
South Africa.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
