South Africa: The Online Issues Affecting IP

Last Updated: 29 January 2013
Article by Rachel Sikwane

Most Read Contributor in South Africa, September 2016

An article that appeared in the Miami Herald on 9 December 2012 neatly summarised the myriad intellectual property (IP)  law issues that business owners and consumers now face as a result of the fact that so much commerce now takes place online. As the article pointed out, what makes the subject so vexed is that IP rights were created for a world that was very different from the digital world we now operate in.

Where to start? Well, as we all know following the well-publicised patent wars involving companies like Apple,  Samsung and Google, there is an extraordinary amount of patent activity in the field of computer software and, more particularly,  mobile devices.  As part of this activity, certain companies are accumulating huge portfolios of patents which cover every conceivable operating feature.   Some of these companies - known as ‘patent trolls' - don’t even do much in the way of manufacturing, they simply collect patents. The effect of this is that companies operating in this space need to be very careful, and they need to know that if they proceed without doing proper patent searches, they may well be sued for infringement. If so, they may have to pay damages or perhaps negotiate a licence deal. 

There have been significant developments in the area of copyright law. Early cases like the Grokster decision in the USA confirmed that file sharing/downloading is indeed an infringement of copyright, whereas the recent  Meltwater case in the UK confirmed that news aggregators who take headlines and short snippets from the sites of newspapers are infringing copyright – the German government intends to formalise this by introducing legislation that is colloquially referred to as the ‘Google Tax’. In between, the Newzbin decision confirmed that - although Internet Service Providers (ISP) enjoy a certain immunity insofar as automatic and passive activities are concerned, including the creation of temporary copies that have no independent economic existence (the so-called ‘conduit defence’) - they may be liable if they facilitate copying.

Companies operating in this area have (reluctantly?) had to come to grips with IP issues. Companies like Facebook and LinkedIn do, for example, have so-called ‘take down’ procedures, in terms of which they will order users (their customers) to remove material that infringes IP rights in cases where a complaint has been lodged – this issue is also dealt with in our own Electronic Communications and Transmission Act.

There are plenty of trade mark issues too! Let’s start with the domain name, which is basically the company’s internet address, and which will, in most cases, be the same as the company’s name or brand name.  A company needs to register its name as a domain name in those registries it deems appropriate, e.g. .com, ,net,, - the big issue now is whether or not to register the company name or brand name as  a Top Level Domain name. In many cases, however, the company will find that the name is already taken.  The company may have to simply accept this on the ‘first come, first served’ principle, but if there has been bad faith - what’s called ‘cybersquatting’- it may be able to mount a challenge.

Then there’s the oft-overlooked issue of whether, if you put your brand on the internet (for example on a website), you are automatically using your trade mark worldwide.  If you are, you may of course be infringing all sorts of trade mark registrations. It’s a difficult issue and foreign cases suggest that much will depend on how you do it – for example, if your site has a foreign language component, lists foreign contact details and quotes prices in multiple currencies, a court may well take the view that you are trying to use the mark outside of South Africa, and that you are then potentially infringing foreign trade mark registrations.

And just when are other people infringing your trade mark rights online? An awful lot of shopping gets done online these days and a recent survey suggests that one in five online shoppers has bought counterfeit goods, often inadvertently. What happens if a competitor  of yours buys your brand name as a keyword (an Adword in Google-speak), which has the result that whenever a consumer types your brand name into a search engine they are referred to your competitor’s pop-up advert? European cases involving Louis Vuitton and Interflora suggest that Google - being a passive party who simply stores the name - may not be liable for trade mark infringement, but that the competitor who bought the name may be if its ad does in fact cause confusion. And what if an infringer advertises rip-offs of your goods under your brand name on eBay? A  European decision suggests that eBay may be liable too for contributory infringement if the ad suggests that the goods are in fact connected with you.

It’s fascinating yet difficult stuff and, because the law was never designed to deal with an online environment, courts are pretty much making it up as they go along.  The best advice I can give you is this: get advice!

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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