South African companies with international operations face a unique challenge in the management and structuring of the ownership and use of intellectual property in their international operations. Deciding which group company should own these assets and then regulating the use of intellectual property between group companies needs to take account of all of the following:
- Intellectual property laws and practices in South Africa, in the countries in which the intellectual property rights are registered and the countries in which group operations take place;
- International treaties relating to intellectual property rights;
- South African exchange control considerations; and
- Transfer pricing considerations.
In taking account of these issues there is an overriding objective of ensuring that the structuring of the ownership and use of the intellectual property assets is appropriate to the commercial needs and objectives of the group.
There has to be a careful interplay between intellectual property, legal, tax, exchange control and transfer pricing considerations in the way in which an IP management and ownership structure is conceived and then implemented. This requires a blend of intellectual property, legal and tax skills. If there is attention only to the filing and prosecution of patents and trade marks, without appropriate attention to intercompany commercial arrangements for the use of these assets, it can have devastating consequences from a tax perspective. Likewise, we have worked with clients who have focused on tax considerations at the expense of intellectual property issues, which have resulted in patents and trade marks being rendered invalid or unenforceable.
ENSafrica has launched a Comprehensive Guide to the Management and Structuring of Intellectual Property Assets for South African Companies with International Operations.
This 80 page Guide is now available to be purchased by making contact with Chris Bull, a director in our Intellectual Property Department, at: firstname.lastname@example.org
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.