Many of our clients ask us whether they need permission to
licence their intellectual property outside of South
Africa. This is always a big concern if you are planning on
In the past
Regulation 10(1)(c) of the Currency and Exchanges Act requires
you to get permission from the Reserve Bank to export
'capital', or 'any right to capital', from South
The SCA decided that Regulation 10 did not apply to intellectual
property in the Oilwellcase,
because intellectual property was not capital. This meant that you
did not need to get permission to export intellectual property.
For an explanation of what intellectual property includes please
However, the President amended the Currency and Exchanges Act
regulations on 8 June 2012 by inserting Regulation 10(4). This
'capital', as including any intellectual property;
'export', as the 'transfer' of any intellectual
property outside of South Africa.
The word 'transfer' makes this amendment confusing. It
can be used in the context of intellectual property to mean the
assignment or the licensing of intellectual property from one
person to another.
It is clear that you now have to get permission to
assign intellectual property to someone resident
in another country. You may be charged with a crime or fined if you
fail to do so.
But, it is unclear whether you now also have to get permission
to license intellectual property to some one
resident in another country.
We asked SARS whether 'transfer' includes licensing.
They said that it didn't and that you do not need to get
permission to licence intellectual property to some one resident in
another country. However, they do not administer the Currency and
We would argue that 'transfer' does not include
non-exclusive licensing to people outside of South Africa, because
the rights-holder keeps their rights to the intellectual property
and merely gives third parties in other countries the right to use
Despite this, the situation remains unclear and there will be no
more certainty unless a court interprets the amendment.
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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