It’s a problem with a specialist field like IP –
every now and then a judge who doesn’t know his
®'s from his elbow gives a judgement that stuffs things up
completely. It’s something that lawyers love, of course
– a new revenue stream that’s quickly shrouded in
So it came to pass that in 2004 a judge in a case that is
generally known as the Reddot case held that a patent is a form of
‘capital’ because it has a monetary value. The result
of this finding was dramatic – every time that a South
African patent (or trade mark, design or copyright) was transferred
to a foreigner there was an export of capital, something that
required Treasury approval. If there was no Treasury approval, the
whole deal was void from the outset. Not exactly in sync with the
whole free trade / globalisation thing. Within no time law
firms had created entire divisions to help their clients to get
Treasury approval for transfers of IP to foreigners.
Eventually these matters do come up before judges who know about
IP and things are sorted out. So it came to pass that in March 2011
the Supreme Court of Appeal handed down a decision in a case that
will be known as the Oilwell case, a case that involved the
transfer of a SA trade mark registration to a foreigner. The judge,
Louis Harms, made it very clear that a trade mark (or a patent,
design or copyright for that matter) is not capital. There are
various reasons for this said the good judge, one of these being
the fact that if everything with a monetary value is capital, it
must mean that Treasury approval is needed if an income-producing
movable object is sold to a foreigner. Something the judge –
who in one fell swoop dispelled the cruel myths that judges are out
of touch and incapable of levity – said ‘would surprise
many, not only those who hawked vuvuzelas during the Soccer World
Cup.’ He went on to hold that even if an agreement does
require Treasury approval a failure to do so does not make it void
as the Treasury can approve it after the fact.
So sanity has returned to the gentle world of IP – trade
marks and other IP rights can be transferred to foreigners without
Reserve Bank approval. If the foreign owner enters into a licence
agreement with a local, however, Treasury approval will still be
needed before royalties can be sent abroad. Nice and simple!
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
It has always been the practice of the Industrial Property Institute of Mozambique to prohibit the refiling of trade marks that have been finally refused, which has posed a serious obstacle to trade mark applicants...
A recent Australian decision on keyword usage of a registered trade mark is in line with decisions in many other countries, including South Africa.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).