South Africa: Trade Secrets And IP Lite

Last Updated: 19 September 2012
Article by Ruweida Collings

Most Read Contributor in South Africa, September 2018

On 15 August 2012 a young man phoned Cape Talk radio. He wasn't happy, and he wanted the world to know about it: some time back he'd devised what he felt was a very clever coin counting device; he'd presented his device to a leading bank and the bank had told him that it wasn't interested; the bank was now using a coin counting device that was remarkably similar to his invention; and the bank was refusing to pay him any compensation.   The bank declined to discuss the matter on air, but an IP attorney gave his views. Something that would have been easy to do, because every IP attorney hears this story on a regular basis.

It's a story that requires the attorney to give the client a crash course on IP, a kind of IP Lite. But where to start?  Well, it may surprise you to hear this, but in South Africa copying is lawful.  Yes, you can quite lawfully copy those smart things that the others (your competitors) are doing.  Except when you're infringing rights that are specifically protected by the law. So just what rights are protected by the law? 

Patents

If you invent something that's new and that involves an inventive step, you can get a patent for that invention. The invention will be new if it's never been done anywhere in the world before, and   it will involve an inventive step if it's not obvious to someone who's skilled in that field.  It's possible to get a patent on all manner of things, including a mechanical device, an electronic gadget,   and a pharmaceutical product.   Certain things are, however, excluded from patent protection, such as a mathematical method, a scientific theory, and a work of literature.   A controversial exclusion is the computer program, but this exclusion does not stop you from patenting an invention that simply makes use of software to achieve a technical result. Another controversial exclusion relates to business methods, the reason behind this exclusion being the importance of encouraging business innovation and the belief that allowing patents for business methods will add a burden on trade and industry. Once you have a patent on something you have an absolute right to stop anyone else making or using the invention for a period of up to 20 years.

Registered Designs

A design registration may be obtained for various product features, including product shape.  Once again the design must be new. The shape can be either aesthetic (attractive to the eye) or functional. If you have a design registration you have an absolute right to stop anyone else using it. The protection that you will get will last between 10 or 15 years, depending on the nature of the design.

Trade Marks

It is possible to register a trade mark for the name or logo that you use to identify your product, provided that the name or logo is distinctive. Once you have secured a trade mark registration you can stop others causing consumer confusion by using a similar trade mark in relation to a similar type of product. Your registration will last indefinitely, subject to the payment of renewal fees every 10 years, and providing proof of use of the mark.

Copyright

Copyright law protects all manner of things including writing, art, music, sound recordings and films. Copyright law also protects computer programs.  There are several differences between copyright and the other rights I have discussed. First, with copyright there is no registration, the right comes in to existence once the work is created.  Second, there is no requirement of novelty as there is with patents and designs, although there is a requirement that it must not have been copied from another source. Third, the right is more limited than the rights granted by patents and designs - you can stop someone copying your work, but you can't do anything about someone who independently comes up with the same thing. The right lasts for a long time - the period is 50 years, and that runs from the date of death of the creator in the case of things like books and artworks, and from the date of release in the case of things like sound recording and films.

Trade Secrets

The law does give a measure of protection to trade secrets, but this a somewhat vague area of the law. If information is given in confidence, the law may impose a duty on the person receiving it not to use or disclose it. This may occur in an employment relationship, and often the employee will sign a restraint of trade or confidentiality agreement, in terms of which they agree not to use the information for their own benefit or for the benefit of another employer. It may also occur in a situation where one party makes a pitch or business proposal to another.

Back to the story

So did the caller to the radio station have any legally protected rights? He made it clear on air that he hadn't registered any rights, but if he had sought legal advice it's most likely that he would have registered a patent, provided that his product was indeed new and inventive. It's unlikely that shape would have played a significant role in the product, so he probably wouldn't have gone for a design registration. He might have been able to get a trade mark registration for his product's name or logo, but it's unlikely that this would've helped him in this case, because the bank could've used a different name or no name at all. It's very unlikely that he would have had any copyright protection.  As for trade secrets, there may have been  a duty on the bank not to disclose the information if the information was in fact secret, but what he really should have done is ask the bank to sign a Non-Disclosure Agreement ('NDA') before making his presentation. This certainly would have helped him establish that the information was given in confidence.

It really is worth bearing the NDA in mind.  It can be a surprisingly short and simple document: it will acknowledge that the information is being provided in anticipation of a possible business relationship; the company receiving the information will undertake not to use that information for its own benefit; and the document will acknowledge that if the information is in fact already in the public domain there will be no obligation on the company receiving the information not to use it.  The NDA's not perfect, but in many cases it's the only form of protection there is.

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.

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